[Congressional Record Volume 141, Number 1 (Wednesday, January 4, 1995)]
[Senate]
[Pages S173-S416]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



[[Page S173]]

Vol. 141         WASHINGTON, WEDNESDAY, JANUARY 4, 1995           No. 1
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                                 Senate


            (Legislative day of Wednesday, January 4, 1995)

                             

      By Mr. DOMENICI (for himself, Mr. Exon, Mr. Craig, Mr. Bradley, 
        Mr. Cohen, and Mr. Dole):
  S. 14. A bill to amend the Congressional Budget and Impoundment 
Control Act of 1974 to provide for the expedited consideration of 
certain proposed cancellations of budget items; to the Committee on the 
Budget and the Committee on Governmental Affairs, jointly, pursuant to 
the order of August 4, 1977, with instructions that if one committee 
reports, the other committees have 30 days to report or be discharged.

                     legislative line item veto act

 Mr. DOMENICI. Mr. President, I introduce legislation to give the 
President a legislative line-item veto. I am particularly pleased to be 
joined by the distinguished ranking minority member of the Senate 
Budget Committee, Senator Exon, and Senators Craig, Bradley, and Dole 
in introducing this legislation. We have a bipartisan bill that I think 
will enjoy strong support in the Senate and has the best chance of 
becoming law.
  The American people are demanding greater accountability for the 
decisions that Congress makes. If Congress includes provisions in 
legislation that provide new spending that cannot stand on its merits, 
then there should be a procedure to extract this funding. The 
legislation we introduce today provides such a procedure.
  Mr. President, there is a great deal of support for an item veto. All 
but two Presidents in the 20th century have expressed their support for 
an item veto authority. President Clinton campaigned on a promise that 
he could cut spending by $10 billion from the enactment of a line-item 
veto. Forty-three of our 50 State Governors have some form of item veto 
authority. Finally, the House, even under Democratic control, has sent 
the Senate two separate rescission bills during the 103d Congress.
  There are two statutory line-item approaches that the Congress will 
consider. The first, Senator McCain's enhanced rescission bill would 
provide the President with unilateral authority to delete any item 
funded in an appropriations bill. In order to overturn the President's 
action, each House of the Congress would have to pass a bill of 
disapproval, send it to the President, and then override the 
President's veto of this bill of disapproval. This provides an 
extraordinary shift of power from the legislative branch to the 
executive branch.
  The second approach, embodied in the legislation that I introduce 
today, is frequently referred to as expedited rescission authority. 
Under this approach, the
 President proposes a rescission and is guaranteed a vote up or down by 
Congress on these proposed rescissions.

  Our legislation is stronger than the enhanced rescission bill in many 
respects, but I will just mention two provisions. Our bill provides a 
``lock box'' to guarantee that any savings go to deficit reduction. It 
also extends this rescission authority to direct spending, the real 
culprit behind the growth in Federal spending, and targeted tax 
benefits.
  There is no question that discretionary spending can contribute to 
deficit reduction, but discretionary spending is a shrinking as a 
portion of the budget. Direct spending, spending outside the control of 
the appropriations process, will grow from 54 percent to 62 percent of 
the budget over the next 10 years.
  Mr. President, the Constitution grants the President the power of the 
sword and the Congress the power of purse. The President has a great 
deal of power as Commander-in-Chief as we have most recently seen in 
Haiti. I am not ready today to turn as much of Congress' power over the 
purse over to the President as provided for in Senator McCain's 
enhanced rescission proposal. But I do think there is a need to 
recalibrate the scales, balance them, and guarantee the President a 
vote on his or her rescission proposals.
  Finally, Mr. President, I would like to take a moment to commend the 
senior Senator from Idaho, Senator Craig, for his leadership on this 
legislation. The legislation I introduce today, in many respects, 
represents the work product of the distinguished Senator from Idaho. In 
addition, the legislation borrows heavily from previous legislation 
written by the senior Senator from Maine, Senator Cohen, and the 
efforts of the senior Senator from New Jersey to fight tax breaks in 
our laws.
  Mr. President, I ask unanimous consent that a brief description and 
the text of this legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 14

       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 ``Legislative Line Item Veto 
     Act''.

     SEC. 2. EXPEDITED CONSIDERATION OF CERTAIN PROPOSED 
                   RESCISSIONS AND REPEALS OF TAX EXPENDITURES AND 
                   DIRECT SPENDING.

       (a) In General.--Title X of the Congressional Budget and 
     Impoundment Control Act of 1974 (2 U.S.C. 621 et seq.) is 
     amended by adding after section 1012 the following new 
     section:


 ``expedited consideration of certain proposed rescissions and repeals 
                of tax expenditures and direct spending

       ``Sec. 1012A. (a) Proposed Cancellation of Budget Item.--
     The President may propose, at the time and in the manner 
     provided in subsection (b), the cancellation of any budget 
     item provided in any Act.
       ``(b) Transmittal of Special Message.--
       ``(1)(A) Subject to the time limitations provided in 
     subparagraph (B), the President 
     [[Page S174]] may transmit to Congress a special message 
     proposing to cancel budget items and include with that 
     special message a draft bill that, if enacted, would only 
     cancel those budget items as provided in this section. The 
     bill shall clearly identify each budget item that is proposed 
     to be canceled including, where applicable, each program, 
     project, or activity to which the budget item relates. The 
     bill shall specify the amount, if any, of each budget item 
     that the President designates for deficit reduction as 
     provided in paragraph (4).
       ``(B) A special message may be transmitted under this 
     section--
       ``(i) during the 20-calendar-day period (excluding 
     Saturdays, Sundays, and legal holidays) commencing on the day 
     after the date of enactment of the provision proposed to be 
     rescinded or repealed; or
       ``(ii) at the same time as the President's budget.
       ``(2) In the case of an Act that includes budget items 
     within the jurisdiction of more than one committee of a 
     House, the President in proposing to cancel such budget item 
     under this section shall send a separate special message and 
     accompanying draft bill for each such committee.
       ``(3) Each special message shall specify, with respect to 
     the budget item proposed to be canceled--
       ``(A) the amount that the President proposes be canceled;
       ``(B) any account, department, or establishment of the 
     Government to which such budget item is available for 
     obligation, and the specific project or governmental 
     functions involved;
       ``(C) the reasons why the budget item should be canceled;
       ``(D) to the maximum extent practicable, the estimated 
     fiscal, economic, and budgetary effect (including the effect 
     on outlays and receipts in each fiscal year) of the proposed 
     cancellation; and
       ``(E) all facts, circumstances, and considerations relating 
     to or bearing upon the proposed cancellation and the decision 
     to effect the proposed cancellation, and to the maximum 
     extent practicable, the estimated effect of the proposed 
     cancellation upon the objects, purposes, and programs for 
     which the budget item is provided.
       ``(4)(A) Not later than 5 days after the date of enactment 
     of a bill containing an amount designated by the President 
     for deficit reduction under paragraph (1), the President 
     shall--
       ``(i) with respect to a rescission bill, reduce the 
     discretionary spending limits under section 601 of the 
     Congressional Budget Act of 1974 for the budget year and each 
     outyear to reflect such amount; and
       ``(ii) with respect to a repeal of a tax expenditure or 
     direct spending, adjust the balances for the budget year and 
     each outyear under section 252(b) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 to reflect such amount.
       ``(B) Not later than 5 days after the date of enactment of 
     a bill containing an amount designated by the President for 
     deficit reduction under paragraph (1), the chairs of the 
     Committees on the Budget of the Senate and the House of 
     Representatives shall revise levels under section 311(a) and 
     adjust the committee allocations under section 602(a) to 
     reflect such amount.
       ``(c) Procedures for Expedited Consideration.--
       ``(1)(A) Before the close of the second day of session of 
     the Senate and the House of Representatives, respectively, 
     after the date of receipt of a special message transmitted to 
     Congress under subsection (b), the majority leader or 
     minority leader of each House shall introduce (by request) 
     the draft bill accompanying that special message. If the bill 
     is not introduced as provided in the preceding sentence in 
     either House, then, on the third day of session of that House 
     after the date of receipt of that special message, any Member 
     of that House may introduce the bill.
       ``(B) The bill shall be referred to the appropriate 
     committee or (in the House of Representatives) committees. 
     The committee shall report the bill without substantive 
     revision and with or without recommendation. The committee 
     shall report the bill not later than the seventh day of 
     session of that House after the date of receipt of that 
     special message. If the committee fails to report the bill 
     within that period, the committee shall be automatically 
     discharged from consideration of the bill, and the bill shall 
     be placed on the appropriate calendar.
       ``(C) A vote on final passage of the bill shall be taken in 
     the Senate and the House of Representatives on or before the 
     close of the 10th day of session that House after the date of 
     the introduction of the bill in that House. If the bill is 
     passed, the Clerk of the Senate or the House of 
     Representatives, as the case may be, shall cause the bill to 
     be engrossed, certified, and transmitted to the other House 
     within one calendar day of the day on which the bill is 
     passed.
       ``(2)(A) During consideration under this subsection in the 
     House of Representatives, any Member of the House of 
     Representatives may move to strike any proposed cancellation 
     of a budget item if supported by 49 other Members.
       ``(B) A motion in the House of Representatives to proceed 
     to the consideration of a bill under this subsection shall be 
     highly privileged and not debatable. An amendment to the 
     motion shall not be in order, nor shall it be in order to 
     move to reconsider the vote by which the motion is agreed to 
     or disagreed to.
       ``(C) Debate in the House of Representatives on a bill 
     under this subsection shall not exceed 4 hours, which shall 
     be divided equally between those favoring and those opposing 
     the bill. A motion further to limit debate shall not be 
     debatable. It shall not be in order to move to recommit a 
     bill under this subsection or to move to reconsider the vote 
     by which the bill is agreed to or disagreed to.
       ``(D) Appeals from decisions of the Chair relating to the 
     application of the Rules of the House of Representatives to 
     the procedure relating to a bill under this section shall be 
     decided without debate.
       ``(E) Except to the extent specifically provided in this 
     section, consideration of a bill under this section shall be 
     governed by the Rules of the House of Representatives. It 
     shall not be in order in the House of Representatives to 
     consider any rescission bill introduced pursuant to the 
     provisions of this section under a suspension of the rules or 
     under a special rule.
       ``(3)(A) During consideration of a bill under this 
     subsection in the Senate, any Member of the Senate may move 
     to strike any proposed cancellation of a budget item if 
     supported by 11 other Members.
       ``(B) It shall not be in order to move to reconsider the 
     vote by which the motion is agreed to or disagreed to.
       ``(C) Debate in the Senate on a bill under this subsection, 
     and all debatable motions and appeals in connection therewith 
     (including debate pursuant to subparagraph (D)), shall not 
     exceed 10 hours. The time shall be equally divided between, 
     and controlled by, the majority leader and the minority 
     leader or their designees.
       ``(D) Debate in the Senate on any debatable motion or 
     appeal in connection with a bill under this subsection shall 
     be limited to not more than 1 hour, to be equally divided 
     between, and controlled by, the mover and the manager of the 
     bill, except that in the event the manager of the bill is in 
     favor of any such motion or appeal, the time in opposition 
     thereto, shall be controlled by the minority leader or his 
     designee. Such leaders, or either of them, may, from time 
     under their control on the passage of a bill, allot 
     additional time to any Senator during the consideration of 
     any debatable motion or appeal.
       ``(E) A motion in the Senate to further limit debate on a 
     bill under this subsection is not debatable. A motion to 
     recommit a bill under this subsection is not in order.
       ``(F) If the Senate proceeds to consider a bill introduced 
     in the House of Representatives under paragraph (1)(A), then 
     any Senator may offer as an amendment the text of the 
     companion bill introduced in the Senate under paragraph 
     (1)(A) as amended if amended (under subparagraph (A)). Debate 
     in the Senate on such bill introduced in the House of 
     Representatives, and all debatable motions and appeals in 
     connection therewith (including debate pursuant to 
     subparagraph (D)), and any amendment offered under this 
     subparagraph, shall not exceed 10 hours minus such times (if 
     any) as Senators consumed or yielded back during 
     consideration of the companion bill introduced in the Senate 
     under paragraph (1)(A).
       ``(4) Debate in the House of Representatives or the Senate 
     on the conference report on any bill considered under this 
     section shall be limited to not more than 2 hours, which 
     shall be divided equally between the majority leader and the 
     minority leader. A motion further to limit debate is not 
     debatable. A motion to recommit the conference report is not 
     in order, and it is not in order to move to reconsider the 
     vote by which the conference report is agreed to or disagreed 
     to.
       ``(d) Amendments and Divisions Prohibited.--Except as 
     otherwise provided by this section, no amendment to a bill 
     considered under this section shall be in order in either the 
     Senate or the House of Representatives. It shall not be in 
     order to demand a division of the question in the House of 
     Representatives (or in a Committee of the Whole). No motion 
     to suspend the application of this subsection shall be in 
     order in the House of Representatives, nor shall it be in 
     order in the House of Representatives to suspend the 
     application of this subsection by unanimous consent.
       ``(e) Requirement To Make Available for Obligation.--Any 
     budget item proposed to be canceled in a special message 
     transmitted to Congress under subsection (b) shall not be 
     made available for obligation or take effect until the day 
     after the date on which either House rejects the bill 
     transmitted with that special message.
       ``(f) Definitions.--For purposes of this section--
       ``(1) the term `appropriation Act' means any general or 
     special appropriation Act, and any Act or joint resolution 
     making supplemental, deficiency, or continuing 
     appropriations;
       ``(2) the term `direct spending' shall have the same 
     meaning given such term in section 250(c)(8) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985;
       ``(3) the term `budget item' means--
       ``(A) an amount, in whole or in part, of budget authority 
     provided in an appropriation Act;
       ``(B) an amount of direct spending; or
       ``(C) a targeted tax benefit;
       ``(4) the term `cancellation of a budget item' means--
       ``(A) the rescission of any budget authority provided in an 
     appropriation Act;
     [[Page S175]]   ``(B) the repeal of any amount of direct 
     spending; or
       ``(C) the repeal of any targeted tax benefit; and
       ``(5) the term `targeted tax benefit' means any provision 
     which has the practical effect of providing a benefit in the 
     form of a different treatment to a particular taxpayer or a 
     limited class of taxpayers, whether or not such provision is 
     limited by its terms to a particular taxpayer or a class of 
     taxpayers. Such term does not include any benefit provided to 
     a class of taxpayers distinguished on the basis of general 
     demographic conditions such as income, number of dependents, 
     or marital status.''.
       (b) Exercise of Rulemaking Powers.--Section 904 of the 
     Congressional Budget Act of 1974 (2 U.S.C. 621 note) is 
     amended--
       (1) in subsection (a), by striking ``and 1017'' and 
     inserting ``1012A, and 1017''; and
       (2) in subsection (d), by striking ``section 1017'' and 
     inserting ``sections 1012A and 1017''.
       (c) Clerical Amendments.--The table of sections for subpart 
     B of title X of the Congressional Budget and Impoundment 
     Control Act of 1974 is amended by inserting after the item 
     relating to section 1012 the following:

``Sec. 1012A. Expedited consideration of certain proposed rescissions 
              and repeals of tax expenditures and direct spending.''.
       (d) Effective Period.--The amendments made by this Act 
     shall--
       (1) take effect on the date of enactment of this Act;
       (2) apply only to budget items provided in Acts enacted on 
     or after the date of enactment of this Act; and
       (3) cease to be effective on September 30, 1998.

  Mr. CRAIG. Mr. President, I also wish to speak on S. 14 that has just 
been introduced by Budget Committee chairman Senator Domenici and also 
Senator Exon and myself. That is a new bill that will create a 
legislative line-item veto. We believe that is another important issue 
that the American people have been continually asking for for well over 
a decade now with calls the Congress refused to hear or to respond to. 
Now we think this new Congress will respond.
  While I remain a strong cosponsor of S. 4--S. 4 is the pure line-item 
veto that Senator McCain and Senator Coats have brought before this 
Senate year after year--I am also, in S. 14, offering an additional 
alternative.
  Make no confusion by my remarks. I will support the pure line-item 
veto S. 4. I think it is important that we give it a clean opportunity. 
But if that cannot be accomplished, I think it is important that the 
Budget Committee recognize, as they have with the introduction of S. 14 
by Senator Pete Domenici, an alternative piece of legislation of this 
type similar to that I introduced last year which also clearly allows 
the President to exercise a line-item veto and the Congress, through a 
procedure both timely and responsive, to address those items singled 
out by the President.
  These are important issues. It is important to the American people 
who are watching today the most historic event in 40 years to see a 
House sworn in, to see a Republican Speaker by the name of Newt 
Gingrich take his seat, or to see 11 new Members, Republican Members, 
come to the U.S. Senate and see a historic change once again in the 
leadership of the Senate; for those who observe us to know that we will 
address the Contract With America, we will address mandates, we will 
vote on a line-item veto, we will vote on a balanced budget amendment.
  That is what the American people have asked for. I believe that is 
what the 104th Congress will produce for them. That is historic. I 
think it is clearly important that we now respond to the mandate the 
American people sent us to this new Congress to address.
  In September of last year, I, along with a dozen of our Senate 
colleagues, introduced a legislative line-item veto as a part of S. 
2458, the Common Cents Budget Reform Act of 1994. This year, S. 14 
incorporates all the essentials of title III of that legislation and 
makes improvements in the fine tuning.
  This bill is also similar to H.R. 4600 in the 103d Congress, as it 
passed the House last June 14, by a vote of 342 to 69, after a weaker 
version was rejected.
  I want to acknowledge and commend the thoughtfulness and cooperation 
of the other original sponsors of S. 14. These also include the 
Senators from Maine [Mr. Cohen] and New Jersey [Mr. Bradley], both of 
whom have had their own legislation in this area, and the distinguished 
majority leader. They, along with the chairman and ranking member [Mr. 
Exon] of the Budget Committee have worked hard to achieve a meeting of 
the minds.
  As I have noted, I am also an original cosponsor of S. 4.
  In brief, S. 4 is an enhanced rescission bill, which would allow a 
Presidential rescission of spending to stand unless a disapproval of 
that rescission was enacted into law, presumably over the President's 
veto, which would require a two-thirds vote.
  Under S. 14 which contains an expedited rescission process, a 
Presidential proposal to cancel budget items--whether appropriations, 
narrowly targeted tax benefits, or new direct spending--would be given 
mandatory consideration in Congress, with approval or disapproval by 
majority vote concluded on an expedited basis.
  I prefer the pure approach taken in S. 4. But both versions are 
second, effective reforms. Both would increase accountability, promote 
fiscal responsibility, and improve public confidence in the budget 
process. This Senator is committed, and I call on my colleagues to 
commit, to passing the strongest legislative line item veto possible. 
The most effective line item veto is the one that becomes law.
  There are three principal reasons for Congress to pass this kind of 
budget reform:
  First, it would promote fiscal responsibility.
  According to GAO, since 1974, Presidents have requested 1,019 
individual rescissions of appropriations. Congress has approved 354--
34.5 percent--of these, amounting to 30 percent of the dollar volume of 
proposed rescissions.
  Excluding 1981, Congress has approved less than 20 percent of the 
dollar volume of rescissions proposed by Presidents.
  Congress has simply ignored $48 billion in rescissions proposed under 
title X of the 1974 Budget Act, refusing to take a vote on the merits.
  Alone, a line-item veto is not going to be enough to balance the 
budget. However, it's routinely estimated that an additional $10 
billion a year in discretionary spending could be saved this way. To 
quote the late Senator Everett Dirksen, and adjust him for inflation: 
``$10 billion here, $10 billion there, pretty soon we're talking about 
real money.''
  On the tax side, public cynicism regarding Congress has grown with 
increased attention to provisions, hidden away in large tax bills, 
which benefit narrow interests and special constituencies.
  For example, in H.R. 11, passed late in 1992--but vetoed, there were 
50 special tax provisions that cost more than the enterprise zones that 
were supposed to be the centerpiece of the bill.
  We've all heard the horror stories about tax breaks that benefit one 
sports stadium, one wealthy family, one large corporation, Our 
constituents have heard those stories, too. They're demanding that 
things change.
  Second, it would improve legislative accountability and produce a 
more thoughtful legislative process.
  A line-item veto would cast an additional dose of sunlight on the 
legislative process.
  All too often, large bills include individual items that would never 
stand up to public scrutiny.
  We're all familiar with the rush to get the legislative trains out on 
time. That means bills and reports spanning hundreds of pages that 
virtually no one is able to read--much less digest--in the day or two 
that they are voted on.
  Moreover, any more, virtually every appropriations bill--even the 13 
regular bills--and certainly every tax bill, is a huge bill.
  Knowing that any individual provision may have to return to Congress 
one more time to stand on its own merits will promote more responsible 
legislation in the first place.
  Third, it would improve executive accountability.
  There is always some concern that any form of line-item veto or 
expedited rescission process would transfer too much power from the 
Congress to the President.
  But there's another side to that coin.
  Many of us on both sides of the aisle have suggested, at different 
times, that Presidents aren't always serious about the rescission 
messages they send to Congress, or that the volume of rescissions they 
propose don't live up to their tough talk about what they would do if 
they had a line-item veto.
  [[Page S176]] I think it's time to call the President's bluff--and I 
mean every President, because this is a bipartisan issue.
  Already we are seeing groups like Citizens Against Government Waste 
and others come up with billions of dollars in long lists of pork 
items. Once we give the President expedited rescission authority, he or 
she will have to answer to the people if the use of that authority 
doesn't match the Presidential rhetoric.
  In particular, in S. 14, we give the President the chance to 
designate how much of his or her rescissions savings would be applied 
to the deficit through the use of a lockbox, or deficit reduction 
account.
  Under this expedited rescission procedure, Congress would not lose 
the power of the purse, but the power of the spotlight would be 
restored to the President.
  In conclusion:
  I commend to the attention of my colleagues both S. 4 and S. 14, and 
urge prompt consideration. This year, I believe, we will enact a line 
item veto law, and I look forward to this long overdue reform.
                                 ______

      By Mr. MOYNIHAN:
  S. 15. A bill to provide that professional baseball teams and leagues 
composed of such teams shall be subject to the antitrust laws; to the 
Committee on the Judiciary.


                   national pastime preservation act

 Mr. MOYNIHAN. Mr. President, in his book, ``God's Country and Mine,'' 
the author Jacques Barzun, a former history professor at Columbia 
University, wrote ``Whoever wants to know the heart and mind of America 
had better learn baseball. * * *''
  Baseball is America's national pastime. It was invented, at least 
according to the view espoused by New Yorkers, by General Abner 
Doubleday in Cooperstown, NY, in 1839. Today it is deeply embedded in 
our culture.
  Yet in recent years the game has become troubled. Baseball has had 
eight work stoppages over the last two decades, more than in all other 
professional sports combined. The existing strike has been with us 
since August, and no end is in sight. The 1995 season is in grave 
jeopardy. Indeed, many observers believe the future of baseball itself 
is in peril.
  The current difficulties may be traced back to 1922, when Justice 
Oliver Wendell Holmes delivered the opinion of the U.S. Supreme Court 
in Federal Baseball v. National League, 259 U.S. 200. It was therein 
decided that the Sherman Act did not apply to exhibitions of baseball 
because baseball was not interstate commerce.
  The Supreme Court has considered this matter on two subsequent 
occasions: In 1953 in Toolson v. New York Yankees, 346 U.S. 356, and in 
1972 in Flood v. Kuhn, 407 U.S. 258. In Flood, the most recent 
pronouncement, the Court concluded that the antitrust exemption was an 
``anomaly'' and an ``aberration confined to baseball'' and that 
``professional baseball is a business and it is engaged in interstate 
commerce.'' Even so, the Court refused to reverse its 1922 decision in 
Federal Baseball. Justice Blackman, delivering the opinion of the Court 
in Flood, wrote:

       If there is any inconsistency or illogic in all this, it is 
     an inconsistency and illogic of long standing that is to be 
     remedied by the Congress and not by this Court.

  This decision clearly laid responsibility for baseball's antitrust 
exemption on Congress. It also explicitly recognized baseball's 
evolution into a major industry. George F. Will aptly described this 
transformation in his bestselling book ``Men at Work'':

       It has been said that baseball in the pre-Civil War era 
     taught a puritanical America the virtues of play. But 
     industrialists of the Gilded Age would approve of the way 
     baseball has become a big business. Fifty years ago baseball 
     was a comparatively mom-and-pop operation. Sunday play was 
     not permitted in Pittsburgh and Philadelphia until 1934. In 
     1922 the U.S. Supreme Court held, for purposes of antitrust 
     regulations, that baseball is not a business. Today sports 
     columnist Jim Murray says, ``If it isn't, General Motors is a 
     sport.''

  As a result of this anomaly in American law, Mr. President, the World 
Series was cancelled in 1994 for the first time since 1904. With none 
of the legal restraints that prevent other businesses from engaging in 
anticompetitive behavior, the baseball team owners are free to act as a 
cartel. To end this monopoly, Congress must remove baseball's antitrust 
exemption and subject the game to the same rules of law that apply to 
all other major league sports.
  This is why I am introducing today the National Pastime Preservation 
Act, a bill to repeal the antitrust exemption for major league 
baseball. It may not solve all of baseball's troubles, but it is a 
necessary step and one that is decades overdue. Many Members of 
Congress have begun to examine this issue more closely in view of the 
seeming intractability of the strike. My friend Senator Orrin Hatch, 
the new chairman of the Judiciary Committee, has indicated that he 
supports repealing the exemption and is prepared to move a bill quickly 
through his committee. I look forward to working with him and other 
Members of Congress who share our concern about the future of major 
league baseball in America.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 15

       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 ``National Pastime 
     Preservation Act of 1995''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) the business of organized professional baseball is in, 
     or affects, interstate commerce; and
       (2) the antitrust laws should be amended to reverse the 
     result of the decisions of the Supreme Court of the United 
     States in Federal Baseball Club of Baltimore, Inc. v. 
     National League of Professional Baseball Clubs, 259 U.S. 200 
     (1922), Toolson v. New York Yankees, Inc., 346 U.S. 356 
     (1953), and Flood v. Kuhn, 407 U.S. 258 (1972), which 
     exempted baseball from coverage under the antitrust laws.

     SEC. 3. APPLICATION OF ANTITRUST LAWS TO PROFESSIONAL 
                   BASEBALL.

       The Clayton Act (15 U.S.C. 12 et seq.) is amended by adding 
     at the end the following new section:
       ``Sec. 27. (a) In General.--Except as provided in Public 
     Law 87-331 (15 U.S.C. 291 et seq.) (commonly known as the 
     `Sports Broadcasting Act of 1961'), the antitrust laws shall 
     apply to the business of organized professional baseball.
       ``(b) Application of Section.--This section--
       (1) shall apply to any agreement that is in effect on or 
     after the date of enactment of this section and to conduct 
     engaged in after that date in furtherance of that agreement 
     or in furtherance of any other object; but
       (2) shall not apply to conduct engaged in before that 
     date.''.
                                 ______

      By Mr. DOLE:
  S. 16. A bill to establish a Commission to review the dispute 
settlement reports of the World Trade Organization, and for other 
purposes; to the Committee on Finance.


                wto dispute settlement review commission

  Mr. DOLE. Mr. President, just over 1 month ago, in consecutive 
special sessions, both Houses of Congress passed a landmark bill 
implementing the new GATT Agreement. The Agreement establishes a new 
international body, the World Trade Organization, to oversee with 
unprecedented authority the growth and development of international 
trade into the 21st century.
  I heard from Americans across the country in the days and weeks 
leading up to the vote. They wanted to know what effect the WTO would 
have on U.S. sovereignty. People from all over Kansas and just about 
everywhere else were deeply concerned that this entirely new 
international organization would rob us of our freedom. I set out to 
identify those things in this new organization that had the greatest 
potential to go awry, that might end up harming instead of helping U.S. 
interests in global trade. I believe the legislation I am introducing 
today goes a long way toward ensuring that America retains full control 
of her destiny, that no international organization staffed by unelected 
bureaucrats will dictate what we do here at home.
  I hope my colleagues understand, and I want the American people to 
understand, that the World Trade Organization is an experiment. It is 
an experiment that Congress has endorsed. But we have not done so 
unconditionally. Far from it. We have not signed away American 
sovereignty. To the contrary, Mr. President, we intend to scrutinize 
this institution--the WTO--to ensure that its every act is consistent 
with the interests of the United States.
  [[Page S177]] The WTO is an organization which is on trial. I know it 
is just starting out, just beginning the process of establishing 
itself. The outcome of that trial will depend on these early actions, 
on the strict observance by the WTO of its mandate, and in particular 
on the results of the dispute settlement mechanism.
  An effective dispute settlement mechanism was one of the major 
negotiating objectives for the United States. In the GATT talks, the 
United States sought to have binding and automatic dispute settlement. 
Trade disputes would be put to international panels, and the defendant 
would be deprived of any means of blocking the result. The United 
States supported this idea out of frustration largely with our European 
friends who maintained agricultural policies that adversely affected 
every other agricultural exporting nation.
  All other nations agreed with our proposal, obviously from a variety 
of motivations, not always identical with our own. They largely 
objected to our use of what they called our ``unilateral measures,'' 
actions which we have taken to defend our national
 commerical interests against their dumped and subsidized goods, or 
occasionally using our leverage of access to the world's largest, most 
open market to pry open the markets of others.

  Despite different motivations, for the first time in any 
international forum, there will be binding dispute settlement. This 
means that no nation will be able to prevent the result from being 
accepted by the body of nations in the WTO. The defendant will incur 
costs of various kinds if it ignores the findings of a dispute 
settlement panel--costs in terms of international condemnation, in 
terms of weakening international respect for the trading rules, and in 
terms of possible internationally sanctioned retaliation against its 
goods.
  This places a heavy burden on the new dispute settlement system, and 
all who manage it and participate in it.
  Make no mistake, the future of the World Trading System depends on 
this new dispute settlement process being used prudently and 
administered wisely. Those of us who voted for the GATT Agreement knew 
these risks when we accepted the overall package. There was no option 
for us, or for any other country, to pick and choose among the parts of 
the Agreement or to make any modifications.
  Therefore, we must do what we can with the Agreement that was 
negotiated, and make a good faith effort to make it work well, to 
further international trade and American national commercial interests.
  President Clinton assured me in this connection last month as we 
approached the vote on the GATT Agreement that he and his 
administration would fully support my effort to ensure that U.S. 
interests will be protected. Working with Ambassador Kantor, I 
developed a proposal, which I am introducing today, that will give the 
fullest possible protection against abuses by the WTO, and yet allow us 
to enjoy all of the benefits of the GATT Agreement.
  My proposal establishes the WTO Dispute Settlement Review Commission. 
It will be composed of five Federal appellate judges, appointed by the 
President in consultation with Congress. The Commission will be 
empowered to review every adverse decision produced by the WTO dispute 
settlement process. In cases where the dispute settlement panels 
adhered to the proper standard of review, and where they did not exceed 
or abuse their authority, no further action will be taken. But if a 
panel decision reaches an inappropriate result that amounts to abuse of 
its mandate, the Review Commission would transmit that determination to 
Congress. Any Members would then be permitted to introduce a privileged 
resolution requiring renegotiation of the WTO dispute settlement rules. 
After three determinations of inappropriate decisions by
 dispute settlement panels, any Member could introduce a resolution to 
withdraw from the WTO. I call this process ``Three strikes and we're 
out.''

  The United States is only one country, but we are the one most 
capable of exercising international leadership. My proposal today is a 
way to exercise that needed leadership.
  I want to avoid the worst of all possible results--a kind of 
nightmare scenario in which panelists who may come from countries whose 
firms engage in widespread dumping, whose governments heavily subsidize 
industry, agriculture, and services, and whose governments fail to live 
up to a reasonable standard of antitrust enforcement, advised by a WTO 
secretariat of international bureaucrats with an agenda of their own to 
modify existing international trade amendments, abuse their role, and 
reach inappropriate results.
  I am not making a prediction that such a scenario will occur. I am 
saying that the knowledge of the existence of a highly competent, 
impartial Commission of judges in the United States overseeing in 
detail the operation of these panels will serve as a protection against 
that outcome. If the dispute settlement process proves tyrannical and 
abusive rather than fair and impartial, the United States will be well 
on the road to withdrawal from the WTO.
  Mr. President, I ask unanimous consent that the bill and a letter to 
me from Ambassador Mickey Kantor dated today be inserted in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 16

       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 ``WTO Dispute Settlement 
     Review Commission Act''.

     SEC. 2. CONGRESSIONAL FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds the following:
       (1) The United States joined the World Trade Organization 
     as a founding member with the goal of creating an improved 
     global trading system.
       (2) The American people must receive assurances that United 
     States sovereignty will be protected, and United States 
     interests will be advanced, within the global trading system 
     which the WTO will oversee.
       (3) The survival of the new WTO requires the continuation 
     of both trade liberalization and the ability to respond 
     effectively to unfair or otherwise harmful trade practices.
       (4) United States support for the WTO depends upon 
     obtaining mutual trade benefits through the openness of 
     foreign markets and the maintenance of effective United 
     States and WTO remedies against unfair or otherwise harmful 
     trade practices.
       (5) Congress passed the Uruguay Round Agreements Act based 
     upon its understanding that effective trade remedies would 
     not be eroded. These remedies are essential to continue the 
     process of opening foreign markets to imports of goods and 
     services and to prevent harm to American industry and 
     agriculture particularly through foreign dumping and 
     subsidization.
       (6) The continued support of the Congress for the WTO is 
     dependent upon a WTO dispute settlement system that--
       (A) operates in a fair and impartial manner;
       (B) does not add to the obligations of or diminish the 
     rights of the United States under the Uruguay Round 
     agreements; and
       (C) does not exceed its authority, scope, or established 
     standard of review.
       (b) Purpose.--It is the purpose of this Act to provide for 
     the establishment of the WTO Dispute Settlement Review 
     Commission to achieve the goals described in subsection 
     (a)(6).

     SEC. 3. ESTABLISHMENT OF COMMISSION.

       (a) Establishment.--There is established a commission to be 
     known as the WTO Dispute Settlement Review Commission 
     (hereafter in this Act referred to as the ``Commission'').
       (b) Membership.--
       (1) Composition.--The Commission shall be composed of 5 
     members all of whom shall be judges of the Federal judicial 
     circuits and shall be appointed by the President, after 
     consultation with the Majority Leader and Minority Leader of 
     the House of Representatives, the Majority Leader and 
     Minority Leader of the Senate, the chairman and ranking 
     member of the Committee on Ways and Means of the House of 
     Representatives, and the chairman and ranking member of the 
     Committee on Finance of the Senate.
       (2) Date.--The appointments of the members of the 
     Commission shall be made no later than 60 days after the date 
     of the enactment of this Act.
       (c) Period of Appointment; Vacancies.--
       (1) In general.--Members of the Commission first appointed 
     shall each be appointed for a term of 5 years. After the 
     initial 5-year term, 3 members of the Commission shall be 
     appointed for terms of 3 years and the remaining 2 members 
     shall be appointed for terms of 2 years.
       (2) Vacancies.--
       (A) In general.--Any vacancy on the Commission shall not 
     affect its powers, but shall be filled in the same manner as 
     the original appointment and shall be subject to the same 
     conditions as the original appointment.
     [[Page S178]]   (B) Unexpired term.--An individual chosen to 
     fill a vacancy shall be appointed for the unexpired term of 
     the member replaced.
       (d) Initial Meeting.--No later than 30 days after the date 
     on which all members of the Commission have been appointed, 
     the Commission shall hold its first meeting.
       (e) Meetings.--The Commission shall meet at the call of the 
     Chairman.
       (f) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (g) Chairman and Vice Chairman.--The Commission shall 
     select a Chairman and Vice Chairman from among its members.

     SEC. 4. DUTIES OF THE COMMISSION.

       (a) Review of WTO Dispute Settlement Reports.--
       (1) In general.--The Commission shall review--
       (A) all reports of dispute settlement panels or the 
     Appellate Body of the World Trade Organization in proceedings 
     initiated by other parties to the WTO which are adverse to 
     the United States and which are adopted by the Dispute 
     Settlement Body, and
       (B) upon request of the United States Trade Representative, 
     any other report of a dispute settlement panel or the 
     Appellate Body which is adopted by the Dispute Settlement 
     Body.
       (2) Scope of review.--In the case of reports described in 
     paragraph (1), the Commission shall conduct a complete review 
     and determine whether--
       (A) the panel or the Appellate Body, as the case may be, 
     exceeded its authority or its terms of reference;
       (B) the panel or the Appellate Body, as the case may be, 
     added to the obligations of or diminished the rights of the 
     United States under the Uruguay Round agreement which is the 
     subject of report;
       (C) the panel or the Appellate Body, as the case may be, 
     acted arbitrarily or capriciously, engaged in misconduct, or 
     demonstrably departed from the procedures specified for 
     panels and Appellate Bodies in the applicable Uruguay Round 
     Agreement; and
       (D) the report of the panel or the Appellate Body, as the 
     case may be, deviated from the applicable standard of review, 
     including in antidumping, countervailing duty, and other 
     unfair trade remedy cases, the standard of review set forth 
     in Article 17.6 of the Agreement on Implementation of Article 
     VI of the General Agreement on Tariffs and Trade 1994.
       (3) Affirmative determination.--If the Commission makes an 
     affirmative determination with respect to the action of a 
     panel or an Appellate Body under subparagraph (A), (B), (C), 
     or (D) of paragraph (2), the Commission shall determine 
     whether the action of the panel or Appellate Body materially 
     affected the outcome of the report of the panel or Appellate 
     Body.
       (b) Determination; Report.--
       (1) Determination.--No later than 120 days after the date 
     of a report of a panel or Appellate Body described in 
     subsection (a)(1) is adopted by the Dispute Settlement Body, 
     the Commission shall make a written determination with 
     respect to matters described in subsections (a)(2) and 
     (a)(3).
       (2) Reports.--The Commission shall report the 
     determinations described in paragraph (1) to the Committee on 
     Ways and Means of the House of Representatives and the 
     Committee on Finance of the Senate.

     SEC. 5. POWERS OF THE COMMISSION.

       (a) Hearings.--The Commission may hold such hearings, sit 
     and act at such times and places, take such testimony, and 
     receive such evidence as the Commission considers advisable 
     to carry out the purposes of this Act.
       (b) Information From Interested Parties and Federal 
     Agencies.--
       (1) Notice of panel or appellate body report.--The United 
     States Trade Representative shall advise the Commission no 
     later than 5 days after the date the Dispute Settlement Body 
     adopts the report of a panel or Appellate Body that is 
     adverse to the United States and shall immediately publish 
     notice of such advice in the Federal Register, along with 
     notice of an opportunity for interested parties to submit 
     comments to the Commission.
       (2) Submissions and requests for information.--Any 
     interested party may submit comments to the Commission 
     regarding the panel or Appellate Body report. The Commission 
     may also secure directly from any Federal department or 
     agency such information as the Commission considers necessary 
     to carry out the provisions of this Act. Upon request of the 
     Chairman of the Commission, the head of such department or 
     agency shall furnish such information to the Commission.
       (3) Access to panel and appellate body documents.--The 
     United States Trade Representative shall make available to 
     the Commission all submissions and relevant documents 
     relating to the panel or Appellate Body report, including any 
     information contained in such submissions identified by the 
     provider of the information as proprietary information or 
     information treated as confidential by a foreign government.

     SEC. 6. REVIEW OF DISPUTE SETTLEMENT PROCEDURES AND 
                   PARTICIPATION IN THE WTO.

       (a) Affirmative Report by Commission.--
       (1) In general.--If a joint resolution described in 
     subsection (b)(1) is enacted into law pursuant to the 
     provisions of subsection (c), the President shall undertake 
     negotiations to amend or modify the rules and procedures of 
     the Understanding on Rules and Procedures Governing the 
     Settlement of Disputes to which such joint resolution 
     relates.
       (2) 3 affirmative reports by commission.--If a joint 
     resolution described in subsection (b)(2) is enacted into law 
     pursuant to the provisions of subsection (c), the approval of 
     the Congress, provided under section 101(a) of the Uruguay 
     Round Agreements Act, of the WTO Agreement shall cease to be 
     effective in accordance with the provisions of the joint 
     resolution and the United States shall cease to be a member 
     of the WTO.
       (b) Joint Resolutions Described.--
       (1) In general.--For purposes of subsection (a)(1), a joint 
     resolution is described in this paragraph, if it is a joint 
     resolution of the 2 Houses of Congress and the matter after 
     the resolving clause of such joint resolution is as follows: 
     ``That the Congress authorizes and directs the President to 
     undertake negotiations to amend or modify the rules and 
     procedures of the Understanding on Rules and Procedures 
     Governing the Settlement of Disputes relating to ____ with 
     respect to the affirmative determination submitted to the 
     Congress by the WTO Dispute Settlement Review Commission on 
     ____'', the first blank space being filled with the specific 
     rules and procedures with respect to which the President is 
     to undertake negotiations and the second blank space being 
     filled with the date of the affirmative determination 
     submitted to the Congress by the Commission pursuant to 
     section 4(b) which has given rise to the joint resolution.
       (2) Withdrawal resolution.--For purposes of subsection 
     (a)(2), a joint resolution is described in this paragraph, if 
     it is a joint resolution of the 2 Houses of Congress and the 
     matter after the resolving clause of such joint resolution is 
     as follows: ``That the Congress authorizes and directs the 
     President to undertake negotiations to amend or modify the 
     rules and procedures of the Understanding on Rules and 
     Procedures Governing the Settlement of Disputes relating to 
     ____ with respect to the affirmative report submitted to the 
     Congress by the WTO Dispute Settlement Review Commission on 
     ____ and if such negotiations do not result in a satisfactory 
     solution by ____, the Congress withdraws its approval, 
     provided under section 101(a) of the Uruguay Round Agreements 
     Act, of the WTO Agreement as defined in section 2(9) of that 
     Act'', the first blank space being filled with the specific 
     rules and procedures with respect to which the President is 
     to undertake negotiations, the second blank space being 
     filled with the date of the affirmative determination 
     submitted to the Congress by the Commission pursuant to 
     section 4(b) which has given rise to the joint resolution, 
     and the third blank space being filled with the date the 
     Congress withdraws its approval of the WTO Agreement.
       (c) Procedural Provisions.--
       (1) In general.--The requirements of this subsection are 
     met if the joint resolution is enacted in accordance with 
     this subsection, and--
       (A) in the case of a joint resolution described in 
     subsection (b)(1) the Congress adopts and transmits the joint 
     resolution to the President before the end of the 90-day 
     period (excluding any day described in section 154(b) of the 
     Trade Act of 1974), beginning on the date on which the 
     Congress receives an affirmative determination from the 
     Commission described in section 4(b), or
       (B) in the case of a joint resolution described in 
     subsection (b)(2), the Commission has made 3 affirmative 
     determinations described in section 4(b) during a 5-year 
     period, and the Congress adopts and transmits the joint 
     resolution to the President before the end of the 90-day 
     period (excluding any day described in section 154(b) of the 
     Trade Act of 1974), beginning on the date on which the 
     Congress receives the third such affirmative determination.
       (2) Presidential veto.--In any case in which the President 
     vetoes the joint resolution, the requirements of this 
     subsection are met, if each House of Congress votes to 
     override that veto on or before the later of the last day of 
     the 90-day period referred to in subparagraph (A) or (B), 
     whichever is applicable, or the last day of the 15-day period 
     (excluding any day described in section 154(b) of the Trade 
     Act of 1974) beginning on the date on which the Congress 
     receives the veto message from the President.
       (3) Introduction.--
       (A) Time.--A joint resolution to which this section applies 
     may be introduced at any time on or after the date on which 
     the Commission transmits to the Congress an affirmative 
     determination described in section 4(b), and before the end 
     of the 90-day period referred to in subparagraph (A) or (B), 
     as the case may be.
       (B) Any member may introduce.--A joint resolution described 
     in subsection (b) may be introduced in either House of the 
     Congress by any Member of such House.
       (4) Expedited procedures.--
       (A) General rule.--Subject to the provisions of this 
     subsection, the provisions of subsections (b), (d), (e), and 
     (f) of section 152 of the Trade Act of 1974 (19 U.S.C. 
     2192(b), (d), (e), and (f)) apply to joint resolutions 
     described in subsection (b) to the same extent as such 
     provisions apply to resolutions under such section.
       (B) Report or discharge of committee.--If the committee of 
     either House to which a joint resolution has been referred 
     has not reported it by the close of the 45th day after its 
     introduction (excluding any day described in section 154(b) 
     of the Trade Act of 1974), such committee shall be 
     automatically discharged 
     [[Page S179]] from further consideration of the joint 
     resolution and it shall be placed on the appropriate 
     calendar.
       (C) Finance and ways and means committees.--It is not in 
     order for--
       (i) the Senate to consider any joint resolution unless it 
     has been reported by the Committee on Finance or the 
     committee has been discharged under subparagraph (B); or
       (ii) the House of Representatives to consider any joint 
     resolution unless it has been reported by the Committee on 
     Ways and Means or the committee has been discharged under 
     subparagraph (B).
       (D) Special rule for house.--A motion in the House of 
     Representatives to proceed to the consideration of a joint 
     resolution may only be made on the second legislative day 
     after the calendar day on which the Member making the motion 
     announces to the House his or her intention to do so.
       (5) Consideration of second resolution not in order.--It 
     shall not be in order in either the House of Representatives 
     or the Senate to consider a joint resolution (other than a 
     joint resolution received from the other House), if that 
     House has previously adopted a joint resolution under this 
     section relating to the same matter.
       (d) Rules of House of Representatives and Senate.--This 
     section is enacted by the Congress--
       (1) as an exercise of the rulemaking power of the House of 
     Representatives and the Senate, respectively, and as such is 
     deemed a part of the rules of each House, respectively, and 
     such procedures supersede other rules only to the extent that 
     they are inconsistent with such other rules; and
       (2) with the full recognition of the constitutional right 
     of either House to change the rules (so far as relating to 
     the procedures of that House) at any time, in the same 
     manner, and to the same extent as any other rule of that 
     House.

     SEC. 7. PARTICIPATION IN WTO PANEL PROCEEDINGS.

       (a) In General.--If the United States Trade Representative, 
     in proceedings before a dispute settlement panel or the 
     Appellate Body of the WTO, seeks--
       (1) to enforce United States rights under a multilateral 
     trade agreement, or
       (2) to defend a challenged action or determination of the 
     United States Government,

     a private United States person that is supportive of the 
     United States Government's position before the panel or 
     Appellate Body and that has a direct economic interest in the 
     panel's or Appellate Body's resolution of the matters in 
     dispute shall be permitted to participate in consultations 
     and panel proceedings. The Trade Representative shall issue 
     regulations, consistent with subsections (b) and (c), 
     ensuring full and effective participation by any such private 
     person.
       (b) Access to Information.--The United States Trade 
     Representative shall make available to persons described in 
     subsection (a) all information presented to or otherwise 
     obtained by the Trade Representative in connection with a WTO 
     dispute settlement proceeding. The United States Trade 
     Representative shall promulgate regulations implementing a 
     protective order system to protect information designated by 
     the submitting member as confidential.
       (c) Participation in Panel Process.--Upon request from a 
     person described in subsection (a), the United States Trade 
     Representative shall--
       (1) consult in advance with such person regarding the 
     content of written submissions from the United States to the 
     WTO panel concerned or to the other member countries 
     involved;
       (2) include, where appropriate, such person or its 
     appropriate representative as an advisory member of the 
     delegation in sessions of the dispute settlement panel;
       (3) allow such special delegation member, where such member 
     would bring special knowledge to the proceeding, to appear 
     before the panel, directly or through counsel, under the 
     supervision of responsible United States Government 
     officials; and
       (4) in proceedings involving confidential information, 
     allow appearance of such person only through counsel as a 
     member of the special delegation.

     SEC. 8. DEFINITIONS.

       For purposes of this Act:
       (1) Appellate body.--The term ``Appellate Body'' means the 
     Appellate Body established under Article 17.1 of the Dispute 
     Settlement Understanding.
       (2) Adverse to the united states.--The term ``adverse to 
     the United States'' includes any report which holds any law, 
     regulation, or application thereof by a government agency to 
     be inconsistent with international obligations under the 
     Uruguay Round Agreement (or a nullification or impairment 
     thereof), whether or not there are other elements of the 
     decision which favor arguments made by the United States.
       (3) Dispute settlement panel; panel.--The terms ``dispute 
     settlement panel'' and ``panel'' mean a panel established 
     pursuant to Article 6 of the Dispute Settlement 
     Understanding.
       (4) Dispute settlement body.--The term ``Dispute Settlement 
     Body'' means the Dispute Settlement Body administering the 
     rules and procedures set forth in the Dispute Settlement 
     Understanding.
       (5) Dispute settlement understanding.--The term ``Dispute 
     Settlement Understanding'' means the Understanding on Rules 
     and Procedures Governing the Settlement of Disputes referred 
     to in section 101(d)(16) of the Uruguay Round Agreements Act.
       (6) Uruguay round agreement.--The term ``Uruguay Round 
     Agreement'' means one or more of the agreements described in 
     section 101(d) of the Uruguay Round Agreements Act.
       (7) World trade organization; wto.--The terms ``World Trade 
     Organization'' and ``WTO'' mean the organization established 
     pursuant to the WTO Agreement.
       (8) WTO agreement.--The term ``WTO Agreement'' means the 
     Agreement Establishing the World Trade Organization entered 
     into on April 15, 1994.
                                                                    ____

                                        U.S. Trade Representative,


                            Executive Office of the President,

                                  Washington, DC, January 4, 1995.
     Hon. Robert Dole,
     Senate Majority Leader,
     U.S. Senate,
     Washington, DC.
       Dear Senator Dole: Thank you for providing me with a draft 
     earlier today of your bill to establish a commission to 
     review adverse dispute settlement reports of the World Trade 
     Organization (WTO) and to provide for expedited Congressional 
     action in the event that the commission makes affirmative 
     determinations under the criteria set out in the bill.
       Your bill reflects the basic agreement we reached on those 
     subjects in November. It also adds a new provision regarding 
     participation by private persons in WTO dispute settlement 
     proceedings, which I look forward to reviewing with you.
       I hope to have the chance to discuss with you shortly the 
     details of your bill.
           Sincerely,
                                                   Michael Kantor.
                                 ______

      By Mr. SPECTER (for himself and Ms. Moseley-Braun):
  S. 17. A bill to promote a new urban agenda, and for other purposes; 
to the Committee on Finance.


                 new urban agenda for america's cities

  Mr. SPECTER. Mr. President, as we begin the 104th Congress, we have 
an historic opportunity to make fundamental changes in the Federal 
government. We have an opportunity to reduce the size of Government, to 
have less spending, to reduce taxes, to attack crime control, and to 
speak with a strong voice on foreign policy. I think it is very 
important, as we approach the issue of reducing expenses, that we be 
very careful and handle the issue with a scalpel as opposed to a meat 
axe. As we look forward to cutting taxes, we should examine the capital 
gains tax which should have been cut long ago, and which will probably 
produce more revenue because of more transactions. It is something we 
should have accomplished a long time ago. But where we have tax cuts we 
should not add to the deficit, unless we first have spending cuts so 
that we know precisely what we are doing.
  I agree with key points in the Contract With America. I have long 
urged the adoption of a constitutional amendment for a balanced budget 
when it came to the floor of the Senate more than a decade ago. And I 
have urged the President to exercise the line-item veto on the 
fundamental proposition that the President currently has authority 
under the Constitution to do so because the Federal provision is 
identical with the provision of the Massachusetts State constitution, 
followed by other States, where the Governors, the chief executive 
officers, have exercised the line-item veto. I tried to persuade 
President Bush to exercise the line-item veto under existing authority, 
and he said, ``Arlen, my lawyer tells me I cannot do that.'' I made 
perhaps the tempered suggestion that he change lawyers. I quickly added 
that he should not tell the Bar Association about that. I have urged 
President Clinton to do the same and sent him a detailed memorandum of 
law. These are items within the Contract With America, and others, 
which we can implement to have very sensible change in the Federal 
Government.
  I hope, Mr. President, that the Congress does not move to the 
activist social agenda. There is nothing in the Contract With America 
on school prayer. Although I very fervently believe in the power of 
prayer, I think that it belongs in the churches and synagogues and 
homes, and not in the schools. I recall my own experience as a child of 
six or seven in Wichita, KS, when there was school prayer. I recall how 
uncomfortable I felt--perhaps not quite intimidated--but I hope that 
issue does not come before the Congress. If it reaches the floor of the 
U.S. Senate, it is a matter which will take weeks or perhaps months 
before it is concluded.
  [[Page S180]] Also, I hope that we do not occupy the time of the U.S. 
Senate on the abortion issue. Here again, I personally am very much 
opposed to abortion, but I believe it is a matter for the individual, 
again and for families or ministers, priests and rabbis. And I hope 
that we will spend our time tackling the tough, substantive issues 
which I think last November's mandate calls upon the Congress to do.
  It is my hope, Mr. President, that we will not become embroiled in 
the gridlock and partisanship which occupied so much of the 103d 
Congress. I think it would be a mistake for those on this side of the 
aisle, Republicans, to think that the mandate of last November's 
election is a blanket endorsement for whatever views we have. In many 
quarters--and I think with some cause--it is viewed that last 
November's election was a repudiation of the Congress controlled by the 
Democrats for what the administration had
 done. So it is my hope that we will tackle these core issues and that 
we will deal with them in a way which does not get us bogged down in 
partisanship but looks to the national interests.

  When we talk about the agenda, I hope, Mr. President, that we will 
tackle health care reform early on. I think that there are a number of 
divergent positions regarding health care reform, but a centrist 
position is one I will urge the Congress to adopt. I will be 
introducing today a bill designated as Senate bill 18, by 
prearrangement, which is the same number my health care reform bill had 
last year. Senate bill 18 preserves the free enterprise entrepreneurial 
system, which provides the best health care in the world to 
approximately 85 percent of the American people, and then targets the 
specific problems to extend coverage to people when they change jobs, 
to cover preexisting conditions, where we find in the courts that 
lawyers spend more time arguing about what is a preexisting condition 
than it would take the doctors to treat the condition.
  We will also deal with the issue of spiraling health care costs, with 
more managed care in Medicare, for example, where the costs are 
astronomical and have to be brought under control. And managed care has 
to be very carefully calibrated so that the care is adequate and with a 
view to more than a profit motive. A significant provision of my 
legislation is dealing with low-birthweight babies. They are a human 
tragedy, weighing no more than a pound, a human about as big as the 
size of my hand, carrying scars for a lifetime and enormous health care 
costs of more than $150,000 per child. Provisions in S. 18 are one way 
of how we can curtail health care costs.
  Mr. President, I intend to introduce today Senate bill 17, a number 
arranged by a designation which will deal with an urban agenda for 
America's cities, which I will introduce on behalf of Senator Carol 
Moseley-Braun and myself. I think it may well be the case that the 
Federal Government, Washington, DC, has given up on America's cities, 
and I think that is a tragedy. We have long seen the unsuccessfulness 
and difficulties of throwing money at the problems of cities.
  My legislation embodied in the urban agenda for American cities is 
patterned after proposals suggested by the distinguished mayor of 
Philadelphia, Edward Rendell, and has the backing of many mayors in 
America and the National League of Cities. What it intends to do is to 
provide assistance to the cities, without additional Federal 
expenditures, by means such as a requirement that Federal procurement 
be located in the distressed areas of America's cities; that 15 percent 
of foreign aid be expended in distressed areas of American cities; that 
items like the historical tax credit, scaled back in 1986, be restored. 
It has been a revenue loser for the Federal Government to strike that 
form of a deduction, which had been tremendously developmental for 
American cities and had produced a net effect of more money. These 
items which are encompassed within the legislative proposal by Mayor 
Rendell and embodied in this bill will do much for America's cities.
  I live in one of America's great cities, the city of Philadelphia. My 
experience goes beyond the big city to my birthplace of Wichita, KS, 
which is a moderate-size city in America, and to the town where I moved 
when I was 12, Russell, KS, a city of 5,000. The problems of the 
cities, Mr. President, are not left for the cities alone, but they 
travel across America. Today, you may find the gangs of Los Angeles, 
the Bloods and the Crips, in Des Moines, IA, or in Lancaster, PA. So 
that in moving to assist the cities, we are moving to assist all of 
America.
  Mr. President, I know my time is short with the period set aside for 
each Senator being limited to 10 minutes. I thank my colleagues, and 
the distinguished Senator from West Virginia, for awaiting my 
presentation.
  Mr. President, We convene in legislative session eight weeks after 
the most extraordinary congressional election in American history. With 
a voice that was consistent throughout the nation, the American people 
repudiated the policies of the current Administration and its 
congressional majorities, and for the first time in four decades gave 
control of both houses of Congress to Republicans.
  The very extraordinariness of the election that has brought us here 
guarantees that the 104th Congress that we begin today will be 
historically memorable. We have it in our power now, and as we work 
together over the next two years, to determine whether this Congress 
will be remembered as the moment when a new majority and new 
legislative leadership spawned a new American Renaissance of growth, 
prosperity and accomplishment--or as the moment when Republicans showed 
that they were no more capable or governing than Democrats.


                   the failures of the 103d congress

  The 103d Congress just concluded will find its own way into the 
history books, and I do not believe the references will be 
complimentary. The legislative accomplishment of the last two years 
were meager, as we failed to do anything to expand access to health 
care; as we failed to enact meaningful Congressional reform or curb the 
influence of lobbyists; as we failed in our efforts at campaign finance 
reform; and as we consigned our children to more years of deficit and 
more mountains of debt by failing to adopt a balanced budget amendment 
to the Constitution.
  Only in the area of international trade, with most Republicans 
joining some Democrats to support the NAFTA and GATT agreements--
agreements worked out under both Republican and Democratic 
administrations--was there real legislative cooperation to promote the 
best interests of the nation.
  We also passed a Crime Bill that, while not perfect, should help to 
make America safer by providing more police, building more prisons, 
expanding the federal death penalty, and reducing violence against 
women--but we did so in such a spirit of legislative acrimony that the 
meanness of the debate nearly overswept the bill's value as an 
anticrime measure.
  In fact, it may be that the spirit more than the substance of the 
103d Congress is what endures. If so, it will not be a pleasant 
recollection. In my 14 years in this body, I do not recall a session 
when party and partisanship, rather than honest debate on the merits of 
the issues, played so large a role in determining what legislation 
would be considered, or when, or how it would be voted upon.
  Take the issue of health care. Faced only with the alternatives of 
the massive bureaucracy and government regulation proposed by the 
Clinton administration, on the one hand, and the determination of some 
in my own caucus to do nothing, on the other, we accomplished nothing. 
That failure was almost entirely a failure of process--begun by the 
administration, which excluded Congressional Republicans from the 
formulation of its health care proposals; and compounded by some in the 
Republican caucus who decided that it was more important to deny the 
President whatever credit there might be in a good health care bill 
than to address the problems of those Americans who lacked coverage, or 
were not getting care. The enormous miscalculation of the Democratic 
congressional leadership in refusing even to bring up health care until 
late August, when they thought the coercive power of a summer recess 
would let them force a bad bill through, was the final nail in the 
coffin.
  Had we gone about our work differently, we could have had a good 
[[Page S181]] health care bill in the last Congress--a bill that solved 
the problems of portability, of pre-existing conditions and other
 impediments to health insurance access, while at the same time 
maintaining the private market and patient-physician choice system that 
has given the best health care in the world to 86% of Americans. What 
we needed, but did not have, was an open process of bipartisan 
consideration and debate, where the needs of working Americans were 
considered ahead of tactical maneuverings for the next election.

  For my part, I have been pushing for wise health care reform since my 
first term in the Senate, when I sponsored the ``Health Care Cost 
Containment Act'' of 1983. In the 102d and 103d congressional sessions, 
I made repeated attempts to bring the health care issue to the floor in 
a setting where the issue could receive full and fair consideration. My 
attempts were, unfortunately, blocked by the Democratic leadership. 
What we got, instead, were partisan efforts to pass the so-called 
Clinton and Mitchell health care bills--bills drafted without 
Republican participation, and bills which relied on massive federal 
bureaucracy rather than free market forces to produce health care 
reform.
  Regrettably, the very process of health care reform turned the issue 
into a matter of partisanship. The Administration's health care task 
force met in secret, illegally as it turns out, and made no effort to 
reach out to Republican Senators with a demonstrated commitment to 
health care reform to create a broad base of Congressional support that 
crossed party lines. Similarly, the Democratic leadership in both 
houses made no effort to build bipartisan support, believing instead 
that they could pass a bill by legislative hardball.
  The result, not surprisingly, was a bad bill--a bill based on more 
Big Government and social engineering; a bill that undercut the 
longstanding determination we've had that health care choices should be 
made by patients and their physicians and not faceless bureaucrats; a 
bill that in the name of reform threatened to raise premiums and reduce 
choice for working Americans; a bill that, once it was understood, had 
no chance of passage.
  The result of this partisan hubris, unfortunately, was also to 
preclude those Republicans and Democrats who were interested in forging 
a compromise on health care from having the opportunity to do so. The 
American people would have welcomed a health care reform package that 
relied on market mechanisms to expand coverage and control costs, but 
the social engineers of the Democratic left demanded a bill that put 
America's whole health care system under the thumb of more than 150 
federal agencies, while the naysayers of the Republican right were only 
too happy to use the Democrats' excess as an excuse to do nothing.
  The 103d Congress is likely to be remembered more than anything else 
as the Congress of gridlock--and not just for its failure to enact 
health care reform. Senators of both parties were more willing than 
ever to invoke pointless procedural rules, like requiring bills to be 
read in full, to keep the Senate in session nearly all night and to 
delay adjournments. The results were short tempers and frayed nerves--
and an erosion of some of the sense of collegiality that ought to have 
allowed us to cross boundaries of partisanship and ideology in search 
of compromise and in service of the people's best interests.
  Obstructionism found its practitioners on both sides of the aisle; it 
was the delaying tactics of a Democratic chairman that forced us to 
return for a special post-election session to take up the GATT issue. 
The inability of Democrats in the Senate to reach agreement with their 
own colleagues in the House prevented campaign finance reform from 
coming to the Senate floor until the final days of session, when it had 
no chance for passage.
  The record of the 103d Congress is one we would do well not to 
replicate.
          the 104th congress: a new spirit of bipartisanship?

  Fiorello La Guardia, a great Republican Mayor of New York, once 
observed that ``There is no Democratic or Republican way of cleaning 
the streets.'' La Guardia did not mean that there were not differences, 
longstanding and important, between the two major American parties, but 
rather that sometimes those differences need to be overcome in doing 
the work of governing. I agree, and I share Woodrow Wilson's wish, 
expressed while he was a candidate for President, that ``party battles 
could be fought with less personal passion and more passion for the 
common good.'' I urge in the strongest terms that the spirit of putting 
the common good ahead of party advantage be the spirit of the 104th 
Congress.
  In a spirit of accommodation, I urge my colleagues across the aisle 
to recognize in the results of the last election the people's rejection 
of high taxes, big government and bureaucracy--and the people's 
rejection of an entrenched and tired Congressional leadership. But in 
that same spirit, I urge my colleagues on this side of the aisle not to 
misread the results of the last election as a mandate for uncaring or 
do nothing government, or a government that turns its back on people's 
problems--because if we do, our majorities will be short lived.
  I urge all my colleagues in this body, and those in the House, to 
hear in the election just past the voice of the American people calling 
on us to leave behind partisanship, to end gridlock, to stop wrangling 
for tactical advantage, and instead to forge a new spirit of compromise 
and cooperation that will enable the 104th to be remembered as a 
Congress of accomplishment.
  Sometimes, as one of the giants of this body, Scoop Jackson, 
observed, ``[t]he best politics is no politics.''
  A spirit of bipartisanship that in critical moments puts the national 
interest above party has always been part of the American grain. In his 
Farewell Address, Washington warned that ``[t]he alternate domination 
of one faction over another, sharpened by the spirit of revenge natural 
of party dissension * * * is itself a frightful despotism.'' At the 
close of his life, Jefferson wrote that a democratic government, like 
ours, demands

       much compromise of opinion; that things even salutary 
     should not be crammed down the throats of dissenting brethren 
     * * * and that a great deal of indulgence is necessary to 
     strengthen habits of harmony and fraternity.

  In more recent years, a great American who was to be elected 
President as a Democrat, John F. Kennedy, spoke out while a Senator to 
remind us ``not [to] seek the Republican answer or the Democratic 
answer, but the right answer.'' Another great American who was to be 
elected President as a Republican, Dwight Eisenhower, said that ``[t]o 
define democracy in one word, we must use the word `cooperation.'''
  Even in the bitter 103d Congress, we did have moments where we could 
lay partisanship aside and cooperate in seeking ``right answers'' for 
the American people. I have already mentioned NAFTA and GATT. President 
Clinton had the full backing of Congressional Republicans for his 
prompt response to last fall's provocative Iraqi troop movements, just 
as many Democrats had supported President Bush's liberation of Kuwait. 
So we know that today legislative bipartisanship is not an 
impossibility.
  I respectfully suggest to my colleagues that bipartisanship and 
cooperation are now not only possibilities, they are imperatives. In 
the last Congress, we too often did our legislative business with our 
eyes fixed on the electoral calendar, more concerned with polls and 
``spin'' and ``fallout''--with getting credit and placing blame--than 
with meeting the needs of the nation. The voters responded by 
repudiating the Congressional majority with unprecedented unanimity. So 
if the 104th Congress does no better, we should not be surprised if the 
people render the same verdict on its new Congressional majority.
  As World War I ended, and controversy swirled over whether America 
would continue to play a role in maintaining a peaceful world, 
President Wilson asked Americans ``What difference does
 party make when mankind is involved?'' Today, when our schools do not 
educate; when violent crime spreads from city to suburb to rural 
America; when a sixth of our population cannot get health insurance; 
when teen pregnancy rates soar and our welfare system works more as a 
trap of dependency than a door to opportunity; when our cities decay 
as 
[[Page S182]] jobs flee and their tax bases erode; when our prosperity 
at home and our competitiveness abroad are held back by a government 
that overspends, overtaxes and overregulates--Today, we ought to ask 
what difference does party make when the future of the nation is at 
stake?
  America's needs are real enough. Let us spend these two years 
addressing them without rancor or bitterness, looking on both sides of 
the aisles for honest answers and constructive solutions. Let us not 
waste time worrying about who will get the ``credit'' for our 
successes, because in that divisive struggle lies the certainty that we 
will all be held accountable for our failures.


            A FRAMEWORK FOR MEETING THE NEEDS OF THE NATION

  I believe that the Congressional session we begin today has the 
potential for historic greatness. The work that the Republican leaders 
in both houses have already done, to reduce the size of Congressional 
staffs and budgets and to open up the legislative process, represents 
an excellent beginning. The fact that even before our session has 
begun, the President and Congressional leaders are engaged in a dialog 
over how best to cut spending and provide tax relief to middle class 
Americans is a welcome sign.
  The prospects are excellent in the coming Congress for real health 
care reform targeted at problems and not at supplanting the system; for 
welfare reform to end dependency and reduce irresponsible teen 
pregnancy; for measures to lower the deficit and cut federal spending, 
including a balanced budget amendment to the constitution; for tax 
reforms that provide relief to working Americans while promoting growth 
and prosperity; and for a key step in the fight against violent crime 
by ending the absurd federal court delays in carrying out death 
sentences.
  The prospects for these accomplishments, and more, are there. But to 
attain them, we must avoid the pitfalls of the last Congress. We must, 
as I have said, legislate responsibility and without concern for 
political advantage. We must resist intransigence, recognizing as 
another future Republican President, Gerald Ford, told Congress in his 
vice-presidential confirmation hearings, that ``[c]ompromise is the oil 
that makes governments go.''
  We must also be careful not to misread the electoral mandate. For my 
part, I am convinced that the last election was a message for smaller 
government, but not uncaring government; for lower taxes, but not an 
end to government's efforts to help the disadvantaged, improve access 
to health care, reform our educational system and fight crime. I 
believe that we will respond best to what the people want if we look to 
find ways to meet the needs of the nation not with government programs 
and bureaucracies, but by engaging the most basic engine of our 
prosperity and growth, the free enterprise system, in bettering the 
lives of all Americans.
  For my part, I am also convinced that the last election was most 
emphatically not a mandate for Congress to enmesh itself in legislating 
a divisive social agenda. We should not let issues like school prayer 
or choice on abortion, on which Americans of both parties are divided, 
divert us from what we can accomplish.
  In the last Congress, I supported legislative initiatives to make 
federal education monies available for experiments in the private 
management of public schools; to provide assistance to distressed urban 
areas without new taxes, new spending or new government programs under 
a New Urban Agenda; and to improve health care, increase access and 
contain costs through market reforms and narrowly targeted solutions to 
specific problems. These legislative proposals shared a common 
framework as federal responses to critical national needs in which the 
free market, rather than more big government, is the central instrument 
of help.
  This framework, I believe, can be the basis for a bipartisan effort 
in the new Congress as many Democrats, now free to shed the outmoded 
ideas of big-government liberalism, join with constructive Republicans 
who recognize that even as we lower taxes, cut spending and reduce 
government, there remains a vital role for a federal Government that 
meets its citizens needs.
  It is my intention in the coming weeks to offer my own legislative 
program consistent with these principles:
  I will offer a revised comprehensive health care bill to solve 
targeted problems by an incremental process of trial and modification, 
which respects the free enterprise system and preserves patient-
physician choice.
  I will offer a revised Urban Agenda Bill, aimed at directing existing 
federal spending into cities, reviving the historic tax credit, and 
otherwise promoting urban revitalization and job creation without new 
federal outlays, programs or taxes.
  I will offer legislation to further charter schools and the private 
management concept, in an effort to use market competition, and not 
bureaucrats, to spearhead a drive for educational excellence--while at 
the same time preserving and strengthening our public school systems.
  I will offer legislation to make our tax code more growth oriented, 
including capital gains tax relief to encourage investment, expanded 
IRA deductions to provided for educational and medical expenses, and 
reinitiation of selected tax credits, such as those for research and 
development, to promote business expansion and job creation.
  In combatting the nation's number one domestic issue I will offer 
legislation to end the absurd federal court delays in carrying out the 
death sentences handed down in state courts, which will help 
reinvigorate the deterrent aspect of our criminal law.
  I will press my Judiciary Committee Resolution to urge Presidential 
use of the line-item veto under existing constitutional law.
  And in my role as Chairman of the Senate Intelligence Committee, I 
will offer legislation to restructure our intelligence agencies and 
make the CIA more open to public scrutiny and more responsive to our 
national needs in the post-Cold War world.
  For my part, I look forward to constructive work with all my 
colleagues in this chamber and this Congress. The extraordinary 
election that has brought us here has focused extraordinary attention 
upon us. I believe that if we are big enough to lay partisanship aside, 
to identify the issues honestly and work constructively to seek 
solutions that are neither Republican nor Democratic but right, this 
can be a Congress of extraordinary accomplishment.
  Mr. President, I have sought recognition to introduce legislation 
that will deal with the plight of our Nation's cities and Washington's 
increasing neglect of them. We have an opportunity to correct that and 
this legislation, which I introduced in the 103d Congress along with my 
distinguished colleague, Senator Carol Moseley-Braun, is an effort to 
give our cities some much needed attention and to do so without massive 
infusions of cash.
  If we are to really address the very serious issues that we face--
jobs, teenage pregnancy, welfare reform, and other pressing issues--we 
cannot give up on our cities. There must be new strategies for dealing 
with the problems of urban America.
  The days of ``Great Society'' Federal-aid type programs are clearly 
past, but that is no excuse for the national government to turn a blind 
eye to the problem of the cities. The recent November elections 
reaffirm the basic principle of limited government. Limited government, 
however, does not mean an uncaring or do-nothing government.
  Urban areas remain integral to America's greatness, as centers of 
commerce, industry, education, health care, and culture. Yet urban 
areas, particularly the inner cities which tend to have a 
disproportionate share of our Nation's neediest and most disadvantaged, 
also have special needs which must be recognized. We must develop ways 
of aiding our cities that do not require either new taxes or more 
government bureaucracy.
  I commend the Mayor of Philadelphia, Edward Rendell, for his efforts 
to revitalize America's cities. Collaborating with the Conference of 
Mayors and the National League of Cities, he proposed last year a ``New 
Urban Agenda.'' Much of that proposal is the basis of this legislation.
  As a Philadelphia resident, I have firsthand knowledge of the growing 
problems that plague our cities. I have 
[[Page S183]] long supported a variety of programs to assist our cities 
such as funding for community development block grants and legislation 
to establish enterprise and empowerment zones. To encourage similar 
efforts, in April 1994 I took the opportunity to host my Senate 
Republican colleagues on a visit to explore urban problems in my 
hometown. We talked with people who want to obtain work, but have found 
few opportunities. We saw a crumbling infrastructure and its impact on 
residents and businesses. We were reminded of the devastating effect 
that the loss of inner city businesses and jobs has had on our 
neighborhoods in America's cities.
  What my Republican colleagues saw then in Philadelphia was the rule 
across our country and not the exception. There are many who do not 
know of city life, who are far removed from the cities and would not be 
expected to have any kept interest in what goes on in the big cities of 
America.
  I cite my own boyhood experience illustratively: Born in Wichita, KS, 
raised in Russell, a small town of 5,000 people on the plains of 
Kansas, where there is not much knowledge of what goes on in 
Philadelphia, PA, my home, or other big cities like Los Angeles, San 
Francisco, New York, Miami, Pittsburgh, Dallas, Detroit or Chicago.
  Those big cities are alien to people in much of America. But there is 
a growing understanding that the small towns are very much affected by 
the problems of the big cities.
  What are the problems? Crime for one. Take the Bloods and the Crips 
gangs from Los Angeles, CA, and similar gangs; they are all over 
America. They are in Lancaster, PA, in Des Moines, IA, Portland, OR, 
Jackson, MS, Racine, WI, and Martinsburg, WV. They are literally 
everywhere, big city and small city alike.
  In addition, according to the National League of Cities 1992 report, 
``State of America's Cities,'' 397 randomly selected municipal leaders 
said that after overall economic conditions, crime, and drugs were the 
second and third items that had caused their cities to deteriorate the 
most in the prior 5 years. In Atlanta, the number of crimes per 100,000 
people was 18,953, making it number one in 1991. We have all heard of 
that unenviable moniker for our Nation's capital--the ``murder 
capital.'' And from an employer's perspective, Mr. Scott Zelov, 
president of VIZ Manufacturing located in the Germantown section of 
Philadelphia, told my staff that his workers can't even walk to work in 
safety anymore.
  Joblessness and a less skilled work force is another problem. At the 
end of the 103d Congress, I asked my staff to meet with various urban 
leaders and business people during the recess in order to help us 
understand and develop ideas to meet the needs of urban America. One of 
the most important issues that business people--minority and 
nonminority alike--told my staff about was the need for greater 
incentives to help people work and find jobs to meet their skills.
  I have introduced legislation in the last two Congresses to provide 
targeted tax incentives for investing in small minority- or women-owned 
businesses. Small businesses provide the bulk of the jobs in this 
country. Many minority entrepreneurs, for instance, have told me and my 
staff that they are dedicated to staying in the cities to employ people 
there, but continue to confront capital access issues. My ``Minority 
and Women Capital Formation Act'' would help remove the capital access 
barriers thereby facilitating the ability of these entrepreneurs to 
grow their businesses and employee base.
  Municipal leaders are stressing many of the same concerns that 
business people are voicing. In a July 1994 National League of Cities 
report dealing with poverty and economic development, municipal leaders 
ranked inadequate skills and education of workers as one of the top 
three reasons, in addition to shortage of jobs and below-poverty wages, 
for poverty and joblessness in their cities. They said, according to 
the survey, that more jobs must be created through local economic 
development initiatives.
  This ``skills deficit'' is highlighted in an urban revitalization 
plan prepared in 1991 by the National Urban League called ``Playing to 
Win: A Marshall Plan for America's Cities.'' The report cites a 
statistic by the Commission on Achieving Necessary Skills which showed 
that 60 percent of all 21 to 25 year-olds lack the basic reading and 
writing skills needed for the modern workplace, and only 10 percent of 
those in that age group have enough mathematical competence for today's 
jobs.
  The economic problems our cities are facing are not easy to deal with 
or answer. In a report by the National League of Cities entitled ``City 
Fiscal Conditions in 1994,'' municipal officials from 551 cities 
answered questions on the economic state of their cities. For instance, 
17.4 percent reported that they expect their 1994 expenditures to 
exceed 1994 revenues. Seventy percent had to raise taxes or user fees 
during the past 12 months. Just over half of these cities, 54.4 
percent, said they were better able to meet their cities' financial 
needs in 1994 as compared to 1993.
  These numbers are of concern to me and I believe they highlight the 
need for Federal legislation to enhance the ability of cities to 
achieve competitive economic status. An added concern is that city 
managers are forced to balance cuts in services or enact higher taxes. 
Neither choice is easy and it often counteracts municipal efforts to 
retain residents or businesses.
  One issue, in particular, that is hurting many cities is the erosion 
of their respective tax base, evidenced particularly by middle-class 
flight to the suburbs. Mr. Ronald Walters, professor of political 
science at Howard University, in testimony before the Senate Banking 
Committee in April 1993, stated that in 1950, 23 percent of the 
American population lived outside central cities; by 1988, that number 
was up to 46 percent.
  In an October 9, 1994, article in the Washington Post magazine, David 
Finkel profiled ward 7 of Washington, DC, and wrote that ward 7 lost 
13,000 residents between 1980 and 1990 alone. He noted further that the 
population decline in Washington, DC, has averaged 10,000 people a year 
since 1990. These losses are devastating, not only to the financial 
stability of the city, but to the social fabric as well.
  On the financial side, statistics show that these people were earning 
an average of $30,000 and $75,000 a year. On the social side, roughly 
half of these are African-American middle-class families. By losing 
this critical demographic group, the city loses much of what makes it 
strong.
  Eroding tax bases are also evidenced by job-flight and job loss. 
Professor Walters testified that Chicago lost 47 percent of its 
manufacturing jobs between 1972 and 1982. Los Angeles lost 327,000 
jobs, half of which were in the manufacturing
 sector. More recently, according to census data, New York City had 
only 11.4 percent of its population employed in manufacturing. 
According to Stephen Moore and Dean Stansel in a March 1994 USA Today 
magazine article, since the 1970's more than 50 Fortune 500 company 
headquarters have fled New York City, representing a loss of over 
500,000 jobs.

  Pittsburgh, according to the same data, had only 8.5 percent of its 
population in manufacturing jobs. I received a letter dated October 31, 
1994, from Pittsburgh City Councilman Bob O'Connor in response to a 
letter I sent him on October 5th regarding legislative issues in the 
104th Congress. In his response, Councilman O'Connor simply says: ``we 
need jobs, jobs, jobs!'' I ask unanimous consent that a copy of 
Councilman O'Connor's letter be printed in the Record at the end of my 
statement.
  It is clear that the social fabric of our cities is also 
deteriorating. The issues of infant mortality and single-parent 
families are tragic problems that plague American urban areas. 
According to 1990 census data, Washington, DC ranked first out of 77 
cities for infant death rates per 1,000 live births in 1988. Detroit 
led the same number of cities in the percentage of one-parent 
households in 1990 at 53 percent.
  When I traveled to Pittsburgh in 1984, I saw 1-pound babies for the 
first time and I learned that Pittsburgh had the highest infant 
mortality rate of African-American babies of any city in the United 
States. It is a human tragedy for a child to be born weighing 16 ounces 
with attendant problems that last a lifetime. I wondered, how could 
that be true of Pittsburgh, which has such enormous medical resources. 
It was an amazing thing for me to see a 1-pound baby, about as big as 
my hand. 
[[Page S184]] Indeed, our cities are desperate, and the issues are 
heavy.
  Historically, cities have been the center of commerce and culture. 
Surrounding communities have relied on a thriving, growing economy in 
our metropolitan areas to provide jobs and opportunities. As I have 
noted though, over the past several decades, America's cities have 
struggled with the loss or exodus of residents, businesses and industry 
and other problems. The resulting tax base shrinkage causes enormous 
budget problems for city governments. Across the country, cities such 
as New York, Los Angeles, and the District of Columbia have experienced 
the flight of major industries to the suburbs.
  As a result, city residents who remain are faced with problems 
ranging from increased tax burdens and lesser services therefor to 
dwindling economic opportunities leading to welfare dependence and 
unemployment assistance. In the face of all this, what do we do?
  The Federal Government has attempted to revitalize our ailing urban 
infrastructure by providing Federal funding for transit and sewer 
systems, roads and bridges. I have supported this. For example, I have 
been a strong supporter of public transit which provides critically 
needed transportation services in urban areas. Transit helps cities 
meet clean air standards, reduce traffic congestion, and allows 
disadvantaged persons access to jobs. Federal assistance for urban 
areas, however, has become increasingly scarce as we grapple with the 
Nation's deficit and debt. Therefore, we must find alternatives to 
reinvigorate our Nation's cities so they can once again be economically 
productive areas providing promising opportunities for residents and 
neighboring areas.
  I believe there are ways Congress can assist the cities. Mayor 
Rendell has come up with this legislative package which contains many 
good ideas.
  First, recognizing that the Federal Government is the Nation's 
largest purchaser of goods and services, this legislation would require 
that no less than 15 percent of Federal Government purchases be made 
from businesses and industries within designated urban empowerment 
zones and enterprise communities. Similarly, it would require that not 
less than 15 percent of foreign aid funds be redeemed through purchases 
of products manufactured in urban empowerment zones and enterprise 
communities. I presented this idea to then-treasury Secretary Bentsen 
at a March 22, 1994, hearing of the Appropriations Subcommittee on 
Foreign Operations. The Secretary responded favorably.
  I have also written to several mayors across the country regarding 
this concept. By letter dated July 28, 1994, Miami Mayor Stephen P. 
Clark responded: ``Miami's selection as a procurement center for 
foreign aid would be a natural complement to our status as the Business 
Capital of the Americas.'' Miami
 has a wide range of businesses, such as high-technology firms and 
medical equipment manufacturers that would benefit from this provision.

  And by letter dated April 6, 1994, Harrisburg, Pennsylvania Mayor 
Stephen R. Reed wrote:

       Many of our existing businesses would no doubt seize upon 
     the opportunity to broaden their market by engaging in export 
     activity triggered by foreign aid vouchers * * *. Therefore, 
     in brief, we believe the voucher proposal has considerable 
     merit and that this city would benefit from the same.

  I ask unanimous consent that a copy of my letter and the letters from 
Mayor Clark and Mayor Reed be included in the Record at the end of my 
statement.
  To further enhance job opportunities within our urban centers, this 
legislation contains Mayor Rendell's recommendation that the 
manufacturing extension centers be located in the urban zones. These 
proposals do not require new expenditures of Federal funds. Instead, 
these proposals would require that a minimum amount of existing 
government procurement and foreign aid moneys be used to spur economic 
activity within urban areas.
  The second major provision of this bill would commit the Federal 
Government to play an active role in restoring the economic health of 
our cities by encouraging the location, or relocation, of Federal 
facilities in urban areas. To accomplish this, all Federal agencies 
would be required to prepare and submit to the President an urban 
impact statement detailing the impact that relocation or downsizing 
decisions would have on the affected city. Presidential approval would 
be required to place a Federal facility outside an urban area, or to 
downsize a city-based agency.
  The third critical component of this bill would revive and expand 
Federal tax incentives that were eliminated or restricted in the Tax 
Reform Act of 1986. These provisions offer meaningful incentives to 
business to invest in our cities. I am calling for the restoration of 
the Historic Rehabilitation Tax Credit which supports inner city 
revitalization projects.
  According to information provided by Mayor Rendell, there were 8,640 
construction jobs involved in 356 projects in Philadelphia from 1978 to 
1985 stimulated by the historic rehabilitation tax credit. In Chicago, 
302 projects prior to 1985 generated $524 million in investment and 
created 20,695 jobs. In St. Louis, 849 projects generated $653 million 
in investment and created 27,735 jobs.
  Nationally, according to National Park Service estimates for the 16 
years before the 1986 Act, the historic rehabilitation tax credit 
stimulated $16 billion in private investment for the rehabilitation of 
24,656 buildings and the creation of 125,306 homes which included 
23,377 low and moderate income housing units. The 1986 Tax Act 
dramatically reduced the pool of private investment capital available 
for rehabilitation projects. In Philadelphia, projects dropped from 356 
to 11 by 1988 from 1985 levels. During the same period, investments 
dropped 46 percent in Illinois and 92 percent in St. Louis.
  Another tool is to expand the authorization of commercial industrial 
development bonds. Under the Tax Reform Act of 1986, authorization for 
commercial industrial bonds was permitted to expire. Consequently, 
private investment in cities declined. For instance, according to Mayor 
Rendell, from 1986 (the last year commercial development bonds were 
permitted) to 1987, the total number of city-supported projects in 
Philadelphia was reduced by more than half.
  Industrial development or private activity bonds encourage private 
investment by allowing, under certain circumstances, tax-exempt status 
for projects where more than 10 percent of the bond proceeds are used 
for private business purposes. The availability of tax-exempt 
commercial industrial development bonds will encourage private 
investment in cities, particularly the construction of sports, 
convention and trade show facilities; free standing parking facilities 
owned and operated by the private sector, and, industrial parks.
  The bill I am introducing would allow this. It would also increase 
the small issue exemption--which means a way to help finance private 
activity in the building of manufacturing facilities--from $10 million 
to $50 million to allow increased private investment in our cities.
  A minor change in the Federal tax code related to arbitrage rebates 
on municipal bond interest earnings could also free additional capital 
for infrastructure and economic development by cities. Currently, 
municipalities are required to rebate to the Federal Government any 
arbitrage--a fancy financial term meaning interest earned in excess of 
interest paid on the debt--
 earned from the issuance of tax-free municipal bonds. I am informed 
that compliance, or the cost for consultants to perform the complicated 
rebate calculations, is actually costing municipalities more than the 
actual rebate owed to the government. This bill would allow cities to 
keep the arbitrage earned so that they can use it to fund city projects 
and for other necessary purposes.

  A fourth provision of this legislation provides needed reforms to 
regulations concerning affordable housing. This legislation provides 
language to study streamlining Federal housing program assistance to 
urban areas into ``block grant'' form so that municipal agencies can 
better serve local residents. The bill would improve the circumstances 
of public housing tenants by encouraging the location of newly built 
units on the lots of demolished older housing and allowing the original 
residents to 
[[Page S185]] move into the new units. This provision will contribute 
to community stability and promote urban renewal.
  Lastly, the development of urban areas can be accelerated by easing 
certain environmental restrictions on urban land known as ``brown 
fields.'' My legislative provides a ``governmental exception'' which 
will encourage the redevelopment of contaminated industrial sites by 
cities without assuming liability as ``potentially responsible 
parties'' under Superfund laws. While the cities would not be added as 
liable parties, liability would remain with others responsible under 
existing law. Increasingly, certain parcels of urban land that pose a 
very low environmental threat are left unused. If proper remediation 
occurs, they would be reused. This measure also contains a provision 
for a pilot powerplant designed to burn solid waste and create 
inexpensive energy for energy intensive industries. Such a plant will 
create jobs and help provide a solution for cities to deal with their 
treatment of waste.
  In the previous Congress, the New Urban Agenda Act, S. 2535, 
contained a section that would eliminate unfunded Federal mandates. I 
was a cosponsor of legislation in the 103d Congress, S. 993, introduced 
by my distinguished colleague from Idaho, Senator Kempthorne, that 
would eliminate unfunded Federal mandates. The language of S. 993 was 
written into this legislation when I introduced it in the 103d 
Congress. I have chosen to omit that provision from this bill because 
we will soon vote on free-standing unfunded Federal mandates 
legislation in this Congress.
  However, I want to mention some facts regarding how cities are 
adversely affected by unfunded mandates and how important it is that we 
enact such legislation promptly. In Senator Kempthorne's home State of 
Idaho, the city of Boise had to cover over $3 million for eight 
mandates in fiscal year 1993, according to a report done by the 
accounting firm of Price Waterhouse for the United States Conference of 
Mayors. I am informed that six Pennsylvania cities--Allentown, Altoona, 
Philadelphia, Pittsburgh, Wilkes-Barre, and York--faced 10 unfunded 
Federal mandates that cost them a collective total of $17 million for 
fiscal year 1993.
  All over the country the story is the same. In California, 54 cities 
had to cover a grand total $948.3 million in unfunded Federal mandates, 
with Los Angeles paying almost $582 million, according to the report 
done for the Conference of Mayors. In Texas, 27 cities had to cover 
$316 million in unfunded mandates, with Houston covering $154 million. 
New York had nine cities working to find $517 million and New York City 
was $475 million of that total. Illinois, in fiscal year 1993, had 22 
cities facing a total of $88 million, with Chicago comprising $70 
million of that number.
  Cities are facing incredible financial burdens from unfunded Federal 
mandates and must reallocate resources accordingly. Atlanta had to pay 
for nine unfunded Federal mandates--totaling almost $50 million--taking 
much needed funds from infrastructure projects, an overburdened 
criminal justice system, and housing programs. Phoenix has had to raise 
consumer's sewage and water rates to cover $36 million in unfunded 
Federal mandates, along with curtailing almost all of the city's 
service departments. The release from Federal mandates would allow 
Houston to allocate $154 million more for the maintenance of city 
property and public safety. The U.S. Conference of Mayors report 
presents similar facts on 314 cities. In addition, the National League 
of Cities report on city fiscal conditions in 1994 claims that unfunded 
Federal mandates was the second most important factor as a negative 
impact on city budgets. It is critical that as legislators we 
financially back the laws we write, or otherwise provide the 
appropriate assistance so that municipalities can comply.
  Mr. President, it may well be that America has given up on its 
cities. That is a stark statement, but it is one which I believe may be 
true--that America has given up on its cities. But this Senator has not 
done so. And I believe there are others in this body on both sides of 
the aisle who have not done so.
  As one of a handful of U.S. Senators who lives in a big city, I have 
seen firsthand both the problems and the promise of urban America. This 
legislation for our cities is good public policy. The plight of our 
cities must be of extreme concern to America. We can ill-afford for 
them to wither and die. I am committed to a new urban agenda that 
relies on market forces, and not welfare-statism, for urban 
revitalization. I invite the input and assistance of my colleagues in 
order to fashion a strong approach assisting the cities with their 
pressing problems.
  I ask unanimous consent that my bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 17

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``New Urban 
     Agenda Act of 1995''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.

       TITLE I--FEDERAL COMMITMENT TO URBAN ECONOMIC DEVELOPMENT

Sec. 101. Federal purchases from businesses in empowerment zones, 
              enterprise communities, and enterprise zones.
Sec. 102. Minimum allocation of foreign assistance for purchase of 
              certain United States goods.
Sec. 103. Preference for location of manufacturing outreach centers in 
              urban areas.
Sec. 104. Preference for construction and improvement of Federal 
              facilities in distressed urban areas.
Sec. 105. Definitions.

   TITLE II--TAX INCENTIVES TO STIMULATE URBAN ECONOMIC DEVELOPMENT.

Sec. 201. Treatment of rehabilitation credit under passive activity 
              limitations.
Sec. 202. Rehabilitation credit allowed to offset portion of 
              alternative minimum tax.
Sec. 203. Commercial industrial development bonds.
Sec. 204. Increase in amount of qualified small issue bonds permitted 
              for facilities to be used by related principal users.
Sec. 205. Simplification of arbitrage interest rebate waiver.

             TITLE III--COMMUNITY-BASED HOUSING DEVELOPMENT

Sec. 301. Block grant study.
Sec. 302. Demolition and disposition of public housing.

          TITLE IV--RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES

                   Subtitle A--Environmental Cleanup

Sec. 401. Exemption from liability for local governments that are 
              owners or operators of facilities in distressed urban 
              areas.
Sec. 402. Standards for remediation in distressed urban areas.

              Subtitle B--Environmental-Economic Recovery

Sec. 411. Findings.
Sec. 412. Definitions.
Sec. 413. Loan authority.
Sec. 414. Facility.
Sec. 415. Reinvestment of savings.
Sec. 416. Report to Congress.
     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) cities in the United States have been facing an 
     economic downhill trend in the past several years; and
       (2) a new approach to help such cities prosper is 
     necessary.
       (b) Purposes.--It is the purpose of this Act to--
       (1) provide various incentives for the economic growth of 
     cities in the United States;
       (2) provide an economic agenda designed to reverse current 
     urban economic trends; and
       (3) revitalize the jobs and tax base of such cities without 
     significant new Federal outlays.
       TITLE I--FEDERAL COMMITMENT TO URBAN ECONOMIC DEVELOPMENT
     SEC. 101. FEDERAL PURCHASES FROM BUSINESSES IN EMPOWERMENT 
                   ZONES, ENTERPRISE COMMUNITIES, AND ENTERPRISE 
                   ZONES.

       (a) Requirements.--The Office of Federal Procurement Policy 
     Act (41 U.S.C. 401 et seq.) is amended by adding at the end 
     the following new section:


     ``purchases from businesses in empowerment zones, enterprise 
                   communities, and enterprise zones

       ``Sec. 29. (a) Minimum Purchase Requirement.--Not less than 
     15 percent of the total amount expended by executive agencies 
     for the purchase of goods in a fiscal year shall be expended 
     for the purchase of goods from businesses located in 
     empowerment zones, enterprise communities, or enterprise 
     zones.
       ``(b) Recycled Products.--To the maximum extent practicable 
     consistent with applicable law, the head of an executive 
     agency 
     [[Page S186]] shall purchase recycled products that meet the 
     needs of the executive agency from businesses located in 
     empowerment zones, enterprise communities, or enterprise 
     zones.
       ``(c) Regulations.--The Federal Acquisition Regulations 
     shall include provisions that ensure the attainment of the 
     minimum purchase requirement set out in subsection (a).
       ``(d) Definitions.--In this section:
       ``(1) The term `empowerment zone' means a zone designated 
     as an empowerment zone pursuant to subchapter U of chapter 1 
     of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et 
     seq.).
       ``(2) The term `enterprise community' means a community 
     designated as an enterprise community pursuant to subchapter 
     U of chapter 1 of the Internal Revenue Code of 1986 (26 
     U.S.C. 1391 et seq.).
       ``(3) The term `enterprise zone' has the meaning given such 
     term in section 701(a)(1) of the Housing and Community 
     Development Act of 1987 (42 U.S.C. 11501(a)(1)).''.
       (b) Effective Date.--Section 29 of the Office of Federal 
     Procurement Policy Act, as added by subsection (a), shall 
     take effect on the date of the enactment of this Act and 
     shall apply with respect to fiscal years beginning after 
     September 30, 1995.
     SEC. 102. MINIMUM ALLOCATION OF FOREIGN ASSISTANCE FOR 
                   PURCHASE OF CERTAIN UNITED STATES GOODS.

       (a) Allocation of Assistance.--Notwithstanding any other 
     provision of law, effective beginning with fiscal year 1996, 
     not less than 15 percent of United States assistance provided 
     in a fiscal year shall be provided in the form of credits 
     which may only be used for the purchase of United States 
     goods produced, manufactured, or assembled in empowerment 
     zones, enterprise communities, or enterprise zones within the 
     United States.
       (b) United States Assistance.--As used in this section, the 
     term ``United States assistance'' means--
       (1) any assistance under the Foreign Assistance Act of 
     1961;
       (2) sales, or financing of sales under the Arms Export 
     Control Act; and
       (3) assistance and other activities under the Support for 
     East European Democracy (SEED) Act of 1989 (Public Law 101-
     179, as amended).
     SEC. 103. PREFERENCE FOR LOCATION OF MANUFACTURING OUTREACH 
                   CENTERS IN URBAN AREAS.

       (a) Designation.--In designating an organization as a 
     manufacturing outreach center under paragraph (1) of section 
     304(c) of the Stevenson-Wydler Technology Innovation Act of 
     1980, the Secretary of Commerce shall, to the maximum extent 
     practicable, designate organizations that are located in 
     empowerment zones, enterprise communities, or enterprise 
     zones.
       (b) Financial Assistance.--In utilizing a competitive, 
     merit-based review process to determine the manufacturing 
     outreach centers to which to provide financial assistance 
     under paragraph (3) of such section, the Secretary shall give 
     such additional preference to centers located in empowerment 
     zones, enterprise communities, and enterprise zones as the 
     Secretary determines appropriate in order to ensure the 
     continuing existence of such centers in such zones.

     SEC. 104. PREFERENCE FOR CONSTRUCTION AND IMPROVEMENT OF 
                   FEDERAL FACILITIES IN DISTRESSED URBAN AREAS.

       (a) Preference.--Notwithstanding any other provision of 
     law, in determining the location for the construction of a 
     new facility of a department or agency of the Federal 
     Government, in determining to improve an existing facility 
     (including an improvement in lieu of such construction), or 
     in determining the location to which to relocate functions of 
     a department or agency, the head of the department or agency 
     making the determination shall take affirmative action to 
     construct or improve the facility, or to relocate the 
     functions, in a distressed urban area.
       (b) Urban Impact Statement.--A determination to construct a 
     new facility of a department or agency of the Federal 
     Government, to improve an existing facility, or to relocate 
     the functions of a department or agency may not be made until 
     the head of the department or agency making the determination 
     prepares and submits to the President a report that--
       (1) in the case of a facility to be constructed--
       (A) identifies at least one distressed urban area that is 
     an appropriate location for the facility;
       (B) describes the costs and benefits arising from the 
     construction and utilization of the facility in the area, 
     including the effects of such construction and utilization on 
     the rate of unemployment in the area; and
       (C) describes the effect on the economy of the area of the 
     closure or consolidation, if any, of Federal facilities 
     located in the area during the 10-year period ending on the 
     date of the report, including the total number of Federal and 
     non-Federal employment positions terminated in the area as a 
     result of such closure or consolidation;
       (2) in the case of a facility to be improved that is not 
     located in a distressed urban area--
       (A) identifies at least one facility located in a 
     distressed urban area that would serve as an appropriate 
     alternative location for the facility;
       (B) describes the costs and benefits arising from the 
     improvement and utilization of the facility located in such 
     area as an alternative location for the facility to be 
     improved, including the effect of the improvement and 
     utilization of the facility so located on the rate of 
     unemployment in such area; and
       (C) describes the effect on the economy of such area of the 
     closure or consolidation, if any, of Federal facilities 
     located in such area during the 10-year period ending on the 
     date of the report, including the total number of Federal and 
     non-Federal employment positions terminated in such area as a 
     result of such closure or consolidation;
       (3) in the case of a facility to be improved that is 
     located in a distressed urban area--
       (A) describes the costs and benefits arising from the 
     improvement and continuing utilization of the facility in the 
     area, including the effect of such improvement and continuing 
     utilization on the rate of unemployment in the area; and
       (B) describes the effect on the economy of the area of the 
     closure or consolidation, if any, of Federal facilities 
     located in the area during the 10-year period ending on the 
     date of the report, including the total number of Federal and 
     non-Federal employment positions terminated in the area as a 
     result of such closure or consolidation; or
       (4) in the case of a relocation of functions--
       (A) identifies at least one distressed urban area that 
     would serve as an appropriate location for the carrying out 
     of the functions;
       (B) describes the costs and benefits arising from carrying 
     out the functions in the area, including the effect of 
     carrying out the functions on the rate of unemployment in the 
     area; and
       (C) describes the effect on the economy of the area of the 
     closure or consolidation, if any, of Federal facilities 
     located in the area during the 10-year period ending on the 
     date of the report, including the total number of Federal and 
     non-Federal employment positions terminated in the area as a 
     result of such closure or consolidation.
       (c) Applicability to Department of Defense Facilities.--The 
     requirements set forth in subsections (a) and (b) shall apply 
     to a determination to construct or improve any facility of 
     the Department of Defense, or to relocate any functions of 
     the Department, unless the President determines that the 
     waiver of the application of such requirements to the 
     facility, or to such relocation, is in the national interest.
       (d) Definition.--In this section, the term ``distressed 
     urban area'' means any city having a population of more than 
     100,000 that meets (as determined by the Secretary of Housing 
     and Urban Development) the qualifications for a distressed 
     community that are otherwise established for large cities and 
     urban counties under section 570.452(c) of title 24, Code of 
     Federal Regulations.

     SEC. 105. DEFINITIONS.

       As used in this title:
       (1) The term ``empowerment zone'' means a zone designated 
     as an empowerment zone pursuant to subchapter U of chapter 1 
     of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et 
     seq.).
       (2) The term ``enterprise community'' means a community 
     designated as an enterprise community pursuant to subchapter 
     U of chapter 1 of the Internal Revenue Code of 1986 (26 
     U.S.C. 1391 et seq.).
       (3) The term ``enterprise zone'' has the meaning given such 
     term in section 701(a)(1) of the Housing and Community 
     Development Act of 1987 (42 U.S.C. 11501(a)(1)).
   TITLE II--TAX INCENTIVES TO STIMULATE URBAN ECONOMIC DEVELOPMENT.
     SEC. 201. TREATMENT OF REHABILITATION CREDIT UNDER PASSIVE 
                   ACTIVITY LIMITATIONS.

       (a) General Rule.--Paragraphs (2) and (3) of section 469(i) 
     of the Internal Revenue Code of 1986 (relating to $25,000 
     offset for rental real estate activities) are amended to read 
     as follows:
       ``(2) Dollar limitations.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the aggregate amount to which paragraph (1) 
     applies for any taxable year shall not exceed $25,000 reduced 
     (but not below zero) by 50 percent of the amount (if any) by 
     which the adjusted gross income of the taxpayer for the 
     taxable year exceeds $100,000.
       ``(B) Phaseout not applicable to low-income housing 
     credit.--In the case of the portion of the passive activity 
     credit for any taxable year which is attributable to any 
     credit determined under section 42--
       ``(i) subparagraph (A) shall not apply, and
       ``(ii) paragraph (1) shall not apply to the extent that the 
     deduction equivalent of such portion exceeds--

       ``(I) $25,000, reduced by
       ``(II) the aggregate amount of the passive activity loss 
     (and the deduction equivalent of any passive activity credit 
     which is not so attributable and is not attributable to the 
     rehabilitation credit determined under section 47) to which 
     paragraph (1) applies after the application of subparagraph 
     (A).

       ``(C) $55,500 limit for rehabilitation credits.--In the 
     case of the portion of the passive activity credit for any 
     taxable year which is attributable to the rehabilitation 
     credit determined under section 47--
       ``(i) subparagraph (A) shall not apply, and
       ``(ii) paragraph (1) shall not apply to the extent that the 
     deduction equivalent of such portion exceeds--

       ``(I) $55,500, reduced by
       ``(II) the aggregate amount of the passive activity loss 
     (and the deduction equivalent of any passive activity credit 
     which is not so attributable) to which paragraph (1) applies 
     [[Page S187]] for the taxable year after the application of 
     subparagraphs (A) and (B).
       ``(3) Adjusted gross income.--For purposes of paragraph 
     (2)(A), adjusted gross income shall be determined without 
     regard to--
       ``(A) any amount includable in gross income under section 
     86,
       ``(B) any amount excludable from gross income under section 
     135,
       ``(C) any amount allowable as a deduction under section 
     219, and
       ``(D) any passive activity loss.''.
       (b) Conforming Amendments.--
       (1) Subparagraph (B) of section 469(i)(4) of the Internal 
     Revenue Code of 1986 is amended to read as follows:
       ``(B) Reduction for surviving spouse's exemption.--For 
     purposes of subparagraph (A), the $25,000 amounts under 
     paragraph (2)(A) and (2)(B)(ii) and the $55,500 amount under 
     paragraph (2)(C)(ii) shall each be reduced by the amount of 
     the exemption under paragraph (1) (determined without regard 
     to the reduction contained in paragraph (2)(A)) which is 
     allowable to the surviving spouse of the decedent for the 
     taxable year ending with or within the taxable year of the 
     estate.''.
       (2) Subparagraph (A) of section 469(i)(5) of such Code is 
     amended by striking clauses (i), (ii), and (iii) and 
     inserting the following:
       ``(i) `$12,500' for `$25,000' in subparagraphs (A) and 
     (B)(ii) of paragraph (2),
       ``(ii) `$50,000' for `$100,000' in paragraph (2)(A)'', and
       ``(iii) `$27,750' for `$55,500' in paragraph (2)(C)(ii).''.
       (3) The subsection heading for subsection (i) of section 
     469 of such Code is amended by striking ``$25,000''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service on or after the 
     date of the enactment of this Act, in taxable years ending on 
     or after such date.

     SEC. 202. REHABILITATION CREDIT ALLOWED TO OFFSET PORTION OF 
                   ALTERNATIVE MINIMUM TAX.

       (a) In General.--Section 38(c) of the Internal Revenue Code 
     of 1986 (relating to limitation based on amount of tax) is 
     amended by redesignating paragraph (2) as paragraph (3) and 
     by inserting after paragraph (1) the following new paragraph:
       ``(2) Rehabilitation investment credit may offset portion 
     of minimum tax.--
       ``(A) In general.--In the case of the rehabilitation 
     investment tax credit--
       ``(i) this section and section 39 shall be applied 
     separately with respect to such credit, and
       ``(ii) for purposes of applying paragraph (1) to such 
     credit--

       ``(I) the tentative minimum tax under subparagraph (A) 
     thereof shall be reduced by the minimum tax offset amount 
     determined under subparagraph (B) of this paragraph, and
       ``(II) the limitation under paragraph (1) (as modified by 
     subclause (I)) shall be reduced by the credit allowed under 
     subsection (a) for the taxable year (other than the 
     rehabilitation investment tax credit).

       ``(B) Minimum tax offset amount.--For purposes of 
     subparagraph (A)(ii)(I), the minimum tax offset amount is an 
     amount equal to--
       ``(i) in the case of a taxpayer not described in clause 
     (ii), the lesser of--

       ``(I) 25 percent of the tentative minimum tax for the 
     taxable year, or
       ``(II) $20,000, or

       ``(ii) in the case of a C corporation other than a closely 
     held C corporation (as defined in section 469(j)(1)), 5 
     percent of the tentative minimum tax for the taxable year.
       ``(C) Rehabilitation investment tax credit.--For purposes 
     of this paragraph, the term `regular investment tax credit' 
     means the portion of the credit under subsection (a) which is 
     attributable to the credit determined under section 47.''.
       (b) Conforming Amendment.--Section 38(d) of the Internal 
     Revenue Code of 1986 (relating to components of investment 
     credit) is amended by adding at the end the following new 
     paragraph:
       ``(4) Special rule for rehabilitation credit.--
     Notwithstanding paragraphs (1) and (2), the rehabilitation 
     investment tax credit (as defined in subsection (c)(2)(C)) 
     shall be treated as used last.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 203. COMMERCIAL INDUSTRIAL DEVELOPMENT BONDS.

       (a) Facility Bonds.--
       (1) In general.--Subsection (a) of section 142 of the 
     Internal Revenue Code of 1986 (relating to exempt facility 
     bond) is amended by striking ``or'' at the end of paragraph 
     (11), by striking the period at the end of paragraph (12) and 
     inserting a comma, and by adding at the end the following new 
     paragraphs:
       ``(13) sports facilities,
       ``(14) convention or trade show facilities,
       ``(15) freestanding parking facilities,
       ``(16) air or water pollution control facilities, or
       ``(17) industrial parks.''.
       (2) Industrial parks defined.--Section 142 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new subsection:
       ``(k) Industrial Parks.--A facility shall be treated as 
     described in subsection (a)(17) only if all of the property 
     to be financed by the net proceeds of the issue--
       ``(1) is--
       ``(A) land, and
       ``(B) water, sewage, drainage, or similar facilities, or 
     transportation, power, or communication facilities incidental 
     to the use of such land as an industrial park, and
       ``(2) is not structures or buildings (other than with 
     respect to facilities described in paragraph (1)(B)).''.
       (3) Conforming amendments.--
       (A) Section 147(c) of the Internal Revenue Code of 1986 
     (relating to limitation on use for land acquisition) is 
     amended by adding at the end the following new paragraph:
       ``(4) Special rule for industrial parks.--In the case of a 
     bond described in section 142(a)(17), paragraph (1)(A) shall 
     be applied by substituting `50 percent' for `25 percent'.''.
       (B) Section 147(e) of such Code (relating to no portion of 
     bonds may be issued for skyboxes, airplanes, gambling 
     establishments, etc.) is amended by striking ``A private 
     activity bond'' and inserting ``Except in the case of a bond 
     described in section 142(a)(13), a private activity bond''.
       (b) Small Issue Bonds.--Section 144(a)(12) of the Internal 
     Revenue Code of 1986 (relating to termination of qualified 
     small issue bonds) is amended--
       (1) by striking ``any bond'' in subparagraph (A)(i) and 
     inserting ``any bond described in subparagraph (B)'',
       (2) by striking ``a bond'' in subparagraph (A)(ii) and 
     inserting ``a bond described in subparagraph (B)'', and
       (3) by striking subparagraph (B) and inserting the 
     following:
       ``(B) Bonds for farming purposes.--A bond is described in 
     this subparagraph if it is issued as part of an issue 95 
     percent or more of the net proceeds of which are to be used 
     to provide any land or property not in accordance with 
     section 147(c)(2).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after December 31, 1995.

     SEC. 204. INCREASE IN AMOUNT OF QUALIFIED SMALL ISSUE BONDS 
                   PERMITTED FOR FACILITIES TO BE USED BY RELATED 
                   PRINCIPAL USERS.

       (a) In General.--Clause (i) of section 144(a)(4)(A) of the 
     Internal Revenue Code of 1986 (relating to $10,000,000 limit 
     in certain cases) is amended by striking ``$10,000,000'' and 
     inserting ``$50,000,000''.
       (b) Clerical Amendment.--The heading of paragraph (4) of 
     section 144(a) of the Internal Revenue Code of 1986 is 
     amended by striking ``$10,000,000'' and inserting 
     ``$50,000,000''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to--
       (1) obligations issued after the date of the enactment of 
     this Act, and
       (2) capital expenditures made after such date with respect 
     to obligations issued on or before such date.
     SEC. 205. SIMPLIFICATION OF ARBITRAGE INTEREST REBATE WAIVER.

       (a) In General.--Clause (ii) of section 148(f)(4)(C) of the 
     Internal Revenue Code of 1986 (relating to exception from 
     rebate for certain proceeds to be used to finance 
     construction expenditures) is amended to read as follows:
       ``(ii) Spending requirement.--The spending requirement of 
     this clause is met if 100 percent of the available 
     construction proceeds of the construction issue are spent for 
     the governmental purposes of the issue within the 3-year 
     period beginning on the date the bonds are issued.''.
       (b) Conforming Amendments.--
       (1) Clause (iii) of section 148(f)(4)(C) of the Internal 
     Revenue Code of 1986 (relating to exception for reasonable 
     retainage) is repealed.
       (2) Subclause (II) of section 148(f)(4)(C)(vi) of such Code 
     (relating to available construction proceeds) is amended by 
     striking ``2-year period'' and inserting ``3-year period''.
       (3) Subclause (I) of section 148(f)(4)(C)(vii) of such Code 
     (relating to election to pay penalty in lieu of rebate) is 
     amended by striking ``, with respect to each 6-month period 
     after the date the bonds were issued,'' and ``, as of the 
     close of such 6-month period,''.
       (4) Clause (viii) of section 148(f)(4)(C) of such Code 
     (relating to election to terminate 1\1/2\ percent penalty) is 
     amended by striking ``to any 6-month period'' in the matter 
     preceding subclause (I).
       (5) Clause (ii) of section 148(c)(2)(D) of such Code 
     (relating to bonds used to provide construction financing) is 
     amended by striking ``2 years'' and inserting ``3 years''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.
             TITLE III--COMMUNITY-BASED HOUSING DEVELOPMENT

     SEC. 301. BLOCK GRANT STUDY.

       (a) In General.--The Secretary of Housing and Urban 
     Development shall conduct a study regarding--
       (1) the feasibility of consolidating existing public and 
     low-income housing programs under the United States Housing 
     Act of 1937 into a comprehensive block grant system of 
     Federal aid that--
       (A) provides assistance on an annual basis;
       (B) maximizes funding certainty and flexibility; and
       (C) minimizes paperwork and delay; and
       (2) the possibility of administering future public and low-
     income housing programs under the United States Housing Act 
     of 1937 in accordance with such a block grant system.
       (b) Report to Comptroller General.--Not later than 18 
     months after the date of 
     [[Page S188]] enactment of this Act, the Secretary of Housing 
     and Urban Development shall submit to the Comptroller General 
     of the United States a report that includes--
       (1) the results of the study conducted under subsection 
     (a); and
       (2) any recommendations for legislation.
       (c) Report to Congress.--Not later than 24 months after the 
     date of enactment of this Act, the Comptroller General of the 
     United States shall submit to the Congress a report that 
     includes--
       (1) an analysis of the report submitted under subsection 
     (b); and
       (2) any recommendations for legislation.

     SEC. 302. DEMOLITION AND DISPOSITION OF PUBLIC HOUSING.

       Section 18(b)(3) of the United States Housing Act of 1937 
     (42 U.S.C. 1437p(b)(3)) is amended--
       (1) in subparagraph (G), by striking ``and'' at the end;
       (2) in subparagraph (H), by adding ``and'' at the end; and
       (3) by adding at the end the following new subparagraph:
       ``(I) provides, subject to the approval of both the unit of 
     general local government in which the property on which the 
     units to be demolished or disposed of are located and the 
     local public housing agency, for--
       ``(i) the eventual reconstruction of units on the same 
     property on which the units to be demolished or disposed of 
     are located; and
       ``(ii) the ultimate relocation of displaced tenants to that 
     property;''.
          TITLE IV--RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES
                   Subtitle A--Environmental Cleanup

     SEC. 401. EXEMPTION FROM LIABILITY FOR LOCAL GOVERNMENTS THAT 
                   ARE OWNERS OR OPERATORS OF FACILITIES IN 
                   DISTRESSED URBAN AREAS.

       Section 101 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601) is 
     amended--
       (1) in paragraph (20), by adding at the end the following:
       ``(E) Exclusion of distressed urban areas.--The term `owner 
     or operator' does not include a unit of local government for 
     a distressed urban area that--
       ``(i) purchased real property, in the distressed urban 
     area, on or in which a facility is located;
       ``(ii) purchased the property to further the redevelopment 
     of the property for industrial activities;
       ``(iii) did not conduct or permit the generation, 
     transportation, storage, treatment, or disposal of any 
     hazardous substance at the facility; and
       ``(iv) did not contribute to the release or threat of 
     release of a hazardous substance at the facility through any 
     action or omission.''; and
       (2) by adding at the end the following new paragraphs:
       ``(39) Distressed urban area.--The term `distressed urban 
     area' has the meaning given the term in section 104(d) of the 
     New Urban Agenda Act of 1995.
       ``(40) Industrial activity.--The term `industrial activity' 
     means commercial, manufacturing, or any other activity 
     carried out to further the development, manufacturing, or 
     distribution of goods and services, including administration, 
     research and development, warehousing, shipping, transport, 
     remanufacturing, and repair and maintenance of commercial 
     machinery and equipment.''.

     SEC. 402. STANDARDS FOR REMEDIATION IN DISTRESSED URBAN 
                   AREAS.

       Section 121 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9621) is 
     amended by adding at the end the following:
       ``(g) Facilities in Distressed Urban Areas.--
       ``(1) Identification.--The President shall identify the 
     facilities on the National Priorities List that are located 
     in distressed urban areas.
       ``(2) Study and report.--The President shall conduct, 
     directly or by grant or contract, a study of appropriate 
     response actions for facilities located in distressed urban 
     areas. In conducting the study, the President shall examine 
     the appropriate degree of cleanup of hazardous substances, 
     pollutants, and contaminants released into the environment at 
     such a facility, and the appropriate considerations for the 
     selection of a response action at such a facility.
       ``(3) Standards.--Notwithstanding any other provision of 
     this Act, the President shall by regulation establish 
     standards for the degree of cleanup described in paragraph 
     (2), and the considerations described in paragraph (2), for 
     such a facility. In establishing the standards, the President 
     shall take into consideration the results of the study 
     described in paragraph (2).''.
              Subtitle B--Environmental-Economic Recovery

     SEC. 411. FINDINGS.

       Congress finds that--
       (1) plants such as the SEMASS plant in Rochester, 
     Massachusetts, and the Wheelabrator plant in Baltimore, 
     Maryland, provide an effective and efficient means of 
     disposing of solid waste and obtaining inexpensive electrical 
     power and steam; and
       (2) the availability of such plants in a community will 
     attract energy intensive industry to the community, 
     increasing the tax base and strengthening the economy of the 
     community.

     SEC. 412. DEFINITIONS.

       As used in this subtitle:
       (1) Distressed urban area.--The term ``distressed urban 
     area'' has the meaning given the term in section 104(d).
       (2) Energy intensive industry.--The term ``energy intensive 
     industry'' means an industry that consumes more than 25,000 
     BTUs per dollar of value added, as determined by the 
     Secretary.
       (3) Fully operational.--The term ``fully operational'' 
     means at least 90 percent operational, determined by 
     averaging the percentage of solid waste intake capacity 
     achieved and the percentage of electric output capacity 
     achieved.
       (4) Market rate.--The term ``market rate'' means the 
     applicable rate for retail bulk power sales made by the 
     electric utility within the service territory concerned.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (6) Solid waste.--The term ``solid waste'' has the meaning 
     given the term in section 1004(27) of the Solid Waste 
     Disposal Act (42 U.S.C. 6903(27)).

     SEC. 413. LOAN AUTHORITY.

       (a) Loans.--
       (1) In general.--The Secretary shall make not more than 3 
     loans to units of local government for distressed urban areas 
     for the establishment of facilities described in section 414.
       (2) Priority.--In making one of the loans, the Secretary 
     shall give priority to a unit of local government that 
     demonstrates that the unit of local government will establish 
     the facility through a contract or agreement with an 
     organization that has demonstrated an ability to oversee and 
     manage the creation of a comprehensive, national, strategic, 
     energy intensive, environmental industry initiative.
       (b) Authority To Borrow.--
       (1) In general.--Subject to paragraphs (2), (3), and (4), 
     and notwithstanding any other provision of law, the Secretary 
     may borrow from the Treasury such funds as the Secretary 
     determines to be necessary to make loans under this section.
       (2) Amounts.--The Secretary may borrow funds under 
     paragraph (1) if amounts sufficient to pay for the cost, as 
     defined in section 502(5) of the Congressional Budget Act of 
     1974 (2 U.S.C. 661a(5)), of the loan involved are provided in 
     advance in appropriation Acts.
       (3) Terms.--Subject to paragraph (4), the Secretary may 
     borrow the funds on such terms as may be established by the 
     Secretary and the Secretary of the Treasury.
       (4) Interest.--The rate of interest to be charged in 
     connection with a loan made under paragraph (1) shall be not 
     less than a rate determined by the Secretary of the Treasury, 
     taking into consideration current market yields on 
     outstanding marketable obligations of the United States of 
     comparable maturities.

     SEC. 414. FACILITY.

       Each facility referred to in section 413--
       (1) shall produce electric power, or steam, from solid 
     waste;
       (2) shall have 2 boilers and be capable of expansion;
       (3) shall be located in a distressed urban area in the 
     United States;
       (4) shall provide electricity or steam to energy intensive 
     industry customers at no more than 40 percent of the market 
     rate for electricity;
       (5) may provide electricity to public entities or light 
     industry, but not to residential consumers; and
       (6) shall obtain a continuing supply of feedstock 
     sufficient to sustain maximum operational capability through 
     long-term contracts with municipal and other governmental 
     sources.

     SEC. 415. REINVESTMENT OF SAVINGS.

       (a) In General.--Any energy intensive industry customer 
     obtaining electricity or steam from the facility described in 
     section 414 shall--
       (1) invest in equipment, physical plant, or increased 
     employment at least 7 percent of the saving gained by such 
     customer; and
       (2) from the saving gained by such customer, make payments 
     to the Secretary, in an amount determined by the Secretary to 
     be appropriate, to assist in repaying the funds borrowed by 
     the Secretary under section 413 and the costs associated with 
     borrowing the funds.
       (b) Definition.--As used in this section, the term 
     ``saving'', used with respect to a customer obtaining 
     electricity or steam from a facility described in section 
     414, means an amount equal to--
       (1) the cost of obtaining an amount of such electricity or 
     steam from other sources during a period of time; minus
       (2) the cost of obtaining the same amount of such 
     electricity or steam from the facility during such period.

     SEC. 416. REPORT TO CONGRESS.

       (a) Report.--Not later than 1 year after the facilities 
     described in section 414 become fully operational, the 
     Secretary shall prepare and submit to Congress a report 
     containing a recommendation concerning whether the Federal 
     Government should make additional loans similar to the loans 
     authorized by this subtitle.
       (b) Analysis.--Such recommendation shall be based on 
     analysis of the Secretary concerning whether the loans made 
     under this subtitle have resulted in--
       (1) the creation of jobs in the communities in which the 
     facilities are located due to the relocation of energy 
     intensive industry;
       (2) the effective disposal of solid waste; and
     [[Page S189]]   (3) easier and less expensive production of 
     electricity and steam.
                                                                    ____

                                                     Bob O'Connor,


                               Councilman, City of Pittsburgh,

                                Pittsburgh, PA, October, 31, 1994.
     Hon. Arlen Spector,
     U.S. Senate, Washington, DC
       Dear Senator Spector: Thank you for your letter of October 
     5th, soliciting my input on your legislative agenda in the 
     U.S. Senate. I appreciate your interest.
       As you know, the City of Pittsburgh and Southwestern 
     Pennsylvania have been decimated economically beginning in 
     the 1970's and especially in the early 1980's. We have seen 
     our principal manufacturing base literally disappear, our 
     population decline, and lost corporate leadership due to 
     buyouts and consolidations.
       Your questions all can be answered with one response--we 
     need jobs, jobs, jobs! And, these jobs have to fill the full 
     spectrum of employment opportunities from high tech to low 
     tech.
       We have planted seeds for growth here in Pittsburgh which 
     will hopefully fuel our local economy. Those ``seeds'' 
     include robotics, high speed rail, motion pictures, tourism, 
     exporting and computer software.
       The federal government can foster the development of these 
     and other industries in the region by directing contracts and 
     research to this area which will enhance employment 
     opportunities.
       If we don't meet the challenge of job creation in this 
     region then we have no choice but to increase spending on 
     social welfare programs.
       I wish you well in your efforts to bring employment 
     opportunities to Pittsburgh. Your efforts on our behalf are 
     greatly appreciated.
           Sincerely,
                                                     Bob O'Connor,
     Councilman.
                                                                    ____



                                                  U.S. Senate,

                                   Washington, DC, March 31, 1994.
     Hon. Steve Clark,
     Mayor, City of Miami,
     Miami, FL.
       Dear Mayor Clark: I was interested to read in the 
     Washington Post on March 20, 1994, of Philadelphia Mayor 
     Rendell's interest in requiring some amount of foreign aid to 
     be issued in vouchers ``redeemable only in distressed 
     cities.'' I raised this idea with Secretary of Treasury 
     Bentsen at a hearing before the Foreign Operations 
     Subcommittee on Appropriations on Tuesday, March 22, 1994. I 
     agree that we must look for innovative ways to make cities 
     attractive investment opportunities for the businesses of the 
     future. Foreign aid vouchers could play an effective role in 
     accomplishing this objective.
       In order to flesh out this foreign aid proposal in more 
     detail, I am interested in your views on whether this would 
     be an effective tool in attracting investment capital to 
     cities. If you could have someone on your staff help us 
     identify which business activities and services in Miami 
     could be useful in extending foreign assistance, I would be 
     very appreciative. This information will help me in pursuing 
     this idea in my capacity as a member of the Foreign 
     Operations Subcommittee.
       I look forward to working with you on this important 
     matter. Please have you staff contact Morrie Ruffin (202 224-
     9016) of my staff with any information that could be useful 
     in this endeavor.
       My best.
           Sincerely,
     Arlen Specter.
                                                                    ____

                                                  U.S. Senate,

                                   Washington, DC, March 29, 1994.
     Hon. Stephen R. Reed,
     Mayor, City of Harrisburg,
     Harrisburg, PA.
       Dear Stephen: I was interested to read in the Washington 
     Post on March 20, 1994, of Philadelphia Mayor Rendell's 
     interest in requiring some amount of foreign aid to be issued 
     in vouchers ``redeemable only in distressed cities.'' I 
     raised this idea with Secretary of Treasury Bentsen at a 
     hearing before the Foreign Operations Subcommittee on 
     Appropriations on Tuesday, March 22, 1994. I agree that we 
     must look for innovative ways to make cities attractive 
     investment opportunities for the businesses of the future. 
     Foreign aid vouchers could play an effective role in 
     accomplishing this objective.
       In order to flesh out this foreign aid proposal in more 
     detail, I am interested in your views on whether this would 
     be an effective tool in attracting investment capital to 
     cities. If you could have someone on your staff help us 
     identify which business activities and services in Harrisburg 
     could be useful in extending foreign assistance, I would be 
     very appreciative. This information will help me in pursuing 
     this idea in my capacity as a member of the Foreign 
     Operations Subcommittee.
       I look forward to working with you on this important 
     matter. Please have your staff contact Morrie Ruffin (202 
     224-9016) of my staff with any information that could be 
     useful in this endeavor.
       My best.
           Sincerely,
     Arlen Specter.
                                                                    ____



                                             City of Miami, FL

                                         Miami, FL, July 28, 1994.
     Hon. Arlen Specter,
     Hart Senate Office Building, Washington, DC.
       Dear Senator Specter: On behalf of the City of Miami, thank 
     you for including our community in your and Mayor Rendell's 
     proposal to require some amount of foreign aid to be issued 
     in vouchers, which can be redeemed in distressed cities 
     throughout the country. The initiative set forth in Mayor 
     Rendell's New Urban Agenda, will benefit Greater Miami/Dade 
     County, should our application for Empowerment Zone or 
     Enterprise Community status be successful. Miami's selection 
     as a procurement center for foreign aid would be a natural 
     complement to our status as the Business Capital of the 
     Americas.
       My staff and The Beacon Council, Greater Miami/Dade 
     County's economic development organization, have been working 
     for the past several months with Doug Troutman of your staff 
     to determine which business activities and services in Miami 
     could be useful in extending foreign assistance: Toward this 
     end, Mr. Troutman has been extremely helpful in providing 
     further background information to assist our efforts. We look 
     forward to working with you and your staff further on this 
     important issue.
       On behalf of our community, thank you for involving Miami 
     in this significant project.
           Sincerely,
                                                 Stephen P. Clark,
     Mayor.
                                                                    ____

                                              Office of the Mayor,


                                       The City of Harrisburg,

                                    Harrisburg, PA, April 6, 1994.
     Hon. Arlen Specter,
     U.S. Senate,
     Senate Office Building, Washington, DC.
       Dear Senator Specter: This is to acknowledge and thank you 
     for your correspondence, which I was pleased to receive on 
     April 4, 1994, regarding the suggestion by the Mayor of 
     Philadelphia that a portion of foreign aid be issued in the 
     form of vouchers that would be redeemable only in distressed 
     cities.
       The concept has considerable merit and we would support 
     such. The key to such a voucher provision having a measurable 
     and nearly immediate impact in urban communities would be for 
     a proper and clearly stated definition of the words 
     ``distressed cities.'' At a minimum, such a definition should 
     stipulate that eligible cities would be those with 15% or 
     more of its households living at or below the Federal poverty 
     income level.
       I suspect that most cities would be able to benefit by such 
     a voucher program. It would redirect investment, development 
     and growth forces into such cities since foreign aid vouchers 
     would represent a far less speculative venture and, in some 
     cases, a literally guaranteed opportunity.
       In the case of the City of Harrisburg, there are few areas 
     of products and services which could not be provided. Many of 
     our existing businesses would no doubt seize upon the 
     opportunity to broaden their market by engaging in export 
     activity triggered by foreign aid vouchers. Our 
     infrastructure is sufficient to also accommodate additional 
     growth of existing and new businesses and industries.
       Therefore, in brief, we believe the voucher proposal has 
     considerable merit and that this City would benefit from the 
     same.
       I appreciate your affording us this opportunity to express 
     an opinion on the subject.
       WIth warmest personal regards, I am
           Yours sincerely,
                                                  Stephen R. Reed,
                                                            Mayor.
                                 ______

      By Mr. SPECTER:
  S. 18. A bill to provide improved access to health care, enhance 
informed individual choice regarding health care services, low health 
care costs through the use of appropriate providers, improve the 
quality of health care, improve access to long-term care, and for other 
purposes; to the Committee on Finance.


                       health care assurance act

  Mr. SPECTER. Mr. President, there are some who believe health care 
reform is dead and declared as much last Fall when Congress failed to 
enact reform legislation. But they are wrong. President Clinton was 
grossly in error when he proposed health care by government mandate and 
massive bureaucracy. But anyone who reads the repudiation of the 
Clinton bill as an excuse to do nothing is equally in error. There is 
as much need now as there was then to correct the problems in our 
health care system for the 14.6 percent or 39.7 million Americans, for 
whom the system does not work--a group which, according to the Census 
Bureau, contained 1.1 million more uninsured individuals in 1993 than 
the previous year. As I have said many times, we can do so without big 
government and turning the best health care system in the world, 
serving 85.4 percent of all Americans, on its head. The legislation I 
am introducing today, the Health Care Assurance Act of 1995, will do 
just that.
  While Congressional jaw-boning in the 103d Congress may have caused 
market competition to dampen cost increases a bit and encouraged more 
[[Page S190]] managed care, in my judgment no amount of congressional 
talk will fix many of the problems that still exist--for instance, the 
pre-existing condition problem, where people are denied health care 
insurance because of a pre-existing health problem; or the portability 
problem, where people lose their job or are otherwise between jobs and 
lose their health coverage; or the self-employed problem, where self-
employed individuals are denied the right to deduct as a business 
expense their health care costs unlike other employers who may deduct 
100 percent of that business expense; or the problem of employees in 
small businesses not having health coverage because their employer 
simply cannot afford to provide it.
  The recent November elections reaffirmed the basic principle of 
limited government. Limited government, however, does not mean an 
uncaring or do-nothing government. Consistent with this principle, 
Congress should enact health care reform legislation that focuses on 
these and other problems in the current system while leaving intact 
what already works for 220 million Americans.
  To be sure, health care reform remains a very complex issue for 
Congress to address. But it is not so complex that we cannot act now in 
a bipartisan way. As many of my colleagues will recall, in 1990 the 
Congress passed Clean Air Act amendments that many said were not 
doable. That issue was brought to the Senate floor, and task forces 
were formed which took up the complex question of sulfuric acid in the 
air. We targeted the removal of 10 million tons in a year. We made 
significant changes in industrial pollution and in tailpipe emissions. 
We produced a balanced bill which protected the environment and 
retained jobs. This can be done with health care reform. If we forces 
on the areas both Democrats and Republicans agree upon--insurance 
market reforms, full-deductibility for the self-employed, 
administrative
 simplification, to name a few--we will accomplish a lot in addressing 
problems with our current health care system.

  I have been advocating reform in one form or another throughout my 
now 15 years in the Senate. My strong interest in health care dates 
back to my first term when I sponsored the Health Care Cost Containment 
Act of 1983, S. 2051, which would have granted a limited anti-trust 
exemption to health insurers permitting them to engage in certain joint 
activities such as acquiring or processing information, and collecting 
and distributing insurance claims for health care services aimed at 
curtailing then escalating health care costs. Later, in 1985, I 
introduced the Community Based Disease Prevention and Health Promotion 
Projects Act of 1985, S. 1873, directed at reducing the human tragedy 
of low birthweight babies and infant mortality. Since 1983, I have 
introduced and cosponsored numerous other bills concerning health care 
in our country. A complete list of the 20 health care bills that I have 
sponsored since 1983 are included for the Record.
  During the 102d Congress, I pressed to have the Senate take action on 
this issue. On July 29, 1992, I offered an amendment on health care to 
legislation then pending on the Senate Floor. This amendment included 
provisions from legislation introduced by Senator Chafee, which I 
cosponsored and which was previously proposed by Senators Bentsen and 
Durenberger. The amendment included a change from 25 percent to 100 
percent deductibility for health care insurance purchased by self-
employed persons and small business insurance market reform to make 
health coverage more affordable for small businesses. When then-
Majority Leader George Mitchell argued that the health care amendment I 
was proposing did not belong on that bill, I offered to withdraw the 
amendment if he would set a date certain to take up health care, just 
as product liability legislation had been placed on the calendar for 
September 8, 1992. The Majority Leader rejected that suggestion and the 
Senate did not consider comprehensive health care legislation during 
the balance of the 102d Congress. The amendment was defeated on a 
procedural motion by a vote of 35 to 60 along party lines.
  The substance of that amendment, however, was adopted later by the 
Senate as part of broader tax legislation on September 23, 1992 when it 
was included in an amendment to H.R. 11 introduced by Senators Bentsen 
and Durenberger and which I cosponsored. This latter amendment, which 
included substantially the same self-employed deductibility and small 
group reforms that I had proposed on July 29, passed the Senate by 
voice vote. Unfortunately, these provisions were later dropped from 
H.R. 11 in the House-Senate conference. On January 23, 1994, when 
Senator Mitchell was asked on the television program ``Face The 
Nation'' about Senator Bentsen's bill from 1992, he stated that 
President Bush vetoed that provision as part of a broader bill. In 
fact, the legislation sent to President Bush never included that 
provision.
  On August 12, 1992, I introduced legislation entitled the ``Health 
Care Affordability and Quality Improvement Act of 1992,'' S. 3176, that 
would have enhanced informed individual choice regarding health care 
services by providing certain information to health care recipients, 
lowered the cost of health care through use of the most appropriate 
provider, and improves the quality of health care.
  On January 21, 1993, the first day of the 103d Congress, I introduced 
comprehensive health care legislation, entitled the ``Comprehensive 
Health Care Act of 1993,'' S. 18. This legislation was comprised of 
reform initiatives that our health care system could adopt immediately. 
They were reforms which both improved access and affordability of 
insurance coverage and implemented systemic changes to bring down the 
escalating cost of care in this country. S. 18, which is the principal 
basis of the legislation I am introducing today, melded the two health 
care reform bills I introduced and the one bill that I cosponsored in 
the 102d Congress and built upon with significant additions.
  On March 23, 1993, I introduced the Comprehensive Access and 
Affordability Health Care Act of 1993, S. 631, which was a composite of 
health care legislation introduced by Senators Cohen, Kassebaum, Bond, 
and McCain, as well as my bill, S. 18. I introduced this legislation in 
an attempt to move ahead on the consideration of health care 
legislation and provide a critical mass as a starting point. On April 
28, 1993, I proposed this bill as an amendment to then pending S. 171, 
the Department of
 Environment Act in an attempt to urge the Senate to act on health care 
reform.

  In total, I have taken to this floor on 13 occasions over the past 3 
years to urge the Senate to address health care reform. On two 
occasions I introduced health care related amendments.
  As early as June 26, 1984, I stated that the issue of health care is 
one of the most important matters facing the Nation today. That 
statement continues to ring true today, 10 years later. As reported in 
the New York Times on December 29, 1993, the Commerce Department 
estimated that health spending would total $942.5 billion in 1994 and 
would rise 12.5 percent in 1995. Moreover, there are an estimated 40 
million, or 15 percent of the American population without health 
insurance.
  Not long ago, Mr. President, in June 1993, I had my own health 
problem when a magnetic resonance imaging machine discovered an 
intercranial lesion in my head. I was the beneficiary of the greatest 
health care delivery system in the world. That experience made me ever 
more aware, knowledgeable of and sensitive to the subject than I had 
been in the past.
  I share the American people's frustration with government and their 
desire to have the problems addressed. This past November they made it 
abundantly clear that they want the problems fixed--be it health care, 
welfare, tax or spending reform. But I want to make clear, Mr. 
President, since it has been said from time to time that Republicans 
support only the status quo, that many of my Republican colleagues have 
shared my sentiment to pass health care legislation, and we continue to 
be committed to action. In the 102d Congress, for instance, Senate 
Republicans were instrumental in the passage of reforms that would have 
helped small businesses and self-employed individuals to afford 
coverage more easily. In the 103d Congress, Senate Republicans 
introduced numerous health care bills that did not go to the 
[[Page S191]] floor. And now I am introducing legislation that targets 
many of the problems and will result in affordable coverage for 
millions of the uninsured.
  From last year's debate, I believe we learned a great deal about our 
health care system and what the American people are willing to accept 
from the Federal Government. The message we heard loudest was that 
Congress was acting too hastily, and that Americans did not want a 
massive overhaul of the health care system. Instead, our constituents 
want Congress to proceed more slowly and to target what isn't working 
in the health care system while leaving in place what is working.
  As I have said both publicly and privately, I was willing to 
cooperate with President Clinton in solving the problems facing the 
country. However, there were many important areas where I differed with 
the President's approach and I did so because I believed that they were 
proposals that would have been deleterious to my fellow Pennsylvanians, 
to the American people, and to our health care system. Most 
importantly, I did not support creating a large new government 
bureaucracy because I believe that savings should go to health care 
services and not bureaucracies.
  On this latter issue, I first became concerned about the bureaucracy 
back in September 1993 after reading the President's 239-page 
preliminary health care reform proposal. I was surprised by the number 
of new boards, agencies, and commissions, so I asked my legislative 
assistant to make me a list of all of them. Instead, she decided to 
make a chart. The initial chart depicted 77 new entities and 54 
existing entities with new or additional responsibilities. When the 
President's 1,342-page Health Security Act was transmitted to Congress 
on October 27, 1993, my staff reviewed it and found an increase to 105 
new agencies, boards, and commissions and 47 existing departments, 
programs and agencies with new or expanded jobs. This chart received 
national attention after being used by Senator Bob Dole in his response 
to the President's State of the Union address on January 24, 1994. The 
response to the chart was tremendous, with more than 12,000 people from 
across the country contacting my office for a copy. Numerous groups and 
associations--such as United We Stand America, the American Small 
Business Association, the National Federation of Republican Women, and 
the Christian Coalition--reprinted the chart in their publications 
amounting to hundreds of thousands more in distribution. I might add, 
Mr. President, that proposals offered during last year's debate by 
Democratic leaders like Senator Kennedy, then-Chairman of the Labor 
Committee, and then-Majority Leader, Senator Mitchell, also
 suffered from the same big government affliction, as the Kennedy plan 
proposed 107 new entities and the Mitchell plan proposed 167 new 
entities.

  In addressing our health care problems, let me be clear: In creating 
solutions it is imperative that we do so without adversely affecting 
the many positive aspects of our health care system which works for 85 
percent of all Americans. I believe our approach should be to focus on 
affordable coverage for the approximately 15 percent of the population 
without insurance, covering people who change jobs, providing adequate 
coverage to the underinsured, holding down spiraling costs and 
generally addressing the specific problems with the current system 
rather than a massive change.
  If such reforms do not solve the problems of coverage and costs then 
we will need to revisit them. Different proposals introduced in the 
last Congress had a phase-in period under any reform plan. I believe 
that a prudent approach is to implement targeted reforms and then act 
to improve upon what we have done. I call this trial and modification. 
We must be careful not to damage the positive aspects of our health 
care system upon which more than 220 million Americans justifiably 
rely.
  Legislation which I am introducing today has four objectives: (1) to 
provide affordable health insurance for the 40 million Americans now 
not covered; (2) to reduce the health care costs for all Americans; (3) 
to increase the security of coverage and the portability of health 
insurance between jobs; and (4) to improve coverage for underinsured 
individuals and families. This legislation is comprised of initiatives 
that our health care system can readily adopt in order to meet these 
objectives, and it does not create an enormous new bureaucracy to meet 
them.
  This bill builds and improves upon provisions put forth in my 
legislation from the 103d Congress, S. 18, which included: full 
deductibility of health care costs for the self-employed; purchasing 
groups and insurance market reforms for small employers to have access 
to affordable health insurance; increased availability to prenatal care 
and outreach for the prevention of low-birthweight births; improved 
implementation of patients' rights regarding medical care at the end of 
life; improved health education; greater emphasis on and expanded 
access to primary and preventive health services; and improved 
utilization of non-physician providers, consumer information, and 
outcomes research.
  To this I have added: insurance market reforms to provide greater 
coverage security and portability between jobs; COBRA reform to extend 
the time period for employees who leave their jobs to continue their 
health benefits until alternative coverage becomes available and 
provide such individuals with additional affordable options; an 
obligation on employers to offer--but not to pay for--health care 
insurance; and a 1-year extension of the Medicare Select Program, which 
gives beneficiaries the option to select a managed care plan and 
provides Medicare recipients more choice in choosing supplemental 
insurance plans. Taken together, I believe these reforms will both 
improve the quality of health care delivery and will cut the escalating 
cost of health care in this country. They represent a blueprint which 
can be modified, improved and expanded. In total, I believe this bill 
can significantly reduce the number of uninsured Americans, improve the 
affordability of care, ensure the portability and security of coverage 
between jobs; and yield cost savings of billions of dollars to the 
Federal Government which can be used to insure the remaining uninsured 
and underinsured Americans.


                  increasing coverage and saving costs

  The 6 titles of the bill seek to reduce the health care costs and the 
concerns regarding security for the 220 million, or 85 percent of 
Americans now covered, and to increase coverage for the other 39.7 
million, or 15 percent, of Americans who are not.


                                coverage

  The 220 million Americans now covered derive their health insurance 
coverage as follows: approximately 57 percent from employer plans; 24.9 
percent from Medicare and Medicaid; 3.7 percent from the military; and 
13 percent from individual private insurance.
  Title I would implement health insurance reforms which include: 
extending full deductibility of health insurance premiums to the self-
employed; establishing small employer and individual health insurance 
purchasing groups; obligating employers to offer, but not pay for, at 
least two health
 insurance plans that protect individual freedom of choice and that 
meets a standard minimum benefit package; improving health insurance 
market practices to guarantee coverage of pre-existing conditions; and 
extending COBRA benefits and coverage options to provide portability 
and security of affordable coverage between jobs.

  While it is not possible to predict with certainty how many 
additional Americans will be covered as a result of the reforms in 
Title I, a reasonable expectation would be that the reforms included in 
this legislation will cover approximately 21 million Americans. This 
estimate encompasses the provisions included in Title I which I discuss 
in further detail below.
  Title I seeks to make insurance affordable by enhancing portability 
of insurance and choice to cover persons who are uninsured for brief 
periods between jobs. The reason that we often hear varying statistics 
cited regarding the number of uninsured persons is because a number of 
the uninsured are without insurance for limited periods of time between 
jobs. To address this portion of the uninsured, Title I includes 
reforms to increase the portability of coverage. These reforms also 
address the 220 million with insurance and their concerns with security 
and portability. These reforms include: (1) insurance market reform to 
cover pre- 
[[Page S192]] existing conditions, including hereditary conditions and 
pregnancy; (2) extending COBRA health benefits option from 18 to 24 
months and enhancing coverage options under COBRA to make insurance 
more affordable; and (3) providing individuals access to affordable 
insurance through purchasing groups.
  Coverage of pre-existing conditions is a concern of many people with 
insurance who face the potential threat of losing their coverage if 
they or a family member becomes ill. I believe that these practices are 
resulting in too much litigation and too much money being spent on 
lawyers rather than providing coverage for such persons. According to 
the Employee Benefit Research Institute, of the 5.9 million workers 
American who are denied coverage through their employers' health plan, 
100,000 workers are ineligible for insurance because of pre-existing 
health conditions. Under my bill, no one will be denied reasonably 
priced coverage or continued coverage due to a pre-existing condition.
  Title I also extends the COBRA benefit option from 18 months to 24 
months. COBRA refers to a measure which was enacted in 1985 as part of 
the Omnibus Budget Reconciliation Act [OBRA '85] to allow employees who 
leave their job, either through a law-off of choice, to continue 
receiving their health care benefits by paying the full cost of such 
coverage. By extending this option, such unemployed persons will have 
enhanced coverage options.
  In addition, options under COBRA are expanded to include plans with 
lower premiums and higher deductible of either $1,000 or $3,000. This 
provision is incorporated from legislation introduced in the 103rd 
Congress by Senator Phil Gramm and will provide an extra cushion of 
coverage options for people in transition. According to Senator Gramm, 
with these options, the typical monthly premium paid for a family of 
four would drop by as much as 20 percent when switching to a $1,000 
deductible and as much as 52 percent when switching to a $3,000 
deductible.
  With respect to the uninsured and underinsured, my bill would permit 
individuals and families to purchase guaranteed, comprehensive health 
coverage through purchasing groups. Health insurance plans offered 
through the purchasing groups would be required to meet basic, 
comprehensive standards with respect to benefits. Such benefits must 
include a variation of benefits permitted among actuarially equivalent 
plans to be developed by the National Association of Insurance 
Commissioners. The standard plan would consist of the following 
services when medically necessary or appropriate: (1) medical and 
surgical devices; (2) medical equipment; (3) preventive services; and 
(4) emergency transportation in frontier areas. It is estimated that 
for businesses with fewer than 50 employees, voluntary purchasing 
cooperatives such as those included in my legislation could cover up to 
17 million people who are currently uninsured.\8\
  My bill would also create individual health insurance purchasing 
groups for individuals wishing to purchase health insurance on their 
own. In today's market, such individuals often face a market where 
coverage options are not affordable. These purchasing groups will 
change that by allowing small businesses and individuals to buy 
coverage by pooling together within purchasing groups, and choose from 
among insurance plans
 that provide comprehensive benefits, with guaranteed enrollment and 
renewability, and equal pricing through community rating adjusted by 
age and family size. Community rating will assure that no one small 
business or individual will be singly priced out of being able to buy 
comprehensive health coverage because of health status. With community 
rating, a small group of individuals and businesses can join together, 
spread the risk, and have the same purchasing power that larger 
companies have today.

  For example, Pennsylvania has the fourth lowest rate of uninsured in 
the nation with over 90 percent of all Pennsylvanians enrolled in some 
form of heath coverage. Lewin and Associates found that one of the 
factors enabling Pennsylvania to achieve this low rate of uninsured 
persons is the practice by Pennsylvania's Blue Cross/Blue Shield plans 
which provide guaranteed enrollment and renewability, an open 
enrollment period, community rating, and coverage for persons with pre-
existing conditions. My legislation seeks to enact reforms to provide 
for more of these types of practices.
  The purchasing groups as developed and administered on a local level, 
in addition to the insurance market reforms related to pre-existing 
conditions for all insurance policies, will provide small businesses 
and all individuals with affordable health coverage options.
  For individuals who are self-employed, this bill seeks to extend the 
same tax advantage for the purchase of health insurance to these 
individuals as is afforded to all other employers. Under current law, 
businesses are permitted to deduct 100 percent of what they pay for the 
health insurance of their employees, but self-employed individuals may 
not deduct any of their cost. The provision permitting self-employed 
individuals to deduct 25 percent of their health insurance costs 
expired on December 31, 1993. It is hard to find a provision in the 
Internal Revenue Code that is more discriminatory than this one.
  According to the Congressional Research Service, 12 percent or 3.9 
million of uninsured workers are self-employed. Providing full 
deductibility of health insurance premiums, beginning with 
reinstatement of the 25 percent deduction for 1994 and reaching 100 
percent by 1999, for self-employed individuals is a simple matter of 
fairness. It also should make health insurance coverage more affordable 
for the estimated 3.9 million self-employed individuals and their 
families who are now uninsured.
  The Joint Committee on Taxation has estimated the cost of this 
provision at $1.0 billion in the first year and $5.2 billion over the 
next 5 years.
  Unique barriers to coverage exist in both rural and urban medically 
underserved areas. Within my home State of Pennsylvania, there are 
examples of such barriers due to a lack of health care providers in 
rural areas and other problems associated with the lack of coverage for 
indigent populations living in inner cities. This bill improves access 
to health care services for these populations by increasing Public 
Health Service programs and also through training more primary care 
providers to serve in such areas; increasing the utilization of non-
physician providers including nurse practitioners, clinical nurse 
specialists and physician assistants through direct reimbursements 
under the Medicare and Medicaid programs; and increasing support for 
education and outreach.
  While I reiterate the difficulty in making definitive conclusions 
regarding the reforms put forth under this legislation and 
accomplishing universal health coverage for all Americans, I believe 
that it is a promising starting point. Admittedly, the figures are 
inexact, but by my rough calculations potentially 21 million of the 40 
million uninsured will be able to obtain affordable health care 
coverage under my bill. I arrive at this figure by including the 17 
million that will be able to purchase insurance as a result of allowing 
individuals and small employers to purchase insurance through voluntary 
purchasing cooperatives, the 3.9 self-employed individuals who are 
uninsured that will now have full-deductibility for the cost of their 
health insurance, and the 100,000 who now will not be denied coverage 
due to pre-existing conditions. Certainly increasing the 220 million 
Americans with coverage to 241 million is a significant improvement. 
But we must not lose sight of those who for whatever reason may not 
achieve coverage under this plan. In this regard, I welcome any and all 
suggestions that make sense within our current constraints to increase 
coverage. I am committed to enacting reforms this year and committing 
to a
 time certain when the Congress must revisit the issue and act to 
modify these reforms and correct problems related to coverage where 
they still exist.


                              cost savings

  It is anticipated that the increased costs of coverage to employers 
choosing to cover employees under Title I would be offset by 
administrative savings from the development of the small employer 
purchasing groups. Such savings have been estimated as high as $9 
billion annually. In addition, if we address some of the areas within 
the 
[[Page S193]] health care system that are exacerbating costs, we can 
achieve significant savings to be redirected toward direct health care 
services.
  Title I includes a provision to extend the Medicare Select program, 
which already has demonstrated success in passing along savings to the 
consumer. The Medicine Select program is a demonstration project 
initiated in the Omnibus Reconciliation Act of 1990 that allows 
Medicare recipients to select managed care plans, specifically through 
preferred provider organizations, for their Medicare supplemental 
insurance. Fifteen States have demonstration sites and over 400,000 
Medicare beneficiaries are enrolled in the program. Medicare Select 
plans are 10 to 30 percent less expensive than traditional plans that 
offer the same benefits and quality is not sacrificed. The August 1994 
Consumer Reports rated Medicare Select plans as some of the best 
Medigap products nationwide. Of the top 15 Medigap rated policies, 8 
were Medicare Select plans.
  While savings from such reforms are difficult to predict, I believe 
that savings of $214 billion over 5 years can be achieved through the 
reforms set forth in this legislation.
  While examining the issues that contribute to our health care crisis, 
I was struck by the fact that so much attention is being focused on 
treating the symptoms and so little on some of its root causes. 
Granted, our existing health care system suffers from very serious 
structural problems. But there also are some common sense steps we can 
take to head off problems before they reach crisis proportions. Title 
II of my bill includes three initiatives which enhance primary and 
preventive care services aimed at preventing disease and ill-health.
  Each year about 7 percent, or 287,000, of the 4,100,000 American 
babies born in the U.S. are born of low birth weight, multiplying their 
risk of death and disability. Nearly 37,000 of those born die before 
their first birthday. Approximately 1,000 of those deaths are 
preventable. Although the infant mortality rate in the United States 
fell to an all-time low in 1989, an increasing percentage of babies 
still are born of low birth weight. The Executive Director of the 
National Commission To Prevent Infant Mortality, put it this way, 
``More babies are being born at risk and all we are doing is saving 
them with expensive technology.''
  It is a human tragedy for a child to be born weighing 16 ounces with 
attendant problems which last a lifetime. I first saw 1-pound babies in 
1984 when I was astounded to learn that Pittsburgh, PA, had the highest 
infant mortality rate of African-American babies of any city in the 
United States. I wondered, how could that be true of Pittsburgh, which 
has such enormous medical resources. It was an amazing thing for me to 
see a 1-pound baby, about as big as my hand.
  Beyond the human tragedy of low birth weight there are the financial 
consequences. Low birth weight children, those who weigh less than 5.5 
pounds, account for 16 percent of all costs for initial 
hospitalization, re-hospitalization and special services up to age 35. 
The short and long-term costs of saving and caring for infants of low 
birth weight is staggering. A study issued by the Office of Technology 
Assessment in 1988, concluded that $8 billion was expended in 1987 for 
the care of 262,000 low birth weight infants in excess of that which 
would have been spent on an equivalent number of babies born of normal 
weight birth averted by earlier or more frequent prenatal care, the 
U.S. health care system saves between $14,000 and $30,000 in the first 
year in addition to the projected savings in lifetime care.
  The Department of Health and Human Services estimated that by 
reducing the number of children born of low birth weight by 82,000 
births, we could save between $1.1 billion and $2.5 billion per year.
  We know that in most instances prenatal care is effective in 
preventing low birth weight babies. Numerous studies have
 demonstrated that low birth weight, that does not have a genetic link, 
is associated with inadequate prenatal care or lack of prenatal care.

  To improve pregnancy outcomes for women at risk of low birth weight, 
Title II authorizes the Secretary of Health and Human Services to award 
grants to States for projects to reduce infant mortality and low birth 
weight births and to improve the health and well-being of mothers and 
their families, pregnant women and infants. The funds would be awarded 
to community-based consortia, made up of State and local governments, 
the private sector, religious groups, community and migrant health 
centers, and hospitals and medical schools, whose goal would be to 
develop and coordinate effective health care and social support 
services for women and their babies.
  The second initiative under Title II involves the provision of 
comprehensive health education for our nation's children. The Carnegie 
Foundation for the Advancement of Teaching recently conducted a survey 
of teachers. More than half of the respondents said that poor 
nourishment among students is a serious problem at their schools; 60 
percent cited poor health as a serious problem. Another study issued in 
1992 by the Children's Defense Fund reported that children deprived of 
basic health care and nutrition are ill-prepared to learn. Both studies 
indicated that poor health and social habits are carried into adulthood 
and often passed on to the next generation.
  To interrupt this tragic cycle, this nation must invest in proven 
preventive health education programs. My legislation includes 
comprehensive health education and prevention initiatives through 
increased support to local educational agencies to develop and 
strengthen comprehensive health education programs and to Head Start 
resource centers to support health education training programs for 
teachers and other day care workers.
  Title II further expands the authorization for a variety of public 
health programs, such as breast and cervical cancer prevention, 
childhood immunizations, family planning and community health centers. 
These existing programs are designed to improve the public health and 
prevent disease through primary and secondary prevention initiatives. 
It is essential that we invest more resources now in these programs if 
we are to make any substantial progress in reducing the costs of acute 
care in this country.
  The proposed expansions in preventive health services included in 
Title II are conservatively projected to save approximately $2.5 
billion per year or $12.5 billion over 5 years. I believe the savings 
will be higher. Again, it is impossible to be certain of such savings; 
only experience will tell. For example, how do you quantify today the 
savings that will surely be achieved tomorrow from future generations 
of children that are truly educated in a range of health-related 
subjects including hygiene, nutrition, physical and emotional health, 
drug and alcohol abuse, accident prevention and safety, et cetera? I 
suggest these projections, subject to future modification, only to give 
some generalized perspective on the impact of this bill.
  Title III would establish a federal standard and create uniform 
national forms concerning the patient's right to decline medical 
treatment. Nothing in my bill mandates the use of uniform forms, 
rather, the purpose of this provision is to make it easier for 
individuals to make their own choices and determination regarding their 
treatment during this vulnerable and highly personal time. Studies have 
also found that improved access to living wills and advanced directives 
will lead to substantial dollar savings. According to a 1978 study by 
the Health Care Financing Administration, about 30 percent of 
expenditures for people who died were spent in the last 30 days of life 
and constituted 8 percent of total Medicare expenditures that year. 
Approximately 27 percent of Medicare expenditures are made in the final 
days of life, and conservatively estimating that approximately 10 
percent of such expenditures are unwanted, we could save nearly $4 
billion per year. I believe that such savings could be greater. A 
recent study by researchers at Thomas Jefferson University Medical 
College in Philadelphia also concluded the notion that greater use of 
advanced directives have potential for enormous cost savings. This 
study also cited research which found that about 90 percent of the 
American population expresses interest in participating in advance 
directives discussion although 
[[Page S194]] only 8 to 15 percent of
 adults have prepared a living will. Provisions in my bill would 
provide information on individuals' rights regarding living wills and 
advanced directives and would make it clearer for people to have their 
rights known and honored.

  Title IV provides incentives to improve the supply of generalist 
physicians and would increase the utilization of non-physician 
providers like nurse practitioners, clinical nurse specialists and 
physician assistants through direct reimbursement under the Medicare 
and Medicaid programs. These provisions I believe will also yield 
substantial savings. A study of the Canadian health system utilizing 
nurse practitioners projected a 10 to 15 percent savings for all 
medical costs--or $300 million to $450 million. While our system is 
dramatically different from Canada's, it may not be unreasonable to 
project a 5 percent--or $41.5 billion--savings from the increase in the 
number of primary care providers in our system. Again, experience will 
raise or lower this projection. Assuming this savings, though, it seems 
reasonable, based on an average expenditure for health care of $3,299 
per person in 1993, that we could cover over 10 million more uninsured 
persons.
  Outcomes research is another area where we can achieve considerable 
health care savings in the long run and improve the quality of care. 
According to the former editor-in-chief of the New England Journal of 
Medicine, Dr. Marcia Angell, 20 to 30 percent of health care procedures 
are either inappropriate, ineffective or unnecessary. If the 
implementation of medical practice guidelines eliminates 10 to 20 
percent of these costs, savings between $8 and $16 billion can be 
realized annually. To achieve this we must, as Dr. C. Everett Koop, 
former Surgeon General of the United States says, have a well funded 
program for outcomes research. Title V would accomplish this by 
imposing a one-tenth of 1 cent surcharge on all health insurance 
premiums. Based on the Congressional Budget Office's estimate that in 
1993 private health insurance premiums totalled $315 billion, this 
surcharge would result in a $315 million outcomes research fund--
compared to the approximately $81 million appropriated for fiscal year 
1995.
  Title V also includes provisions to reduce the administrative costs 
incurred by our health care system. Estimates for administrative costs 
range as high a 25 cents per dollar spent on health care, or over $225 
billion annually. A reasonable expectation is that we can reduce 
administrative costs by 25 percent through such reforms. This would 
yield savings of $55 billion over the next 5 years. While the 
development of a national electronic claims system to handle the 
billions of dollars in claims is complex and will take time to 
implement fully, I believe it is essential for operating a more 
efficient health care system and achieving the savings necessary to 
provide insurance for the remaining uninsured Americans.
  Title V also includes a provision to improve consumer access to 
health care information. True cost containment and competition cannot 
occur it purchasers of health care do not have the information 
available to them to compare cost and quality.
  Title V authorizes the Secretary of Health and Human Services to 
award grants to States to establish or improve a health care data 
information system. Currently, there are 39 States that have a mandate 
to establish such a system, and 20 States are in various stages of 
implementation. In my own State, the Pennsylvania Health Care Cost 
Containment Council has received national recognition for the work it 
has done in providing important information regarding health care costs 
and quality. Consumers, businesses, labor, insurance companies, health 
maintenance organizations, and hospitals have utilized this 
information. For example, hospitals have used information provided by 
the Pennsylvania's Cost Containment Council to become more competitive 
in the marketplace; businesses and labor have used this data to lower 
their health care expenditures; health plans have used this information 
when contracting with providers; and consumers have used this 
information to compare costs and outcomes of health care providers and 
procedures.
  States have not yet produced any figures on statewide savings as a 
result of implementing health information systems, however, there are 
many examples of savings from users of these systems all across the 
country. In Pennsylvania, for example, Accutrex, a mid-size company 
that is part of an alliance of businesses in southwest Pennsylvania, 
reported a savings of $1 million over a 6-month period by using 
information produced by the Pennsylvania Cost Containment Council.
  There are many other examples of savings such as this, and I believe 
that if such systems where in place in every State, the savings could 
be substantial.
  Title VI addresses the issue of home nursing care. The costs of such 
care to those requiring it are exorbitant. Title VI proposes, among 
other things, a tax credit for premiums paid to purchase private long-
term care insurance and tax deductions to offset long-term care 
expenses and proposes home and community-based care benefits as less 
costly alternatives to institutional care. The Joint Tax Committee 
estimates that the cost to the Treasury of this proposal is 
approximately $20 billion. Other tax incentives and reforms to make 
long term care insurance more affordable are: (1) allowing employees to 
select long-term care insurance as part of a cafeteria plan and 
allowing employers to deduct this expense; (2) excluding life insurance 
savings used to pay for long term care from income tax; and (3) setting 
standards for long term care insurance that reduce the bias that favors 
institutional care over community and home-based alternatives.
  While precision is again impossible, it is a reasonable projection 
that we could achieve under my proposal a net savings of approximately 
$174.9 million. I arrive at this sum by totaling the projected savings 
of $214 billion over 5 years--$45 billion in small employer market 
reforms coupled with employer purchasing groups; $12.5 billion for 
preventive health services; $20 billion for reducing unwanted care; 
$41.5 billion from increasing primary care providers; $40 billion 
through outcomes research; and $55 billion through reducing 
administrative costs--and netting against that the projected cost of 
$39.1 billion--$5.2 billion for extending full deductibility of health 
insurance cost to the self employed; $20 billion for long term care; 
and approximately $13.9 billion in funding for primary and preventive 
health care programs and the initiatives that I am proposing.
  Since there are no precise estimates in each one of these areas, 
experience will require modification of these projections, but at least 
it is a beginning. I am prepared to work with other Senators in the 
development of implementing legislation, to press this important area 
of health care reform.


                               Conclusion

  The provisions which I have outlined today contain the framework for 
providing affordable health care for all Americans. I am opposed to 
rationing health care. I do not want rationing for myself, for my 
family, or for America. The question is whether we have essential 
resources--doctors and other health care providers, hospitals, 
pharmaceutical products, et cetera--to provide medical care for all 
Americans. I am confident that we do.
  In my judgment, we should not scrap, but build on our current health 
delivery system. We do not need the overwhelming bureaucracy that 
President Clinton and other Democratic leaders proposed last year to 
accomplish this. I believe we can provide care for the almost 40 
million Americans who are now not covered and reduce health care costs 
for those who are covered within the currently growing $884.2 billion 
in health spending.
  With the savings projected in this bill, I believe it is possible to 
provide access to comprehensive affordable health care for all 
Americans. This bill is a significant first-step in obtaining that 
objective. It is obvious that the total answer to the health care issue 
will not be achieved immediately or easily but the time has come for 
concerted action on this subject.
  I understand that there are several controversial issues presented in 
this bill and I am open to suggestions on possible modifications. I 
urge the Congressional leadership, including the appropriate committee 
chairmen, to move this legislation and other health care bills forward 
promptly.
   [[Page S195]] I ask unanimous consent that a summary and the full 
text 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. 18

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Health 
     Care Assurance Act of 1995''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                TITLE I--HEALTH CARE INSURANCE COVERAGE

                        Subtitle A--Definitions

Sec. 100. Definitions.

  Subtitle B--Increased Availability and Continuity of Health Coverage

   Part 1--Reform of Health Insurance Marketplace for Small Employers


                   Subpart A--Insurance Market Reform

Sec. 111. Requirement for insurers to offer qualified health insurance 
              plans.
Sec. 112. Actuarial equivalence in benefits permitted.
Sec. 113. Establishment of health insurance plan standards.


 Subpart B--Additional Standards for Health Insurance Plans Offered to 
                            Small Employers

Sec. 121. General issuance requirements.
Sec. 122. Rating limitations for community-rated market.
Sec. 123. Rating practices and payment of premiums.


              Subpart C--Small Employer Purchasing Groups

Sec. 131. Qualified small employer purchasing groups.
Sec. 132. Agreements with small employers.
Sec. 133. Enrolling eligible employees, eligible individuals, and 
              certain uninsured individuals in qualified health 
              insurance plans.
Sec. 134. Receipt of premiums.
Sec. 135. Marketing activities.
Sec. 136. Grants to States and qualified small employer purchasing 
              groups.
Sec. 137. Qualified small employer purchasing groups established by a 
              State.

       Part 2--Standards Applicable to All Health Insurance Plans

Sec. 141. Coverage requirements.

      Part 3--Enforcement of Standards for Health Insurance Plans

Sec. 151. Enforcement by excise tax on insurers.

                        Part 4--Effective Dates

Sec. 161. Effective dates.

   Subtitle C--Required Coverage Options for Eligible Employees and 
                     Dependents of Small Employers

Sec. 171. Requiring small employers to offer coverage for eligible 
              individuals.
Sec. 172. Compliance with applicable requirements through multiple 
              employer health arrangements.
Sec. 173. Enforcement by excise tax on small employers.

 Subtitle D--Required Coverage Options for Individuals Insured Through 
                           Association Plans

                  Part 1--Qualified Association Plans

Sec. 181. Treatment of qualified association plans.
Sec. 182. Qualified association plan defined.
Sec. 183. Definitions and special rules.

 Part 2--Special Rule for Church, Multiemployer, and Cooperative Plans

Sec. 191. Special rule for church, multiemployer, and cooperative 
              plans.

                          Part 3--Enforcement

Sec. 1001. Enforcement by excise tax on qualified associations.

            Subtitle E--1-Year Extension of Medicare Select

Sec. 1011. 1-year extension of period for issuance of medicare select 
              policies.

                       Subtitle F--Tax Provisions

Sec. 1021. Deduction for health insurance costs of self-employed 
              individuals.
Sec. 1022. Amendments to COBRA.

             TITLE II--PRIMARY AND PREVENTIVE CARE SERVICES

Sec. 201. Grants to States for healthy start initiatives.
Sec. 202. Reauthorization of certain programs providing primary and 
              preventive care.
Sec. 203. Comprehensive school health education program.
Sec. 204. Comprehensive early childhood health education program.

        TITLE III--PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT

Sec. 301. Patient's right to decline medical treatment.

            TITLE IV--PRIMARY AND PREVENTIVE CARE PROVIDERS

Sec. 401. Expanded coverage of certain nonphysician providers under the 
              medicare program.
Sec. 402. Requiring coverage of certain nonphysician providers under 
              the medicaid program.
Sec. 403. Medical student tutorial program grants.
Sec. 404. General medical practice grants.

                       TITLE V--COST CONTAINMENT

Sec. 501. New drug clinical trials program.
Sec. 502. Medical treatment effectiveness.
Sec. 503. National health insurance data and claims system.
Sec. 504. Health care cost containment and quality information program.

                        TITLE VI--LONG-TERM CARE

    Subtitle A--Tax Treatment of Qualified Long-Term Care Insurance 
                         Policies and Services

Sec. 601. Amendment of 1986 Code.
Sec. 602. Qualified long-term care services treated as medical care.
Sec. 603. Definition of qualified long-term care insurance policy.
Sec. 604. Treatment of qualified long-term care insurance as accident 
              and health insurance for purposes of taxation of 
              insurance companies.
Sec. 605. Treatment of accelerated death benefits under life insurance 
              contracts.

  Subtitle B--Tax Incentives for Purchase of Qualified Long-Term Care 
                               Insurance

Sec. 611. Credit for qualified long-term care premiums.
Sec. 612. Exclusion from gross income of benefits received under 
              qualified long-term care insurance policies.
Sec. 613. Employer deduction for contributions made for long-term care 
              insurance.
Sec. 614. Inclusion of qualified long-term care insurance in cafeteria 
              plans.
Sec. 615. Exclusion from gross income for amounts received on 
              cancellation of life insurance policies and used for 
              qualified long-term care insurance policies.
Sec. 616. Use of gain from sale of principal residence for purchase of 
              qualified long-term health care insurance.
                TITLE I--HEALTH CARE INSURANCE COVERAGE
                        Subtitle A--Definitions

     SEC. 100. DEFINITIONS.

       For purposes of this title:
       (1) Dependent.--The term ``dependent'' means, with respect 
     to any individual, any person who is--
       (A) the spouse or surviving spouse of the individual; or
       (B) under regulations of the Secretary, a child (including 
     an adopted child) of such individual and--
       (i) under 19 years of age; or
       (ii) under 25 years of age and a full-time student.
       (2) Eligible employee.--The term ``eligible employee'' 
     means, with respect to an employer, an employee who normally 
     performs on a monthly basis at least 30 hours of service per 
     week for that employer.
       (3) Eligible individual.--The term ``eligible individual'' 
     means, with respect to an eligible employee, such employee, 
     and any dependent of such employee.
       (4) Employer.--The term ``employer'' shall have the meaning 
     given such term in section 3(5) of the Employee Retirement 
     Income Security Act of 1974.
       (5) Group health plan.--The term ``group health plan'' 
     means an employee welfare benefit plan providing medical care 
     (as defined in section 213(d) of the Internal Revenue Code of 
     1986) to participants or beneficiaries directly or through 
     insurance, reimbursement, or otherwise, but does not include 
     any type of coverage excluded from the definition of a health 
     insurance plan under paragraph (6)(B).
       (6) Health insurance plan.--
       (A) In general.--Except as provided in subparagraph (B), 
     the term ``health insurance plan'' means any hospital or 
     medical service policy or certificate, hospital, or medical 
     service plan contract, or health maintenance organization 
     group contract offered by an insurer.
       (B) Exception.--Such term does not include any of the 
     following:
       (i) Coverage only for accident, dental, vision, disability 
     income, or long-term care insurance, or any combination 
     thereof.
       (ii) Medicare supplemental health insurance.
       (iii) Coverage issued as a supplement to liability 
     insurance.
       (iv) Worker's compensation or similar insurance.
       (v) Automobile medical-payment insurance.
       (vi) Any combination of the insurance described in clauses 
     (i) through (v).
       (7) Health maintenance organization.--The term ``health 
     maintenance organization'' includes an organization 
     recognized under State law as a health maintenance 
     organization or managed care organization or a similar 
     organization regulated under State law for solvency that 
     offers to provide health services on a prepaid, at-risk basis 
     primarily through a defined set of providers.
       (8) Insurer.--The term ``insurer'' means any person that 
     offers a health insurance plan including--
       (A) a licensed insurance company;
       (B) a prepaid hospital or medical service plan;
       (C) a health maintenance organization;
     [[Page S196]]   (D) a self-insurer carrier;
       (E) a reinsurance carrier; and
       (F) a multiple small employer welfare arrangement (a 
     combination of small employers associated for the purpose of 
     providing health insurance plan coverage for their 
     employees).
       (9) NAIC.--The term ``NAIC'' means the National Association 
     of Insurance Commissioners.
       (10) Qualified health insurance plan.--The term ``qualified 
     health insurance plan'' shall have the meaning given such 
     term in section 111(b).
       (11) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (12) Small employer.--The term ``small employer'' means, 
     with respect to a calendar year, an employer that normally 
     employs more than 1 but not more than 50 eligible employees 
     on a typical business day. For the purposes of this 
     paragraph, the term ``employee'' includes a self-employed 
     individual. For purposes of determining if an employer is a 
     small employer, rules similar to the rules of subsection (b) 
     and (c) of section 414 of the Internal Revenue Code of 1986 
     shall apply.
       (13) State.--The term ``State'' means the 50 States, the 
     District of Columbia, Puerto Rico, the Virgin Islands, Guam, 
     and American Samoa.
  Subtitle B--Increased Availability and Continuity of Health Coverage

   PART 1--REFORM OF HEALTH INSURANCE MARKETPLACE FOR SMALL EMPLOYERS

                   Subpart A--Insurance Market Reform

     SEC. 111. REQUIREMENT FOR INSURERS TO OFFER QUALIFIED HEALTH 
                   INSURANCE PLANS.

       (a) Requirement To Offer.--Each insurer that makes 
     available a health insurance plan to a small employer in a 
     State shall make available to each small employer in the 
     State a qualified health insurance plan (as defined in 
     subsection (b)).
       (b) Qualified Health Insurance Plan.--The term ``qualified 
     health insurance plan'' means a health insurance plan 
     (whether a managed-care plan, indemnity plan, or other plan) 
     that is designed to provide standard coverage (consistent 
     with section 112(b)).
       (c) Marketing Requirements.--The requirements of subsection 
     (a) are not met unless the plan described in subsection (a) 
     is made available to small employers using at least the 
     marketing methods and other sales practices which are used in 
     selling other health insurance plans within the same class of 
     business made available by the insurer.

     SEC. 112. ACTUARIAL EQUIVALENCE IN BENEFITS PERMITTED.

       (a) Set of Rules of Actuarial Equivalence.--
       (1) Initial determination.--The NAIC is requested to submit 
     to the Secretary, within 6 months after the date of the 
     enactment of this Act, a set of rules which the NAIC 
     determines is sufficient for determining, in the case of any 
     health insurance plan and for purposes of this section, the 
     actuarial value of the coverage offered by the plan.
       (2) Certification.--If the Secretary determines that the 
     NAIC has submitted a set of rules that comply with the 
     requirements of paragraph (1), the Secretary shall certify 
     such set of rules for use under this subtitle. If the 
     Secretary determines that such a set of rules has not been 
     submitted or does not comply with such requirements, the 
     Secretary shall promptly establish a set of rules that meets 
     such requirements.
       (b) Standard Coverage.--
       (1) In general.--A health insurance plan is considered to 
     provide standard coverage consistent with this subsection if 
     the benefits are determined, in accordance with the set of 
     actuarial equivalence rules certified under subsection (a), 
     to have a value that is within 5 percentage points of the 
     target actuarial value for standard coverage established 
     under paragraph (2).
       (2) Initial determination of target actuarial value for 
     standard coverage.--
       (A) Initial determination.--
       (i) In general.--The NAIC is requested to submit to the 
     Secretary, within 6 months after the date of the enactment of 
     this Act, a target actuarial value for standard coverage 
     equal to the average actuarial value of the coverage 
     described in clause (ii). No specific procedure or treatment, 
     or classes thereof, is required to be considered in such 
     determination by this Act or through regulations. The 
     determination of such value shall be based on a 
     representative distribution of the population of eligible 
     employees offered such coverage and a single set of 
     standardized utilization and cost factors.
       (ii) Coverage described.--The coverage described in this 
     clause is coverage for medically necessary and appropriate 
     services consisting of medical and surgical services, medical 
     equipment, preventive services, and emergency transportation 
     in frontier areas. No specific procedure or treatment, or 
     classes thereof, is required to be covered in such a plan, by 
     this Act or through regulations.
       (B) Certification.--If the Secretary determines that the 
     NAIC has submitted a target actuarial value for standard 
     coverage that complies with the requirements of subparagraph 
     (A), the Secretary shall certify such value for use under 
     this subtitle. If the Secretary determines that a target 
     actuarial value has not been submitted or does not comply 
     with the requirements of subparagraph (A), the Secretary 
     shall promptly determine a target actuarial value that meets 
     such requirements.
       (c) Subsequent Revisions.--
       (1) NAIC.--The NAIC may submit from time to time to the 
     Secretary revisions of the set of rules of actuarial 
     equivalence and target actuarial values previously 
     established or determined under this section if the NAIC 
     determines that revisions are necessary to take into account 
     changes in the relevant types of health benefits provisions 
     or in demographic conditions which form the basis for the set 
     of rules of actuarial equivalence or the target actuarial 
     values. The provisions of subsection (a)(2) shall apply to 
     such a revision in the same manner as they apply to the 
     initial determination of the set of rules.
       (2) Secretary.--The Secretary may by regulation revise the 
     set of rules of actuarial equivalence and target actuarial 
     values from time to time if the Secretary determines such 
     revisions are necessary to take into account changes 
     described in paragraph (1).

     SEC. 113. ESTABLISHMENT OF HEALTH INSURANCE PLAN STANDARDS.

       (a) Establishment of General Standards.--
       (1) Role of naic.--The NAIC is requested to submit to the 
     Secretary, within 9 months after the date of the enactment of 
     this Act, model regulations that specify standards with 
     respect to the requirement, under section 111(a), that 
     insurers make available qualified health insurance plans. If 
     the NAIC develops recommended regulations specifying such 
     standards within such period, the Secretary shall review the 
     standards. Such review shall be completed within 60 days 
     after the date the regulations are developed. Unless the 
     Secretary determines within such period that the standards do 
     not meet the requirement under section 111(a), such standards 
     shall serve as the standards under this section, with such 
     amendments as the Secretary deems necessary.
       (2) Contingency.--If the NAIC does not develop such model 
     regulations within the period described in paragraph (1), or 
     the Secretary determines that such regulations do not specify 
     standards that meet the requirement under section 111(a), the 
     Secretary shall specify, within 15 months after the date of 
     the enactment of this Act, standards to carry out such 
     requirement.
       (3) Effective date.--The standards specified in the model 
     regulations shall apply to health insurance plans in a State 
     on or after the respective date the standards are implemented 
     in the State under subsection (b).
       (4) No preemption of state law.--A State may implement 
     standards for health insurance plans made available to small 
     employers that are more stringent than the requirements under 
     this section, except that a State may not implement standards 
     that prevent the offering by an insurer of at least one 
     health insurance plan that provides standard coverage (as 
     described in section 112(b)).
       (b) Application of Standards Through States.--
       (1) In general.--Each State shall submit to the Secretary, 
     by the deadline specified in paragraph (2), a report on the 
     steps the State is taking to implement and enforce the 
     standards with respect to insurers, and qualified health 
     insurance plans offered, not later than such deadline.
       (2) Deadline for report.--
       (A) 1 year after standards established.--Subject to 
     subparagraph (B), the deadline under this paragraph is 1 year 
     after the date the standards are established under subsection 
     (a).
       (B) Exception for legislation.--In the case of a State 
     which the Secretary identifies, in consultation with the 
     NAIC, as--
       (i) requiring State legislation (other than legislation 
     appropriating funds) in order for insurers and qualified 
     health insurance plans offered to meet the standards 
     established under subsection (a), but
       (ii) having a legislature which is not scheduled to meet in 
     1997 in a legislative session in which such legislation may 
     be considered,
     the date specified in this paragraph is the first day of the 
     first calendar quarter beginning after the close of the first 
     legislative session of the State legislature that begins on 
     or after January 1, 1998. For purposes of the previous 
     sentence, in the case of a State that has a 2-year 
     legislative session, each year of such session shall be 
     deemed to be a separate regular session of the State 
     legislature.
       (3) Federal role.--If the Secretary determines that a State 
     has failed to submit a report by the deadline specified under 
     paragraph (1) or finds that the State has not implemented and 
     provided adequate enforcement of the standards under such 
     paragraph, the Secretary shall notify the State and provide 
     the State a period of 60 days in which to submit the report 
     or to implement and enforce the standards. If, after that 60-
     day period, the Secretary finds that the failure has not been 
     corrected, the Secretary shall provide for the implementation 
     and enforcement of the standards in the State in such a way 
     as the Secretary determines to be appropriate. Such 
     implementation and enforcement shall take effect with respect 
     to insurers and qualified health insurance plans offered or 
     renewed on or after 3 months after the date of the 
     Secretary's finding under the previous sentence and until the 
     date the Secretary finds that such a failure has been 
     corrected.
  [[Page S197]] Subpart B--Additional Standards for Health Insurance 
                    Plans Offered to Small Employers

     SEC. 121. GENERAL ISSUANCE REQUIREMENTS.

       (a) General Rule.--Any insurer offering a health insurance 
     plan to a small employer shall meet the following 
     requirements:
       (1) The guaranteed issue requirements of subsection (b).
       (2) The mandatory registration and disclosure requirements 
     of subsection (c).
       (b) Guaranteed Issue.--
       (1) In general.--The requirements of this subsection are 
     met if the insurer offering a health insurance plan to small 
     employers in the State--
       (A) accepts every small employer in the State that applies 
     for coverage under the plan; and
       (B) accepts for enrollment under the plan every eligible 
     individual who applies for enrollment on a timely basis 
     (consistent with paragraph (3)).
       (2) Special rules for health maintenance organizations.--In 
     the case of a plan offered by a health maintenance 
     organization, the plan may--
       (A) limit the employers that may apply for coverage to 
     those with eligible individuals residing in the service area 
     of the plan;
       (B) limit the individuals who may be enrolled under the 
     plan to those who reside in the service area of the plan; and
       (C) within the service area of the plan, deny coverage to 
     such employers if the plan demonstrates that--
       (i) it will not have the capacity to deliver services 
     adequately to enrollees of any additional groups because of 
     its obligations to existing group contract holders and 
     enrollees; and
       (ii) it is applying this subparagraph uniformly to all 
     employers without regard to the health status, claims 
     experience, or duration of coverage of those employers and 
     their employees.
       (3) Clarification of timely enrollment.--
       (A) General initial enrollment requirement.--Except as 
     provided in this paragraph, a health insurance plan may 
     consider enrollment of an eligible individual not to be 
     timely if the eligible employee or dependent fails to enroll 
     in the plan during an initial enrollment period, if such 
     period is at least 30 days long.
       (B) Enrollment due to loss of previous employer coverage.--
     Enrollment in a health insurance plan is considered to be 
     timely in the case of an eligible individual who--
       (i) was covered under another health insurance plan or 
     group health plan at the time of the individual's initial 
     enrollment period;
       (ii) stated at the time of the initial enrollment period 
     that coverage under a health insurance plan or a group health 
     plan was the reason for declining enrollment;
       (iii) lost coverage under another health insurance plan or 
     group health plan (as a result of the termination of the 
     other plan's coverage, termination or reduction of 
     employment, or other reason); and
       (iv) requests enrollment within 30 days after termination 
     of such coverage.
       (C) Requirement applies during open enrollment periods.--
     Each health insurance plan shall provide for at least one 
     period (of not less than 30 days) each year during which 
     enrollment under the plan shall be considered to be timely.
       (D) Exception for court orders.--Enrollment of a spouse or 
     minor child of an employee shall be considered to be timely 
     if--
       (i) a court has ordered that coverage be provided for the 
     spouse or child under a covered employee's group health plan; 
     and
       (ii) a request for enrollment is made within 30 days after 
     the date the court issues the order.
       (E) Enrollment of spouses and dependents.--
       (i) In general.--Enrollment of the spouse (including a 
     child of the spouse) and any dependent child of an eligible 
     employee shall be considered to be timely if a request for 
     enrollment is made either--

       (I) within 30 days of the date of the marriage or of the 
     date of the birth or adoption of a child, if family coverage 
     is available as of such date; or
       (II) within 30 days of the date family coverage is first 
     made available.

       (ii) Coverage.--If a plan makes family coverage available 
     and enrollment is made under the plan on a timely basis under 
     clause (i)(I), the coverage shall become effective not later 
     than the first day of the first month beginning after the 
     date of the marriage or the date of birth or adoption of the 
     child (as the case may be).
       (4) Financial capacity exception.--Paragraph (1) shall not 
     require any insurer to issue a health insurance plan to the 
     extent that the issuance of such plan would result in such 
     insurer violating the financial solvency standards (if any) 
     established by the State in which such plan is to be issued.
       (5) Delivery capacity exception.--
       (A) In general.--Paragraph (1) shall not prohibit an 
     insurer from ceasing enrollment under a health insurance plan 
     if--
       (i) the insurer ceases to enroll any new small employers 
     under the plan; and
       (ii) the insurer can demonstrate to the Secretary that its 
     provider capacity to serve previously covered groups or 
     individuals (and additional individuals who will be expected 
     to enroll because of affiliation with such previously covered 
     groups or individuals) will be impaired if it is required to 
     enroll other small employers.
       (B) First-come-first-served.--An insurer is only eligible 
     to exercise the exceptions provided for in subparagraph (A) 
     if such insurer provides for enrollment on a first-come-
     first-served basis (except in the case of additional 
     individuals described in subparagraph (A)(ii)).
       (6) Additional exceptions.--Paragraph (1) shall not apply 
     to a failure to issue a health insurance plan to a small 
     employer if--
       (A) such employer is unable to pay the premium for such 
     contract; or
       (B) in the case of a small employer with fewer than 15 
     employees, such employer fails to enroll a minimum percentage 
     of the employer's employees for coverage under such plan, so 
     long as such percentage is enforced uniformly for all small 
     employers of comparable size.
       (7) Exception for alternative state programs.--
       (A) In general.--Paragraph (1) shall not apply if the State 
     in which the health insurance plan is issued--
       (i) has a program which--

       (I) assures the availability of health insurance plans to 
     small employers through the equitable distribution of high 
     risk groups among all insurers offering such contracts to 
     such small employers; and
       (II) is consistent with a model program developed by the 
     NAIC;

       (ii) has a qualified State-run reinsurance program; or
       (iii) has a program which the Secretary has determined 
     assures all small employers in the State an opportunity to 
     purchase a health insurance plan without regard to any risk 
     characteristic.
       (B) Reinsurance program.--
       (i) Program requirements.--For purposes of subparagraph 
     (A)(ii), a State-run reinsurance program is qualified if such 
     program is one of the NAIC reinsurance program models 
     developed under clause (ii) or is a variation of one of such 
     models, as approved by the Secretary.
       (ii) Models.--Not later than 120 days after the date of the 
     enactment of this Act, the NAIC shall develop several models 
     for a reinsurance program, including options for program 
     funding.
       (c) Mandatory Registration Requirements.--The requirements 
     of this subsection are met if the insurer offering health 
     insurance plans to small employers in any State registers 
     with the State commissioner or superintendent of insurance or 
     other State authority responsible for regulation of health 
     insurance.
     SEC. 122. RATING LIMITATIONS FOR COMMUNITY-RATED MARKET.

       (a) Standard Premiums With Respect to Community-Rated 
     Eligible Employees and Eligible Individuals.--
       (1) In general.--Each health insurance plan offered to a 
     small employer shall establish within each community rating 
     area in which the plan is to be offered, a standard premium 
     for enrollment of eligible employees and eligible individuals 
     for the standard coverage (as defined under section 112(b)).
       (2) Establishment of community rating area.--
       (A) In general.--Not later than January 1, 1996, each State 
     shall, in accordance with subparagraph (B), provide for the 
     division of the State into 1 or more community rating areas. 
     The State may revise the boundaries of such areas from time 
     to time consistent with this paragraph.
       (B) Geographic area variations.--For purposes of 
     subparagraph (A), a State--
       (i) may not identify an area that divides a 3-digit zip 
     code, a county, or all portions of a metropolitan statistical 
     area;
       (ii) shall not permit premium rates for coverage offered in 
     a portion of an interstate metropolitan statistical area to 
     vary based on the State in which the coverage is offered; and
       (iii) may, upon agreement with one or more adjacent States, 
     identify multi-State geographic areas consistent with clauses 
     (i) and (ii).
       (3) Eligible individuals.--For purposes of this section, 
     the term ``eligible individuals'' includes certain uninsured 
     individuals (as described in section 133).
       (b) Uniform Premiums Within Community Rating Areas.--
       (1) In general.--Subject to paragraphs (2) and (3), the 
     standard premium for each health insurance plan shall be the 
     same, but shall not include the costs of premium processing 
     and enrollment that may vary depending on whether the method 
     of enrollment is through a qualified small employer 
     purchasing group (established under subpart C), through a 
     small employer, or through a broker.
       (2) Application to enrollees.--
       (A) In general.--The premium charged for coverage in a 
     health insurance plan which covers eligible employees and 
     eligible individuals shall be the product of--
       (i) the standard premium (established under paragraph (1));
       (ii) in the case of enrollment other than individual 
     enrollment, the family adjustment factor specified under 
     subparagraph (B); and
       (iii) the age adjustment factor (specified under 
     subparagraph (C)).
       (B) Family adjustment factor.--
       (i) In general.--The standards established under section 
     113 shall specify family adjustment factors that reflect the 
     relative actuarial costs of benefit packages based on family 
     classes of enrollment (as compared with such costs for 
     individual enrollment).
       (ii) Classes of enrollment.--For purposes of this Act, 
     there are 4 classes of enrollment:
     [[Page S198]]   (I) Coverage only of an individual (referred 
     to in this Act as the ``individual'' enrollment or class of 
     enrollment).
       (II) Coverage of a married couple without children 
     (referred to in this Act as the ``couple-only'' enrollment or 
     class of enrollment).
       (III) Coverage of an individual and one or more children 
     (referred to in this Act as the ``single parent'' enrollment 
     or class of enrollment).
       (IV) Coverage of a married couple and one or more children 
     (referred to in this Act as the ``dual parent'' enrollment or 
     class of enrollment).

       (iii) References to family and couple classes of 
     enrollment.--In this subtitle:

       (I) Family.--The terms ``family enrollment'' and ``family 
     class of enrollment'' refer to enrollment in a class of 
     enrollment described in any subclause of clause (ii) (other 
     than subclause (I)).
       (II) Couple.--The term ``couple class of enrollment'' 
     refers to enrollment in a class of enrollment described in 
     subclause (II) or (IV) of clause (ii).

       (iv) Spouse; married; couple.--

       (I) In general.--In this subtitle, the terms ``spouse'' and 
     ``married'' mean, with respect to an individual, another 
     individual who is the spouse of, or is married to, the 
     individual, as determined under applicable State law.
       (II) Couple.--The term ``couple'' means an individual and 
     the individual's spouse.

       (C) Age adjustment factor.--The Secretary, in consultation 
     with the NAIC, shall specify uniform age categories and 
     maximum rating increments for age adjustment factors that 
     reflect the relative actuarial costs of benefit packages 
     among enrollees. For individuals who have attained age 18 but 
     not age 65, the highest age adjustment factor may not exceed 
     3 times the lowest age adjustment factor.
       (3) Administrative charges.--
       (A) In general.--In accordance with the standards 
     established under section 113, a health insurance plan which 
     covers eligible employees and eligible individuals may add a 
     separately-stated administrative charge which is based on 
     identifiable differences in legitimate administrative costs 
     and which is applied uniformly for individuals enrolling 
     through the same method of enrollment. Nothing in this 
     subparagraph may be construed as preventing a qualified small 
     employer purchasing group from negotiating a unique 
     administrative charge with an insurer for a health insurance 
     plan.
       (B) Enrollment through a qualified small employer 
     purchasing group.--In the case of an administrative charge 
     under subparagraph (A) for enrollment through a qualified 
     small employer purchasing group, such charge may not exceed 
     the lowest charge of such plan for enrollment other than 
     through a qualified small employer purchasing group in such 
     area.
       (c) Treatment of Negotiated Rate as Community Rate.--
     Notwithstanding any other provision of this section, an 
     insurer which negotiates a premium rate (exclusive of any 
     administrative charge described in subsection (b)(3)) with a 
     qualified small employer purchasing group in a community 
     rating area shall charge the same premium rate to all 
     eligible employees and eligible individuals.

     SEC. 123. RATING PRACTICES AND PAYMENT OF PREMIUMS.

       (a) Full Disclosure of Rating Practices.--
       (1) In general.--An insurer shall fully disclose rating 
     practices for such plan to the appropriate certifying 
     authority (as determined under section 121(c)).
       (2) Notice on expiration.--An insurer shall provide for 
     notice of the terms for renewal of a health insurance plan at 
     the time of the offering of the plan and at least 90 days 
     before the date of expiration of the plan.
       (3) Actuarial certification.--Each insurer shall file 
     annually with the appropriate certifying authority a written 
     statement by a member of the American Academy of Actuaries 
     (or other individual acceptable to such authority) who is not 
     an employee of the insurer certifying that, based upon an 
     examination by the individual which includes a review of the 
     appropriate records and of the actuarial assumptions of such 
     insurer and methods used by the insurer in establishing 
     premium rates and administrative charges for health insurance 
     plans--
       (A) such insurer is in compliance with the applicable 
     provisions of this subtitle; and
       (B) the rating methods are actuarially sound.
     Each insurer shall retain a copy of such statement at its 
     principal place of business for examination by any 
     individual.
       (b) Payment of Premiums.--
       (1) In general.--With respect to a new enrollee in a health 
     insurance plan, the plan may require advanced payment of an 
     amount equal to the monthly applicable premium for the plan 
     at the time such individual is enrolled.
       (2) Notification of failure to receive premium.--If a 
     health insurance plan fails to receive payment on a premium 
     due with respect to an eligible employee or eligible 
     individual covered under the plan, the plan shall provide 
     notice of such failure to the employee or individual within 
     the 20-day period after the date on which such premium 
     payment was due. A plan may not terminate the enrollment of 
     an eligible employee or eligible individual unless such 
     employee or individual has been notified of any overdue 
     premiums and has been provided a reasonable opportunity to 
     respond to such notice.

              Subpart C--Small Employer Purchasing Groups

     SEC. 131. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS.

       (a) Qualified Small Employer Purchasing Groups Described.--
       (1) In general.--A qualified small employer purchasing 
     group is an entity that--
       (A) is a nonprofit entity certified under State law;
       (B) has a membership consisting solely of small employers;
       (C) is administered solely under the authority and control 
     of its member employers;
       (D) with respect to each State in which its members are 
     located, consists of not fewer than the number of small 
     employers established by the State as appropriate for such a 
     group;
       (E) offers a program under which qualified health insurance 
     plans are offered to eligible employees and eligible 
     individuals through its member employers and to certain 
     uninsured individuals in accordance with section 122; and
       (F) an insurer, agent, broker, or any other individual or 
     entity engaged in the sale of insurance--
       (i) does not form or underwrite; and
       (ii) does not hold or control any right to vote with 
     respect to.
       (2) State certification.--A qualified small employer 
     purchasing group formed under this section shall submit an 
     application to the State for certification. The State shall 
     determine whether to issue a certification and otherwise 
     ensure compliance with the requirements of this Act.
       (3) Special rule.--Notwithstanding paragraph (1)(B), an 
     employer member of a small employer purchasing group that has 
     been certified by the State as meeting the requirements of 
     paragraph (1) may retain its membership in the group if the 
     number of employees of the employer increases such that the 
     employer is no longer a small employer.
       (b) Board of Directors.--Each qualified small employer 
     purchasing group established under this section shall be 
     governed by a board of directors or have active input from an 
     advisory board consisting of individuals and businesses 
     participating in the group.
       (c) Domiciliary State.--For purposes of this section, a 
     qualified small employer purchasing group operating in more 
     than one State shall be certified by the State in which the 
     group is domiciled.
       (d) Membership.--
       (1) In general.--A qualified small employer purchasing 
     group shall accept all small employers and certain uninsured 
     individuals residing within the area served by the group as 
     members if such employers or individuals request such 
     membership.
       (2) Voting.--Members of a qualified small employer 
     purchasing group shall have voting rights consistent with the 
     rules established by the State.
       (e) Duties of Qualified Small Employer Purchasing Groups.--
     Each qualified small employer purchasing group shall--
       (1) enter into agreements with insurers offering qualified 
     health insurance plans;
       (2) enter into agreements with small employers under 
     section 132;
       (3) enroll only eligible employees, eligible individuals, 
     and certain uninsured individuals in qualified health 
     insurance plans, in accordance with section 133;
       (4) provide enrollee information to the State;
       (5) meet the marketing requirements under section 135; and
       (6) carry out other functions provided for under this Act.
       (f) Limitation on Activities.--A qualified small employer 
     purchasing group shall not--
       (1) perform any activity involving approval or enforcement 
     of payment rates for providers;
       (2) perform any activity (other than the reporting of 
     noncompliance) relating to compliance of qualified health 
     insurance plans with the requirements of this Act;
       (3) assume financial risk in relation to any such health 
     plan; or
       (4) perform other activities identified by the State as 
     being inconsistent with the performance of its duties under 
     this Act.
       (g) Rules of Construction.--
       (1) Establishment not required.--Nothing in this section 
     shall be construed as requiring--
       (A) that a State organize, operate or otherwise establish a 
     qualified small employer purchasing group, or otherwise 
     require the establishment of purchasing groups; and
       (B) that there be only one qualified small employer 
     purchasing group established with respect to a community 
     rating area.
       (2) Single organization serving multiple areas and 
     states.--Nothing in this section shall be construed as 
     preventing a single entity from being a qualified small 
     employer purchasing group in more than one community rating 
     area or in more than one State.
       (3) Voluntary participation.--Nothing in this section shall 
     be construed as requiring any individual or small employer to 
     purchase a qualified health insurance plan exclusively 
     through a qualified small employer purchasing group.

     SEC. 132. AGREEMENTS WITH SMALL EMPLOYERS.

       (a) In General.--A qualified small employer purchasing 
     group shall offer to enter into an agreement under this 
     section with each small employer that employs eligible 
     employees in the area served by the group.
       (b) Payroll Deduction.--
     [[Page S199]]   (1) In general.--Under an agreement under 
     this section between a small employer and a qualified small 
     employer purchasing group, the small employer shall deduct 
     premiums from an eligible employee's wages.
       (2) Additional premiums.--If the amount withheld under 
     paragraph (1) is not sufficient to cover the entire cost of 
     the premiums, the eligible employee shall be responsible for 
     paying directly to the qualified small employer purchasing 
     group the difference between the amount of such premiums and 
     the amount withheld.

     SEC. 133. ENROLLING ELIGIBLE EMPLOYEES, ELIGIBLE INDIVIDUALS, 
                   AND CERTAIN UNINSURED INDIVIDUALS IN QUALIFIED 
                   HEALTH INSURANCE PLANS.

       (a) In General.--Each qualified small employer purchasing 
     group shall offer--
       (1) eligible employees,
       (2) eligible individuals, and
       (3) certain uninsured individuals,
     the opportunity to enroll in any qualified health insurance 
     plan which has an agreement with the qualified small employer 
     purchasing group for the community rating area in which such 
     employees and individuals reside.
       (b) Uninsured individuals.--For purposes of this section, 
     an individual is described in subsection (a)(3) if such 
     individual is an uninsured individual who is not an eligible 
     employee of a small employer that is a member of a qualified 
     small employer purchasing group or a dependent of such 
     individual.

     SEC. 134. RECEIPT OF PREMIUMS.

       (a) Enrollment Charge.--The amount charged by a qualified 
     small employer purchasing group for coverage under a 
     qualified health insurance plan shall be equal to the sum 
     of--
       (1) the premium rate offered by such health plan;
       (2) the administrative charge for such health plan; and
       (3) the purchasing group administrative charge for 
     enrollment of eligible employees, eligible individuals and 
     certain uninsured individuals through the group.
       (b) Disclosure of Premium Rates and Administrative 
     Charges.--Each qualified small employer purchasing group 
     shall, prior to the time of enrollment, disclose to enrollees 
     and other interested parties the premium rate for a qualified 
     health insurance plan, the administrative charge for such 
     plan, and the administrative charge of the group, separately.

     SEC. 135. MARKETING ACTIVITIES.

       Each qualified small employer purchasing group shall market 
     qualified health insurance plans to members through the 
     entire community rating area served by the purchasing group.

     SEC. 136. GRANTS TO STATES AND QUALIFIED SMALL EMPLOYER 
                   PURCHASING GROUPS.

       (a) In General.--The Secretary shall award grants to States 
     and small employer purchasing groups to assist such States 
     and groups in planning, developing, and operating qualified 
     small employer purchasing groups.
       (b) Application Requirements.--To be eligible to receive a 
     grant under this section, a State or small employer 
     purchasing group shall prepare and submit to the Secretary an 
     application in such form, at such time, and containing such 
     information, certifications, and assurances as the Secretary 
     shall reasonably require.
       (c) Use of Funds.--Amounts awarded under this section may 
     be used to finance the costs associated with planning, 
     developing, and operating a qualified small employer 
     purchasing group. Such costs may include the costs associated 
     with--
       (1) engaging in education and outreach efforts to inform 
     small employers, insurers, and the public about the small 
     employer purchasing group;
       (2) soliciting bids and negotiating with insurers to make 
     available health care benefit plans;
       (3) preparing the documentation required to receive 
     certification by the Secretary as a qualified small employer 
     purchasing group; and
       (4) such other activities determined appropriate by the 
     Secretary.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated for awarding grants under this subsection 
     such sums as may be necessary.

     SEC. 137. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS 
                   ESTABLISHED BY A STATE.

       A State may establish a system in all or part of the State 
     under which qualified small employer purchasing groups are 
     the sole mechanism through which health care coverage for the 
     eligible employees of small employers shall be purchased or 
     provided.

       PART 2--STANDARDS APPLICABLE TO ALL HEALTH INSURANCE PLANS

     SEC. 141. COVERAGE REQUIREMENTS.

       (a) General Rule.--Any insurer offering a health insurance 
     plan shall meet the coverage requirements of subsection (b).
       (b) Coverage Requirements.--
       (1) In general.--The requirements of this subsection are 
     met with respect to any health insurance plan if, under the 
     terms and operation of the plan, the following requirements 
     are met:
       (A) Guaranteed eligibility.--No individual (and any 
     dependent of the individual eligible for coverage) may be 
     denied, limited, conditioned, or excluded from coverage under 
     (or benefits of) the plan for any reason, including health 
     status, medical condition, claims experience, receipt of 
     health care, medical history, anticipated need for health 
     care expenses, disability, or lack of evidence of 
     insurability, of the individual.
       (B) Limitations on coverage of preexisting conditions.--Any 
     limitation under the plan on any preexisting condition--
       (i) may not extend beyond the 6-month period beginning with 
     the date an insured is first covered by the plan;
       (ii) may only apply to preexisting conditions which 
     manifested themselves, or for which medical care or advice 
     was sought or recommended, during the 3-month period 
     preceding the date an insured is first covered by the plan;
       (iii) may not extend to an individual who, as of the date 
     of birth, was covered under the plan; and
       (iv) may not relate to pregnancy.
       (C) Guaranteed renewability.--
       (i) In general.--The plan must be renewed at the election 
     of the insured unless the plan is terminated for cause.
       (ii) Cause.--For purposes of this subparagraph, the term 
     ``cause'' means--

       (I) nonpayment of the required premiums;
       (II) fraud or misrepresentation of the insured or their 
     representatives;
       (III) noncompliance with the plan's minimum participation 
     requirements;
       (IV) noncompliance with the plan's employer contribution 
     requirements; or
       (V) repeated misuse of a provider network provision in the 
     plan.

       (2) Waiting periods.--Paragraph (1)(A) shall not apply to 
     any period an employee is excluded from coverage under the 
     plan solely by reason of a requirement applicable to all 
     employees that a minimum period of service with the employer 
     is required before the employee is eligible for such 
     coverage.
       (3) Determination of periods for rules relating to 
     preexisting conditions.--For purposes of paragraph (1)(B), 
     the date on which an insured is first covered by a plan shall 
     be the earlier of--
       (A) the date on which coverage under such plan begins; or
       (B) the first day of any continuous period--
       (i) during which the insured was covered under one or more 
     other health insurance arrangements; and
       (ii) in the case of an employee, which does not end more 
     than 120 days before the date employment with the employer 
     begins.
       (4) Cessation of business.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, an insurer shall not be treated as failing to meet 
     the requirements of paragraph (1)(C) if such insurer 
     terminates the class of business which includes the health 
     insurance plan.
       (B) Notice requirement.--Subparagraph (A) shall apply only 
     if the insurer gives notice of the decision to terminate at 
     least 90 days before the expiration of the plan.
       (C) 5-year moratorium.--If, within 5 years of the year in 
     which an insurer terminates a class of business under 
     subparagraph (A), such insurer establishes a new class of 
     business, the issuance of plans in that year shall be treated 
     as a failure to which this section applies.
       (D) Transfers.--If, upon a failure to renew a plan to which 
     subparagraph (A) applies, an insurer offers to transfer such 
     plan to another class of business, such transfer must be made 
     without regard to risk characteristics.
       (5) Class of business.--
       (A) In general.--Except as provided in subparagraph (B), 
     the term ``class of business'' means, with respect to health 
     care insurance provided to persons, all health care insurance 
     provided to such persons.
       (B) Establishment of groupings.--
       (i) In general.--An issuer may establish separate classes 
     of business with respect to health care insurance provided to 
     all persons but only if such classes are based on one or more 
     of the following:
       (I) Business marketed and sold through insurers not 
     participating in the marketing and sale of such insurance to 
     other persons.
       (II) Business acquired from other insurers as a distinct 
     grouping.
       (III) Business provided through an association of not less 
     than 20 small employers which was established for purposes 
     other than obtaining insurance.
       (IV) Business related to managed care plans.
       (V) Any other business which the Secretary determines needs 
     to be separately grouped to prevent a substantial threat to 
     the solvency of the insurer.

       (ii) Exception allowed.--Except as provided in subparagraph 
     (C), an insurer may not establish more than one distinct 
     group of persons for each category specified in clause (i).
       (C) Special rule.--An insurer may establish up to 2 groups 
     under each category in subparagraph (A) or (B) to account for 
     differences in characteristics (other than differences in 
     plan benefits) of health insurance plans that are expected to 
     produce substantial variation in health care costs.

      PART 3--ENFORCEMENT OF STANDARDS FOR HEALTH INSURANCE PLANS

     SEC. 151. ENFORCEMENT BY EXCISE TAX ON INSURERS.

       (a) In General.--Chapter 43 of the Internal Revenue Code of 
     1986 (relating to qualified pension, etc., plans) is amended 
     by adding at the end the following new section:
     [[Page S200]] ``SEC. 4980C. FAILURE OF INSURER TO COMPLY WITH 
                   CERTAIN STANDARDS FOR HEALTH INSURANCE PLANS.

       ``(a) Imposition of Tax.--
       ``(1) In general.--There is hereby imposed a tax on the 
     failure of an insurer to comply with the requirements 
     applicable to such insurer under parts 1 and 2 of subtitle B 
     of title I of the Health Care Assurance Act of 1995.
       ``(2) Exception.--Paragraph (1) shall not apply to a 
     failure by an insurer in a State if the Secretary of Health 
     and Human Services determines that the State has in effect a 
     regulatory enforcement mechanism that provides adequate 
     sanctions with respect to such a failure by such an insurer.
       ``(b) Amount of Tax.--
       ``(1)  In general.--Subject to paragraph (2), the amount of 
     the tax imposed by subsection (a) shall be $100 for each day 
     during which such failure persists for each person to which 
     such failure relates. A rule similar to the rule of section 
     4980B(b)(3) shall apply for purposes of this section.
       ``(2) Limitation.--The amount of the tax imposed by 
     subsection (a) for an insurer with respect to a health 
     insurance plan shall not exceed 25 percent of the amounts 
     received under the plan for coverage during the period such 
     failure persists.
       ``(c) Liability for Tax.--The tax imposed by this section 
     shall be paid by the insurer.
       ``(d) Limitations on Amount of Tax.--
       ``(1) Tax not to apply to failures corrected within 30 
     days.--No tax shall be imposed by subsection (a) on any 
     failure if--
       ``(A) such failure was due to reasonable cause and not to 
     willful neglect, and
       ``(B) such failure is corrected during the 30-day period 
     (or such period as the Secretary may determine appropriate) 
     beginning on the first date the insurer knows, or exercising 
     reasonable diligence could have known, that such failure 
     existed.
       ``(2) Waiver by secretary.--In the case of a failure which 
     is due to reasonable cause and not to willful neglect, the 
     Secretary may waive part or all of the tax imposed by 
     subsection (a) to the extent that the payment of such tax 
     would be excessive relative to the failure involved.
       ``(e) Definitions.--For purposes of this section, the terms 
     `health insurance plan' and `insurer' have the meanings given 
     such terms in section 100 of the Health Care Assurance Act of 
     1995.''.
       (b) Clerical Amendment.--The table of sections for such 
     chapter 43 is amended by adding at the end the following new 
     item:

``Sec. 4980C. Failure of insurer to comply with certain standards for 
              health insurance plans.''.
                        PART 4--EFFECTIVE DATES

     SEC. 161. EFFECTIVE DATES.

       (a) In General.--Except as provided in this subtitle, the 
     provisions of this subtitle are effective on the date of the 
     enactment of this Act.
       (b) Exception.--The provisions of section 121(b) shall 
     apply to contracts which are issued, or renewed, after the 
     date which is 18 months after the date of the enactment of 
     this Act.
   Subtitle C--Required Coverage Options for Eligible Employees and 
                     Dependents of Small Employers

     SEC. 171. REQUIRING SMALL EMPLOYERS TO OFFER COVERAGE FOR 
                   ELIGIBLE INDIVIDUALS.

       (a) Requirement To Offer.--Each small employer shall make 
     available with respect to each eligible employee a group 
     health plan under which--
       (1) coverage of each eligible individual with respect to 
     such an eligible employee may be elected on an annual basis 
     for each plan year;
       (2) coverage is provided for at least the standard coverage 
     specified in section 112(b); and
       (3) each eligible employee electing such coverage may elect 
     to have any premiums owed by the employee collected through 
     payroll deduction.
       (b) No Employer Contribution Required.--An employer is not 
     required under subsection (a) to make any contribution to the 
     cost of coverage under a group health plan described in such 
     subsection.
       (c) Special Rules.--
       (1) Exclusion of new employers and certain very small 
     employers.--Subsection (a) shall not apply to any small 
     employer for any plan year if, as of the beginning of such 
     plan year--
       (A) such employer (including any predecessor thereof) has 
     been an employer for less than 2 years;
       (B) such employer has no more than 2 eligible employees; or
       (C) no more than 2 eligible employees are not covered under 
     any group health plan.
       (2) Exclusion of family members.--Under such procedures as 
     the Secretary may prescribe, any relative of a small employer 
     may be, at the election of the employer, excluded from 
     consideration as an eligible employee for purposes of 
     applying the requirements of subsection (a). In the case of a 
     small employer that is not an individual, an employee who is 
     a relative of a key employee (as defined in section 416(i)(1) 
     of the Internal Revenue Code of 1986) of the employer may, at 
     the election of the key employee, be considered a relative 
     excludable under this paragraph.
       (3) Optional application of waiting period.--A group health 
     plan shall not be treated as failing to meet the requirements 
     of subsection (a) solely because a period of service by an 
     eligible employee of not more than 60 days is required under 
     the plan for coverage under the plan of eligible individuals 
     with respect to such employee.
       (d) Construction.--Nothing in this section shall be 
     construed as limiting the group health plans, or types of 
     coverage under such a plan, that an employer may offer to an 
     employee.

     SEC. 172. COMPLIANCE WITH APPLICABLE REQUIREMENTS THROUGH 
                   MULTIPLE EMPLOYER HEALTH ARRANGEMENTS.

       (a) In General.--In any case in which an eligible employee 
     is, for any plan year, a participant in a group health plan 
     which is a multiemployer plan, the requirements of section 
     171(a) shall be deemed to be met with respect to such 
     employee for such plan year if the employer requirements of 
     subsection (b) are met with respect to the eligible employee, 
     irrespective of whether, or to what extent, the employer 
     makes employer contributions on behalf of the eligible 
     employee.
       (b) Employer Requirements.--The employer requirements of 
     this subsection are met under a plan with respect to an 
     eligible employee if--
       (1) the employee is eligible under the plan to elect 
     coverage on an annual basis and is provided a reasonable 
     opportunity to make the election in such form and manner and 
     at such times as are provided by the plan;
       (2) coverage is provided for at least the standard coverage 
     specified in section 112(b);
       (3) the employer facilitates collection of any employee 
     contributions under the plan and permits the employee to 
     elect to have employee contributions under the plan collected 
     through payroll deduction; and
       (4) in the case of a plan to which part 1 of subtitle B of 
     title I of the Employee Retirement Income Security Act of 
     1974 does not otherwise apply, the employer provides to the 
     employee a summary plan description described in section 
     102(a)(1) of such Act in the form and manner and at such 
     times as are required under such part 1 with respect to 
     employee welfare benefit plans.

     SEC. 173. ENFORCEMENT BY EXCISE TAX ON SMALL EMPLOYERS.

       (a) In General.--Chapter 47 of the Internal Revenue Code of 
     1986 (relating to excise taxes on certain group health plans) 
     is amended by inserting after section 5000 the following new 
     section:

     ``SEC. 5000A. SMALL EMPLOYER REQUIREMENTS.

       ``(a) General Rule.--There is hereby imposed a tax on the 
     failure of any small employer to comply with the requirements 
     of subtitle C of title I of the Health Care Assurance Act of 
     1995.
       ``(b) Amount of Tax.--The amount of tax imposed by 
     subsection (a) shall be equal to $100 for each day for each 
     individual for which such a failure occurs.
       ``(c) Limitation on Tax.--
       ``(1) Tax not to apply where failures corrected within 30 
     days.--No tax shall be imposed by subsection (a) with respect 
     to any failure if--
       ``(A) such failure was due to reasonable cause and not to 
     willful neglect, and
       ``(B) such failure is corrected during the 30-day period 
     (or such period as the Secretary may determine appropriate) 
     beginning on the 1st date any of the individuals on whom the 
     tax is imposed knew, or exercising reasonable diligence would 
     have known, that such failure existed.
       ``(2) Waiver by secretary.--In the case of a failure which 
     is due to reasonable cause and not to willful neglect, the 
     Secretary may waive part or all of the tax imposed by 
     subsection (a) to the extent that the payment of such tax 
     would be excessive relative to the failure involved.''.
       (b) Clerical Amendment.--The table of sections for such 
     chapter 47 is amended by adding at the end the following new 
     item:

``Sec. 5000A. Small employer requirements.''.
 Subtitle D--Required Coverage Options for Individuals Insured Through 
                           Association Plans

                  PART 1--QUALIFIED ASSOCIATION PLANS

     SEC. 181. TREATMENT OF QUALIFIED ASSOCIATION PLANS.

       (a) General Rule.--For purposes of this subtitle, in the 
     case of a qualified association plan--
       (1) except as otherwise provided in this part, the plan 
     shall meet all applicable requirements of subpart A of part 1 
     and part 2 of subtitle B and subtitle C for group health 
     plans offered to and by small employers;
       (2) if such plan is certified as meeting such requirements 
     and the requirements of this part, such plan shall be treated 
     as a plan established and maintained by a small employer, and 
     individuals enrolled in such plan shall be treated as 
     eligible employees; and
       (3) any individual who is a member of the association not 
     enrolling in the plan shall not be treated as an eligible 
     employee solely by reason of membership in such association.
       (b) Election To Be Treated as Purchasing Cooperative.--
     Subsection (a) shall not apply to a qualified association 
     plan if--
       (1) the health plan sponsor makes an irrevocable election 
     to be treated as a qualified small employer purchasing group 
     for purposes of subpart C of subtitle B; and
       (2) such sponsor meets all requirements of this title 
     applicable to a purchasing cooperative.

     SEC. 182. QUALIFIED ASSOCIATION PLAN DEFINED.

       (a) General Rule.--For purposes of this part, a plan is a 
     qualified association plan if the plan is a multiple employer 
     welfare arrangement or similar arrangement--
     [[Page S201]]   (1) which is maintained by a qualified 
     association;
       (2) which has at least 500 participants in the United 
     States;
       (3) under which the benefits provided consist solely of 
     medical care (as defined in section 213(d) of the Internal 
     Revenue Code of 1986);
       (4) which may not condition participation in the plan, or 
     terminate coverage under the plan, on the basis of the health 
     status or health claims experience of any employee or member 
     or dependent of either;
       (5) which provides for bonding, in accordance with 
     regulations providing rules similar to the rules under 
     section 412 of the Employee Retirement Income Security Act of 
     1974, of all persons operating or administering the plan or 
     involved in the financial affairs of the plan; and
       (6) which notifies each participant or provider that it is 
     certified as meeting the requirements of this subtitle 
     applicable to it.
       (b) Self-Insured Plans.--In the case of a plan which is not 
     fully insured (within the meaning of section 514(b)(6)(D) of 
     the Employee Retirement Income Security Act of 1974), the 
     plan shall be treated as a qualified association plan only 
     if--
       (1) the plan meets minimum financial solvency and cash 
     reserve requirements for claims which are established by the 
     Secretary of Labor and which shall be in lieu of any other 
     such requirements under this subtitle;
       (2) the plan provides an annual funding report (certified 
     by an independent actuary) and annual financial statements to 
     the Secretary of Labor and other interested parties; and
       (3) the plan appoints a plan sponsor who is responsible for 
     operating the plan and ensuring compliance with applicable 
     Federal and State laws.
       (c) Certification.--
       (1) In general.--A plan shall not be treated as a qualified 
     association plan for any period unless there is in effect a 
     certification by the Secretary of Labor that the plan meets 
     the requirements of this part. For purposes of this subtitle, 
     the Secretary of Labor shall be the appropriate certifying 
     authority with respect to the plan.
       (2) Fee.--The Secretary of Labor shall require a $5,000 fee 
     for the original certification under paragraph (1) and may 
     charge a reasonable annual fee to cover the costs of 
     processing and reviewing the annual statements of the plan.
       (3) Expedited procedures.--The Secretary of Labor may by 
     regulation provide for expedited registration, certification, 
     and comment procedures.
       (4) Agreements.--The Secretary of Labor may enter into 
     agreements with the States to carry out the Secretary's 
     responsibilities under this part.
       (d) Availability.--Notwithstanding any other provision of 
     this subtitle, a qualified association plan may limit 
     coverage to individuals who are members of the qualified 
     association establishing or maintaining the plan, an employee 
     of such member, or a dependent of either.
       (e) Special Rules for Existing Plans.--In the case of a 
     plan in existence on January 1, 1995--
       (1) the requirements of subsection (a) (other than 
     paragraph (4), (5), and (6) thereof) shall not apply;
       (2) no original certification shall be required under this 
     part; and
       (3) no annual report or funding statement shall be required 
     before January 1, 1997, but the plan shall file with the 
     Secretary of Labor a description of the plan and the name of 
     the plan sponsor.

     SEC. 183. DEFINITIONS AND SPECIAL RULES.

       (a) Qualified Association.--For purposes of this part, the 
     term ``qualified association'' means any organization which--
       (1) is organized and maintained in good faith by a trade 
     association, an industry association, a professional 
     association, a chamber of commerce, a religious organization, 
     a public entity association, or other business association 
     serving a common or similar industry;
       (2) is organized and maintained for substantial purposes 
     other than to provide a health plan;
       (3) has a constitution, bylaws, or other similar governing 
     document which states its purpose; and
       (4) receives a substantial portion of its financial support 
     from its active, affiliated, or federation members.
       (b) Multiple Employer Welfare Arrangement.--For purposes of 
     this subchapter, the term ``multiple employer welfare 
     arrangement'' has the meaning given such term by section 
     3(40) of the Employee Retirement Income Security Act of 1974.
       (c) Coordination With Part 2.--The term ``qualified 
     association plan'' shall not include a plan to which part 2 
     applies.
 PART 2--SPECIAL RULE FOR CHURCH, MULTIEMPLOYER, AND COOPERATIVE PLANS

     SEC. 191. SPECIAL RULE FOR CHURCH, MULTIEMPLOYER, AND 
                   COOPERATIVE PLANS.

       (a) General Rule.--For purposes of this subtitle, in the 
     case of a group health plan to which this section applies--
       (1) except as otherwise provided in this part, the plan 
     shall be required to meet all applicable requirements of 
     subpart A of part 1 and part 2 of subtitle B and subtitle C 
     for group health plans offered to and by small employers;
       (2) if such plan is certified as meeting such requirements, 
     such plan shall be treated as a plan established and 
     maintained by a small employer and individuals enrolled in 
     such plan shall be treated as eligible employees; and
       (3) any individual eligible to enroll in the plan who does 
     not enroll in the plan shall not be treated as an eligible 
     employee solely by reason of being eligible to enroll in the 
     plan.
       (b) Modified Standards.--
       (1) Certifying authority.--For purposes of this subtitle, 
     the Secretary of Labor shall be the appropriate certifying 
     authority with respect to a plan to which this section 
     applies.
       (2) Availability.--Rules similar to the rules of subsection 
     (e) of section 182 shall apply to a plan to which this 
     section applies.
       (3) Access.--An employer which, pursuant to a collective 
     bargaining agreement, offers an employee the opportunity to 
     enroll in a plan described in subsection (c)(2) shall not be 
     required to make any other plan available to the employee.
       (4) Treatment under state laws.--A church plan described in 
     subsection (c)(1) which is certified as meeting the 
     requirements of this section shall not be deemed to be a 
     multiple employer welfare arrangement or an insurance company 
     or other insurer, or to be engaged in the business of 
     insurance, for purposes of any State law purporting to 
     regulate insurance companies or insurance contracts.
       (c) Plans to Which Section Applies.--This section shall 
     apply to a health plan which--
       (1) is a church plan (as defined in section 414(e) of the 
     Internal Revenue Code of 1986) which has at least 100 
     participants in the United States;
       (2) is a multiemployer plan (as defined in section 3(37) of 
     the Employee Retirement Income Security Act of 1974) which is 
     maintained by a health plan sponsor described in section 
     3(16)(B)(iii) of such Act and which has at least 500 
     participants in the United States; or
       (3) is a plan which is maintained by a rural electric 
     cooperative or a rural telephone cooperative association 
     (within the meaning of section 3(40) of such Act) and which 
     has at least 500 participants in the United States.

                          PART 3--ENFORCEMENT

     SEC. 1001. ENFORCEMENT BY EXCISE TAX ON QUALIFIED 
                   ASSOCIATIONS.

       (a) In General.--Chapter 43 of the Internal Revenue Code of 
     1986 (relating to qualified pension, etc., plans), as amended 
     by section 151, is amended by adding at the end the following 
     new section:

     ``SEC. 4980D. FAILURE OF QUALIFIED ASSOCIATIONS, ETC., TO 
                   COMPLY WITH CERTAIN STANDARDS FOR HEALTH 
                   INSURANCE PLANS.

       ``(a) Imposition of Tax.--
       ``(1) In general.--There is hereby imposed a tax on the 
     failure of a qualified association (as defined in section 183 
     of the Health Care Assurance Act of 1995), church plan (as 
     defined in section 414(e) of the Internal Revenue Code of 
     1986), multiemployer plan (as defined in section 3(37) of the 
     Employee Retirement Income Security Act of 1974), or plan 
     maintained by a rural electric cooperative or a rural 
     telephone cooperative association (within the meaning of 
     section 3(40) of such Act) to comply with the requirements 
     applicable to such association or plans under parts 1 and 2 
     of subtitle D of title I of the Health Care Assurance Act of 
     1995.
       ``(2) Exception.--Paragraph (1) shall not apply to a 
     failure by a qualified association, church plan, 
     multiemployer plan, or plan maintained by a rural electric 
     cooperative or a rural telephone cooperative association in a 
     State if the Secretary of Health and Human Services 
     determines that the State has in effect a regulatory 
     enforcement mechanism that provides adequate sanctions with 
     respect to such a failure by such a qualified association or 
     plan.
       ``(b) Amount of Tax.--The amount of the tax imposed by 
     subsection (a) shall be $100 for each day during which such 
     failure persists for each person to which such failure 
     relates. A rule similar to the rule of section 4980B(b)(3) 
     shall apply for purposes of this section.
       ``(c) Liability for Tax.--The tax imposed by this section 
     shall be paid by the qualified association or plan.
       ``(d) Limitations on Amount of Tax.--
       ``(1) Tax not to apply to failures corrected within 30 
     days.--No tax shall be imposed by subsection (a) on any 
     failure if--
       ``(A) such failure was due to reasonable cause and not to 
     willful neglect, and
       ``(B) such failure is corrected during the 30-day period 
     (or such period as the Secretary may determine appropriate) 
     beginning on the first date the qualified association, church 
     plan, multiemployer plan, or plan maintained by a rural 
     electric cooperative or a rural telephone cooperative 
     association knows, or exercising reasonable diligence could 
     have known, that such failure existed.
       ``(2) Waiver by secretary.--In the case of a failure which 
     is due to reasonable cause and not to willful neglect, the 
     Secretary may waive part or all of the tax imposed by 
     subsection (a) to the extent that the payment of such tax 
     would be excessive relative to the failure involved.''.
       (b) Clerical Amendment.--The table of sections for such 
     chapter 43, as amended by section 151, is amended by adding 
     at the end the following new item:

[[Page S202]]

``Sec. 4980D. Failure of qualified associations, etc., to comply with 
              certain standards for health insurance plans.''.
            Subtitle E--1-Year Extension of Medicare Select

     SEC. 1011. 1-YEAR EXTENSION OF PERIOD FOR ISSUANCE OF 
                   MEDICARE SELECT POLICIES.

       (a) In General.--Section 4358(c) of the Omnibus Budget 
     Reconciliation Act of 1990 (42 U.S.C. 1320c-3 note) is 
     amended by striking ``3\1/2\-year'' and inserting ``4\1/2\-
     year''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as if included in the enactment of the 
     Omnibus Budget Reconciliation Act of 1990.
                       Subtitle F--Tax Provisions

     SEC. 1021. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
                   EMPLOYED INDIVIDUALS.

       (a) Phase-in Deduction.--Section 162(l) of the Internal 
     Revenue Code of 1986 (relating to special rules for health 
     insurance costs of self-employed individuals) is amended--
       (1) by striking paragraph (6); and
       (2) by striking paragraph (1) and inserting the following:
       ``(1) Allowance of deduction.--
       ``(A) In general.--In the case of an individual who is an 
     employee within the meaning of section 401(c)(1), there shall 
     be allowed as a deduction under this section an amount equal 
     to the applicable percentage of the amount paid during the 
     taxable year for insurance which constitutes medical care for 
     the taxpayer, his spouse, and dependents.
       ``(B) Applicable percentage.--For purposes of subparagraph 
     (A), the applicable percentage shall be determined as 
     follows:

``If the taxable year                                    The applicable
begins in:                                               percentage is:
 25 percent5...........................................................
 50 percent7...........................................................
 75 percent9...........................................................
100 percent.eafter.....................................................
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1993.

     SEC. 1022. AMENDMENTS TO COBRA.

       (a) Lower Cost Coverage Options.--Subparagraph (A) of 
     section 4980B(f)(2) of the Internal Revenue Code of 1986 
     (relating to continuation coverage requirements of group 
     health plans) is amended to read as follows:
       ``(A) Type of benefit coverage.--The coverage must consist 
     of coverage which, as of the time the coverage is being 
     provided--
       ``(i) is identical to the coverage provided under the plan 
     to similarly situated beneficiaries under the plan with 
     respect to whom a qualifying event has not occurred,
       ``(ii) is so identical, except such coverage is offered 
     with an annual $1,000 deductible, and
       ``(iii) is so identical, except such coverage is offered 
     with an annual $3,000 deductible.

     If coverage under the plan is modified for any group of 
     similarly situated beneficiaries, the coverage shall also be 
     modified in the same manner for all individuals who are 
     qualified beneficiaries under the plan pursuant to this 
     subsection in connection with such group.''.
       (b) Termination of COBRA Coverage After Eligible for 
     Employer-Based Coverage for 90 Days.--Clause (iv) of section 
     4980B(f)(2)(B) of such Code (relating to period of coverage) 
     is amended--
       (1) by striking ``or'' at the end of subclause (I),
       (2) by redesignating subclause (II) as subclause (III), and
       (3) by inserting after subclause (I) the following new 
     subclause:

       ``(II) eligible for such employer-based coverage for more 
     than 90 days, or''.

       (c) Reduction of Period of Coverage.--Clause (i) of section 
     4980B(f)(2)(B) of such Code (relating to period of coverage) 
     is amended by striking ``18 months'' each place it appears 
     and inserting ``24 months''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to qualifying events occurring after the date of 
     the enactment of this Act.
             TITLE II--PRIMARY AND PREVENTIVE CARE SERVICES

     SEC. 201. GRANTS TO STATES FOR HEALTHY START INITIATIVES.

       (a) In General.--The Secretary shall make grants to States 
     with applications approved under this section in order to 
     significantly reduce infant mortality and low birth weight 
     births and improve the health and well-being of pregnant 
     women, mothers, infants, and their families over a 5-year 
     period through accelerated implementation of innovative 
     strategies.
       (b) Projects Described.--
       (1) In general.--In order to achieve the purposes described 
     in subsection (a), grant funds under this section shall be 
     used to conduct projects in eligible project areas (as 
     defined in paragraph (3)). A project under this section shall 
     be conducted by a community-based consortium (as defined in 
     paragraph (4)) located in such eligible project area.
       (2) Certain activities.--A community-based consortium 
     conducting a project under this section shall--
       (A) have the ability to maximize and coordinate existing 
     Federal, State, and local resources and acquire additional 
     resources;
       (B) ensure substantial involvement in State and local 
     maternal and child health agencies and other agencies;
       (C) have a demonstrated ability to effectively manage the 
     project's fiscal resources;
       (D) have the leadership capability to achieve the project 
     goals and objectives; and
       (E) target communities in which problems are most severe, 
     resources can be concentrated, implementation is manageable, 
     and progress can be measured.
       (3) Eligible project area.--The term ``eligible project 
     area'' means an area which is composed of one or more 
     contiguous or noncontiguous geographic areas which have--
       (A) an average annual infant mortality rate of 150 percent 
     of the State's average annual infant mortality rate based 
     upon an average of the most recently available official vital 
     statistics data for the previous 5-year period; and
       (B) at least 50 infant deaths per year, but not more than 
     200 infant deaths per year.
       (4) Community-based consortium.--The term ``community-based 
     consortium'' means a group of project area providers and 
     consumers, including public health departments, community and 
     migrant health centers, hospitals, local professional 
     associations, medical schools, grant-making foundations, 
     civic groups, schools, churches, social and fraternal 
     organizations, and residents of areas to be served.
       (5) Duration.--A project receiving funds under this section 
     shall operate for no more than 5 years.
       (c) Application.--
       (1) In general.--To be eligible to receive a grant under 
     this section a State shall prepare and submit to the 
     Secretary for approval an application at such time, in such 
     manner, and containing such information, as the Secretary may 
     require, including a description of the use to which the 
     State will apply any amounts received under the grant and the 
     information required under paragraph (3). A State may submit 
     only one application under this subsection.
       (2) Applications on behalf of consortia.--Applications for 
     grant funds shall be submitted under paragraph (1) on behalf 
     of a community-based consortium located in an eligible 
     project area. Such applications shall be approved by the 
     highest elected official of the city or county in which the 
     consortium is based.
       (3) Information required.--The information required is a 
     detailed description of the following:
       (A) The extent to which the State has justified and 
     documented the need for the project to be funded by the grant 
     and developed measurable goals and objectives for meeting the 
     need.
       (B) The level of community commitment and involvement with 
     the project.
       (C) The extent to which the community-based consortium 
     operating in the project area has demonstrated plans for 
     coordinating and maximizing existing and proposed Federal, 
     State, and local and private resources.
       (D) The extent of the involvement of State and local 
     providers of primary care and public health services in the 
     project.
       (E) The State's approach to planning for a public education 
     campaign to address the maintenance of early and continuous 
     prenatal care and of preventive health practices during 
     pregnancy and infancy.
       (F) Other factors which the Secretary determines will 
     increase the potential of projects to reduce by 50 percent 
     the rate of infant mortality.
       (d) Funding.--
       (1) Authorization of appropriations.--For the purposes of 
     carrying out this section, there are authorized to be 
     appropriated $150,000,000 for fiscal year 1996, $250,000,000 
     for fiscal year 1997, and $300,000,000 for fiscal years 1998 
     through 2001.
       (2) Distribution of funds.--
       (A) In general.--For a fiscal year, each State shall be 
     allocated an amount equal to the applicable percentage 
     determined under subparagraph (B) of the total amount 
     available under this section for all States.
       (B) Applicable percentage.--The applicable percentage for a 
     State for a fiscal year is the amount (expressed as a 
     percentage) equal to--
       (i) the amount available to the State in the preceding 
     fiscal year under title V of the Social Security Act; divided 
     by
       (ii) the total amount available to all States in the 
     preceding fiscal year under such title.

     SEC. 202. REAUTHORIZATION OF CERTAIN PROGRAMS PROVIDING 
                   PRIMARY AND PREVENTIVE CARE.

       (a) Immunization Programs.--Section 317(j)(1)(A) of the 
     Public Health Service Act (42 U.S.C. 247b(j)(1)(A)) is 
     amended--
       (1) by striking ``and such sums'' and inserting ``such 
     sums''; and
       (2) by striking ``each of the fiscal years 1992 through 
     1995'' and inserting ``each of the fiscal years 1992 through 
     1995, $600,000,000 for fiscal years 1996 and 1997, and such 
     sums as may be necessary for each of the fiscal years 1998 
     through 2000''.
       (b) Tuberculosis Prevention Grants.--Section 317(j)(2) of 
     the Public Health Service Act (42 U.S.C. 247b(j)(2)) is 
     amended--
       (1) by striking ``and such sums'' and inserting ``such 
     sums''; and
       (2) by striking ``each of the fiscal years 1992 through 
     1995'' and inserting ``each of the fiscal years 1992 through 
     1995, $150,000,000 for fiscal year 1996, and such sums as may 
     be necessary for each of the fiscal years 1997 through 
     1999''.
       (c) Sexually Transmitted Diseases.--Section 318(d)(1) of 
     the Public Health Service Act (42 U.S.C. 247c(d)(1)) is 
     amended--
       (1) by striking ``and such sums'' and inserting ``such 
     sums''; and
       (2) by inserting before the first period the following: 
     ``$125,000,000 for fiscal years 1996 and 1997, and such sums 
     as may be necessary 
     [[Page S203]] for each of the fiscal years 1998 through 
     2000''.
       (d) Migrant Health Centers.--Section 329(h)(1)(A) of the 
     Public Health Service Act (42 U.S.C. 254b(h)(1)(A)) is 
     amended by striking ``and 1991, and such sums as may be 
     necessary for each of the fiscal years 1992 through 1994'' 
     and inserting ``through 1995, $80,000,000 for fiscal year 
     1996, and such sums as may be necessary for each of the 
     fiscal years 1997 through 1999''.
       (e) Community Health Centers.--Section 330(g)(1)(A) of the 
     Public Health Service Act (42 U.S.C. 254c(g)(1)(A)) is 
     amended by striking ``and 1991, and such sums as may be 
     necessary for each of the fiscal years 1992 through 1994'' 
     and inserting ``through 1995, $700,000,000 for fiscal year 
     1996, and such sums as may be necessary for each of the 
     fiscal years 1997 through 1999''.
       (f) Health Care Services for the Homeless.--Section 
     340(q)(1) of the Public Health Service Act (42 U.S.C. 
     256(q)(1)) is amended--
       (1) by striking ``and such'' and inserting ``such''; and
       (2) by striking ``and 1994.'' and inserting ``through 1995, 
     $90,000,000 for fiscal years 1996 and 1997, and such sums as 
     may be necessary for each of the fiscal years 1998 through 
     2000.''.
       (g) Family Planning Project Grants.--Section 1001(d) of the 
     Public Health Service Act (42 U.S.C. 300(d)) is amended--
       (1) by striking ``and $158,400,000'' and inserting 
     ``$158,400,000''; and
       (2) by inserting before the period the following: ``; 
     $200,000,000 for fiscal year 1996, and such sums as may be 
     necessary for each of the fiscal years 1997 through 1999''.
       (h) Breast and Cervical Cancer Prevention.--Section 1509(a) 
     of the Public Health Service Act (42 U.S.C. 300n-5(a)) is 
     amended--
       (1) by striking ``and such sums'' and inserting ``such 
     sums''; and
       (2) by striking ``for each of the fiscal years 1992 and 
     1993'' and inserting ``for each of the fiscal years 1992 
     through 1995, $100,000,000 for fiscal year 1996, and such 
     sums as may be necessary for each of the fiscal years 1997 
     through 1999''.
       (i) Preventive Health and Health Services Block Grant.--
     Section 1901(a) of the Public Health Service Act (42 U.S.C. 
     300w(a)) is amended by striking ``$205,000,000'' and 
     inserting ``$235,000,000''.
       (j) HIV Early Intervention.--Section 2655 of the Public 
     Health Service Act (42 U.S.C. 300ff-55) is amended--
       (1) by striking ``and such sums'' and inserting ``such 
     sums''; and
       (2) by inserting before the period ``, $650,000,000 for 
     fiscal year 1996, and such sums as may be necessary for each 
     of the fiscal years 1997 through 1999''.
       (k) Maternal and Child Health Services Block Grant.--
     Section 501(a) of the Social Security Act (42 U.S.C. 701(a)) 
     is amended by striking ``$705,000,000 for fiscal year 1994 
     and each fiscal year thereafter'' and inserting 
     ``$705,000,000 for fiscal years 1994 and 1995, $800,000,000 
     for fiscal year 1996, and such sums as may be necessary in 
     each of the fiscal years 1997 through 1999''.

     SEC. 203. COMPREHENSIVE SCHOOL HEALTH EDUCATION PROGRAM.

       (a) Purpose.--It is the purpose of this section to 
     establish a comprehensive school health education and 
     prevention program for elementary and secondary school 
     students.
       (b) Program Authorized.--The Secretary of Education 
     (referred to in this section as the ``Secretary''), through 
     the Office of Comprehensive School Health Education 
     established in subsection (e), shall award grants to States 
     from allotments under subsection (c) to enable such States 
     to--
       (1) award grants to local or intermediate educational 
     agencies, and consortia thereof, to enable such agencies or 
     consortia to establish, operate, and improve local programs 
     of comprehensive health education and prevention, early 
     health intervention, and health education, in elementary and 
     secondary schools (including preschool, kindergarten, 
     intermediate, and junior high schools); and
       (2) develop training, technical assistance, and 
     coordination activities for the programs assisted pursuant to 
     paragraph (1).
       (c) Reservations and State Allotments.--
       (1) Reservations.--From the sums appropriated pursuant to 
     the authority of subsection (f) for any fiscal year, the 
     Secretary shall reserve--
       (A) 1 percent for payments to Guam, American Samoa, the 
     Virgin Islands, the Republic of the Marshall Islands, the 
     Federated States of Micronesia, the Northern Mariana Islands, 
     and the Republic of Palau, to be allotted in accordance with 
     their respective needs; and
       (B) 1 percent for payments to the Bureau of Indian Affairs.
       (2) State allotments.--From the remainder of the sums not 
     reserved under paragraph (1), the Secretary shall allot to 
     each State an amount which bears the same ratio to the amount 
     of such remainder as the school-age population of the State 
     bears to the school-age population of all States, except that 
     no State shall be allotted less than an amount equal to 0.5 
     percent of such remainder.
       (3) Reallotment.--The Secretary may reallot any amount of 
     any allotment to a State to the extent that the Secretary 
     determines that the State will not be able to obligate such 
     amount within 2 years of allotment. Any such reallotment 
     shall be made on the same basis as an allotment under 
     paragraph (2).
       (d) Use of Funds.--Grant funds provided to local or 
     intermediate educational agencies, or consortia thereof, 
     under this section may be used to improve elementary and 
     secondary education in the areas of--
       (1) personal health and fitness;
       (2) prevention of chronic diseases;
       (3) prevention and control of communicable diseases;
       (4) nutrition;
       (5) substance use and abuse;
       (6) accident prevention and safety;
       (7) community and environmental health;
       (8) mental and emotional health;
       (9) parenting and the challenges of raising children; and
       (10) the effective use of the health services delivery 
     system.
       (e) Office of Comprehensive School Health Education.--The 
     Secretary shall establish within the Office of the Secretary 
     an Office of Comprehensive School Health Education which 
     shall have the following responsibilities:
       (1) To recommend mechanisms for the coordination of school 
     health education programs conducted by the various 
     departments and agencies of the Federal Government.
       (2) To advise the Secretary on formulation of school health 
     education policy within the Department of Education.
       (3) To disseminate information on the benefits to health 
     education of utilizing a comprehensive health curriculum in 
     schools.
       (f) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated 
     $50,000,000 for fiscal year 1996 and such sums as may be 
     necessary for each of the fiscal years 1997 and 1998 to carry 
     out this section.
       (2) Availability.--Funds appropriated pursuant to the 
     authority of paragraph (1) in any fiscal year shall remain 
     available for obligation and expenditure until the end of the 
     fiscal year succeeding the fiscal year for which such funds 
     were appropriated.

     SEC. 204. COMPREHENSIVE EARLY CHILDHOOD HEALTH EDUCATION 
                   PROGRAM.

       (a) Purpose.--It is the purpose of this section to 
     establish a comprehensive early childhood health education 
     program.
       (b) Program.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary'') shall 
     conduct a program of awarding grants to agencies conducting 
     Head Start training to enable such agencies to provide 
     training and technical assistance to Head Start teachers and 
     other child care providers. Such program shall--
       (1) establish a training system through the Head Start 
     agencies and organizations conducting Head Start training for 
     the purpose of enhancing teacher skills and providing 
     comprehensive early childhood health education curriculum;
       (2) enable such agencies and organizations to provide 
     training to day care providers in order to strengthen the 
     skills of the early childhood workforce in providing health 
     education;
       (3) provide technical support for health education programs 
     and curricula; and
       (4) provide cooperation with other early childhood 
     providers to ensure coordination of such programs and the 
     transition of students into the public school environment.
       (c) Use of Funds.--Grant funds under this section may be 
     used to provide training and technical assistance in the 
     areas of--
       (1) personal health and fitness;
       (2) prevention of chronic diseases;
       (3) prevention and control of communicable diseases;
       (4) dental health;
       (5) nutrition;
       (6) substance use and abuse;
       (7) accident prevention and safety;
       (8) community and environmental health;
       (9) mental and emotional health; and
       (10) strengthening the role of parent involvement.
       (d) Reservation for Innovative Programs.--The Secretary 
     shall reserve 5 percent of the funds appropriated pursuant to 
     the authority of subsection (e) in each fiscal year for the 
     development of innovative model health education programs or 
     curricula.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated $40,000,000 for fiscal year 1996 and such 
     sums as may be necessary for each of the fiscal years 1997 
     and 1998 to carry out this section.
        TITLE III--PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT

     SEC. 301. PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT.

       (a) Right To Decline Medical Treatment.--
       (1) Rights of competent adults.--
       (A) In general.--Except as provided in subparagraph (B), a 
     State may not restrict the right of a competent adult to 
     consent to, or to decline, medical treatment.
       (B) Limitations.--
       (i) Affect on third parties.--A State may impose 
     limitations on the right of a competent adult to decline 
     treatment if such limitations protect third parties 
     (including minor children) from harm.
       (ii) Treatment which is not medically indicated.--Nothing 
     in this subsection shall be construed to require that any 
     individual be offered, or to state that any individual may 
     demand, medical treatment which the health care provider does 
     not have available, or which is, under prevailing medical 
     standards, either futile or otherwise not medically 
     indicated.
       (2) Rights of incapacitated adults.--
       (A) In general.--Except as provided in subparagraph (B)(i) 
     of paragraph (1), States 
     [[Page S204]] may not restrict the right of an incapacitated 
     adult to consent to, or to decline, medical treatment as 
     exercised through the documents specified in this paragraph, 
     or through similar documents or other written methods of 
     directive which evidence the adult's treatment choices.
       (B) Advance directives and powers of attorney.--
       (i) In general.--In order to facilitate the communication, 
     despite incapacity, of an adult's treatment choices, the 
     Secretary, in consultation with the Attorney General, shall 
     develop a national advance directive form that--

       (I) shall not limit or otherwise restrict, except as 
     provided in subparagraph (B)(i) of paragraph (1), an adult's 
     right to consent to, or to decline, medical treatment; and
       (II) shall, at minimum--

       (aa) provide the means for an adult to declare such adult's 
     own treatment choices in the event of a terminal condition;
       (bb) provide the means for an adult to declare, at such 
     adult's option, treatment choices in the event of other 
     conditions which are medically incurable, and from which such 
     adult likely will not recover; and
       (cc) provide the means by which an adult may, at such 
     adult's option, declare such adult's wishes with respect to 
     all forms of medical treatment, including forms of medical 
     treatment such as the provision of nutrition and hydration by 
     artificial means which may be, in some circumstances, 
     relatively nonburdensome.
       (ii)  National durable power of attorney form.--The 
     Secretary, in consultation with the Attorney General, shall 
     develop a national durable power of attorney form for health 
     care decisionmaking. The form shall provide a means for any 
     adult to designate another adult or adults to exercise the 
     same decisionmaking powers which would otherwise be exercised 
     by the patient if the patient were competent.
       (iii) Honored by all health care providers.--The national 
     advance directive and durable power of attorney forms 
     developed by the Secretary shall be honored by all health 
     care providers.
       (iv) Limitations.--No individual shall be required to 
     execute an advance directive. This section makes no 
     presumption concerning the intention of an individual who has 
     not executed an advance directive. An advance directive shall 
     be sufficient, but not necessary, proof of an adult's 
     treatment choices with respect to the circumstances addressed 
     in the advance directive.
       (C) Definition.--For purposes of this paragraph, the term 
     ``incapacity'' means the inability to understand or to 
     communicate concerning the nature and consequences of a 
     health care decision (including the intended benefits and 
     foreseeable risks of, and alternatives to, proposed treatment 
     options), and to reach an informed decision concerning health 
     care.
       (3) Health care providers.--
       (A) In general.--No health care provider may provide 
     treatment to an adult contrary to the adult's wishes as 
     expressed personally, by an advance directive as provided for 
     in paragraph (2)(B), or by a similar written advance 
     directive form or another written method of directive which 
     clearly and convincingly evidence the adult's treatment 
     choices. A health provider who acts in good faith pursuant to 
     the preceding sentence shall be immune from criminal or civil 
     liability or discipline for professional misconduct.
       (B) Health care providers under the medicare and medicaid 
     programs.--Any health care provider who knowingly provides 
     services to an adult contrary to the adult's wishes as 
     expressed personally, by an advance directive as provided for 
     in paragraph (2)(B), or by a similar written advance 
     directive form or another written method of directive which 
     clearly and convincingly evidence the adult's treatment 
     choices, shall be denied payment for such services under 
     titles XVIII and XIX of the Social Security Act.
       (C) Transfers.--Health care providers who object to the 
     provision of medical care in accordance with an adult's 
     wishes shall transfer the adult to the care of another health 
     care provider.
       (4)  Definition.--For purposes of this subsection, the term 
     ``adult'' means--
       (A) an individual who is 18 years of age or older; or
       (B) an emancipated minor.
       (b) Federal Right Enforceable in Federal Courts.--The 
     rights recognized in this section may be enforced by filing a 
     civil action in an appropriate district court of the United 
     States.
       (c) Suicide and Homicide.--Nothing in this section shall be 
     construed to permit, condone, authorize, or approve suicide 
     or mercy killing, or any affirmative act to end a human life.
       (d) Rights Granted by States.--Nothing in this section 
     shall impair or supersede rights granted by State law which 
     exceed the rights recognized by this section.
       (e) Effect on Other Laws.--
       (1) In general.--Except as specified in paragraph (2), 
     written policies and written information adopted by health 
     care providers pursuant to sections 4206 and 4751 of the 
     Omnibus Budget Reconciliation Act of 1990 (Public Law 101-
     508), shall be modified within 6 months after the enactment 
     of this section to conform to the provisions of this section.
       (2) Delay period for uniform forms.--Health care providers 
     shall modify any written forms distributed as written 
     information under sections 4206 and 4751 of the Omnibus 
     Budget Reconciliation Act of 1990 (Public Law 101-508) not 
     later than 6 months after promulgation of the forms referred 
     to in clauses (i) and (ii) of subsection (a)(2)(B) by the 
     Secretary.
       (f) Information Provided to Certain Individuals.--The 
     Secretary shall provide on a periodic basis written 
     information regarding an individual's right to consent to, or 
     to decline, medical treatment as provided in this section to 
     individuals who are beneficiaries under titles II, XVI, 
     XVIII, and XIX of the Social Security Act.
       (g) Recommendations to Congress on Issues Relating to a 
     Patient's Right of Self-Determination.--Not later than 180 
     days after the date of the enactment of this Act, and 
     annually thereafter for a period of 3 years, the Secretary 
     shall provide recommendations to Congress concerning the 
     medical, legal, ethical, social, and educational issues 
     related to in this section. In developing recommendations 
     under this subsection the Secretary shall address the 
     following issues:
       (1) The contents of the forms referred to in clauses (i) 
     and (ii) of subsection (a)(2)(B).
       (2) Issues pertaining to the education and training of 
     health care professionals concerning patients' self-
     determination rights.
       (3) Issues pertaining to health care professionals' duties 
     with respect to patients' rights, and health care 
     professionals' roles in identifying, assessing, and 
     presenting for patient consideration medically indicated 
     treatment options.
       (4) Issues pertaining to the education of patients 
     concerning their rights to consent to, and decline, 
     treatment, including how individuals might best be informed 
     of such rights prior to hospitalization and how uninsured 
     individuals, and individuals not under the regular care of a 
     physician or another provider, might best be informed of 
     their rights.
       (5) Issues relating to appropriate standards to be adopted 
     concerning decisionmaking by incapacitated adult patients 
     whose treatment choices are not known.
       (6) Such other issues as the Secretary may identify.
       (h) Effective Date.--
       (1) In general.--This section shall take effect on the date 
     that is 6 months after the date of enactment of this Act.
       (2) Subsection (g) .--The provisions of subsection (g) 
     shall take effect on the date of enactment of this Act.
            TITLE IV--PRIMARY AND PREVENTIVE CARE PROVIDERS

     SEC. 401. EXPANDED COVERAGE OF CERTAIN NONPHYSICIAN PROVIDERS 
                   UNDER THE MEDICARE PROGRAM.

       (a) In General.--Section 1833(a)(1) of the Social Security 
     Act (42 U.S.C. 1395l(a)(1)) is amended--
       (1) in subparagraph (K), by striking ``80 percent'' and all 
     that follows through ``physician)'' and inserting ``85 
     percent of the fee schedule amount provided under section 
     1848 for the same service performed by a physician''; and
       (2) by amending subparagraph (O) to read as follows: ``(O) 
     with respect to services described in section 1861(s)(2)(K) 
     (relating to services provided by a nurse practitioner, 
     clinical nurse specialist, or physician assistant) the 
     amounts paid shall be 85 percent of the fee schedule amount 
     provided under section 1848 for the same service performed by 
     a physician, and''.
       (b) Nurse Practitioners and Physician Assistants.--Section 
     1842(b)(12) of the Social Security Act (42 U.S.C. 
     1395u(b)(12)) is amended to read as follows:
       ``(12) With respect to services described in clause (i), 
     (ii), or (iv) of section 1861(s)(2)(K) (relating to physician 
     assistants and nurse practitioners)--
       ``(A) payment under this part may only be made on an 
     assignment-related basis; and
       ``(B) the prevailing charges determined under paragraph (3) 
     shall not exceed--
       ``(i) in the case of services performed as an assistant at 
     surgery, 85 percent of the amount that would otherwise be 
     recognized if performed by a physician who is serving as an 
     assistant at surgery, or
       ``(ii) in other cases, 85 percent of the fee schedule 
     amount specified in section 1848 for such services performed 
     by physicians who are not specialists.''.
       (c) Direct Payment for All Nurse Practitioners or Clinical 
     Nurse Specialists.--(1) Section 1832(a)(2)(B)(iv) of the 
     Social Security Act (42 U.S.C. 1395k(a)(2)(B)(iv)) is amended 
     by striking ``provided in a rural area (as defined in section 
     1886(d)(2)(D))''.
       (2) Subparagraph (C) of section 1842(b)(6) of such Act (42 
     U.S.C. 1395u(b)(6)) is amended by striking ``shall'' and 
     inserting ``may''.
       (d) Removal of Restrictions on Settings.--Section 
     1861(s)(2)(K) of the Social Security Act (42 U.S.C. 
     1395x(s)(2)(K)) is amended--
       (1) in clause (i), by striking ``(I) in a hospital'' and 
     all that follows through ``professional shortage area,'';
       (2) in clause (ii), by striking ``in a skilled'' and all 
     that follows through ``1919(a)''; and
       (3) in clause (iii), by striking ``in a rural'' and all 
     that follows through ``(d)(2)(D))''.

     SEC. 402. REQUIRING COVERAGE OF CERTAIN NONPHYSICIAN 
                   PROVIDERS UNDER THE MEDICAID PROGRAM.

       Section 1905(a) of the Social Security Act (42 U.S.C. 
     1396d(a)) is amended--
       (1) by striking ``and'' at the end of paragraph (24),
       (2) by redesignating paragraph (25) as paragraph (26), and
     [[Page S205]]   (3) by inserting after paragraph (24) the 
     following new paragraph:
       ``(25) services furnished by a physician assistant, nurse 
     practitioner, clinical nurse specialist (as defined in 
     section 1861(aa)(5)), and certified registered nurse 
     anesthetist (as defined in section 1861(bb)(2)); and''.

     SEC. 403. MEDICAL STUDENT TUTORIAL PROGRAM GRANTS.

       Part C of title VII of the Public Health Service Act is 
     amended by adding at the end thereof the following new 
     section:

     ``SEC. 753. MEDICAL STUDENT TUTORIAL PROGRAM GRANTS.

       ``(a) Establishment.--The Secretary shall establish a 
     program to award grants to eligible schools of medicine or 
     osteopathic medicine to enable such schools to provide 
     medical students for tutorial programs or as participants in 
     clinics designed to interest high school or college students 
     in careers in general medical practice.
       ``(b) Application.--To be eligible to receive a grant under 
     this section, a school of medicine or osteopathic medicine 
     shall prepare and submit to the Secretary an application at 
     such time, in such manner, and containing such information as 
     the Secretary may require, including assurances that the 
     school will use amounts received under the grant in 
     accordance with subsection (c).
       ``(c) Use of Funds.--
       ``(1) In general.--Amounts received under a grant awarded 
     under this section shall be used to--
       ``(A) fund programs under which students of the grantee are 
     provided as tutors for high school and college students in 
     the areas of mathematics, science, health promotion and 
     prevention, first aide, nutrition and prenatal care;
       ``(B) fund programs under which students of the grantee are 
     provided as participants in clinics and seminars in the areas 
     described in paragraph (1); and
       ``(C) conduct summer institutes for high school and college 
     students to promote careers in medicine.
       ``(2) Design of programs.--The programs, institutes, and 
     other activities conducted by grantees under paragraph (1) 
     shall be designed to--
       ``(A) give medical students desiring to practice general 
     medicine access to the local community;
       ``(B) provide information to high school and college 
     students concerning medical school and the general practice 
     of medicine; and
       ``(C) promote careers in general medicine.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $5,000,000 for fiscal year 1996, and such sums as may be 
     necessary for fiscal year 1997.''.

     SEC. 404. GENERAL MEDICAL PRACTICE GRANTS.

       Part C of title VII of the Public Health Service Act (as 
     amended by section 403) is further amended by adding at the 
     end thereof the following new section:

     ``SEC. 754. GENERAL MEDICAL PRACTICE GRANTS.

       ``(a) Establishment.--The Secretary shall establish a 
     program to award grants to eligible public or private 
     nonprofit schools of medicine or osteopathic medicine, 
     hospitals, residency programs in family medicine or 
     pediatrics, or to a consortium of such entities, to enable 
     such entities to develop effective strategies for recruiting 
     medical students interested in the practice of general 
     medicine and placing such students into general practice 
     positions upon graduation.
       ``(b) Application.--To be eligible to receive a grant under 
     this section, an entity of the type described in subsection 
     (a) shall prepare and submit to the Secretary an application 
     at such time, in such manner, and containing such information 
     as the Secretary may require, including assurances that the 
     entity will use amounts received under the grant in 
     accordance with subsection (c).
       ``(c) Use of Funds.--Amounts received under a grant awarded 
     under this section shall be used to fund programs under which 
     effective strategies are developed and implemented for 
     recruiting medical students interested in the practice of 
     general medicine and placing such students into general 
     practice positions upon graduation.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $25,000,000 for each of the fiscal years 1996 through 2000, 
     and such sums as may be necessary for fiscal years 
     thereafter.''.
                       TITLE V--COST CONTAINMENT

     SEC. 501. NEW DRUG CLINICAL TRIALS PROGRAM.

       Part B of title IV of the Public Health Service Act (42 
     U.S.C. 284 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 409B. NEW DRUG CLINICAL TRIALS PROGRAM.

       ``(a) In General.--The Director of the National Institutes 
     of Health (referred to in this section as the `Director') is 
     authorized to establish and implement a program for the 
     conduct of clinical trials with respect to new drugs and 
     disease treatments determined to be promising by the 
     Director. In determining the drugs and disease treatments 
     that are to be the subject of such clinical trials, the 
     Director shall give priority to those drugs and disease 
     treatments targeted toward the diseases determined--
       ``(1) to be the most costly to treat;
       ``(2) to have the highest mortality; or
       ``(3) to affect the greatest number of individuals.
       ``(b) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $120,000,000 for fiscal year 1996, and such sums as may be 
     necessary for each of the fiscal years 1997 through 2000.''.

     SEC. 502. MEDICAL TREATMENT EFFECTIVENESS.

       (a) Research on Cost-Effective Methods of Health Care.--
     Section 926 of the Public Health Service Act (42 U.S.C. 299c-
     5) is amended--
       (1) in subsection (a), by striking ``and'' and inserting 
     ``and such sums as may be necessary for each of the fiscal 
     years 1996 through 1998''; and
       (2) by adding at the end the following new subsection:
       ``(f) Use of Additional Appropriations.--Within amounts 
     appropriated under subsection (a) for each of the fiscal 
     years 1995 through 1997 that are in excess of the amounts 
     appropriated under such subsection for fiscal year 1993, the 
     Secretary shall give priority to expanding research conducted 
     to determine the most cost-effective methods of health care 
     and for developing and disseminating new practice guidelines 
     related to such methods. In utilizing such amounts, the 
     Secretary shall give priority to diseases and disorders that 
     the Secretary determines are the most costly to the United 
     States and evidence a wide variation in current medical 
     practice.''.
       (b) Research on Medical Treatment Outcomes.--
       (1) Imposition of tax on health insurance policies.--
       (A) In general.--Chapter 36 of the Internal Revenue Code of 
     1986 (relating to certain other excise taxes) is amended by 
     adding at the end thereof the following new subchapter:
            ``Subchapter G--Tax on Health Insurance Policies
``Sec. 4501. Imposition of tax.
``Sec. 4502. Liability for tax.
     ``SEC. 4501. IMPOSITION OF TAX.

       ``(a) General Rule.--There is hereby imposed a tax equal to 
     .001 cent on each dollar, or fractional part thereof, of the 
     premium paid on a policy of health insurance.
       ``(b) Definition.--For purposes of subsection (a), the term 
     `policy of health insurance' means any policy or other 
     instrument by whatever name called whereby a contract of 
     insurance is made, continued, or renewed with respect to the 
     health of an individual or group of individuals.

     ``SEC. 4502. LIABILITY FOR TAX.

       ``The tax imposed by this subchapter shall be paid, on the 
     basis of a return, by any person who makes, signs, issues, or 
     sells any of the documents and instruments subject to the 
     tax, or for whose use or benefit the same are made, signed, 
     issued, or sold. The United States or any agency or 
     instrumentality thereof shall not be liable for the tax.''.
       (B) Conforming amendment.--The table of subchapters for 
     chapter 36 of the Internal Revenue Code of 1986 is amended by 
     adding at the end thereof the following new item:

``Subchapter G. Tax on health insurance policies.''.
       (2) Establishment of trust fund.--
       (A) In general.--Subchapter A of chapter 98 of such Code 
     (relating to trust fund code) is amended by adding at the end 
     thereof the following new section:

     ``SEC. 9512. TRUST FUND FOR MEDICAL TREATMENT OUTCOMES 
                   RESEARCH.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Trust Fund for Medical Treatment Outcomes Research' 
     (referred to in this section as the `Trust Fund'), consisting 
     of such amounts as may be appropriated or credited to the 
     Trust Fund as provided in this section or section 9602(b).
       ``(b) Transfers to Trust Fund.--There is hereby 
     appropriated to the Trust Fund an amount equivalent to the 
     taxes received in the Treasury under section 4501 (relating 
     to tax on health insurance policies).
       ``(c) Distribution of Amounts in Trust Fund.--On an annual 
     basis the Secretary shall distribute the amounts in the Trust 
     Fund to the Secretary of Health and Human Services. Such 
     amounts shall be available to the Secretary of Health and 
     Human Services to pay for research activities related to 
     medical treatment outcomes.''.
       (B) Conforming amendment.--The table of sections for 
     subchapter A of chapter 98 of such Code is amended by adding 
     at the end thereof the following new item:

``Sec. 9512. Trust Fund for Medical Treatment Outcomes Research.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to policies issued after December 31, 1995.

     SEC. 503. NATIONAL HEALTH INSURANCE DATA AND CLAIMS SYSTEM.

       (a) In General.--Using advanced technologies to the maximum 
     extent practicable, the Secretary of Health and Human 
     Services (referred to in this section as the ``Secretary'') 
     shall establish and maintain a national health insurance data 
     and claims system, which shall be comprised of--
       (1) a centralized national data base for health insurance 
     and health outcomes information;
       (2) a standardized, universal mechanism for electronically 
     processing health insurance and health outcomes data; and
     [[Page S206]]   (3) a standardized system for uniform claims 
     and uniform transmission of claims.
       (b) National Data Base for Health Insurance Information.--
     The national data base for health insurance and health 
     outcomes information shall--
       (1) be centrally located;
       (2) rely on advanced technologies to the maximum extent 
     practicable; and
       (3) be readily accessible for data input and retrieval.
       (c) Standardized System for Uniform Claims and Transmission 
     of Claims.--
       (1) Consultation with the naic.--The Secretary shall 
     consult with the National Association of Insurance 
     Commissioners in connection with the establishment of the 
     system under subsection (a)(3).
       (2) Use of recognized standards.--The Secretary shall, to 
     the maximum extent practicable, establish standards for the 
     system under subsection (a)(3) that are consistent with 
     standards that are widely recognized and adopted.
       (3) Timing for establishment of system.--
       (A) In general.--Not later than 12 months after the date of 
     the enactment of this Act, the Secretary shall establish 
     standards for the system under subsection (a)(3).
       (B) Review.--Not later than 24 months after standards have 
     been established under subparagraph (A), the Secretary shall 
     review such standards and make any modifications determined 
     appropriate by the Secretary.
       (d) Confidentiality.--The Secretary shall ensure that all 
     patient information collected under this section is managed 
     so that confidentiality is protected.
       (e) Authorization of Appropriations.--There shall be 
     authorized to be appropriated such sums as may be necessary 
     to carry out the purposes of this section.

     SEC. 504. HEALTH CARE COST CONTAINMENT AND QUALITY 
                   INFORMATION PROGRAM.

       (a) Grant Program.--
       (1) In general.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary'') shall make 
     grants to States that establish or operate health care cost 
     containment and quality information systems (as defined in 
     subsection (f)(1)). In order to be eligible for a grant under 
     this section, a State must establish or operate a system 
     which, at a minimum, meets the Federal standards established 
     under subsection (c).
       (2) Use of funds.--States may use grant funds received 
     under this section only to establish a health care cost 
     containment and quality information system or to improve an 
     existing system operated by the State.
       (b) Submission of Applications.--To be eligible for a grant 
     under this section, a State must submit an application to the 
     Secretary within 2 years after the date of the enactment of 
     this section. Such application shall be submitted in a manner 
     determined appropriate by the Secretary and shall include the 
     designation of a State agency that will operate the health 
     care cost containment and quality information system for the 
     State. The Secretary shall approve or disapprove a State 
     application within 6 months after its submission.
       (c) Minimum Federal Standards.--Not later than 6 months 
     after the date of the enactment of this section, the 
     Secretary, after consultation with the Agency for Health Care 
     Policy and Research, other Federal agencies, the Joint 
     Commission on Accreditation of Hospitals, States, health care 
     providers, consumers, insurers, health maintenance 
     organizations, businesses, academic health centers, and labor 
     organizations that purchase health care, shall establish 
     Federal standards for the operation of health care cost 
     containment and quality information systems by States 
     receiving grants under this section.
       (d) Collection and Public Dissemination of Information by 
     States.--
       (1) In general.--A State receiving a grant under this 
     section shall require that a health care cost containment and 
     quality information system will collect at least the 
     information described in paragraph (2) and publicly 
     disseminate such information in a useful format to 
     appropriate persons such as businesses, consumers of health 
     care services, labor organizations, health plans, hospitals, 
     and other States.
       (2) Information described.--The information described in 
     this paragraph is the following:
       (A) Information on hospital charges.
       (B) Clinical data.
       (C) Demographic data.
       (D) Information regarding treatment of individuals by 
     particular health care providers.
       (3) Electronic transmission of information.--The State 
     program under this section shall provide that any information 
     described in paragraph (2) with respect to which the 
     Secretary has established standards for data elements and 
     information transactions under section 503 shall be 
     transmitted to the State health care cost containment and 
     quality information system in accordance with such standards.
       (4) Privacy and confidentiality.--The State cost 
     containment and quality information system shall ensure that 
     patient privacy and confidentiality is protected at all 
     times.
       (e) Compliance.--If the Secretary determines that a State 
     receiving grant funds under this section has failed to 
     operate a system in accordance with the terms of its approved 
     application, the Secretary may withhold payment of such funds 
     until the State remedies such noncompliance.
       (f) Definitions.--For purposes of this section--
       (1) the term ``health care cost containment and quality 
     information system'' means a system which is established or 
     operated by a State in order to collect and disseminate the 
     information described in subsection (d)(2) in accordance with 
     subsection (d)(1) for the purpose of providing information on 
     health care costs and outcomes in the State; and
       (2) the term ``State'' means a State, the District of 
     Columbia, the Commonwealth of Puerto Rico, the Virgin 
     Islands, Guam, American Samoa, and includes the Commonwealth 
     of the Northern Mariana Islands.
       (g) Authorization.--
       (1) In general.--There are authorized to be appropriated 
     for the purpose of carrying out this section not more than 
     $150,000,000 for fiscal years 1996 through 1998, and such 
     sums as may be necessary thereafter, to remain available 
     until expended.
       (2) Allocation to states.--The Secretary shall allocate the 
     amounts available for grants under this section in any fiscal 
     year in accordance with a formula developed by the Secretary 
     which takes into account--
       (A) the number of hospitals in a State relative to the 
     total number of hospitals in all States;
       (B) the population of the State relative to the total 
     population of all States; and
       (C) the type of system operated or intended to be operated 
     by the State, including whether the State establishes an 
     independent State agency to operate the system.
                        TITLE VI--LONG-TERM CARE
    Subtitle A--Tax Treatment of Qualified Long-Term Care Insurance 
                         Policies and Services

     SEC. 601. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

     SEC. 602. QUALIFIED LONG-TERM CARE SERVICES TREATED AS 
                   MEDICAL CARE.

       (a) General Rule.--Paragraph (1) of section 213(d) 
     (defining medical care) is amended by striking ``or'' at the 
     end of subparagraph (B), by redesignating subparagraph (C) as 
     subparagraph (D), and by inserting after subparagraph (B) the 
     following new subparagraph:
       ``(C) for qualified long-term care services (as defined in 
     subsection (g)), or''.
       (b) Qualified Long-Term Care Services Defined.--Section 213 
     (relating to the deduction for medical, dental, etc., 
     expenses) is amended by adding at the end the following new 
     subsections:
       ``(g) Qualified Long-Term Care Services.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified long-term care 
     services' means necessary diagnostic, curing, mitigating, 
     treating, preventive, therapeutic, and rehabilitative 
     services, and maintenance and personal care services (whether 
     performed in a residential or nonresidential setting) which--
       ``(A) are required by an individual during any period the 
     individual is an incapacitated individual (as defined in 
     paragraph (2)),
       ``(B) have as their primary purpose--
       ``(i) the provision of needed assistance with 1 or more 
     activities of daily living (as defined in paragraph (3)), or
       ``(ii) protection from threats to health and safety due to 
     severe cognitive impairment, and
       ``(C) are provided pursuant to a continuing plan of care 
     prescribed by a licensed professional (as defined in 
     paragraph (4)).
       ``(2) Incapacitated individual.--The term `incapacitated 
     individual' means any individual who--
       ``(A) is unable to perform, without substantial assistance 
     from another individual (including assistance involving 
     cueing or substantial supervision), at least 2 activities of 
     daily living as defined in paragraph (3), or
       ``(B) has severe cognitive impairment as defined by the 
     Secretary in consultation with the Secretary of Health and 
     Human Services.
     Such term shall not include any individual otherwise meeting 
     the requirements of the preceding sentence unless a licensed 
     professional within the preceding 12-month period has 
     certified that such individual meets such requirements.
       ``(3) Activities of daily living.--Each of the following is 
     an activity of daily living:
       ``(A) Eating.
       ``(B) Toileting.
       ``(C) Transferring.
       ``(D) Bathing.
       ``(E) Dressing.
       ``(4) Licensed professional.--The term `licensed 
     professional' means--
       ``(A) a physician or registered professional nurse, or
       ``(B) any other individual who meets such requirements as 
     may be prescribed by the Secretary after consultation with 
     the Secretary of Health and Human Services.
       ``(5) Certain services not included.--The term `qualified 
     long-term care services' shall not include any services 
     provided to an individual--
       ``(A) by a relative (directly or through a partnership, 
     corporation, or other entity) unless the relative is a 
     licensed professional with respect to such services, or
       ``(B) by a corporation or partnership which is related 
     (within the meaning of section 267(b) or 707(b)) to the 
     individual.
     [[Page S207]] For purposes of this paragraph, the term 
     `relative' means an individual bearing a relationship to the 
     individual which is described in paragraphs (1) through (8) 
     of section 152(a).
       ``(h) Special Rule for Certain Long-Term Care Expenses.--
     For purposes of subsection (a), the term `dependent' shall 
     include any parent or grandparent of the taxpayer for whom 
     the taxpayer has expenses for qualified long-term care 
     services described in subsection (g), but only to the extent 
     of such expenses.''.
       (c) Technical Amendments.--
       (1) Subparagraph (D) of section 213(d)(1) (as redesignated 
     by subsection (a)) is amended to read as follows:
       ``(D) for insurance (including amounts paid as premiums 
     under part B of title XVIII of the Social Security Act, 
     relating to supplementary medical insurance for the aged) 
     covering medical care referred to in--
       ``(i) subparagraphs (A) and (B), or
       ``(ii) subparagraph (C), but only if such insurance is 
     provided under a qualified long-term care insurance policy 
     (as defined in section 7705(a)) and the amount paid for such 
     insurance is not disallowed under section 7705(b).''
       (2) Paragraph (6) of section 213(d) is amended--
       (A) by striking ``subparagraphs (A) and (B)'' and inserting 
     ``subparagraph (A), (B), and (C)'', and
       (B) by striking ``paragraph (1)(C)'' in subparagraph (A) 
     and inserting ``paragraph (1)(D)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 603. DEFINITION OF QUALIFIED LONG-TERM CARE INSURANCE 
                   POLICY.

       (a) In General.--Chapter 79 (relating to definitions) is 
     amended by adding at the end the following new section:

     ``SEC. 7705. QUALIFIED LONG-TERM CARE INSURANCE POLICY.

       ``(a) Qualified Long-Term Care Insurance Policy.--For 
     purposes of this title--
       ``(1) In general.--The term `qualified long-term care 
     insurance policy' means any long-term care policy that--
       ``(A) limits benefits under such policy to individuals who 
     are certified by a licensed professional (as defined in 
     section 213(g)(4)) within the preceding 12-month period--
       ``(i) as being unable to perform, without substantial 
     assistance from another individual (including assistance 
     involving cueing or substantial supervision), 2 or more 
     activities of daily living (as defined in section 213(g)(3)), 
     or
       ``(ii) having a severe cognitive impairment (as defined in 
     section 213(g)(2)(B)), and
       ``(B) satisfies the requirements of paragraphs (2), (3), 
     (4), (5), and (6).
       ``(2) Premium requirements.--The requirements of this 
     paragraph are met with respect to a policy if such policy 
     provides that premium payments may not be made earlier than 
     the date such payments would have been made if the contract 
     provided for level annual payments over the life expectancy 
     of the insured or 20 years, whichever is shorter. A policy 
     shall not be treated as failing to meet the requirements of 
     the preceding sentence solely by reason of a provision in the 
     policy providing for a waiver of premiums if the insured 
     becomes an individual certified in accordance with paragraph 
     (1)(A).
       ``(3) Prohibition of cash value.--The requirements of this 
     paragraph are met if the policy does not provide for a cash 
     value or other money that can be paid, assigned, pledged as 
     collateral for a loan, or borrowed, other than as provided in 
     paragraph (4).
       ``(4) Refunds of premiums and dividends.--The requirements 
     of this paragraph are met with respect to a policy if such 
     policy provides that--
       ``(A) policyholder dividends are required to be applied as 
     a reduction in future premiums or, to the extent permitted 
     under paragraph (6), to increase benefits described in 
     subsection (a)(2),
       ``(B) refunds of premiums upon a partial surrender or a 
     partial cancellation are required to be applied as a 
     reduction in future premiums, and
       ``(C) any refund on the death of the insured, or on a 
     complete surrender or cancellation of the policy, cannot 
     exceed the aggregate premiums paid under the contract.
     Any refund on a complete surrender or cancellation of the 
     policy shall be includible in gross income to the extent that 
     any deduction or exclusion was allowable with respect to the 
     premiums.
       ``(5) Coordination with other entitlements.--The 
     requirements of this paragraph are met with respect to a 
     policy if such policy does not pay, or provide reimbursement 
     for, expenses incurred to the extent that such expenses are 
     also paid or reimbursed under title XVIII of the Social 
     Security Act or are paid or reimbursed under a qualified 
     health insurance plan (as defined in section 100(10) of the 
     Health Care Assurance Act of 1995).
       ``(6) Maximum benefit.--
       ``(A) In general.--The requirements of this paragraph are 
     met if the benefits payable under the policy for any period 
     (whether on a periodic basis or otherwise) may not exceed the 
     dollar amount in effect for such period.
       ``(B) Nonreimbursement payments permitted.--Benefits shall 
     include all payments described in subsection (a)(2) to or on 
     behalf of an insured individual without regard to the 
     expenses incurred during the period to which the payments 
     relate. For purposes of section 213(a), such payments shall 
     be treated as compensation for expenses paid for medical 
     care.
       ``(C) Dollar amount.--The dollar amount in effect under 
     this paragraph shall be $150 per day (or the equivalent 
     amount within the calendar year in the case of payments on 
     other than a per diem basis).
       ``(D) Adjustments for increased costs.--
       ``(i) In general.--In the case of any calendar year after 
     1996, the dollar amount in effect under subparagraph (C) for 
     any period or portion thereof occurring during such calendar 
     year shall be equal to the sum of--

       ``(I) the amount in effect under subparagraph (C) for the 
     preceding calendar year (after application of this 
     subparagraph), plus
       ``(II) the product of the amount referred to in subclause 
     (I) multiplied by the cost-of-living adjustment for the 
     calendar year.

       ``(ii) Cost-of-living adjustment.--For purposes of clause 
     (i), the cost-of-living adjustment for any calendar year is 
     the percentage (if any) by which the cost index under clause 
     (iii) for the preceding calendar year exceeds such index for 
     the second preceding calendar year.
       ``(iii) Cost index.--The Secretary, in consultation with 
     the Secretary of Health and Human Services, shall before 
     January 1, 1997, establish a cost index to measure increases 
     in costs of nursing home and similar facilities. The 
     Secretary may from time to time revise such index to the 
     extent necessary to accurately measure increases or decreases 
     in such costs.
       ``(iv) Special rule for calendar year 1997.--
     Notwithstanding clause (ii), for purposes of clause (i), the 
     cost-of-living adjustment for calendar year 1997 is the sum 
     of 1.5 percent plus the percentage by which the CPI for 
     calendar year 1996 (as defined in section 1(f)(4)) exceeds 
     the CPI for calendar year 1995 (as so defined).
       ``(E) Period.--For purposes of this paragraph, a period 
     begins on the date that an individual has a condition which 
     would qualify for certification under subsection (b)(1)(A) 
     and ends on the earlier of the date upon which--
       ``(i) such individual has not been so certified within the 
     preceding 12-months, or
       ``(ii) the individual's condition ceases to be such as to 
     qualify for certification under subsection (b)(1)(A).
       ``(F) Aggregation rule.--For purposes of this paragraph, 
     all policies issued with respect to the same insured shall be 
     treated as one policy.
       ``(b) Treatment of Coverage Provided as Part of a Life 
     Insurance Contract.--No deduction shall be allowed under 
     section 213(a) for charges against a life insurance 
     contract's cash surrender value (within the meaning of 
     section 7702(f)(2)(A)), unless such charges are includible in 
     income as a result of the application of section 72(e)(10) 
     and the coverage provided by the rider is a qualified long-
     term care insurance policy under subsection (a).''.
       (b) Clerical Amendment.--The table of sections for chapter 
     79 is amended by inserting after the item relating to section 
     7704 the following new item:

``Sec. 7705. Qualified long-term care insurance.''.
     SEC. 604. TREATMENT OF QUALIFIED LONG-TERM CARE INSURANCE AS 
                   ACCIDENT AND HEALTH INSURANCE FOR PURPOSES OF 
                   TAXATION OF INSURANCE COMPANIES.

       (a) In General.--Section 818 (relating to other definitions 
     and special rules) is amended by adding at the end the 
     following new subsection:
       ``(g) Qualified Long-Term Care Insurance Treated as 
     Accident or Health Insurance.--For purposes of this 
     subchapter, any reference to noncancellable accident or 
     health insurance contracts shall be treated as including a 
     reference to qualified long-term care insurance.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.
     SEC. 605. TREATMENT OF ACCELERATED DEATH BENEFITS UNDER LIFE 
                   INSURANCE CONTRACTS.

       (a) Exclusion of Amounts Received.--Section 101 (relating 
     to certain death benefits) is amended by adding at the end 
     the following new subsection:
       ``(g) Treatment of Certain Accelerated Death Benefits.--
       ``(1) In general.--For purposes of this section, any amount 
     paid to an individual under a life insurance contract on the 
     life of an insured who is a terminally ill individual, who 
     has a dread disease, or who has been permanently confined to 
     a nursing home shall be treated as an amount paid by reason 
     of the death of such insured.
       ``(2) Terminally ill individual.--For purposes of this 
     subsection, the term `terminally ill individual' means an 
     individual who has been certified by a physician, licensed 
     under State law, as having an illness or physical condition 
     which can reasonably be expected to result in death in 12 
     months or less.
       ``(3) Dread disease.--For purposes of this subsection, the 
     term `dread disease' means a medical condition which has been 
     certified by a physician as having required or requiring 
     extraordinary medical intervention without which the insured 
     would die, or a medical condition which would, in the absence 
     of extensive or extraordinary medical treatment, result in a 
     drastically limited life span.
     [[Page S208]]   ``(4) Permanently confined to a nursing 
     home.--For purposes of this subsection, an individual has 
     been permanently confined to a nursing home if the individual 
     is presently confined to a nursing home and has been 
     certified by a physician, licensed under State law, as having 
     an illness or cognitive impairment or loss of functional 
     capacity which can reasonably be expected to result in the 
     individual remaining in a nursing home for the rest of the 
     individual's life.''.
       (b) Treatment of Qualified Accelerated Death Benefit Riders 
     as Life Insurance.--
       (1) In general.--Section 818 (relating to other definitions 
     and special rules), as amended by section 603, is amended by 
     adding at the end the following new subsection:
       ``(h) Qualified Accelerated Death Benefit Riders Treated as 
     Life Insurance.--For purposes of this part--
       ``(1) In general.--Any reference to a life insurance 
     contract shall be treated as including a reference to a 
     qualified accelerated death benefit rider on such contract.
       ``(2) Qualified accelerated death benefit rider.--For 
     purposes of this subsection, the term `qualified accelerated 
     death benefit rider' means any rider or addendum on, or other 
     provision of, a life insurance contract which provides for 
     payments to an individual on the life of an insured upon such 
     insured becoming a terminally ill individual (as defined in 
     section 101(g)(2)), incurring a dread disease (as defined in 
     section 101(g)(3)), or being permanently confined to a 
     nursing home (as defined in section 101(g)(4)).''.
       (2) Definitions of life insurance and modified endowment 
     contracts.--
       (A) Rider treated as qualified additional benefit.--
     Subparagraph (A) of section 7702(f)(5) (relating to 
     definition of life insurance contract) is amended by striking 
     ``or'' at the end of clause (iv), by redesignating clause (v) 
     as clause (vi), and by inserting after clause (iv) the 
     following new clause:
       ``(v) any qualified accelerated death benefit rider (as 
     defined in section 818(h)(2)), or any qualified long-term 
     care insurance which reduces the death benefit, or''.
       (B) Transitional rule.--For purposes of applying section 
     7702 or 7702A of the Internal Revenue Code of 1986 to any 
     contract (or determining whether either such section applies 
     to such contract), the issuance of a rider or addendum on, or 
     other provision of, a life insurance contract permitting the 
     acceleration of death benefits (as described in section 
     101(g)) or for qualified long-term care insurance shall not 
     be treated as a modification or material change of such 
     contract.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.
  Subtitle B--Tax Incentives for Purchase of Qualified Long-Term Care 
                               Insurance

     SEC. 611. CREDIT FOR QUALIFIED LONG-TERM CARE PREMIUMS.

       (a) General Rule.--Subpart C of part IV of subchapter A of 
     chapter 1 (relating to refundable credits) is amended by 
     redesignating section 35 as section 36 and by inserting after 
     section 34 the following new section:

     ``SEC. 35. LONG-TERM CARE INSURANCE CREDIT.

       ``(a) General Rule.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     subtitle for the taxable year an amount equal to the 
     applicable percentage of the premiums for a qualified long-
     term care insurance policy (as defined in section 7705(a)) 
     paid during such taxable year for such individual or the 
     spouse of such individual.
       ``(b) Applicable Percentage.--
       ``(1) In general.--For purposes of this section, the term 
     `applicable percentage' means 28 percent reduced (but not 
     below zero) by 1 percentage point for each $1,000 (or 
     fraction thereof) by which the taxpayer's adjusted gross 
     income for the taxable year exceeds the base amount.
       ``(2) Base amount.--For purposes of paragraph (1) the term 
     `base amount' means--
       ``(A) except as otherwise provided in this paragraph, 
     $25,000,
       ``(B) $40,000 in the case of a joint return, and
       ``(C) zero in the case of a taxpayer who--
       ``(i) is married at the close of the taxable year (within 
     the meaning of section 7703) but does not file a joint return 
     for such taxable year, and
       ``(ii) does not live apart from his or her spouse at all 
     times during the taxable year.
       ``(c) Coordination With Medical Expense Deduction.--Any 
     amount allowed as a credit under this section shall not be 
     taken into account under section 213.''.
       (b) Clerical Amendment.--The table of sections for subpart 
     C of part IV of subchapter A of chapter 1 is amended by 
     striking the item relating to section 35 and inserting the 
     following:

``Sec. 35. Long-term care insurance credit.
``Sec. 36. Overpayments of tax.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 612. EXCLUSION FROM GROSS INCOME OF BENEFITS RECEIVED 
                   UNDER QUALIFIED LONG-TERM CARE INSURANCE 
                   POLICIES.

       (a) In General.--Section 105 (relating to amounts received 
     under accident and health plans) is amended by adding at the 
     end the following new subsection:
       ``(j) Special Rules Relating to Qualified Long-Term Care 
     Insurance Policy.--For purposes of section 104, this section, 
     and section 106--
       ``(1) Benefits treated as payable for sickness, etc.--Any 
     benefit received through a qualified long-term care insurance 
     policy shall be treated as amounts received through accident 
     or health insurance for personal injuries or sickness.
       ``(2) Expenses for which reimbursement provided under 
     qualified long-term care insurance policy treated as incurred 
     for medical care or functional loss.--
       ``(A) Expenses.--Expenses incurred by the taxpayer or 
     spouse, or by the dependent, parent, or grandparent of 
     either, to the extent of benefits paid under a qualified 
     long-term care insurance policy shall be treated for purposes 
     of subsection (b) as incurred for medical care (as defined in 
     section 213(d)).
       ``(B) Benefits.--Benefits received under a qualified long-
     term care insurance policy shall be treated for purposes of 
     subsection (c) as payment for the permanent loss or loss of 
     use of a member or function of the body or the permanent 
     disfigurement of the taxpayer or spouse, or the dependent, 
     parent, or grandparent of either.
       ``(3) References to accident and health plans.--Any 
     reference to an accident or health plan shall be treated as 
     including a reference to a plan providing qualified long-term 
     care services (as defined in section 213(a)).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 613. EMPLOYER DEDUCTION FOR CONTRIBUTIONS MADE FOR LONG-
                   TERM CARE INSURANCE.

       (a) In General.--Subparagraph (B) of section 404(b)(2) 
     (relating to plans providing certain deferred benefits) is 
     amended to read as follows:
       ``(B) Exceptions.--Subparagraph (A) shall not apply to--
       ``(i) any benefit provided through a welfare benefit fund 
     (as defined in section 419(e)), or
       ``(ii) any benefit provided under a qualified long-term 
     care insurance policy through the payment (in whole or in 
     part) of premiums for such policy by an employer pursuant to 
     a plan for its active or retired employees, but only if any 
     refund or premium is applied to reduce the future costs of 
     the plan or increase benefits under the plan.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 614. INCLUSION OF QUALIFIED LONG-TERM CARE INSURANCE IN 
                   CAFETERIA PLANS.

       (a) In General.--Paragraph (2) of section 125(d) (relating 
     to the exclusion of deferred compensation) is amended by 
     adding at the end the following new subparagraph:
       ``(D) Exception for qualified long-term care insurance 
     policies.--For purposes of subparagraph (A), amounts paid or 
     incurred for any qualified long-term care insurance policy 
     shall not be treated as deferred compensation to the extent 
     section 404(b)(2)(A) does not apply to such amounts by reason 
     of section 404(b)(2)(B)(ii).''.
       (b) Conforming Amendment.--Subsection (f) of section 125 
     (relating to qualified benefits) is amended by striking ``and 
     such term includes'' and inserting the following: ``, 
     qualified long-term care insurance policies, and''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 615. EXCLUSION FROM GROSS INCOME FOR AMOUNTS RECEIVED ON 
                   CANCELLATION OF LIFE INSURANCE POLICIES AND 
                   USED FOR QUALIFIED LONG-TERM CARE INSURANCE 
                   POLICIES.

       (a) In General.--
       (1) Exclusion from gross income.--
       (A) In general.--Part III of subchapter B of chapter 1 
     (relating to items specifically excluded from gross income) 
     is amended by redesignating section 136 as section 137 and by 
     inserting after section 135 the following new section:

     ``SEC. 136. AMOUNTS RECEIVED ON CANCELLATION, ETC. OF LIFE 
                   INSURANCE CONTRACTS AND USED TO PAY PREMIUMS 
                   FOR QUALIFIED LONG-TERM CARE INSURANCE.

       ``No amount (which but for this section would be includible 
     in the gross income of an individual) shall be included in 
     gross income on the whole or partial surrender, cancellation, 
     or exchange of any life insurance contract during the taxable 
     year if--
       ``(1) such individual has attained age 59\1/2\ on or before 
     the date of the transaction, and
       ``(2) the amount otherwise includible in gross income is 
     used during such year to pay for any qualified long-term care 
     insurance policy which--
       ``(A) is for the benefit of such individual or the spouse 
     of such individual if such spouse has attained age 59\1/2\ on 
     or before the date of the transaction, and
       ``(B) may not be surrendered for cash.''.
       (B) Clerical amendment.--The table of sections for such 
     part III is amended by striking the last item and inserting 
     the following new items:

``Sec. 136. Amounts received on cancellation, etc. of life insurance 
              contracts and used to pay premiums for qualified long-
              term care insurance.
``Sec. 137. Cross references to other Acts.''.
       (2) Certain exchanges not taxable.--Subsection (a) of 
     section 1035 (relating to certain exchanges of insurance 
     contracts) is amended by striking the period at the end of 
     paragraph (3) and inserting ``; or'', and by adding at the 
     end the following new paragraph:
     [[Page S209]]   ``(4) in the case of an individual who has 
     attained age 59\1/2\, a contract of life insurance or an 
     endowment or annuity contract for a qualified long-term care 
     insurance policy, if such policy may not be surrendered for 
     cash.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 616. USE OF GAIN FROM SALE OF PRINCIPAL RESIDENCE FOR 
                   PURCHASE OF QUALIFIED LONG-TERM HEALTH CARE 
                   INSURANCE.

       (a) In General.--Subsection (d) of section 121 (relating to 
     1-time exclusion of gain from sale of principal residence by 
     individual who has attained age 55) is amended by adding at 
     the end the following new paragraph:
       ``(10) Eligibility of home equity conversion sale-leaseback 
     transaction for exclusion.--
       ``(A) In general.--For purposes of this section, the term 
     `sale or exchange' includes a home equity conversion sale-
     leaseback transaction.
       ``(B) Home equity conversion sale-leaseback transaction.--
     For purposes of subparagraph (A), the term `home equity 
     conversion sale-leaseback' means a transaction in which--
       ``(i) the seller-lessee--

       ``(I) has attained the age of 55 before the date of the 
     transaction,
       ``(II) sells property which during the 5-year period ending 
     on the date of the transaction has been owned and used as a 
     principal residence by such seller-lessee for periods 
     aggregating 3 years or more,
       ``(III) uses a portion of the proceeds from such sale to 
     purchase a qualified long-term care insurance policy, which 
     policy may not be surrendered for cash,
       ``(IV) obtains occupancy rights in such property pursuant 
     to a written lease requiring a fair rental, and
       ``(V) receives no option to repurchase the property at a 
     price less than the fair market price of the property 
     unencumbered by any leaseback at the time such option is 
     exercised, and

       ``(ii) the purchaser-lessor--

       ``(I) is a person,
       ``(II) is contractually responsible for the risks and 
     burdens of ownership and receives the benefits of ownership 
     (other than the seller-lessee's occupancy rights) after the 
     date of such transaction, and
       ``(III) pays a purchase price for the property that is not 
     less than the fair market price of such property encumbered 
     by a leaseback, and taking into account the terms of the 
     lease.

       ``(C) Additional definitions.--For purposes of subparagraph 
     (B)--
       ``(i) Occupancy rights.--The term `occupancy rights' means 
     the right to occupy the property for any period of time, 
     including a period of time measured by the life of the 
     seller-lessee on the date of the sale-leaseback transaction 
     (or the life of the surviving seller-lessee, in the case of 
     jointly held occupancy rights), or a periodic term subject to 
     a continuing right of renewal by the seller-lessee (or by the 
     surviving seller-lessee, in the case of jointly held 
     occupancy rights).
       ``(ii) Fair rental.--The term `fair rental' means a rental 
     for any subsequent year which equals or exceeds the rental 
     for the first year of a sale-leaseback transaction.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales after December 31, 1995, in taxable 
     years beginning after such date.
                                                                    ____

                   Health Care Assurance Act of 1995


                            senator specter

                          summary of the bill

       Title I: Health Insurance Market Reforms: Market reforms 
     include:
       Insurance Standards: Title I establishes standards for 
     health insurers which would include guaranteed issue and 
     renewability requirements of coverage to all individuals 
     regardless of the existence of pre-existing conditions.
       Tax Equity for the Self-Employed: Title I provides self-
     employed individuals and their families 100 percent tax 
     deductibility for the cost of health insurance coverage. 
     Under current law, no deduction exists for the self-employed 
     since the law which provided only a 25 percent deduction for 
     such costs expired on December 31, 1993. However, all other 
     employers may deduct 100 percent of such costs. Title I 
     corrects this inequity for the self-employed, 3.9 million of 
     which are currently uninsured.
       Small Employer and Individual Purchasing Groups: Title I 
     establishes voluntary small employer and individual 
     purchasing groups designed to provide affordable, 
     comprehensive health coverage options for such employers, 
     their employees, and other uninsured and underinsured 
     individuals and families. Health plans offering coverage 
     through such groups will: (1) provide a standard health 
     benefits package; (2) guarantee issue and renewability of 
     coverage including persons with pre-existing health 
     conditions; (3) adjusted community rated premiums by age and 
     family size in order to spread risk and provide price equity 
     to all; and (4) meet certain other guidelines involving 
     marketing practices.
       Empoyer Mandate to Offer: Title I provides that each small 
     employer shall offer at least 2 health care plans, one of 
     which is a fee-for-service plan or a plan with a point-of-
     service option. There is no requirement that employers pay 
     for coverage in this bill. This provision is to increase 
     consumers availability of choice in their health care 
     coverage.
       Standard Benefits Package: The standard package of benefits 
     would include a variation of benefits permitted among 
     actuarially equivalent plans developed through the National 
     Association of Insurance Commissioners (NAIC). The standard 
     plan will consist of the following services when medically 
     necessary or appropriate: (1) medical and surgical services; 
     (2) medical equipment; (3) preventive services; and (4) 
     emergency transportation in frontier areas.
       Portability: For those persons who are uninsured between 
     jobs, and for insured persons who fear losing coverage should 
     they lose their jobs, Title I reforms existing COBRA law by: 
     (1) extending to 24 months the minimum time period in which 
     COBRA covers former employees through their former employers' 
     plans; and (2) expanding coverage options to include plans 
     with a lower premium and a $1,000 deductible--saving a 
     typical family of four 20 percent in monthly premiums--and 
     plans with a lower premium and a $3,000 deductible--saving a 
     family of four 52 percent in monthly premiums.
       Medicare Select Program: Title I extends the Medicare 
     Select Program, which expires on June 30, 1995, for one year. 
     This program authorizes States to conduct demonstration 
     projects to give Medicare recipients the option of enrolling 
     in a Preferred Provider Organization for their supplemental 
     Medicare insurance. Currently, there are demonstration 
     projects in 15 States.
       Title II: Primary and Preventive Care Services: Title II 
     authorizes the Secretary of Health and Human services to 
     provide grants to States for projects (healthy start 
     initiatives) to reduce infant mortality and low birth weight 
     births and to improve the health and well-being of mothers 
     and their families, pregnant women and infants. Title II also 
     would provide assistance through a grant program to local 
     education agencies and pre-school programs to provide 
     comprehensive health education. In addition, Title II 
     increases authorization of several existing preventive health 
     programs, such as, breast and cervical cancer prevention, 
     childhood immunizations, and community health centers.
       Title III: Patient's Right to Decline Medical Treatment: 
     Improve the effectiveness and portability of advance 
     directives by strengthening the federal law regarding patient 
     self-determination and establishing uniform federal forms 
     with regard to self-determination.
       Title IV: Primary and Preventive Care Providers: Utilizing 
     non-physician providers, such as nurse practitioners, 
     physician assistants, and clinical nurse specialists, by 
     providing direct reimbursement without regard to the setting 
     where services are provided through the Medicare and Medicaid 
     programs. Title IV also seeks to encourage students early on 
     in their medical training to pursue a career in primary care, 
     and it provides assistance to medical training programs to 
     recruit such students.
       Title V: Cost Containment: Cost containment provisions 
     include:
       Outcomes Research: Expands funding for outcomes research 
     necessary for the development of medical practice guidelines 
     and increasing consumers' access to information in order to 
     reduce the delivery of unnecessary and overpriced care.
       New Drug Clinical Trials Program: Title V authorize a 
     program at the National Institutes of Health to expand 
     support
      for clinical trials on promising new drugs and disease 
     treatments with priority given to the most costly diseases 
     impacting the greatest number of people.
       National Health Insurance Data and Claims System: Title V 
     authorizes the development of a National Health Insurance 
     Data System to curtail the escalating costs associated with 
     paper work and bureaucracy. The Secretary of Health and Human 
     Services is directed to create a system to centralize health 
     insurance and health outcomes information incorporating 
     effective privacy protections. Standardizing such information 
     will reduce the time and expense involved in processing 
     paperwork, increase efficiency, and reduce costs.
       Health Care Cost Containment and Quality Information 
     Project: Title V authorizes the Secretary of Health and Human 
     Services to award grants to States to establish a health care 
     cost and quality information system or to improve an existing 
     system. Currently 39 States have State mandates to establish 
     an information system, and of those 39, approximately 20 
     States have information systems in operation. Information, 
     such as hospital charge data and patient procedure outcomes 
     data, which the State agency or council collects is used by 
     businesses, labor, health maintenance organizations, 
     hospitals, researchers, consumers, States, etc. Such data has 
     enabled hospitals to become more competitive, businesses to 
     save health care dollars, and consumers to make informed 
     choices regarding their care.
       Title VI: Long-Term Care: Title VI increases access to 
     long-term care by: (1) establishing a tax credit and 
     deduction for amounts paid towards long-term care services of 
     family members; (2) excluding life insurance savings used to 
     pay for long-term care from income tax; (3) allowing 
     employees to select long-term care insurance as part of a 
     cafeteria plan and allowing employers to deduct this expense; 
     (4) setting standards 
     [[Page S210]] that require long-term care to eliminate the 
     current bias that favors institutional care over community 
     and home-based alternatives.


                               footnotes

     \1\Bureau of the Census Statistical Brief, ``Health Insurance 
     Coverage: 1993,'' October 1994.
     \2\98th Congress 1/3/83 until 1/2/85--(1) S. 811: The Health 
     Care for Displaced Workers Act of 1983 (3/15/83); (2) S. 
     2051: The Health Care Cost Containment Act of 1983 (11/4/83); 
     99th Congress 1/3/85 until 1/2/87--(3) S. 379: The Health 
     Care Cost Containment Act of 1985 (2/5/85); (4) S. 1873: The 
     Community Based Disease Prevention and Health Promotion 
     Projects Act of 1985 (11/21/85); 100th Congress 1/3/87 until 
     1/2/89--(5) S. 281: The Aid to Families and Employment 
     Transition Act (1/6/87); (6) S. 1871: The Pediatric Acquired 
     Immunodeficiency Syndrome (AIDS) Resource Centers Act (11/17/
     87); (7) S. 1872: The Minority Acquired Immunodeficiency 
     Syndrome (AIDS) Awareness and Prevention Projects Act (11/17/
     87); 101st Congress 1/3/89 until 1/2/91--(8) S. 896: The 
     Pediatric AIDS Resource Centers Act (5/2/89); (9) S. 1607: 
     Authorization of the Office of Minority Health (9/12/89); 
     102nd Congress 1/3/91 until 1/5/93--(10) S. 1122: The Long-
     Term Care Incentives Act of 1991 (5/22/91); (11) S. 1214: The 
     Change in Designation of Lancaster County, PA, for Purposes 
     of Medicare Services (6/4/91); (12) S. 1864: The Children's 
     Hospital of Philadelphia Medical Research Facility Act (10/
     23/91); (13) S. 1995: The Health Care Access and 
     Affordability Act of 1991 (11/20/91); (14) S. 2028: The Women 
     Veteran's Health Equity Act of 1991 (11/22/91); (15) S. 2029: 
     Self-Funding of Veteran's Administration Health Care Act (11/
     22/91); (16) S. 2188: Rural Veterans Health Care Facilities 
     Act (2/5/92); (17) S. 3176: The Health Care Affordability and 
     Quality Improvement Act of 1992 (8/12/92); (18) S. 3353: The 
     Deferred Acquisition Cost Act (10/6/92); 103rd Congress 1/5/
     93 until 2/3/94--(19) S. 18: The Comprehensive Health Care 
     Act of 1993 (1/21/93); (20) S. 631: The Comprehensive Access 
     and Affordability Health Care Act of 1993 (3/23/93).
     \3\``We did pass that bill twice, and President Bush vetoed 
     it twice as part of a broader bill.'' Senator George 
     Mitchell; CBS ``Face The Nation''; Sunday, January 23, 1994.
     \4\August 5, 1992; March 11, 1993; April 1, 1993; May 6, 
     1993; May 13, 1993; September 24, 1993; October 7, 1993; 
     October 27, 1993; January 27, 1994; August 5, 1994; August 
     10, 1994; August 11, 1994; September 26, 1994.
     5. July 29, 1992 and April 27, 1993. A third amendment was 
     filed on March 26, 1993.
     6. Bureau of the Census Statistical Brief, ``Health Insurance 
     Coverage: 1993,'' October 1994.
     7. Employee Benefit Research Institute, Analysis of March 
     1993 Current Population Survey, January 1994.
     8. Employee Benefit Research Institute, Analysis of March 
     1993 Current Population Survey, January 1994.
     9. Congressional Budget Office Testimony before the Committee 
     on Ways and Means, U.S. House of Representatives, March 4, 
     1992.
     10. J. Lubitz and R. Prihoda, ``The Use and Costs of Medicare 
     Services in the Last Two Years of Life,'' Health Care 
     Financing Review, Spring, 1984.
     11. Based on 1993 Medicare expenditures from the Health Care 
     Financing Administration of $143 billion and 1994 projected 
     expenditures of $158 billion.
     12. HHS News, U.S. Department of Health and Human Services, 
     ``National Health Expenditures for 1993,'' November 22, 1994.
     13. Dr. Marcia Angell, former Editor of the New England 
     Journal of Medicine, ``Cost Containment and the Physician,'' 
     The Journal of the American Medical Association, September 6, 
     1985.
     14. The Reporter, Lansdale, PA, March 30, 1993.
     15. HHS News, U.S. Department of Health and Human Services, 
     ``National Health Expenditures for 1993,'' November 22, 1994.
                                 ______

      By Mr. NICKLES (for himself, Mr. Helms, Mr. Smith, and Mr. 
        Grassley):
  S. 19. A bill to amend title IV of the Social Security Act to enhance 
educational opportunity, increase school attendance, and promote self-
sufficiency among welfare recipients; to the Committee on Finance.


                         learnfare legislation

 Mr. NICKLES. Mr. President, today I along with Senators Helms, Smith, 
and Grassley introduce legislation that will give States greater 
flexibility in enacting laws that link school attendance to welfare 
benefits. These innovative State initiatives are known as Learnfare.
  We are all aware that this Congress will face the larger issue of 
comprehensive which emphasizes individual choice and responsibility as 
the key to leaving welfare and getting out of poverty, not a bloated 
bureaucracy. A very significant part of that reform which will break 
the welfare cycle is education and innovative Learnfare programs.
  State governments all over the Nation are looking for new ways to 
reduce the prevalence of welfare dependency and lower high school 
dropout rates. Learnfare calls on adults to be held accountable for 
their actions, and holds parents on public assistance accountable for 
the education of their children. This is just plain common sense.
  Most policymakers agree that education is the best way to break the 
cycle of
 generational poverty that plagues our Nation's poor. Children who drop 
out of high school are more likely to be unemployed, more likely to 
turn to a life of crime, and more likely to end up on welfare than 
their peers who remain in school. We must take every measure possible 
to insure that every child in the country benefits from our Nation's 
educational systems.

  Pioneered in Wisconsin, Learnfare is the linkage of AFDC dollars to 
school attendance. Interest in these programs has been voiced from 
Massachusetts to California and from Washington to Florida as well as 
the State of Oklahoma. Currently, States are able to enact these 
measures by obtaining a waiver from the Department of Health and Human 
Services to expand their mandated Job Opportunities and Basic Skills 
[JOBS] programs to include school-age dependents of AFDC recipients. 
Unfortunately, States seeking to gain this waiver have met with 
Federal, bureaucratic stonewalling. I want to stress that this is not a 
mandate on the States but simply gives them the option by removing 
barriers which currently exist if they chose to implement a Learnfare 
program.
  My legislation will remove this Federal stumbling block by amending 
the State programs section of the social Security code's AFDC 
regulations to allow States the option of implementing Learnfare 
programs. Doing away with the necessity for a Federal waiver will 
encourage States to implement innovative ways of keeping at-risk youths 
in school. It is important to note that this legislation places no 
mandates on the States--it simply gives them the option to establish a 
program if they chose. Knowing the importance of educational 
opportunities, the Nation's Governors adopted a 90-percent graduation 
rate as one of the national education goals. Learnfare will help attain 
this goal.
  I truly hope this will be the first step toward reestablishing the 
once commonplace notion that individuals are answerable for their 
actions. Requiring responsible actions of welfare recipients will 
create a two-way obligation between the States and those on welfare. 
States are obliged to assist recipients in getting off the welfare 
rolls and recipients, in turn, are encouraged to use their benefits to 
better their situation.
  We must challenge all Americans to take a stake in our Nation's 
education systems. As the debate on welfare reform unfolds, I challenge 
my colleagues to support this legislation and ensure that it is a key 
part of any welfare reform package. It will give the States the 
opportunity to enact programs the ensure every school-age child in 
America the educational opportunity they deserve.
                                 ______

      By Mr. MOYNIHAN:
  S. 20. A bill to amend title 18, United States Code, with respect to 
the licensing of ammunition manufacturers, and for other purposes; to 
the Committee on the Judiciary.


                     handgun ammunition control act

 Mr. MOYNIHAN. Mr. President, I introduce a measure to improve our 
information about the regulation and criminal use of ammunition and to 
prevent the irresponsible production of ammunition. This bill has three 
components. First, it would require importers and manufacturers of 
ammunition to keep records and submit an annual report to the Bureau of 
Alcohol, Tobacco and Firearms (BATF) on the disposition of ammunition, 
including the amount, caliber and type of ammunition imported or 
manufactured. Second, it would require the Secretary of the Treasury, 
in consultation with the National Academy of Sciences, to conduct a 
study of ammunition use and make recommendations on the efficacy of 
reducing crime by restricting access to ammunition. Finally, it would 
amend title 18 of the United States Code to raise the application fee 
for a license to manufacture certain calibers of ammunition.
  While there are enough handguns in circulation to last well into the 
22nd century, there is perhaps only a 4-year supply of ammunition. But 
how much of what kind of ammunition? Where does it come from? Where 
does it go? There are currently no reporting requirements for 
manufacturers or importers of ammunition; earlier reporting 
requirements were repealed in 1986. The Federal Bureau of 
Investigation's annual Uniform Crime Reports, based on information 
provided by local law enforcement agencies, does not record the 
caliber, type, or quantity of
 ammunition used in crime. In short, our data base is woefully 
inadequate.

  I supported the Brady law, which requires a waiting period before the 
purchase of a handgun, and the recent ban on semiautomatic weapons. But 
while the debate over gun control continues, I offer another 
alternative: Ammunition control. After all, as I have said 
[[Page S211]] before, guns do not kill people; bullets do.
  Ammunition control is not a new idea. In 1982 Phil Caruso of the New 
York City Patrolmen's Benevolent Association asked me to do something 
about armor-piercing bullets. Jacketed in tungsten or other materials, 
these rounds could penetrate four police flak jackets and five Los 
Angeles County telephone books. They are of no sporting value. I 
introduced legislation, the Law Enforcement Officers Protection Act, to 
ban the ``cop-killer'' bullets in the 97th, 98th and 99th Congresses. 
It enjoyed the overwhelming support of law enforcement groups and, 
ultimately, tacit support from the National Rifle Association. It was 
finally signed into law by President Reagan on August 28, 1986.
  The Crime Bill enacted in 1994 contained my amendment to broaden the 
1986 ban to cover new thick steel-jacketed armor-piercing rounds.
  Our cities are becoming more aware of the benefits to be gained from 
ammunition control. The District of Columbia and some other cities 
prohibit a person from possessing ammunition without a valid license 
for a firearm of the same caliber or gauge as the ammunition. Beginning 
in 1990, the City of Los Angeles banned the sale of all ammunition 1 
week prior to Independence Day and new Year's Day in an effort to 
reduce injuries and deaths caused by the firing of guns into the air. 
And most recently, in September of 1994, the City of Chicago became the 
first in America to ban the sale of all handgun ammunition.
  Such efforts are laudable. But they are isolated attempts to cure 
what is in truth a national disease. We need to do more, but to do so, 
we need information to guide policy-making. This bill would fulfill 
that need by requiring annual reports to BATF by manufacturers and 
importers and by directing a study by the National Academy of Sciences. 
We also need to encourage manufacturers of ammunition to be more 
responsible. By substantially increasing application fees for licenses 
to manufacture .25 caliber, .32 caliber, and 9 mm ammunition, this bill 
would discourage the reckless production of unsafe ammunition or 
ammunition which causes excessive damage.
  I urge my colleagues to support this measure, and ask unanimous 
consent that its full text be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 20

       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 ``Handgun Ammunition Control Act of 
     1995''.

     SECTION 1. RECORDS OF DISPOSITION OF AMMUNITION.

       (a) Amendment of Title 18, United States Code.--Section 
     923(g) of title 18, United States Code, is amended--
       (1) in paragraph (1)(A) by inserting after the second 
     sentence ``Each licensed importer and manufacturer of 
     ammunition shall maintain such records of importation, 
     production, shipment, sale or other disposition of ammunition 
     at the place of business of such importer or manufacturer for 
     such period and in such form as the Secretary may by 
     regulations prescribe. Such records shall include the amount, 
     caliber, and type of ammunition.''; and
       (2) by adding at the end the following new paragraph:
       ``(8) Each licensed importer or manufacturer of ammunition 
     shall annually prepare a summary report of imports, 
     production, shipments, sales, and other dispositions during 
     the preceding year. The report shall be prepared on a form 
     specified by the Secretary, shall include the amounts, 
     calibers, and types of ammunition that were disposed of, and 
     shall be forwarded to the office specified thereon not later 
     than the close of business on the date specified by the 
     Secretary.''.
       (b) Study of Criminal Use and Regulation of Ammunition.--
     The Secretary of the Treasury shall request the National 
     Academy of Sciences to--
       (1) prepare, in consultation with the Secretary, a study of 
     the criminal use and regulation of ammunition; and
       (2) to submit to Congress, not later than July 31, 1997, a 
     report with recommendations on the potential for preventing 
     crime by regulating or restricting the availability of 
     ammunition.

     SEC. 2. INCREASE IN LICENSING FEES FOR MANUFACTURERS OF 
                   AMMUNITION.

       Section 923(a) of title 18, United States Code, is 
     amended--
       (1) in paragraph (1)--
       (A) by redesignating subparagraphs (A), (B), (C), and (D) 
     as subparagraphs (B), (C), (D), and (E) respectively;
       (2) by inserting after paragraph (1), the following new 
     paragraph:
       ``(A) of .25 caliber, .32 caliber, or 9 mm ammunition, a 
     fee of $10,000 per year;''
                                 ______

      By Mr. Dole (for himself, Mr. Lieberman, Mr. Helms, Mr. Thurmond, 
        Mr. McConnell, Mr. Lott, Mr. Feingold, Mr. D'Amato, Mr. McCain, 
        Mr. Biden, Mr. Mack, Mr. Kyl, Mr. Gorton, Mr. Hatch, Mr. 
        Specter, Mr. Packwood and Mr. Craig):
  S. 21. A bill to terminate the United States arms embargo applicable 
to the Government of Bosnia and Herzegovina; to the Committee on 
Foreign Relations.


                  BOSNIA-HERZEGOVINA SELF-DEFENSE ACT

  Mr. DOLE. Mr. President, I will also introduce another bill, which 
will have the number S. 21, together with the distinguished Senator 
from Connecticut, Senator Lieberman. The bill is known as the Bosnia-
Herzegovina Self-Defense Act of 1995, which would terminate the United 
States arms embargo on Bosnia. We are pleased to be joined by a number 
of bipartisan sponsors, and we have had a lot of bipartisan votes. In 
fact, the last time we had a vote we had 58 votes.
  Mr. President, I was hoping that we would not have to offer this 
legislation again this year. I was hoping that after more than a 
thousand days of Sarajevo's Siege, after more than thousand excuses 
from the leaders of the international community, that finally some 
action would be taken. Tragically, despite countless promises of tough 
action against brutal Serb aggression, the international community has 
chosen to confront this egregious violation of international law and 
the affront to principles of humanity, with what amounts to 
appeasement. Ironically, the only promise this administration, the 
Europeans, and the United Nations have kept is their promise to 
continue to deny the Bosnian people the right to defend themselves 
against genocidal aggression.
  What is so disappointing about this situation, is that the last time 
the Senate debated this matter, the Clinton administration made the 
following predictions and commitments: First, the contact group 
countries were serious about living up to the commitments they made in 
the July 30 communique, which included stricter enforcement and 
expansion of the exclusion zones in Bosnia; Second, the Clinton 
administration would seek a multilateral lifting of the arms embargo in 
the U.N. Security Council; and Third no further concessions would be 
made to the Bosnian Serbs, the contact group plan being a ``Peaceful 
Ultimatum.''
  Nearly 6 months later, what do we see? In Bihac we saw that there is 
no will to fulfill current NATO and U.N. commitment to protect the safe 
havens in Bosnia, let alone take on greater responsibilities;
  A U.S.-sponsored resolution to lift the embargo lies dormant in the 
U.N. Security Council for more than 2 months now; and
  Representatives from contact group countries are rushing to Belgrade 
and to Pale to further sweeten the pot for the Bosnian Serbs and their 
mentor, Slobodan Milosevic. The have tacitly agreed to a confederation 
between Serb-controlled areas of Bosnia and Serbia, and are moving 
toward extending sanctions relief for Serbia even though Milosevic's 
announced embargo of the Bosnian Serbs has proven to be a sham.
  We still every day hope peace is around the corner. We are told, let 
us pass some more resolutions, let somebody in the United Nations make 
a statement, let us listen to the British, let us listen to the French, 
let us do all these things and we have been doing it and doing it and 
nothing happens.
  The United Nations has a dual key approach, which means NATO cannot 
do anything in Bosnia, if they want to do anything, and even that is 
questionable.
  Another ceasefire has been reached--and maybe it will hold--but by 
their own admission, the Bosnian Serbs have only agreed to the contact 
group plan as a ``basis for further negotiations.'' Can we really call 
that progress?
  And so, we are offering legislation to lift the arms embargo once 
more. This bill does allow for the possibility that the ceasefire may 
hold for 4 months; it would not lift the arms embargo until 
[[Page S212]] May 1 of this year unless there is a formal request from 
the Bosnian Government prior to that time.
  There are those who will say that this bill undermines the ceasefire 
and the peace process. I strongly disagree. Since when does leverage 
undermine diplomacy? So far, the only leverage is on the Bosnian Serb 
side--because they control 70 percent of Bosnia, they hold U.N. troops 
hostage with impunity, they shut down the Sarajevo airlift by 
threatening NATO planes, because they do these things and all they have 
to fear is another visit by Yasushi Akashi. On the other side are the 
Bosnians, who are nominally protected in their safe havens, and can 
only see evidence of their rights as a sovereign nation on paper--in 
the U.N. Charter or some U.N. resolution.
  The bottom line is that if this legislation is passed and no peace 
settlement is reached, Radovan Karadzic and his thugs will have to face 
greater consequences than another meeting of the contact group. That 
would be a great improvement on the empty threats of the last 33 
months.
  I would like to quote from the late Secretary General of NATO, 
Manfred Woerner, who gave a speech in the Fall of 1993 about NATO and 
foreign policy in the 21st century. He said, and I quote: ``First, 
political solutions and diplomatic efforts will only work if backed by 
the necessary military power and the credible resolve to use it against 
an aggressor. Second, if you cannot or do not want to help the victim 
of aggression, enable him to help himself.''
  The United States and the members of the alliance would do well to 
consider the wise words of Manfred Woerner--one of the strongest 
secretaries general in NATO's history. The contact group's diplomacy is 
not backed by the necessary military power or credible resolve--and 
that is why its diplomatic efforts have failed, causing considerable 
damage to the credibility of the alliance. Furthermore, since after 
these long months it is apparent that the international community is 
unwilling to confront Serbian aggression, we should help the victim of 
this aggression, Bosnia.
  Mr. President, I would also like to address some of the arguments 
made against ``unilaterally'' lifting the arms embargo. First, if the 
United States acts first, that does not mean we will not be joined by 
other countries. I believe that despite British and French objections, 
even some of our NATO allies would join us. Moreover, there are other 
countries, including the gulf states and moderate Islamic governments 
that would participate in financing and providing military assistance. 
As for the argument that leading the way would lead to the demise of 
other embargoes against aggressor states, such as Iraq, this argument 
assumes that our allies cannot tell the difference between a legal and 
illegal embargo.
  Second, the provision of training and arms would not require the 
deployment of U.S. ground troops. The Bosnians have an
 advantage in manpower--what they need are weapons. Indeed, it is the 
administration's policy of committing the United States to assist in 
the enforcement of the contact group settlement that would lead to the 
potential deployment of tens of thousands of U.S. ground troops--and 
for a considerable length of time because the Bosnians would still be 
unable to protect their territory.

  Third, contrary to those who point to reports of arms shipments from 
Iran to Bosnia, a decision to arm the Bosnians would reduce the 
potential influence and role of radical extremists states like Iran. 
The Muslins in Bosnia are secular Muslims, not fundamentalists, who 
have lived with Christians and Jews in peace for centuries. Ironically, 
our policy toward Bosnia has fueled anti-Western extremism in the 
Middle East.
  Some say it is too late, the Bosnians have lost and it would take too 
long for them to achieve the capability to defend themselves against 
the powerful Serb forces. In my view, that judgment should be left to 
the Bosnians--it is their country and their future. Furthermore, the 
fact is that Serb forces have not paid a price for their aggression and 
we do not know what the impact of leveling the military playing field 
will have on the effectiveness of Serb forces. Let us recall that some 
in our Government greatly overestimated the cohesiveness and morale of 
the Iraqi forces, and underestimated the military and political impact 
that stingers had on the mighty Soviet Red Army in Afghanistan. Serb 
forces are not the Red army, they are not the Iraqi army.
  As for the extent of military assistance required, the Bosnians do 
not need to duplicate the inventory of Serb forces, only acquire the 
means to counter them. Earlier Pentagon estimates that $5 billion in 
military assistance is required to assist the Bosnians amount to a 
scare tactic. The Bosnians need Soviet-style weapons--which are readily 
available and less expensive than top of the line U.S. systems--in 
addition to training in strategy and tactics.
  Finally, I would like to address the argument I heard in London, that 
the withdrawal of U.N. protection forces would result in the serious 
deterioration of the humanitarian situation in Bosnia. This would 
likely be true in the short term, particularly in the eastern enclaves. 
However, we must recognize that the circumstances have worsened in 
recent months despite the presence of U.N. protection forces. Should 
the Bosnian Serbs choose to target their forces on the eastern 
enclaves, as they did in Bihac, U.N. protection would probably amount 
to very little. The bottom line is that over the long term, the 
Bosnians are better off putting their future into their own hands, than 
in the hands of international bureaucrats--even if in the short term, 
the situation worsens.
  Mr. President, we are rapidly approaching the third anniversary of 
this tragic war. We have an opportunity to take real action, to take 
meaningful action, by terminating this illegal and unjust arms embargo 
on Bosnia-Herzegovina. I urge my colleagues to sign up as cosponsors 
and take a firm stand in support of democracy, international law and 
humanity.
  Mr. President, I ask unanimous consent that my entire statement be 
made a part of the Record, and also a statement by Senator Lieberman 
and Senator Feingold. And I would indicate to my colleagues the other 
cosponsors. Of course, our resolution is open to additional cosponsors. 
The cosponsors are Senators Dole and Lieberman, Helms, Thurmond, 
McConnell, Lott, Feingold, D'Amato, McCain, Biden, Mack, Kyl, Gorton, 
Hatch, Specter, Packwood and Gregg.
  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. 21

       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 ``Bosnia and Herzegovina Self-
     Defense Act of 1995''.

     SEC. 2. FINDINGS.

       The Congress makes the following findings:
       (1) For the reasons stated in section 520 of the Foreign 
     Relations Authorization Act, Fiscal Years 1994 and 1995 
     (Public Law 103-236), the Congress has found that continued 
     application of an international arms embargo to the 
     Government of Bosnia and Herzegovina contravenes that 
     Government's inherent right of individual or collective self-
     defense under Article 51 of the United National Charter and 
     therefore is inconsistent with international law.
       (2) The United States has not formally sought multilateral 
     support for terminating the arms embargo against Bosnia and 
     Herzegovina through a vote on a United Nations Security 
     Council resolution since the enactment of section 1404 of the 
     National Defense Authorization Act for Fiscal Year 1995 
     (Public Law 103-337).
       (3) The United Nations Security Council has not taken 
     measures necessary to maintain international peace and 
     security in Bosnia and Herzegovina since the aggression 
     against that country began in April 1992.

     SEC. 3. STATEMENT OF SUPPORT.

       The Congress supports the efforts of the Government of the 
     Republic of Bosnia and Herzegovina--
       (1) to defend its people and the territory of the Republic;
       (2) to preserve the sovereignty, independence, and 
     territorial integrity of the Republic; and
       (3) to bring about a peaceful, just, fair, viable, and 
     sustainable settlement of the conflict in Bosnia and 
     Herzegovina.

     SEC. 4. TERMINATION OF ARMS EMBARGO.

       (a) Termination.--The President shall terminate the United 
     States arms embargo of the Government of Bosnia and 
     Herzegovina on--
     [[Page S213]]   (1) the date of receipt from that Government 
     of a request for assistance in exercising its right of self-
     defense under Article 51 of the United Nations Charter, or
       (2) May 1, 1995,
     whichever comes first.
       (b) Definition.--As used in this section, the term ``United 
     States arms embargo of the Government of Bosnia and 
     Herzegovina'' means the application to the Government of 
     Bosnia and Herzegovina of--
       (1) the policy adopted July 10, 1991, and published in the 
     Federal Register of July 19, 1991 (58 F.R. 33322) under the 
     heading ``Suspension of Munitions Export Licenses to 
     Yugoslavia''; and
       (2) any similar policy being applied by the United States 
     Government as of the date of receipt of the request described 
     in subsection (a) pursuant to which approval is denied for 
     transfers of defense articles and defense services to the 
     former Yugoslavia.
       (c) Rule of Construction.--Nothing in this section shall be 
     interpreted as authorization for deployment of United States 
     forces in the territory of Bosnia and Herzegovina for any 
     purpose, including training, support, or delivery of military 
     equipment.

  Mr. LIEBERMAN. Mr. President, the people of Bosnia-Herzegovina are in 
the midst of their third terrible winter of war. For most Bosnians, 
uncertain food supplies, running water, heat and fuel compound the 
misery of loss--of family members, and friends, personal security and 
their former multicultural identity. Bosnia, a United Nations member 
state, has been the victim of aggression from neighboring Serbia, has 
suffered genocide in the guise of ``ethnic cleansing,'' and has been 
effectively forced by the so-called ``Great Powers'' to trade 
sovereignty over more than half of its territory in exchange for 
unfulfilled promises of peace.
  Why did these terrible things happen to Bosnia? Has it blown up 
civilian aircraft? Assassinated policeman? Kidnapped diplomats? Built 
or exported nuclear weapons? No. Bosnia had the temerity to be one of 
four states to leave the former Yugoslavia pursuant to a vote by its 
citizens.
  When the remnants of the former Yugoslavia retaliated by invading 
Bosnia, how did the United Nations respond? It has not supported member 
state Bosnia's right of self-defense. It has not effectively defended 
the safe areas it persuaded Bosnia to agree to. It has assisted the 
Serbs with ethnic cleansing by moving populations out of contested 
areas and providing a share of fuel and humanitarian supplies to Serb 
forces--even while they shelled civilians and U.N. peacekeepers.
  The intention behind these misguided policies was to stop the 
fighting in Bosnia. It was thought that an evenhanded policy taking 
sides against the aggressor was the best way to restore peace. But the 
practical effect of this policy has been anything but evenhanded.
  The divisions rending the former Yugoslavia are not new since the end 
of the cold war. The emotions propelling the violence in that region 
festered invisibly for years but did not disappear under authoritarian 
communism. Similarly, they will not disappear under an unjust peace 
imposed under the United Nations. This is the post-cold war era, when 
democracy and human rights are supposed to be free to flower. It is 
inconsistent both with the opportunities presented by the end of the 
cold war and with the United States' commitment to human rights and 
democracy to participate in a policy which does not side with the 
victims against the aggressor and reward democratic leaders instead of 
authoritarian dictators.
  The United Nations asserts that lifting the arms embargo against 
Bosnia will lead to further violence in Bosnia, expansion of the 
conflict to neighboring Balkan States, the withdrawal of UNPROFOR and 
Serbian conquest of even more of Bosnia. Rather than risk these 
consequences, some argue the United States should continue to acquiesce 
in a peace process that has resulted in more and more concessions from 
the Bosnian side in exchange for more and more broken promises by the 
Serbs and the United Nations. But as the continued shelling of Sarajevo 
and strangling of supplies to the eastern areas shows, this process has 
not produced peace. The attack launched from Croatia into Bihac in 
November demonstrated that it has not prevented spillover to other 
Balkan States. And as President Izethegovic stated at the CSCE Summit 
in Budapest, and unjust peace will not prevent the outgunned Bosnians 
from continuing their fight for freedom.
  Evenhandedness between a victim and an aggressor is not only immoral; 
it is dangerous. If Serbian aggression and intransigence is successful 
in Bosnia, we can expect more of it, not only in the Balkans but 
elsewhere as well. No peace based on injustice will endure long in a 
democracy. In international relations as in medicine, an intervener 
should be sure first to do no harm. These should be the starting points 
of United States' and United Nations' policy in Bosnia. We should not 
presume a U.N. role first and then allow a preoccupation with the 
practicalities of it to obscure our purpose.
  I have heard warnings that if the United States unilaterally lifts 
the arms embargo on Bosnia, not only Bosnia but also the institutions 
of the United Nations and even NATO will be harmed. It do not see the 
consequences of the United States' correcting its policy in Bosnia in 
such stark terms. But I am prepared to live with the consequences that 
follow. To some, Bosnian sovereignty seems a small price to pay in 
order to preserve NATO and the U.N. But if NATO, which stood for a 
strong defense against potential aggression during the cold war, stands 
for timidity in the face of aggression in the New World, then it needs 
to be rethought. Similarly, if the United Nations, created as a forum 
to fairly resolve post-World War II disputes is not preoccupied with 
preserving the status quo at enormous cost and without regard to 
justice, then it too is in need of change.
  Of this much I am certain: the United States should turn away from 
acquiescence in a policy which immorally equates victim and aggressor, 
makes promises to the victims which it does not honor and establishes 
as a tenet of the new world order that determined aggression pays. 
During the current cessation of hostilities in Bosnia, the Bosnian 
Serbs have one more change to reach a peaceful settlement with the 
Bosnian Government. If they do not take advantage of this opportunity 
or violate the cessation of hostilities, the United States should lift 
the arms embargo, preferably with but if necessary without the 
concurrence of the United Nations.
  Mr. FEINGOLD. Mr. President, I rise today as an original co-sponsor 
of the Dole-Lieberman bill to terminate the U.S. arms embargo against 
the Republic of Bosnia and Herzegovina. By introducing this bill on the 
first day of the 104th Congress, we are signalling that we will do all 
we can to pursue a just and moral policy toward Bosnia, and are 
designating it a top foreign policy priority. Of course, the partition 
of a member state of the United Nations should be of utmost concern to 
every member of the international community, but I also believe that 
this debate is about how our post-World War II structures and cold war 
principles respond in practice to post-cold war crises.
  This feels a bit like deja vu. When I came to the Senate 2 years ago, 
the war in Bosnia was already raging. The Bosnian Serbs, egged on by 
Serbia, were fighting to create a greater Serbia at the expense of a 
sovereign nation, and at any cost to humanity and international law. We 
were horrified by evidence of ethnic cleansing of non-Serbs by Serbian 
forces; of systematic rape of Bosnian women by Serb military; and of 
naked aggression against a member state of the United Nations. Informed 
by resolutions after the Holocaust in 1945 that ``never again'' would 
we ``bear witness'' to such atrocities, we debated whether to lift the 
U.N. arms embargo against Bosnia, and permit the Bosnian Government to 
exercise its guaranteed right of self-defense. In March 1993 I 
introduced the first resolution urging the United States to work with 
the United Nations to lift the embargo, and then I joined Senators 
Dole, Lieberman, and others in offering several floor amendments to 
lift the U.S. embargo unilaterally.
  In the Senate Foreign Relations Committee, on the floor of the 
Senate, and in conference on major foreign policy bills during the 103d 
Congress we voted repeatedly on the question of whether to lift the 
arms embargo against Bosnia, either multilaterally or unilaterally. I 
and others argued that as a sovereign nation, Bosnia was entitled to 
exercise its right of self-defense, and that since the negotiating 
strength of each party is dependent to 
[[Page S214]] some degree on equity in access to arms, no peace plan 
would meet success unless Bosnia had an opportunity to counter Serbian 
aggression on its own.
  There was overwhelming majority support to lift the embargo, though 
the Senate was closely divided on any given day about whether the 
United States should proceed unilaterally or only in concert with the 
United Nations. Finally, in response to congressional direction, 
President Clinton announced on November 12 that the United States would 
no longer enforce the embargo. This is a welcome step, but falls short 
of the imperative to terminate the embargo altogether.
  I maintain that the United States is authorized to lift the embargo 
unilaterally because it contravenes Article 51 of the United Nations 
Charter, and is therefore non-binding. Article 51 protects the inherent 
right of individuals and states to self-defense ``until the Security 
Council has taken measures necessary to maintain international peace 
and security.'' Clearly, the United Nations has yet to take measures 
which do that.
  As a substitute, the United Nations has passed resolutions to 
restrain the Serb advances; deployed an international peacekeeping 
force to deliver humanitarian aid to starving Bosnians; and sponsored a 
series of failed and misguided peace plans. NATO has also threatened 
air attacks, obliquely coordinated with the United Nations in certain 
cases. The promises to be a surrogate protector were all supposed to 
compensate Bosnia for the denial of its self-defense by the 
international community.
  But, while some of these measures may have saved lives, there is no 
substitute for self-defense, Mr. President. In fact, these policies 
have subverted the rules of international law and order, and have made 
the United Nations and NATO, through inaction, false fatalism, and now 
appeasement, party to the aggression they were created after World War 
II to combat.
  Mr. President, after taking responsibility for Bosnia's security, the 
member nations of the U.N. Security Council through the Contact Group 
are selling out Bosnia and presiding over the dismemberment of a 
sovereign state of the United Nations. The administration, perhaps 
tired of a difficult situation, has apparently decided to appease the 
Bosnian Serbs by concessions instead of sanctions, implying that the 
war is over and that the Serbs have won because they have demonstrated 
the most force, fought the most viciously, and in the end occupy the 
most land.
  This is hardly a formula for peace. As we learned in World War II, 
and even during the Persian Gulf crisis, appeasement does not work; 
rewarding aggression does not work. Through the latest Contact Group 
plan, and the apparent shift in United States policy, Serbian 
belligerence and nationalism have only been emboldened. U.N. Security 
Council resolutions, along with NATO threats of force, have not been 
enforced and have been proven hollow: in fact, the United Nations has 
so little leverage in the region, Bosnian Serbs are even kidnapping 
U.N. peacekeepers with impunity. Each act of appeasement has only 
whetted their appetite for more, and threatens exactly the wider war 
the administration and NATO say they want to contain. Given this 
situation, I am skeptical that the 4-month ceasefire signed this 
weekend--and, at Serbian insistence, explicitly without any linkage to 
peace talks--will hold: after all, with everything to gain for 
violating it, what incentive do the Serbs have to honor it?
  There may be little the world can do to stop further carnage in 
Bosnia. However, we have an option to pursue justice in Bosnia, an 
option far better than appeasement, an option that would create a level 
playing field: lift the arms embargo against Bosnia, either with or 
without our NATO allies or U.N. approval. The embargo has not contained 
violence in the former Yugoslavia, but rather has helped to victimize 
further Bosnia; it has, as
  President Izetbegovic said at the United Nations in September, 
``turned justice into injustice.''
  If the Contact Group wishes to succeed, then any settlement it 
negotiates will have to include a lifting of the embargo--not just 
because it will restore dignity to the people of Bosnia, but also 
because it is the only type of pressure which may ensure that the Serbs 
abide by the agreement and do not seek additional concessions as time 
goes on. Lifting the embargo may mean the departure of U.N. 
peacekeepers in Bosnia. If it is done in connection with a peace 
agreement, this may be warranted, and perhaps even U.N. weapons in the 
region can be transferred to the Bosnian army. If the U.N. presence 
continues to be the only reason not to lift the embargo, then I would 
submit that the United Nations is standing in the way of a just 
settlement, and its purpose in the region should be re-thought.
  Though I firmly believe legally the United States can send weapons to 
the Bosnians, I think the administration would be well-served 
politically if it continued to work to lift the arms embargo 
multilaterally. In October the U.S. presented a resolution to the 
Security Council to lift the embargo, but has never moved it. At a 
minimum, the United States should call for a vote on the resolution, 
and then work to round up multinational support for it similar to what 
the administration did for its invasion into Haiti. We might lose, but 
at least we would have tried to cooperate with our allies. At least we 
would not be relegating Bosnia to the lowest level of importance in our 
international relationships, or behaving as if we cannot influence what 
the United Nations does.
  I would also urge the administration to continue its efforts to 
negotiate a comprehensive solution to the Balkan war. The Contact Group 
plan addresses only Bosnia, yet Bosnia is just one component of Serbian 
aggression. The Serbs have grabbed about one-third of Croatian 
territory, and the United Nations has not implemented its resolutions 
to cut off those areas. The Croatian-Muslim federation has been one of 
the most positive developments this year, and every step should be 
taken to strengthen this union: indeed, both countries depend on each 
other for survival. Therefore, provided that Croatia continues to 
contribute to an overall peaceful resolution in the Balkans, I would be 
inclined to lift the embargo against Croatia as well. We must remember 
that if there is an agreement between Bosnia and the Serbs, the region 
will quickly erupt again if Croatia's grievances are not addressed as 
well.
  The Balkan war is complex, ugly, and terrifying. The risks and 
potential for further violence are mind-boggling. But, it is also a 
test for the international community to define its interests, 
philosophies, and methods in the post-cold war world. So far, it has 
failed deplorably in principle and practice, and it won't get it right 
until the arms embargo is lifted.
                                 ______

      By Mr. DOLE (for himself, Mr. Heflin, Mr. Brown, Mr. Burns, Mr. 
        Hatch, Mr. Nickles, Mr. Craig and Mrs. Kassebaum:

  )S.22. A bill to require Federal agencies to prepare private property 
taking impact analyses; to the Committee on Governmental Affairs.


                THE PRIVATE PROPERTY RIGHTS ACT OF 1995

  Mr. DOLE.
   Mr. President, time and again I have heard from the people all 
across America that Congress must do more to stop the infringement on 
private property rights. I believe we have all heard this message. 
Today, I along with Senators Heflin, Brown, Craig, Kassebaum, Burns, 
Hatch and Nickles are introducing the private property Rights Act of 
1995. This legislation will serve as a small step toward ensuring that 
government mandates and government bureaucrats do not continue to run 
over individual citizens and individual rights.

  Now, a lot has been said on this floor regarding private property 
rights. I think many of us agree on the need to protect private 
property. The question is--How do we best proceed to get the government 
out of the peoples' backyards?
  Last year I introduced the private property rights Act of 1994. Some 
Members in this Chamber may recall a modified version of that 
legislation was later attached to the Safe Drinking Water Act. Today, I 
am introducing the Private Property Rights Act of 1995. This bill has 
incorporated some of the changes proposed during the debate of the 1994 
Safe Drinking Water Act, although there are still differences.
  This bill takes a ``look before you leap'' approach to the regulatory 
process. The legislation requires Federal 
[[Page S215]] agencies to conduct a takings impact assessment when 
promulgating any agency policy, regulation, guideline or before 
recommending legislative proposals to Congress. This bill does not stop 
legitimate regulatory processes and it only applies to any action which 
could result in an actual taking.
  The assessment must consider the effect of the agency action, the 
cost of the action to the Federal Government, the reduction in the 
value to the owners property, and require the agency to consider 
alternatives to taking private property.
  It is important to note that taking can occur even though title to 
the property remains with the original owner and the government has 
only placed restrictions on its use. Fortunately, courts have 
recognized these partial takings are subject to just compensation. 
Unfortunately, the only check on the enforcement of the Constitution 
has been through the court system, wherein citizens can, at the expense 
of vast amounts of money and time, ensure the government complies with 
the Constitution.
  The rights of property owners are supposed to be protected from the 
Federal Government under the fifth amendment and from State governments 
by the fourteenth amendment. Unfortunately, those who have sworn to 
uphold our Constitution are not always as vigilant as they need to be. 
Let's face it, there are billions of dollars in claims filed against 
the Federal Government by landowners who believe their private property 
has been taken.
  This bill is the first step toward putting the people back in charge 
of their land. This is a good government bill. It brings government 
into the sunshine. If you support the Freedom of Information Act, if 
you support the National Environmental Policy Act, if you support the 
Administrative Procedures Act, then you should support the Private 
Property Rights Act of 1995.
  Mr. President, I ask my colleagues to ask small business owners, 
farmers and ranchers, and those who believe in the private property 
rights contained in our Constitution, what they think about this bill? 
When they do, I am certain they will agree we should adopt this 
legislation in 1995.
  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. 22

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

     SECTION 1. PRIVATE PROPERTY RIGHTS.

       (a) Short Title.--This Act may be cited as the ``Private 
     Property Rights Act of 1995''.
       (b) Findings.--The Congress finds that--
       (1) the protection of private property from a taking by the 
     Government without just compensation is an integral 
     protection for private citizens incorporated into the United 
     States Constitution by the fifth amendment and made 
     applicable to the States by the fourteenth amendment; and
       (2) Federal agencies should take into consideration the 
     impact of governmental actions on the use and ownership of 
     private property.
       (c) Purpose.--The Congress, recognizing the important role 
     that the use and ownership of private property plays in 
     ensuring the economic and social well-being of the Nation, 
     declares that the Federal Government should protect the 
     health, safety, and welfare of the public and, in doing so, 
     to the extent practicable, avoid takings of private property.
       (d) Definitions.--For purposes of this section--
       (1) the term ``agency'' means a department, agency, 
     independent agency, or instrumentality of the United States, 
     including any military department, Government corporation, 
     Government-controlled corporation, or other establishment in 
     the executive branch of the United States Government; and
       (2) the term ``taking of private property'' means any 
     action whereby private property is taken in such a way as to 
     require compensation under the fifth amendment to the United 
     States Constitution.
       (e) Private Property Taking Impact Analysis.--
       (1) In general.--The Congress authorizes and directs that, 
     to the fullest extent possible--
       (A) the policies, regulations, and public laws of the 
     United States shall be interpreted and administered in 
     accordance with the policies under this title; and
       (B) subject to paragraph (2), all agencies of the Federal 
     Government shall complete a private property taking impact 
     analysis before issuing or promulgating any policy, 
     regulation, proposed legislation, or related agency action 
     which is likely to result in a taking of private property.
       (2) Nonapplication.--The provisions of paragraph (1)(B) 
     shall not apply to--
       (A) an action in which the power of eminent domain is 
     formally exercised;
       (B) an action taken--
       (i) with respect to property held in trust by the United 
     States; or
       (ii) in preparation for, or in connection with, treaty 
     negotiations with foreign nations;
       (C) a law enforcement action, including seizure, for a 
     violation of law, of property for forfeiture or as evidence 
     in a criminal proceeding;
       (D) a communication between an agency and a State or local 
     land-use planning agency concerning a planned or proposed 
     State or local activity that regulates private property, 
     regardless of whether the communication is initiated by an 
     agency or is undertaken in response to an invitation by the 
     State or local authority;
       (E) the placement of a military facility or a military 
     activity involving the use of solely Federal property;
       (F) any military or foreign affairs function (including a 
     procurement function under a military or foreign affairs 
     function), but not including the civil works program of the 
     Army Corps of Engineers; and
       (G) any case in which there is an immediate threat to 
     health or safety that constitutes an emergency requiring 
     immediate response or the issuance of a regulation under 
     section 553(b)(B) of title 5, United States Code, if the 
     taking impact analysis is completed after the emergency 
     action is carried out or the regulation is published.
       (3) Content of analysis.--A private property taking impact 
     analysis shall be a written statement that includes--
       (A) the specific purpose of the policy, regulation, 
     proposal, recommendation, or related agency action;
       (B) an assessment of the likelihood that a taking of 
     private property will occur under such policy, regulation, 
     proposal, recommendation, or related agency action;
       (C) an evaluation of whether such policy, regulation, 
     proposal, recommendation, or related agency action is likely 
     to require compensation to private property owners;
       (D) alternatives to the policy, regulation, proposal, 
     recommendation, or related agency action that would achieve 
     the intended purposes of the agency action and lessen the 
     likelihood that a taking of private property will occur; and
       (E) an estimate of the potential liability of the Federal 
     Government if the Government is required to compensate a 
     private property owner.
       (4) Submission to omb.--Each agency shall provide the 
     analysis required by this section as part of any submission 
     otherwise required to be made to the Office of Management and 
     Budget in conjunction with the proposed regulation.
       (5) Public availability of analysis.--An agency shall--
       (A) make each private property taking impact analysis 
     available to the public; and
       (B) to the greatest extent practicable, transmit a copy of 
     such analysis to the owner or any other person with a 
     property right or interest in the affected property.
       (f) Guidance and Reporting Requirements.--
       (1) Guidance.--The Attorney General shall provide legal 
     guidance in a timely manner, in response to a request by an 
     agency, to assist the agency in complying with this section.
       (2) Reporting.--Not later than 1 year after the date of 
     enactment of this Act and at the end of each 1-year period 
     thereafter, each agency shall provide a report to the 
     Director of the Office of Management and Budget and the 
     Attorney General identifying each agency action that has 
     resulted in the preparation of a taking impact analysis, the 
     filing of a taking claim, or an award of compensation 
     pursuant to the Just Compensation Clause of the Fifth 
     Amendment to the Constitution. The Director of the Office of 
     Management and Budget and the Attorney General shall publish 
     in the Federal Register, on an annual basis, a compilation of 
     the reports of all agencies made pursuant to this paragraph.
       (g) Presumptions in Proceedings.--For the purpose of any 
     agency action or administrative or judicial proceeding, there 
     shall be a rebuttable presumption that the costs, values, and 
     estimates in any private property takings impact analysis 
     shall be outdated and inaccurate, if--
       (1) such analysis was completed 5 years or more before the 
     date of such action or proceeding; and
       (2) such costs, values, or estimates have not been modified 
     within the 5-year period preceding the date of such action or 
     proceeding.
       (h) Rules of Construction.--Nothing in this Act shall be 
     construed to--
       (1) limit any right or remedy, constitute a condition 
     precedent or a requirement to exhaust administrative 
     remedies, or bar any claim of any person relating to such 
     person's property under any other law, including claims made 
     under this Act, section 1346 or 1402 of title 28, United 
     States Code, or chapter 91 of title 28, United States Code; 
     or
       (2) constitute a conclusive determination of--
       (A) the value of any property for purposes of an appraisal 
     for the acquisition of property, or for the determination of 
     damages; or
       (B) any other material issue.
     [[Page S216]]   (i) Effective Date.--The provisions of this 
     Act shall take effect 120 days after the date of the 
     enactment of this Act.

  Mr. HEFLIN. Mr. President, I rise today to support the Private 
Property Rights Act of 1995--a bill similar to the private property 
rights legislation Senator Dole and I introduced during the 103d 
Congress. This bill recognizes the important role the use and ownership 
of property plays in American society and declares the policy of the 
Federal Government to be one that will minimize takings of private 
property.
  The fifth amendment to the Constitution clearly provides that private 
property cannot be taken for public use without just compensation. As 
such, the Dole-Heflin bill creates a method whereby the impact on 
private property rights is duly considered in Federal regulatory 
activities. Specifically, the bill will require Federal agencies to 
certify to the Attorney General that a taking impact assessment has 
been completed prior to promulgating any agency policy. The takings 
impact assessment must consider the effect of the agency action, the 
cost of the action to the Federal Government, the reduction in value to 
private property owners, and requires the agency to consider 
alternatives to taking private property. In effect, compliance with 
this act will not only help avoid inadvertent takings of 
constitutionally guaranteed rights but will also reduce the Federal 
Government's financial liability for such compensable takings.
  In closing, I believe that private property rights are the foundation 
of the individual liberties we all enjoy as Americans. Therefore, I 
urge my colleagues to join me in supporting this important legislation.
                                 ______

      By Mr. HELMS:
  S. 23. A bill to protect the First Amendment rights of employees of 
the Federal Government; read the first time.


 PROTECTING FEDERAL EMPLOYEES' RIGHTS TO QUESTION HOMOSEXUAL AGENDA IN 
                             THE WORKPLACE

  Mr. HELMS. Mr. President, it became an embarrassment to the decency 
of the American people last year that in many high places within 
Government, free speech was to be permitted only when organized 
homosexuals agreed to it.
  There was an episode on July 20, 1994, when 58 Senators voted in 
defense of a faithful and longtime employee of the Department of 
Agriculture--Dr. Karl Mertz, whose first amendment rights were 
callously violated after he dared to stand up against sodomy. Took a 
stand, on his own time, by stating his opposition to special rights for 
homosexuals. As a result of that Senate vote and my holding up USDA 
nominations and legislation, the former Secretary of Agriculture, Mike 
Espy, restored that employee, Dr. Karl Mertz, to his previous position.
  While the amendment I offered last summer only protected the first 
amendment rights of employees at the USDA, I said at the time that it 
was also imperative that all employees throughout the Federal 
Government be assured that they are able to exercise, without fear of 
reprisal, their right to question the special rights for homosexuals 
that have been proposed by numerous Federal agencies.
  And that is the intent for the legislation I am introducing today. 
For Senators who did not hear the text of the bill when it was read by 
the clerk, let me read it again.

       Notwithstanding any other provision of law, no employee of 
     the Federal Government shall be peremptorily removed without 
     public hearings from his or her position because of remarks 
     made during personal time in opposition to the Federal 
     Government's policies, or proposed policies, regarding 
     homosexuals, and any such individual so removed prior to date 
     of this Act shall be reinstated to his or her previous 
     position.

  Senators might belittle this bill as needless. Nothing could be 
further from the truth. Simply put, this bill protects the rights of 
Federal employees to speak their mind on their own time when it comes 
to matters
 of moral and spiritual significance. If they lose this right--as Dr. 
Mertz almost did at the Department of Argriculture--then all Americans 
lose.

  Mr. President, Americans have very strong feelings about the 
religious and moral implications of homosexuality. And Americans 
opposed to it have every bit as much a right to oppose the Government's 
efforts to extend special rights to homosexuals.
  As the homosexuals have to ask for special rights, privileges, and 
protections from the Government. Allowing homosexuals to characterize 
free speech opposing their agenda as hate speech--as the news media 
does as well--is one thing; but allowing the Federal Government to take 
their side in the public debate--and in the Federal workplace--is quite 
another.
  That is why this legislation is designed, if enacted, to ensure that 
the Federal Government remains neutral in the on-going cultural debate 
over homosexuality. Federal employees will be able to state their true 
feelings on the issue without having to worry about so-called 
politically correct bureaucrats getting them fired.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 23

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
       Section. 1. Notwithstanding any other provision of law, no 
     employee of the Federal Government shall be peremptorily 
     removed without public hearings from his or her position 
     because of remarks made during personal time in opposition to 
     the Federal Government's policies, or proposed policies 
     regarding homosexuals, and any such individual so removed 
     prior to date of enactment of this Act shall be reinstated to 
     his or her previous position.
                                 ______

      By Mr. HELMS:
  S. 24. A bill to make it a violation of a right secured by the 
Constitution and laws of the United States to perform an abortion with 
knowledge that such abortion is being performed solely because of the 
gender of the fetus, and for other purposes; read the first time.


                      CIVIL RIGHTS OF INFANTS ACT

  Mr. HELMS. Mr. President, all who value the rights of the unborn are 
indebted to our distinguished former colleague from New Hampshire, Mr. 
Humphrey. From the day he arrived in the Senate, until the day he left, 
he championed the cause of the most innocent, most helpless, victims of 
the permissive society that plagues America.
  It was Senator Humphrey who in 1989 brought to the attention of the 
Senate a new and particularly brutal form of discrimination in 
America--abortions performed solely because the prospective mother 
prefers a child of a gender other than that of the fetus in her womb.
  Senator Humphrey brought to Senators' attention a New York Times 
article published on Christmas morning of 1988, headed ``Fetal Sex Test 
used as Step to Abortion.''
  I remember well my own consternation when I read the article, which 
began:

       In a major change in medical attitudes and practices, many 
     doctors are providing prenatal diagnoses to pregnant women 
     who want to abort a fetus on the basis of the gender of the 
     unborn child.
       Geneticists say that the reasons for this change in 
     attitude are an increased availability of diagnostic 
     technologies, a growing disinclination of doctors to be 
     paternalistic, deciding for patients what is best, and an 
     increasing tendency for patients to ask for the tests. Many 
     geneticists and ethicists say they are disturbed by the 
     trend.

  Professor George Annas of the Boston University School of Medicine 
was quoted as saying:

       I think the [medical] profession should set limits and I 
     think most people would be outraged and properly so at the 
     notion that you would have an abortion because you don't want 
     a boy or you don't want a girl. If you are worried about a 
     woman's right to an abortion, the easiest way to lose it is 
     not set any limits on this technology.

  Mr. President, I recall my disbelief after having read the article 
that any mother in a civilized society would be willing to destroy her 
unborn female child simply when she preferred a male--or vice-versa. 
But believe it. It has happened and continues to happen with the 
acquiescence of the U.S. Government.
  That is why I am today again offering legislation to limit this cruel 
and inhumane practice. The 103d Congress declined to act on my 
legislation in this regard. I pray that the 104th Congress will take 
action to end this callous cruelty.
  Specifically, the legislation I've sent to the desk proposes to amend 
title 42 of the United States Code--the statute governing civil 
rights--so as to provide that abortionists who administer an abortion--
because the mother doesn't 
[[Page S217]] like the gender of the infant in her womb--will be 
subject to the same laws which protect other citizens who are victims 
of other forms of discrimination.
  Then, Mr. President, there was a USA Today article published February 
2, 1989, which reported:

       In a break with past medical attitudes more geneticists are 
     open to identifying gender for parents early--so they can 
     decide whether to abort.
       The change has ethicists debating where a parent's right to 
     information ends and the rights of the unborn begin.
       A recent national survey of 212 medical geneticists found 
     20 percent approved of performing prenatal testing for sex 
     selection; in a 1973 survey, only 1 percent approved.
       ``Probably 99 percent of nonmedical requests for prenatal 
     diagnosis are made because people want a boy,'' says Dr.
      Mark Evans, an obstetrician and geneticist at Wayne State 
     University, Detroit. Some experts are concerned about the 
     social impact.
       Evans turns down nonmedical sex selection requests. ``Being 
     female,'' he says, ``is not a disease.''

  Mr. President, how can various feminist groups such as the National 
Organization of Women remain silent while America hurtles down the path 
taken in India 5 years ago when a survey in Bombay 5 years ago revealed 
that of 8,000 abortions, 7,999 were female?
  Mr. President, I have never been able to countenance the senseless 
slaughter of unborn babies. I have sought in vain for someone to 
explain the logic--aside from the moral and spiritual aspects--of 
deliberately destroying literally millions of little baby boys and 
girls when hundreds of thousands of Americans are standing in line to 
adopt babies.
  A Boston Globe poll reported that 93 percent of the American people 
reject the taking of life as a means of gender selection. So, Mr. 
President, when NOW, NARAL, and the other antifamily groups invade 
Capitol Hill from time to time, Molly Yard, Patricia Ireland, and many 
others chant the mantra that when it comes to abortion-on-demand ``it's 
time for Congress to understand we are the majority,'' they may want to 
redo their calculations, based on the November 8 elections.
  Hopefully, this 104th Congress can take some early action to fulfill 
the desires of the 93 percent of the American people who rightfully 
believe it is immoral to destroy unborn babies because the mother 
happens to prefer a boy instead of a girl, or a girl instead of a boy.
  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. 24

       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 ``Civil Rights of Infants 
     Act''.

     SEC. 2. DEPRIVING PERSONS OF THE EQUAL PROTECTION OF LAWS 
                   BEFORE BIRTH.

       Section 1979 of the Revised Statutes (42 U.S.C. 1983) is 
     amended--
       (1) by inserting ``(a)'' before ``Every person''; and
       (2) by adding at the end thereof the following new 
     subsection:
       ``(b) For purposes of subsection (a), and for purposes of 
     other provisions of law, it shall be a deprivation of a 
     `right' secured by the laws of the United States for an 
     individual to perform an abortion with the knowledge that the 
     pregnant woman is seeking the abortion solely because of the 
     gender of the fetus. No pregnant woman who seeks to obtain an 
     abortion solely on the basis of the gender of the fetus shall 
     be liable in any manner under this section.''.
                                 ______

      By Mr. HELMS:
  S. 25. A bill to stop the waste of taxpayer funds on activities by 
Government agencies to encourage its employees or officials to accept 
homosexuality as a legitimate or normal lifestyle; read the first time.


ending taxpayer support for homosexual agendas in the federal workplace

  Mr. HELMS. Mr. President, the American people declared on November 8, 
that there's more government running their lives than is either wanted 
or needed--and certainly more wasteful government than the American 
people should be forced to pay for.
  And Congress, for a half century, has been wasting billions of 
dollars, running up a Federal debt of $4.8 trillion. As a matter of 
fact, the exact Federal debt as of the close of business on December 30 
was $4,800,149,946,143.
  I know of no American who favors adding to this horrendous Federal 
debt--some, of course, don't care as long as the Federal Government 
continues to conduct seminars, fund programs--or hire staff for the 
purpose of persuading, indeed, intimidating--Federal employees to 
accept homosexuality as a legitimate and normal lifestyle.
  But that is precisely how so much of the taxpayer's money is being 
used at numerous Federal agencies including the Department of 
Agriculture, the Department of Housing and Urban Development, the 
Department of Transportation, and the Department of Defense.
  Here are just a few examples of how the taxpayer's money is being 
spent:
  On March 25, 1994, the USDA officially sanctioned GLOBE--The Gay, 
Lesbian, and Bisexual Employee Organization, thus allowing USDA time, 
money, and resources to be used to promote GLOBE's agenda. I might add, 
GLOBE chapters exist in many Federal agencies. The Department of 
Agriculture went further when they created a Gay, Lesbian, and Bisexual 
Program Manager position within the Foreign Agriculture Service.
  The Family Research Council reports that on September 8, 1994, the 
Clinton administration, under the auspices of the U.S. Navy, hosted 
pro-gay and anti-religious diversity training for civilian and military 
Federal employees. The costs of Diversity Day '94, as it was named, 
included: The pay for hundreds of Federal employees, speakers fees, use 
of leased space, transportation, live diversity entertainment, 
Diversity Day '94 trinkets, video and equipment rental costs, and 
reproduction of printed material.
  For Senators who may not have been in the Chamber when the text of 
the bill was read by the clerk, let me read it again for the Record:

       No funds appropriated out of the Treasury of the United 
     States may be used by any entity to fund, promote, or carry 
     out any seminar or program for employees of the Government, 
     or to fund any position in the Government, the purpose of 
     which is to compel, instruct, encourage, urge, or persuade 
     employees or officials to--
       (1) recruit, on the basis of sexual orientation, 
     homosexuals for employment with the Government; or
       (2) embrace, accept, condone, or celebrate homosexuality as 
     a legitimate or normal lifestyle.

  This legislation is similar to an amendment offered by this Senator 
to the 1995 Agriculture Appropriations bill. Although the amendment was 
adopted by the Senate by a vote of 92 to 8, it was subsequently dropped 
in conference. That amendment applied to only the Department of 
Agriculture. The legislation I introduce today applies to USDA and to 
all other agencies of the Federal Government. That, Mr. President, is 
the only difference.
  I wish this legislation was not necessary. But it is and it is a sad 
day for America because of it. You see, the Clinton administration has 
conducted a concerted effort to give homosexual rights, privileges, and 
protections throughout the Federal agencies--to extend the homosexuals 
special rights in the Federal workplace, rights not accorded to most 
other groups and individuals. No other group in America is given 
special rights based on their sexual preferences.
  So, I urge Senators members to consider this bill in light of the 
mandate given by the American people regarding wasteful government 
spending. But I also ask them to consider it in light of whether it is 
proper for the Federal Government to use tax dollars to promote, 
ratify, and protect a lifestyle that most Americans, and most 
religions, consider a sexual and moral perversion.
  Mr. President, I ask unanimous consent that the bill and the Family 
Research Council article titled ``Federal Government Promotes 
Homosexuality Using `Diversity' Cover'' be included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 25

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
     [[Page S218]] SECTION 1. LIMITATION ON USE OF APPROPRIATED 
                   FUNDS.

       No funds appropriated out of the Treasury of the United 
     States may be used by any entity to fund, promote, or carry 
     out any seminar or program for employees of the Government, 
     or to fund any position in the Government, the purpose of 
     which is to compel, instruct, encourage, urge, or persuade 
     employees or officials to--
       (1) recruit, on the basis of sexual orientation, 
     homosexuals for employment with the Government; or
       (2) embrace, accept, condone, or celebrate homosexuality as 
     a legitimate or normal lifestyle.
                                                                    ____

  Federal Government Promotes Homosexuality Using ``Diversity'' Cover

                        (By Robert L. Maginnis)

       The federal government is using taxpayer money to promote 
     homosexuality as the moral equivalent to heterosexuality. 
     This is happening under the guise of diversity and it links 
     virtually every aspect of government to the homosexual 
     agenda.


         federal government grants homosexuals official status

       During the first two years of the Clinton Administration, 
     most federal agencies have amended their equal employment 
     opportunity and civil rights policies to include the term 
     ``sexual orientation.'' These changes are not justified by 
     law.
       For example, Carol Browner, Administrator of the 
     Environmental Protection Agency, sent a memo to all EPA 
     employees on October 14, 1994 stating, ``Today, the EPA joins 
     the growing list of public and private sector employers which 
     have added `sexual orientation' to our equal employment 
     opportunity policy.''\1\
     \1\Footnotes at end of article.
---------------------------------------------------------------------------
       Housing and Urban Development Secretary Henry Cisneros did 
     the same in August, 1994 with a memo that states, ``Sexual 
     harassment and discrimination based on sexual orientation are 
     unacceptable in the workplace and will not be condoned at 
     HUD.''\2\
       Department of Transportation Secretary Federico Pena 
     published his statement in 1993 which declares, ``[N]o one be 
     denied opportunities because of his or her race, color, 
     religion, sex. . .or sexual orientation.''\3\
       The Federal Bureau of Investigation joined the chorus when 
     director Louis Freeh stressed that ``homosexual conduct is 
     not per se misconduct'' and adopted a new policy to admit 
     homosexuals to the ranks of the Bureau.\4\ Several 
     homosexuals are now being trained to become FBI agents.
       Freeh's boss, Attorney General Janet Reno, declared that 
     the Department of Justice will not discriminate on the basis 
     of sexual orientation when conducting security clearances.\5\ 
     Although homosexuality has long been a marker for homosexual 
     misconduct, Reno removed any reference to sexual orientation 
     from application forms. Congressman Barney Frank (D-MA), an 
     openly homosexual man, stated, ``The clear implication is 
     that, outside the uniformed military services, being gay will 
     not be a relevant factor.''\6\
       Moreover, Reno ruled that a foreigner who claimed that he 
     was persecuted by his government for being homosexual may be 
     eligible to immigrate to the U.S.\7\ In 1994 the Attorney 
     General waived immigration laws so that avowed HIV-infected 
     homosexuals could participate in New York's ``Gay-
     Olympics.''\8\
       This official recognition of homosexuals is taking place 
     without legislative action. Indeed, there are no laws 
     requiring these changes, and little chance that such laws 
     could be passed. Homosexuals are being awarded a special 
     class status solely based on behavior, not on a benign 
     characteristic like race or gender.
       The Administration's official recognition goes further. 
     Office of Personnel Management Director James King sent a 
     memo to all OPM employees in January, 1994 announcing the 
     formal recognition of the Gay, Lesbian and Bisexual Employees 
     (GLOBE) as a professional association. This recognition 
     bestows on GLOBE the same privileges extended to other 
     associations. For example, GLOBE can now use government 
     facilities communication systems, bulletin boards, and have 
     official representation at personnel meetings.\9\
       GLOBE's stated purpose is to ``promote understanding of 
     issues affecting gay, lesbian and bisexual employees; provide 
     outreach to the gay, lesbian and bisexual community; serve as 
     a resource group to the Secretary on issues of concern to 
     gay, lesbian and bisexual employees; work for the creation of 
     diverse work force that assures respect and civil rights for 
     gay, lesbian and bisexual employees; and create a forum for 
     the concerns of the gay, lesbian and bisexual 
     community.''\10\ There are more than 40 chapters throughout 
     the federal government.\11\
       The Department of Transportation GLOBE chapter earned some 
     notoriety when posters depicting famous people alleged to be 
     homosexual were displayed on bulletin boards. The posters 
     were made at government expense and identified Eleanor 
     Roosevelt, Virginia Woolf, Errol Flynn, and Walt Whitman as 
     homosexuals.\12\
       Federal Aviation Administration employee Anthony Venchieri 
     complained when he received a DOT voice mail message inviting 
     him to ``celebrate with us the diversity of the gay and 
     lesbian community.'' The message was broadcast to all 4,100 
     DOT voice-mail users. He was removed from the system after 
     complaining but was later reinstated. FAA's Office of Civil 
     Rights spokesman stated, ``The Department of Transportation 
     has officially recognized the organization [GLOBE]. . . . The 
     FAA complies with this recognition of an employee association 
     which contributes to employee welfare and morale and assists 
     in fostering a climate of diversity and inclusion.''\13\
       GLOBE also uses government facilities to promote 
     homosexuality. During June 1994, many federal agencies permit 
     GLOBE chapter to use space to host homosexual programs. For 
     example, DOT hosted six events in the Washington 
     headquarters. Those included: a panel of DOT officials 
     discussing diversity; a presentation by Parent, Friends and 
     Families of Lesbians and Gays; and a program on the gay and 
     lesbian Asian Pacific American community.\14\


                          The diversity agenda

       ``Diversity'' is a vogue concept that is being used to 
     advance the homosexual agenda.\15\
       The U.S. Fish and Wildlife Service has embraced diversity. 
     In a July 1994 memo entitled, ``Stepping Stones to Diversity: 
     An Action Plan,'' the service proclaims that ``Managing 
     diversity needs to be a top service priority. . . . The 
     service must also recognize that the differences among people 
     are important.''\16\
       DOT's Secretary Pena left no doubt about what he means by 
     diversity. In a policy statement he defines it as 
     ``inclusion--hiring developing promoting and retaining 
     employees of all races ethnic groups, sexual orientations, 
     and cultural backgrounds. . . .''\17\
       The Department of Agriculture joined the diversity movement 
     in March 1994 by establishing a GLOBE chapter.\18\ A report 
     in The Sacramento Valley Mirror shows just what the 
     Department of Agriculture and, more specifically, a 
     subordinate organization, the Forest Service, means by 
     diversity.\19\ According to that article, diversity means a 
     redefinition of family promoting gay pride month, and 
     encouraging the use of federal resource to promote homosexual 
     causes.
       A letter from Region 5 Forester Ronald E. Stewart to his 
     employees outlines Forest Service recommendations concerning 
     homosexuals. Stewart's memo to ``All Region 5 Employees'' 
     says, ``We can not allow our personal beliefs to be 
     transformed into behaviors that would discriminate against 
     another employee.''\20\ The recommended policy:
       Prohibits discrimination based on sexual orientation.
       Empowers homosexuals to serve as mentors and network 
     coordinators.
       Incorporates sexual orientation awareness training.
       Establishes a computerized network for isolated homosexual 
     employees.
       Awards pro-gay work settings.
       Encourages local ``multicultural awareness celebrations'' 
     like gay pride month.
       Directs supervisors to consider an employee's domestic 
     partner when assigning schedules.
       Prohibits private permitters and concessionaires from 
     discriminating against domestic partners.
       Mandates unions to become proactive in the ``sexual 
     diversity'' movement.
       Requires that contracts include domestic partner services.
       Guarantees government child care for children of an 
     employee's domestic partner.
       Considers gay and lesbian owned businesses when arranging 
     local purchase agreements.
       The proposals encourage Forest Service employees to lobby 
     for the following.
       Amend federal travel regulations to incorporate the needs 
     of domestic partners.
       Adopt this definition of a family. ``A unit of 
     interdependent and interacting persons, related together over 
     time by strong social and emotional bonds and/or by ties of 
     marriage, birth, and adoption, whose central purpose is to 
     create, maintain, and promote the social, mental, physical 
     and emotional development and well being of each of its 
     members.''
       Advocate to the Small Business Administration the inclusion 
     of gay and lesbian owned businesses eligible for minority 
     set-aside contracts.
       Advocate that retirement benefits include domestic 
     partners.
       Add non-discrimination provisions to all private sector 
     contracts prohibiting discrimination based on sexual 
     orientation except for bona fide religions and youth groups.


                      diversity training mandatory

       Bureau of Labor Statistics Commissioner Katherine Abraham, 
     whose performance agreement with Secretary of Labor Robert 
     Reich includes diversity training, hosted three-hour 
     diversity training sessions for BLS employees. The paid guest 
     speaker began each session by stating, ``Diversity means our 
     national survival.''\21\ He closed the session by reading a 
     letter from homosexual BLS employees complaining about 
     discrimination. The guest concluded, ``What's necessary in 
     the workplace is for everybody to have the attitude that 
     people are not good, not bad, just different.''\22\
       The U.S. Postal Service is also promoting diversity. During 
     a November 1, 1994 diversity seminar a guest psychologist 
     suggested ``aggressive recruitment is needed; develop, 
     attract and retain members from under-represented groups.'' 
     His speech followed legal 
     [[Page S219]] counsel's presentation on the new non-
     discrimination policy for gays, lesbians, and bisexuals.\23\
       The Forest Service has a training booklet entitled, 
     ``Valuing Diversity.'' Inside the booklet are statements such 
     as: ``Fact: Psychological and social influences alone cannot 
     cause homosexuality. . . . Fact: A biological (genetic, 
     hormonal, neurological, other) predisposition toward 
     homosexual, bisexual, or heterosexual orientation is present 
     at birth in all boys and girls.'' No source for these 
     ``facts'' is provided, nor could there be.\24\ So-called 
     genetic studies on homosexuality are flawed and conducted by 
     homosexual activists.
       The U.S. Health and Human Services sponsored a ``Multi-
     Culture Day'' in Dallas, Texas in April, 1994. An HHS 
     employee gained official permission to man an exhibit, 
     ``Highlighting Our Gay and Lesbian Culture.''\25\
       Four federal agencies hosted a ``Global Diversity Day'' on 
     May 25, 1994 at San Francisco's U.S. Customs House. The 
     activities were attended by 300 federal employees and 
     included displays by gay, lesbian, and bisexual 
     representatives. On display were a rainbow flag that was 
     flown at the 1993 March on Washington, posters displaying 
     famous homosexuals, and cultural items such as books and 
     GLOBE applications.\26\
       Possibly the largest diversity event was hosted by the U.S. 
     Navy on September 8, 1994 near the Pentagon. Diversity Day 
     '94 included an opening ceremony with a welcome by a three-
     star admiral who stated, ``The federal and private sector 
     must make diversity part of business.''\27\ He also said that 
     the work environment ``is not a matter for moral 
     issues.''\28\
       The government's guest speaker was diversity expert and 
     professor at Northeastern Illinois University Dr. Samuel 
     Betances. He equated racism, sexism, and homophobia and then 
     stated, ``We can start all over if need be.''\29\ He 
     explained that former Alabama Governor George Wallace, a one-
     time racist, started over by recanting his racist beliefs.
       Betances encouraged homosexuals to organize ``to get 
     respect'' much like women, blacks, and Latinos organized.\30\ 
     He emphasized that all of us ``must be prepared to unlearn'' 
     old ways. He observed that homosexuals are ``part of the 
     diversity equation whether we like it or not'' and they 
     ``need a climate of respect.''\31\
       The activities included a seminar entitled ``Another Color 
     of the Rainbow: Sexual Minorities in the Workplace'' taught 
     by an acknowledged lesbian, and a videotape, ``On Being 
     Gay,'' which promotes homosexuality as the moral equivalent 
     to heterosexuality.
       The U.S. Air Force Academy already has a diversity day 
     scheduled for April 1995. The symposium is entitled, 
     ``Strength Through Diversity Leadership Symposium.'' 
     Conference director Colonel David Wagie says that his program 
     will not include ``sexual orientation'' issues. He explained. 
     ``We are interested only in using the term as officially 
     defined and used by DOD.''\32\
       The Navy, however, is cruising toward sexual diversity. 
     Secretary of the Navy John Dalton wrote the following in his 
     diversity policy statement on May 23, 1994: ``Our continued 
     success requires that each civilian employee and applicant be 
     afforded the opportunity to excel without regard to his or 
     her race, color, gender, sexual orientation. . . .''\33\


               aids awareness or more diversity training?

       President Clinton announced on September 30, 1993 to all 
     heads of executive departments his HIV/AIDS policy. The 
     policy requires each secretary to designate a senior staff 
     member to implement HIV/AIDS education and prevention 
     programs and to develop workplace policies for employees with 
     HIV/AIDS.
       The training has received a mixed review. Federal employees 
     have called the Family Research Council to complain that they 
     found the training offensive.
       Two supervisors and 41 employees in the Federal 
     Communication Commission's audio services division chose not 
     to attend mandatory ``AIDS Awareness Training.'' An FCC 
     employee stated, ``The classes are basically an adult 
     versions of high school sex ed, with the modern-day 
     sensitivity training thrown in.''\34\
       The training includes a brief history of HIV, symptoms and 
     prevention and risk reduction. There is a discussion of 
     needle sharing and sexual contact. Federal employees are told 
     to reduce their HIV contraction risk by practicing ``safer 
     sex'' by using barriers like condoms, dental dams, plastic 
     wrap, and latex gloves. The manual states, ``A dental dam (a 
     small, square piece of latex) or plastic may be used for any 
     oral-vaginal or oral-anal contact. All types of barriers 
     (condoms, dental dams, and plastic wrap) are effective 
     aganist HIV transmission only if they are used correctly and 
     consistently from start to finish.''\36\
       The training materials are based on government ``evidence'' 
     and the materials espouse confidence in latex which is not 
     supported by research. For example, the U.S. Centers for 
     Disease Control and Prevention misrepresent a wealth of 
     conflicting scientific evidence. The CDC does a disservice to 
     the American public when it promotes condoms as a responsible 
     prevention strategy. CDC places its hopes on the correct and 
     consistent use of condoms, an unreached and unreachable 
     goal.''\37\
       The Energy Department makes a disclaimer: ``HIV is 
     transmitted without regard to gender, age, race, ethnicity, 
     sexual orientation, religion, or identification with any 
     group. For this reason, we avoid referring to `high risk 
     groups.''' Not identifying ``high risk groups, is 
     irresponsible. The HIV/AIDS Surveillance Report shows that at 
     least 87 percent of HIV victims either contracted the virus 
     from homosexual encounters or by sharing needles.
       Probably the most outrageous example of government 
     sponsored AIDS training was done for the Forest Service. It 
     took place in the Forest Service's Tahoe Region on May 6, 
     1994 and was conducted by a local health official with 
     degrees in sexology, a self-described homosexual phlebotomist 
     [individual who draws blood], and an HIV-positive woman from 
     the community.\39\
       Most of the ``infectious disease training'' addressed HIV/
     AIDS. The phlebotomist was an exconvict who tried to debunk 
     ``homophobic'' misconceptions. He speculated that many 
     husbands were involved in homosexual affairs. He showed a 
     variety of condoms and how to apply them to a life size 
     replica of erect male genitalia. He even explained a 
     technique for using one's mouth to apply the condom. He also 
     explained the proper cleaning techniques when sharing 
     hypodermic needles.\40\
       One of the workers in the audience later complained, 
     ``There seems to be no logic or equity in penalizing one 
     employee for repeatedly bringing up `Christmas' at work, 
     during December because he or she believes in God, while 
     instructing other employees how to use intravenous drugs or 
     engage in anal sex.''\41\


                  federal money funds ``gay science''

       In Fiscal Year 1993, in addition to more than $2 billion 
     for AIDS, the U.S. Department of Health and Human Services 
     awarded 84 grants worth over $20 million to research topics 
     that primarily involve homosexuals.\42\ These grants include:
       ``Phone counseling in reducing barriers to AIDS 
     prevention,'' which studies homosexual men who are 
     purportedly unable to avoid unsafe sexual behavior.\43\
       A project that examines how ``stress generated by societal 
     reactions leads adolescents who are coming-out to be at 
     higher risk of problems'' than their heterosexual peers.\44\
       A project entitled ``Drinking, drug use and unsafe sex 
     among gay and bisexual couples'' which explores the 
     relationship ``between drinking, drug use and unprotected sex 
     . . . among gay and bisexual couples.''\45\
       A study designed to analyze behavioral data about HIV 
     transmission among bisexual men in Mexico.\46\
       A study by Dr. Dean Hamer provides a good example of how 
     federal funds are being used to help advance gay political 
     activism.
       Dr. Hamer, chief of the Gene Structure and Regulation 
     Section, Laboratory of Biochemistry of the National Cancer 
     Institute, National Institutes of Health, Department of 
     Health and Human Services, published the results of his two 
     year ``gay-gene'' research project, ``A Linkage Between DNA 
     Markers on the X Chromosome and Male Sexual Orientation,'' in 
     the July, 1993 edition of Science.\47\
       The Family Research Council published an investigative 
     report on Dr. Hamer's study. The report shows problems with 
     the study, Hamer's promotion of homosexuality in the media, 
     and questions whether federal funds were properly used.\48\
       While published NCI budgets do not identify money earmarked 
     for Dr. Hamer's research, funding for Hamer's research (which 
     totaled $420,000) apparently came from money designated for 
     research into Kaposi's sarcoma (KS).\49\ NCI's press office 
     indicated that Hamer's study looked at KS, which is an AIDS-
     related cancer prevalent among gay men.\50\ And Hamer 
     promoted his research as a multifactorial study investigating 
     host genetic factors for Kaposi's sarcoma and lymphoma.\51\
       Yet, curiously, Hamer ``ran no tests to determine whether 
     his clients had KS.''\52\ And Hamer stated in a court 
     deposition that he has never published anything on Kaposi's 
     sarcoma.''\53\
       More taxpayer-funded gay research is in the works. Hamer 
     wrote a letter to Health and Human Services Secretary Donna 
     Shalala arguing for the creation of an NIH Office of Gay and 
     Lesbian Health Concerns. The American Medical News reports 
     that the HHS will seriously consider Hamer's proposal. Hamer 
     envisions the office going beyond research into the origins 
     of sexual orientation to include HIV and other sexually 
     transmitted diseases, breast and gynecologic cancers, 
     substance abuse and adolescent suicide.\54\
       In addition, Angela Pattatucci, one of Hamer's research 
     assistants, has an ongoing project that deals with genetics 
     and lesbianism. According to Victoria L. Magnuson of Hamer's 
     NIH office, Pattatucci's ``lesbian study has a cancer 
     component.'' Yet the advertising fliers developed for this 
     study call it a study of the ``genetic nature of sexual 
     orientation . . . a gay gene study.'' They state that ``per 
     diem and travel expenses'' would be covered by ``NIH,'' and 
     that subjects would be interviewed by ``gay-positive'' 
     persons.\55\
       (Pattatucci's track record raises serious questions about 
     her objectivity as a researcher. She recently told Network, a 
     homosexual magazine based in New Jersey, ``I believe the most 
     important thing a gay person 
     [[Page S220]] can do is to be public about his or her 
     homosexuality.'' That article included a picture of Dr. 
     Pattatucci holding her jacket open to reveal a T-shirt with 
     the work ``DYKE'' written in large, bold type.\56\ )


               federal employees on the gay agenda front

       U.S. Patent and Trademark Commissioner Bruce Lehman is a 
     self-described homosexual who promotes Commerce Secretary Ron 
     Brown's ``Diversity Policy.'' For those who object, Lehman 
     states, ``As far as I'm concerned, it's got to be forced down 
     their throats. If they want to be bigots, they can go work 
     for someone else's department.'' The agency's director of 
     human resources created a ``diversity recruitment support 
     team'' to spend up to 15 days of diversity recruiting in 
     1995.\57\
       The nation's former Surgeon General Joycelyn Elders told 
     homosexual magazine The Advocate, ``Americans need to know 
     that sex is wonderful and a normal . . . and healthy part of 
     our being, whether it is homosexual or heterosexual.'' She 
     endorses adoption of children by homosexuals and called the 
     Boy Scouts' ban on homosexual Scouts and Scout leaders 
     ``unfair.''\58\
       Roberta Achtenberg is HUD's assistant secretary for Fair 
     Housing and Equal Opportunity. She appeared in San 
     Francisco's 1992 gay pride parade riding in the back seat of 
     a convertible next to her ``partner'' (Mary Morgan, a San 
     Francisco municipal court judge) and ``their'' child. The 
     sign on the car said: ``Celebrating Family Values.''\59\
       While a member of the San Francisco board of supervisors 
     and a member of a United Way chapter in that area, Achtenberg 
     helped to defund the Boy Scouts for their moral standards. 
     She has continued her activism in the federal government.\60\
       In February 1994 Achtenberg signed a diversity policy that 
     requires managers to ``participate as active members of 
     minority, feminist or other cultural organization's'' to 
     qualify for an ``outstanding'' rating.\61\
       Some federal agencies have appointed homosexual watchdogs 
     to ensure employee compliance with pro-gay diversity 
     policies. For example, the Foreign Agriculture Service has a 
     gay, lesbian and bisexual program manager. This is a 
     collateral duty to take no more than 20 percent of the 
     manager's time. Her task is to promote gay, lesbian and 
     bisexual employment program and develop and disseminate 
     information on employment matters throughout the agency.\62\


                          Discouraging Dissent

       Federal employees who object to the diversity push beware! 
     U.S. Merit Systems Protection Board Chairman Ben Erdreich has 
     embraced diversity. The MSPB is the agency that rules on 
     federal employee appeals of personnel actions. Erdriech told 
     his employees on November 19, 1994: ``I have a strong 
     commitment to diversity and equitable treatment in the 
     workplace. . . . Managers will be graded on . . . respect for 
     diversity in the workplace and performs responsibilities 
     without regard to the differences of race, color . . . sexual 
     orientation. . . .''\63\
       Department of Agriculture and senior EEO manager Karl Mertz 
     ran into the diversity wall. On March 4, 1994 Mertz told a 
     reporter when asked about Secretary Espy's gay-rights agenda, 
     the AG Department should be headed ``toward Camelot, not 
     Sodom and Gomorrah.''\64\
       Mertz was later told that his interview disagrees with 
     Department civil rights policy ``which could seriously 
     undermine your ability to perform your responsibilities.'' He 
     was transferred to a non-management job.\65\


                               conclusion

       The Clinton Administration is methodically unleashing an 
     avalanche of pro-homosexual policies and advocacy. It is 
     costing the federal taxpayer millions of dollars and 
     discriminates against workers who object on religious 
     grounds. The 104th Congress should investigate this abuse and 
     reverse the federal government's promotion of homosexuality 
     under the label of diversity.


                                endnotes

     \1\Environmental Protection Agency memo to all EPA employees, 
     October 14, 1994, signed Carol Browner.
     \2\U.S. Department of Housing and Urban Development, memo for 
     ``All HUD Employees,'' Subject: Policy Statement--Equal 
     Employment Opportunity, Affirmative Employment, Prevention of 
     Sexual Harassment, Discrimination Based on Sexual 
     Orientation, August 30, 1994, signed by Henry G. Cisneros.
     \3\``Equal Opportunity Policy Statement, U.S. Department of 
     Transportation memo ``To All DOT Employees,'' May 27, 1993, 
     signed Federico Pena.
     \4\``FBI Guidelines Stress Ethical, Sexual Behavior,'' The 
     Washington Post, March 8, 1994, p. A-3 and David Johnston, 
     ``Gay Stand Costs Prospect a Justice Post, New York Times, 
     October 20, 1994, p. A-20.
     \5\Joan Biskupic, ``Reno Prohibits Bias Against Gays in 
     Security Clearances,'' The Washington Times, December 3, 
     1993, p. A-4.
     \6\Ibid.
     \7\Memorandum for Mary Maguire Dunne, Acting Chair Board of 
     Immigration Appeals, from The Attorney General (signed by 
     Janet Reno); Subject: Attorney General Order Designating 
     Board of Immigration Appeals Case as Precedent, undated.
     \8\Paula Span, ``A Week About Gay Pride, And Prejudice,'' The 
     Washington Post, June 16, 1994, p. A-1.
     \9\``GLOBE Gains Official Recognition in OPM,'' Federal EEO 
     Update, Vol. 5, No. 01, January 1994, p. 1.
     \10\USDA GLOBE Bylaws, U.S. Department of Agriculture, March 
     25, 1994.
     \11\GLOBE/GSA (Gay, Lesbian or Bisexual Employees/GSA) flier 
     with statement of purpose and lists a GSA Diversity 
     Coordinator at 202-501-2127.
     \12\``Rest in Peace?,'' The Washington Times, July 12, 1993, 
     p. A-6.
     \13\Ruth Larson, ``FAA Employee Objects to Gay-Pride Voice 
     Mail,'' The Washington Times, June 28, 1994.
     \14\``Community Closeness: DOT GLOBE Celebrates Gay Pride 
     Month,'' Intercom, May 31, 1994, p. 6.
     \15\The American Heritage Dictionary (Houghton Mifflin Co: 
     Boston, 1991), p. 412.
     \16\Alston Chase, ``Does Ranger Rick Love Murphy Brown?,'' 
     The Washington Times, August 30, 1994.
     \17\``Diversity Policy Statement,'' Secretary of 
     Transportation memorandum ``To All DOT Employees,'' May 27, 
     1993, signed by Federico Pena.
     \18\``Establishment of USDA GLOBE,'' Department of 
     Agriculture memo to Pat Browne, Spokesperson, USDA GLOBE, 
     signed Wardell C. Townsend, Jr., March 25, 1994.
     \19\Tim Crews, ``U.S.F.S. Now `Proactive' For Gays, Lesbians, 
     Bisexuals,'' The Sacramento Valley Mirror, March 15, 1993.
     \20\``RMT Decisions on Sexual Orientation Report 
     Recommendations,'' U.S. Department of Agriculture, Forest 
     Service, February 24, 1993, signed by Ronald E. Stewart, 
     Regional Forester.
     \21\Kishore Jayabalan, ``Typecasting `Diversity,''' The 
     Washington Post, December 4, 1994, p. C-5.
     \22\Ibid.
     \23\``Inspection Service Diversity Network Meeting Memo,'' 
     United States Postal Service, Cincinnati, Ohio, October 31 to 
     November 1, 1994.
     \24\``Valuing Diversity,'' U.S. Forest Service, Northern 
     Region Phase II, not dated.
     \25\The Washington Times, April 18, 1994.
     \26\``Pacific Southwest News Log,'' U.S. Department of 
     Agriculture, Forest Service, Pacific Southwest Region, June, 
     1994, pp. 12-13.
     \27\Robert L. Maginnis attended the Diversity Day '94 
     welcoming ceremony. This comment reflects notes taken by 
     Maginnis at that ceremony on September 8, 1994 in the Crystal 
     City Forum.
     \28\Ibid.
     \29\Ibid.
     \30\Ibid.
     \31\Ibid.
     \32\``Strength Through Diversity Symposium,'' Center for 
     Character Development, Commandant of Cadets, United States 
     Air Force Academy, October 12, 1994.
     \33\``Equal Employment Opportunity/Diversity Policy 
     Statement,'' Department of the Navy, Office of the Secretary, 
     May 23, 1994, signed by John H. Dalton.
     \34\``Big Brother Is Watching,'' Inside the Beltway, The 
     Washington Times, August 8, 1994, p. A-8.
     \35\``Information about the Federal Workplace AIDS Education 
     Initiative and Class Schedule Announcement,'' Department of 
     Energy, from Donald Donaldson, Federal Workplace HIV/AIDS 
     Education Coordinator, October 9, 1994.
     \36\``Walkin' the Talk,'' HIV Education Materials for 
     Managers, Supervisors and Team Leaders, The Department of 
     Energy, Office of Economic Impact and Diversity, in 
     conjunction with the Federal Workplace HIV Education 
     Initiative, not dated, p. 8.
     \37\Robert L. Maginnis, ``New CDC Report Encourages False 
     Confidence In Condoms,'' Insight by the Family Research 
     Council, IS93K1CI, p. 7.
     \38\``HIV/AIDS Surveillance Report,'' U.S. Department of 
     Health and Human Services, Centers for Disease Control and 
     Prevention, Vol. 5, No. 4, December 1993, p. 8.
     \39\``Infectious Disease Training,'' Forest Service memo to 
     Hope Pineda, Personnel Officer, Tahoe NF, June 7, 1994.
     \40\Ibid.
     \41\Ibid.
     \42\Robert L. Maginnis, ``Taxpayer Funded `Gay-Science' or 
     Legitimate Cancer Research?,'' Family Research Council 
     Insight IS94B2HS, p. 1.
     \43\Project number MH46792-03. The investigator is Roger A. 
     Roffman with the University of Washington, Seattle, 
     Washington.
     \44\Project number MH43520-06, Title: HIV Center--Clinical 
     and Behavioral Studies. The investigator is Mary Jane 
     Rotheram-Borus of New York, NY.
     \45\Project number AA09320-02. The investigator is George R. 
     Seage of Boston, MA.
     \46\NIH project number HD28305-04, Title: Influencing Risk 
     Behaviors of Bisexual Males in Mexico. Kathryn Tolbert is the 
     investigator.
     \47\Dean H. Hamer, Stella Hu, Victoria L. Magnuson, Nan Hu, 
     Angela M. L. Pattatucci, ``A Linkage Between DNA markers on 
     the X Chromosome and Male Sexual Orientation,'' Science, Vol. 
     261, July 16, 1993, pp. 321-327.
     \48\Robert L. Maginnis, op cit.
     \49\NCI Fact Book, National Cancer Institute, 1992, 
     ``Acquired Immunodeficiency Syndrome (AIDS) Funding Activity 
     Fiscal Year 1992,'' Division of Cancer Biology, Diagnosis and 
     Centers $13,620,000. This is cited from page 68. The 1991 
     version of NCI's Fact book (page 63) awards Dr. Hamer's 
     division $13,457,000. These funds are not broken down to the 
     individual sections or laboratories. This researcher visited 
     the office of Dr. Alan Rabson, Chief for the Division of 
     Cancer Biology, Diagnosis and Centers on December 8, 1993 
     (room 3A11, building 31, NIH) and asked for copies of the 
     Division's budgets for FY1991-94. No one was available to 
     discuss the budgets nor did anyone return telephone calls. 
     Linda Anderson, Office of Cancer Communications, Building 31, 
     Bethesda, Maryland stated that Dr. Hamer's study cost 
     $420,000. She indicated that this figure includes salaries. 
     This information comes from a telephone conversation between 
     Ms. Anderson and FRC researcher Craig Gottlieb on December 1, 
     1993. Ms. Anderson followed their conversation with a fax 
     transmission on December 2d which states, ``The budget 
     figured I gave you for Dr. Hamer's study is total including 
     staff salaries.'' Dr. Magnuson indicated that the salaries 
     for research salaries are not part of Hamer's research 
     budget.
     \50\Conversation between Linda Anderson, NCI's press office 
     and Craig Gottlieb on December 1, 1993.
     \51\NCI Press Release entitled ``New Study Finds Genetic Link 
     to Homosexuality,'' July 15, 1993. This information is taken 
     from Dr. Hamer's answer to question 9: ``Why was the research 
     supported by the National Cancer Institute?
     \52\``National Cancer Institute Scandal: Gay Rights Instead 
     of Cancer Research,'' Family Research Report, September-
     October, 1993, p. 6.
     \53\Telephone Deposition of Dean Hamer, taken October 11, 
     1993 in case of Richard G. Evans, et al., v. Roy Romer, et 
     al., District Court, City and County of Denver, State of 
     Colorado, Case No. 92-CV-7223, Courtroom 19, p. 70. A search 
     of NIH Library's files on Dr. Hamer reveals 71 postings for 
     published studies. The ``gay-gene'' study was the first of 
     its kind for Dr. Hamer.
     \54\Brian McCormick, ``Researchers, Doctors Press for Gay 
     Office at NIH,'' American Medical News, September 13, 1993. 
     p. 10.
     \55\Interview of Victoria L. Magnuson, NCI's Biochemistry 
     Laboratory, Building 37, NIH, December 8, 1993. The interview 
     was conducted by FRC research assistant Craig Gottlieb, a 
     Cornell University student.
     \56\``Media Spike `Gay Gene' Researcher's Homosexuality,'' 
     Lambda Report, October 1993, p. 12.
     \57\The Washington Times, September 8, 1994, p. A-6.
     \58\Joyce Price, ``Elders Calls Gay Sex `Wonderful,' 
     `Healthy,''' The Washington Times, March 19, 1994.
     [[Page S221]] \59\Joyce Price, ``Lesbian Nominee's Foes Light 
     Up Senate Phones,'' The Washington Times, May 21, 1993, p. A-
     3.
     \60\Ibid.
     \61\``Certification of the Mandatory Equal Employment 
     Opportunity/Affirmative Employment (EEO/AE), Cultural 
     Diversity Critical Element and Performance Standards for 
     Managers and Supervisors,'' U.S. Department of Housing and 
     Urban Development, January 13, 1994, signed by Roberta 
     Achtenberg, Assistant Secretary for Fair Housing and Equal 
     Opportunity and Marilynn A. Davis, Assistant Secretary for 
     Administration.
     \62\``Announcement Soliciting Applications: Gay, Lesbian and 
     Bi-Sexual Program Manager (Collateral Duty Assignment), 
     Foreign Agriculture Service, not dated.
     \63\Ruth Larson, ``Employees To Be Graded On Support For 
     Diversity,'' The Washington Times, December 2, 1993, p. A-7.
     \64\Max Boot, ``A Different Kind of Whistle-Blower,'' The 
     Wall Street Journal, April 27, 1994.
     \65\Ibid.
                                 ______

      By Mr. HELMS:
  S. 26. A bill to amend the Civil Rights Act of 1964 to make 
preferential treatment an unlawful employment practice, and for other 
purposes; read the first time.


                      civil rights restoration act

  Mr. HELMS. Mr. President, 3\1/2\ years ago, on June 25, 1991, I 
offered an amendment to the Omnibus Crime Bill to do away with quotas 
in the workplace by amending Title VII of the Civil Rights Act of 1964. 
I recall an article in the August 12 of the New Republic magazine which 
reported that my amendment had caused a great deal of agitation in the 
Senate because it required Senators who claimed back home that they 
were opposed to quotas to take a stand on outlawing the practice of 
racial preferences.
  The New Republic went on to say that in order to force ``a showdown 
on preferences in hiring and promotion.'' I should accept a 
modification of the original amendment offered by the distinguished 
Republican Leader, (Mr. Dole). Senators may recall that Senator Dole 
did propose during the June 1991 debate, that the Helms amendment 
contain language which would permit special recruitment of minorities 
and women for the employer's applicant pool--i.e, a broadly acceptable 
form of affirmative action.
  At the time I agreed that Senator Dole's modification would be an 
important addition to my amendment. However, Democrats objected to such 
a modification, and it never happened.
  Mr. President, the legislation I'm introducing today--the Civil 
Rights Restoration Act of 1995--offers Senators the opportunity to pick 
up the gauntlet laid down by Senator Dole and me. This legislation is 
quite simple: It prevents Federal agencies, and the Federal courts, 
from interpreting Title VII of the Civil Rights Act of 1964 to permit 
an employer to grant preferential treatment in employment to any group 
or individual on account of race.
  The Helms proposal prohibits the use of racial quotas in employment 
once and for all. During the past 2 years, almost every member of the 
Senate--and the President of the United States--have proclaimed that 
they are opposed to quotas. This bill will give Senators an opportunity 
to reinforce their statements by voting in a roll call vote against 
quotas.
  I am not here merely on behalf of businesses, large, medium, or 
small. I am here on behalf of working people of all races, ethnic 
groups and gender all over this Nation. The working people don't have 
500 organizations trying to ``protect'' their civil rights. They are 
not organized into Washington pressure groups. They simply want to work 
for a living free of discrimination.
  Unfortunately, Government-imposed and Government-encouraged quotas 
are a fact of life. According to the June 3, 1991, edition of Newsweek 
magazine, a substantial number of Fortune 500 companies have very clear 
minority hiring ``goals'' which is a euphemism for quotas. In a survey 
of CEOs of Fortune 500 companies, 72 percent acknowledged that they use 
some form of--now get this--quota hiring system. Only 14 percent of the 
CEOs claimed that they hire solely on merit.
  I note with interest that the Business Roundtable favored the 
socalled Civil Rights Act passed in the last Congress. Mr. President, 
for whom does the Business Roundtable speak? Surely not for the little 
man. As the Newsweek article suggests, these are big businesses that 
regularly engage in reverse discrimination. They are interested in 
public relations, not the civil rights of their individual workers.
  Mr. President, all the Helms legislation says is, that from here on 
out, employers must hire on a race neutral basis. They can reach out 
into the community to the disadvantaged--something all Senators 
support--and they can even have businesses with 80 percent, 90 percent, 
minority workforces as long as the motivating factor in employment is 
not race.
  The Helms legislation clarifies section 703 (j) of Title VII of the 
Civil Rights Act of 1964 to make it consistent with the intent of its 
authors, Hubert Humphrey and Everett Dirksen. Let me state it for the 
Record:

       It shall be an unlawful employment practice for any 
     employer, employment agency, labor organization, or joint 
     labor committee that is subject to this title to grant 
     preferential treatment, with respect to selection, 
     compensation, terms, condition, or privileges of employment 
     or union membership, to any individual or to any group of 
     individuals on account of the race, color, religion, sex, or 
     national origin of such individual or group for any purpose, 
     except as provided in subsection (e) of this section.
       It shall not be an unlawful employment practice for any 
     person described in paragraph (1) to establish an affirmative 
     action program designed to recruit qualified minorities and 
     women to expand the applicant pool of the person.

  Mr. President, this legislation is necessary because in the 29 years 
since the passage of the Civil Rights Act, the Federal Government and 
the courts have combined to corrupt the spirit of the Act as enumerated 
by both Hubert Humphrey and Everett Dirksen who made clear that they 
were unalterably opposed to racial quotas.
  Specifically, this bill proposes to make part (j) of Section 703 of 
the 1964 Civil Rights Act consistent with subsections (a) and (d) of 
that section. It contains the identical language used in those sections 
to make preferential treatment on the basis of race--that is, quotas--
an unlawful
 employment practice.

  This legislation will forbid the Federal Government from ever again 
terrorizing the small businesses of this country with threats and fines 
for not meeting some bureaucrat's vision of a proportionalized and 
racially ``correct'' society.
  Perhaps Senators are familiar with the Daniel Lamp Company, a small 
Chicago lamp factory recently visited by the investigators of the Equal 
Employment Opportunity Commission [EEOC]. On March 24, 1991 the CBS 
News program, 50 Minutes, blew the cover off of the EEOC's attempt to 
impose its quota mentality on one defenseless businessman.
  As Morley Safer put it, the Daniel Lamp Company ``is guilty of not 
playing the numbers game.'' You see, the EEOC found the owner of the 
Daniel Lamp Company to be a practitioner of racial discrimination and 
leveled a fine of $148,000 against him. What was interesting about the 
charges was the fact that of the company's 28 employees the only two 
who were neither black nor Hispanic were the owner and his father--who, 
by the way, is a survivor of Auschwitz. There were 18 Hispanics and 8 
blacks on the payroll when 60 Minutes began its investigation.
  The trouble began when a disgruntled job applicant filed an EEOC 
racial discrimination complaint against the Daniel Lamp Company. The 
EEOC demanded the records of the company. The owner, who hired only 
minorities, was proud of his work force and happy to allow the Federal 
Government to inspect the ledger. He thought he might be commended for 
providing jobs for minorities. How wrong he was.
  In its investigation CBS found that the only information the EEOC was 
using against the Daniel Lamp Company was the agency's computerized 
quota numbers. The EEOC's computer told the agency that based on the 
employment statistics of Chicago businesses with over 100 employees--a 
fascinating comparison since the Lamp Company never had more than 
thirty workers--the Daniel Lamp Company had to employ exactly 8.45 
blacks. That sounds like a quota to me, and it even sounded like a 
quota to Morley Safer who was puzzled as to why the agency was 
disobeying the law which as Mr. Safer put it ``says the EEOC can't set 
quotas.''
  Despite the denials by the EEOC, Mr. Safer concluded that, ``it --the 
EEOC--did set numbers by telling Mike--the owner of the company--that 
based on other larger companies' personnel, Daniel Lamp should employ 
8.45 
[[Page S222]] blacks.'' When the Daniel Lamp Company stood up to the 
intimidation of the EEOC, the agency tightened the noose. Not only did 
the company have to meet the quota and pay a huge fine, it also had to 
spend $10,000 to advertise in newspapers to tell other job applicants 
that they might have been discriminated against and to please contact 
the Daniel Lamp Company for a potential financial windfall.
  Mr. President, do you see what is going on here? The Daniel Lamp 
Company wasn't one of those Fortune 500 companies that can afford a 
gaggle bunch of lawyers and can placate the various special interest 
groups by hiring according to quotas. The Daniel Lamp Company was a 
small, struggling enterprise which can afford to pay its few employees 
a scant $4.00 an hour. This company hired only minorities. But that 
wasn't good enough for the quota bureaucrats in Washington. They said 
the company didn't hire enough of the ``right'' minorities.
  This bill will put an end to this disgraceful power play by the quota 
crowd in the Federal bureaucracy.
  Mr. President, do we want a nation where privilege and employment are 
handed out on the basis of group identity rather than merit? Already 
police and firemen in our major cities are clashing over who can be 
classified as black or Hispanic to ensure they receive job preference 
because of their minority status. Check the newspapers in San 
Francisco, Chicago, and Boston to see if I'm correct.
  The Helms legislation protects the Daniel Lamp Company and the 
firemen and the policemen, of whatever race, who are out there working 
hard at their jobs in the belief that they will be rewarded for their 
hard work--not judged on the color of their skin.
  This proposal also includes an important safeguard which will protect 
those businesses and institutions whose special needs require personnel 
qualified for the job on the basis of religion, sex, or national 
origin. Like the other sections of title VII, this amendment protects 
the religious school
 or institution which grants preferences in hiring or admission to 
those of its own religion. It protects those ethnic-based enterprises 
which require special language skills and familiarity with particular 
customs.

  Mr. President, some may defensively claim that the Helms legislation 
destroys affirmative action and outreach programs. That flimsy strawman 
comes tumbling down with even a casual examination of the legislation.
  If one equates affirmative action with ``goals'' otherwise known as 
hiring by the numbers, it is clear that this bill does indeed forbid 
that practice.
  But Senators who support race conscious programs, and who support 
race norming tests, will be rebuffed by this legislation and that's why 
they oppose it.
  Those Senators who equate affirmative action with outreach programs 
have had nothing to worry about. Under the language supplied in 1991 by 
the distinguished Republican Leader, a company can recruit and hire in 
the inner city, prefer people who are disadvantaged, create literacy 
programs, recruit in the schools, establish day care programs, and 
expand its labor pool in the poorest sections of the community. In 
other words expansion of the employee pool--Senator Dole calls it good 
affirmative action--is specifically provided for under this act.
  Mr. President, America was founded on the philosophy of individual 
rights with no group entitlement. With that understanding, the former 
Mayor of the City of New York, Ed Koch addressed the issue of numbers 
oriented affirmative action. In a letter to me, Mr. Koch made the 
following observation:

       As to the already existing social problems caused by 
     preferential affirmative action programs, several scholars, 
     including the noted professor and sociologist Thomas Sowell, 
     have observed that racial quotas and discriminatory 
     affirmative action programs have not helped the intended 
     beneficiaries. Those who are often preferred are the very 
     ones who could have competed with the best * * * if we are to 
     uphold our commitment to civil rights--as we should--we must 
     set in motion programs to ensure that all
      deprived persons--without regard to race, color, religion, 
     sex or national origin--have the opportunity to achieve 
     their full potential.
       We should focus our attention on assisting minorities who 
     have suffered from unequal opportunity * * * never excluding 
     from programs others equally poor or deprived simply because 
     they are white. The solution is not to place unqualified 
     minority workers, or others of different national origin, in 
     jobs for which they are not adequately trained as a band-aid 
     to end discrimination. If anything that is the way to destroy 
     the self-esteem of many workers, heightening anger and 
     discrimination among fellow employees when some members of 
     the workforce are unable to carry their fair share of the 
     load * * * such practices unfairly reflect upon many minority 
     members who were hired because they were qualified and are 
     better than other applicants. They unfairly become judged, 
     not individuals, but as members of a protected class, not 
     able to compete with others.

  Mayor Koch's comments cut to the heart of the matter.
  It makes absolutely no sense to that Congress should support programs 
that discriminate against the poor Asians from San Francisco, or the 
poor whites from any where in America simply because they don't fall 
into the class of protected minorities.
  Mr. President, a few days ago I came across a scholarly paper titled, 
``Equality and the American Creed: Understanding the Affirmative Action 
Debate,'' by Seymour Lipset. By the way, this paper was sponsored by 
the Democratic Leadership Council. The central thesis of this paper was 
summed up in this fashion:

       Affirmative action policies--hiring or promoting people by 
     the numbers or group identify--challenge the basic American 
     tenet that rights to equal treatment should be guaranteed to 
     individuals, and that remedial preferences should not be 
     given to groups. And given the strength of individualism in 
     American tradition, it is not surprising that most Americans, 
     including a considerable majority of women and a plurality of 
     blacks, have continued to reject applying emphasis on 
     protected rights to groups.
       It is crucial that civil rights leaders, liberals, and 
     Democrats rethink the politics of special preference. The 
     American Left from Jefferson to Humphrey stood for making 
     equality of opportunity a reality.

  Mr. President, those sentiments are right on the mark. I applaud the 
DLC for its foresight and hope its members join the fight to eliminate 
the use of quotas in our society.
  The Helms proposition puts America back on the course that Thomas 
Jefferson, Hubert Humphrey, and Sam Ervin envisioned. It offers 
Senators an opportunity to back up their speeches and press statements 
against quotas. It gives Senators an opportunity to vote against 
quotas, and this they should do.
  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. 26

       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 ``Civil Rights Restoration Act 
     of 1995'.

     SEC. 2. PREFERENTIAL TREATMENT.

       (a) Unlawful Employment Practice.--Section 703(j) of the 
     Civil Rights Act of 1964 (42 U. (j)) is amended to read as 
     follows:
       ``(j)(1) It shall be an unlawful employment practice for 
     any entity that is an employer, employment agency, labor 
     organization, or joint labor-management committee subject to 
     this title to grant preferential treatment to any individual 
     or group with respect to selection for, discharge from, 
     compensation for, or the terms, conditions or privilege of, 
     employment or union membership, on the basis of the race, 
     color, religion, sex, or national origin of such individual 
     or group, for any purpose, except as provided in subsection 
     (e) or paragraph (2).
       ``(2) It shall not be an unlawful employment practice for 
     an entity described in paragraph (1) to undertake affirmative 
     action designed to recruit individuals of an underrepresented 
     race, color, religion, sex, or national origin, to expand the 
     applicant pool of the individuals seeking employment or union 
     membership with the entity.''.
       (b) Construction.--Nothing in the amendment made by 
     subsection (a) shall be construed to affect the authority of 
     courts to remedy intentional discrimination under section 
     706(g) of the Civil Rights Act of 1964 (42 U.(g)).
                                 ______

      By Mr. HELMS:
  S. 27. A bill to prohibit the provision of Federal funds to any State 
or local educational agency that denies or prevents participation in 
constitutionally-protected prayer in schools; read the first time.


                 voluntary school prayer protection act

  Mr. HELMS. Mr. President, like so many others, I often contemplate 
the obvious fact that America is in the midst of an historic struggle 
between 
[[Page S223]] those who, on the one hand, yearn for a restoration of 
the heritage of traditional values envisioned by our Founding Fathers 
and those who, on the other hand, contend that anything goes no matter 
how destructive--especially when the Federal Government finances it. 
Seldom mentioned is the fact that the Federal Government has no money 
except that which it forcibly extracts from the pockets of the American 
taxpayers back home in our States.
  So, what we have is a struggle for the soul of America. How it is 
finally resolved will determine whether America will move forward--or 
end up on history's ash heap, as have so many nations before us.
  The American people are more aware than ever before about what is at 
stake. They are sick and tired of crime, pornography, mediocre schools, 
and politicians who cater to every fringe group and perverse lifestyle. 
The voters resoundingly and unmistakably demonstrated their anger at 
the polls this past November.
  Mr. President, Reader's Digest presaged this public outcry when it 
published an article a few years ago titled ``Let Us Pray'', in which 
the magazine reported the results of a Wirthlin poll. That poll found 
that 80 percent of the American people resent the Supreme Court's 
ruling that it is unconstitutional for prayers to be offered at high 
school graduations. The poll showed that 75 percent of Americans favor 
prayer in public schools. But a profound impression was found in the 
subtitle which read ``Why can't the voice of the people be heard on 
prayer in schools?''
  As Reader's Digest pointed out, those pro-prayer opinions ``were 
expressed by Democrats, Republicans, blacks and whites, rich and poor, 
high-school dropouts and college graduates--reflecting a profound 
disparity between the citizenry and the Court.'' Yet, despite this 
massive outcry, the liberals in Congress and in the media prate that 
the Constitution somehow forbids governmental establishment of religion 
and ipso facto prayer in school cannot be permitted.
  Well, the voice of the people was unmistakable this past November 8. 
The question before us now is whether we in the Congress are going to 
really listen to them for a change--that's the real change the people 
voted for.
  For instance, seldom is it heard on the issue of school prayer that 
the Constitution also forbids governmental restrictions on the free 
exercise of religion, or that the Constitution protects students' free 
speech--whether religious or not--and that student-initiated, voluntary 
prayer expressed at an appropriate time, place and manner has never 
been outlawed by the Supreme Court.
  But back to the Reader's Digest question: ``Why can't the voice of 
the people be heard on prayer in schools?'' The simple answer is that 
many of the Nation's politicians have misled--and continue to mislead--
the voters about where they really stand on the issue of school prayer. 
They go home at election time--some even run campaign commericals--
proclaiming their staunch support for school prayer and traditional 
family values. Back in Washington they vote otherwise.
  Yet while these same people are in Washington, they knowingly and 
willingly allow the liberal Democratic leadership in the Congress to 
beat back school prayer time after time. That's so these so-called 
moderate family values politicians can vote with a wink and a nod for 
school prayer on the floor of the House and Senate and then go home 
again and lie to their constituents again about how strongly they 
support school prayer when they are in Washington.
  Mr. President, last year was a perfect example of the continuing 
deceit politicians have perpetrated against the voters. The liberal 
Democrats in Congress--and specifically the senior Senator from 
Massachusetts--killed school prayer not once, but twice last year, 
despite overwhelming 3 to 1 votes for school prayer in both the House 
and Senate. However, with the help of the press and the other news 
media, they tried once again to keep the voters in the dark about who 
the true voices are in support of school prayer when they walked into 
the voting booths this past November.
  But no matter how the media tries to explain it away, for once the 
people--the voters--were not fooled in November. They know who has been 
responsible for wrecking the American dream over the past four 
decades--a dream which was built on individual responsibility and an 
acknowledgement of God's governance in the affairs of men.
  Mr. President, my friend Bill Bennett told me recently that America 
has become the kind of country that civilized countries once dispatched 
missionaries to centuries ago. If we care about cleaning up the streets 
and the classrooms, if we care about the long term survival of our 
Nation--how could there be anything more important for Congress to 
protect than the right of America's children to participate in 
voluntary, constitutionally-protected prayer in their schools?
  We already spend more money per pupil than any other industrialized 
country and what has it bought? We have the lowest math scores, the 
lowest language scores, and the highest crime rate of any of our major 
trading partners. We can spend all the money we can tax out of people 
and it will not improve our children's achievement, happiness, or well-
being one whit unless and until we take traditional morality out of 
government-imposed exile and restore it to the prominence and respect 
it once enjoyed.
  As Michael Novak of the American Enterprise Institute has pointed 
out:

       There is no issue in American life in which the public will 
     is so clear and the political establishment is so heedless. 
     The cultural and political elites have simply ignored the 
     overwhelming support of the American people for voluntary 
     school prayer--indeed for the role of religion and faith in 
     the nation's life.

  Mr. President, since the sea change wrought by the November 
elections, there has been a great deal of discussion concerning a 
constitutional amendment regarding school prayer. I must admit that I 
was a bit shocked by the number of so-called friends of school prayer 
who have changed their tune now that it appears Congress might actually 
be able to enact such an amendment--or at least see it brought up for 
discussion on the House and Senate floors. Some groups now question 
either the wisdom of, or the need for, a Constitutional amendment while 
other groups are wrangling over the proper wording for such an 
amendment.
  However, before we get mired in myriad debates about a Constitutional 
amendment, Congress can do something immediately to protect school 
prayer. Congress can enact into the law the school prayer amendment 
that last year overwhelming passed the Senate once, 75-22, and the 
House twice, 367-55 and 345-64. Senators will recall that this was the 
amendment which was dropped in the closing 60 seconds of a conference 
with no debate, no discussion, no vote, just a wink and a nod between 
the Senator from Massachusetts and his counterpart on the House side.
  That amendment, offered by Senator Lott and this Senator would have 
prevented public schools from prohibiting constitutionally-protected, 
voluntary student-initiated school prayer. The amendment did not, as 
was falsely asserted, mandate school prayer. It did not require schools 
to write any particular prayer, nor did it compel any student to 
participate in prayer. It did not stop school districts from 
establishing appropriate time, place, and manner restrictions on 
voluntary prayer--the same kind of restrictions that are placed on 
other forms of free speech in the schools.
  Again, what the amendment would have done is prevent school districts 
from establishing official policies or procedures with the intent of
 prohibiting students from exercising their constitutionally-protected 
right to lead, or participate in, voluntary prayer in school.

  And that is why the amendment met with such vehement opposition and 
subterfuge. It exploded the myth popular among school administrators 
and bureaucrats--a myth perpetuated by liberal groups such as the 
American Civil Liberties Union--that the United States Constitution 
somehow prohibits every last vestige of religion from the public 
schools. However, even the ACLU when it gets to court acknowledges that 
voluntary, student-initiated school prayer may be protected under the 
Constitution on the same basis that students' other non-religious free 
speech is protected--i.e. as long as the 
[[Page S224]] speech in question is uttered in an appropriate time, 
place, and manner, such that the speech does not materially disrupt the 
school day.
  Once the Helms-Lott amendment exploded the old school prayer myths, 
those opposed to school prayer at all costs switched to the argument 
that it was unfair to put school administrators in the position of 
having to be Constitutional scholars in order to determine what 
religious activities must be allowed to prevent their federal funding 
from being put at risk. They missed the whole point--which was that 
school administrators for almost 3 decades have already been acting as 
Constitutional scholars--and bad ones at that--by uniformly prohibiting 
all students from praying or exercising their religion at school in any 
way at any time.
  Why is it that under the liberals' double standard they are so 
concerned that a school district's funding might be adversely affected 
by a school official's Constitutional ignorance, but they don't give 
one whit that an individual child's Constitutional rights might be 
trampled on by such Constitutional ignorance on the part of school 
officials? So much for the liberals always casting themselves as the 
eternal defenders of the individual against the powers of the state.
  The answer is that contrary to the neutrality they profess about 
religious issues, liberals are in fact virulently anti-religious and 
have taken sides in the cultural war against America's--and the 
Founding Fathers'--Judeo-Christian traditions.
  Mr. President, that is why I am introducing the Helms-Lott amendment
   as a bill in the 104th Congress to be known as the ``Voluntary 
School Prayer Protection Act.''

  I reiterate that the intent of the bill is to counteract the 
unbalanced pressure currently being exerted on school boards by the 
ACLU and their legal allies, groups which are in the legal driver's 
seat as far as this issue is concerned. They swoop down on any 
offending school district and threaten its official with a law suit if 
any kind of voluntary student-initiated prayer or religious activity is 
even rumored.
  Under the proposed legislation, school districts could not continue--
in Constitutional ignorance--enforcing blanket denials of students' 
rights to voluntary prayer and religious activity in the schools. 
Schools for the first time would be faced with some real consequences 
for making uninformed and unconstitutional decisions prohibiting all 
voluntary prayer. The bill thus creates a complete system of checks and 
balances to ensure that school districts do not shortchange their 
students one way or the other.
  Mr. President, the bill would ensure that student-initiated prayer is 
treated the same as all other student-initiated free speech--which the 
United States Supreme Court has upheld as constitutionally-protected as 
long as it is done in an appropriate time, place, and manner such that 
it ``does not materially disrupt the school day.'' [Tinker v. Des 
Moines School District, 393 U.S. 503.]
  George Washington's final counsel--and warning--to the Nation is 
significant and just as relevant today as 200 years ago. Washington 
counseled the new nation,

       Of all the dispositions and habits which lead to political 
     prosperity, religion and morality are indispensable supports. 
     In vain would that man claim the tribute of patriotism who 
     should labor to subvert these great pillars of human 
     happiness.

  Mr. President, I ask unanimous consent that the text of the 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 27

       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 ``Voluntary School Prayer 
     Protection Act''.

     SEC. 2. FUNDING CONTINGENT ON RESPECT FOR CONSTITUTIONALLY-
                   PROTECTED SCHOOL PRAYER.

       (a) In General.--Notwithstanding any other provision of 
     law, no funds made available through the Department of 
     Education shall be provided to any State or local educational 
     agency that has a policy of denying, or that effectively 
     prevents participation in, constitutionally-protected prayer 
     in public schools by individuals on a voluntary basis.
       (b) Limitation.--No person shall be required to participate 
     in prayer or influence the form or content of any 
     constitutionally-protected prayer in public schools.
      By Mr. HELMS:
  S. 28. A bill to protect the lives of unborn human beings, and for 
other purposes; read the first time.


                   UNBORN CHILDREN'S CIVIL RIGHTS ACT

  Mr. HELMS. Mr. President, 2 years ago and on occasions prior to that, 
I have offered the Unborn Children's Civil Rights Act, which proposes 
to take that important first step in reversing the infamous Roe v. Wade 
decision. Today, as the 104th Congress is beginning its work, I hope 
that all Senators will give thought to the need to put an end to the 
legalized slaughter of innocent, helpless babies.
  The Unborn Children's Civil Rights Act proposes four things:
  First, to put Congress clearly on record in declaring that (1) every 
abortion destroys deliberately, the life of an unborn child, (2) that 
the U.S. Constitution sanctions no right to abortion, and (3) that Roe 
versus Wade was improperly decided.
  Second, this legislation will prohibit Federal funding to pay for, or 
to promote, abortion. Further, this legislation proposes to defund 
abortion permanently, thereby relieving Congress of annual legislative 
battles about abortion restrictions in appropriation bills.
  Third, the Unborn Children's Civil Rights Act proposes to end 
indirect Federal funding for abortions by (1) prohibiting 
discrimination, at all federally-funded institutions, against citizens 
who as a matter of conscience object to abortion and (2) curtailing 
attorney's fees in abortion-related cases.
  Fourth, this legislation proposes that appeals to the Supreme Court 
be provided as a right if and when any lower Federal court declares 
restrictions on abortion unconstitutional, thus effectively assuring 
Supreme Court reconsideration of the abortion issue.
  Mr. President, if even the warning was applicable that those who 
cannot remember the past are condemned to repeat it--this is it. Fifty 
years ago, millions of European Jews and others died at the hands of 
Hitler's Nazis. Today many forget that horror--and the lesson that all 
human life is sacred.
  We are today reliving another kind of holocaust, by another name. It 
is called abortion, but it is the same horrible fate--except that now, 
in our time, it is being met by millions of unborn children in America. 
Killing
 unborn babies has become a sort of tool-of-convenience in today's 
permissive society. At latest count, more than 32 million unborn 
children have been deliberately, intentionally, destroyed.

  Mr. President, Roe versus Wade has no foundation whatsoever in the 
text or history of the constitution. It was a callous invention. Mr. 
Justice White said it best in his dissent: ``Roe was an exercise in raw 
judicial power,'' he declared.
  Why has this Supreme Court exercise in raw judicial power been 
allowed to stand? Why have we stood idly by for 22 years while 4,000 
unborn babies are deliberately, intentionally destroyed every day as a 
result of legalized abortion?
  The answer is simple, Mr. President. Even though Roe versus Wade was 
and is an unconstitutional decision, Congress has been unwilling to 
exercise its powers to check and balance a Supreme Court that 
deliberately destroyed the lives of the most defenseless, most innocent 
humanity imaginable.
  So, Mr. President, Roe versus Wade still stands and the holocaust 
continues. It is not a failure of the Constitution. It is a failure of 
the supreme Court--but, more importantly, it is the failure of Congress 
for 22 years to do its duty, to overturn Roe versus Wade. Untold 
millions of innocent, helpless little ones have been slaughtered.
  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. 28

       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 ``Unborn Children's Civil 
     Rights Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
     [[Page S225]]   (1) scientific evidence demonstrates that 
     abortion takes the life of an unborn child who is a living 
     human being;
       (2) a right to abortion is not secured by the Constitution; 
     and
       (3) in the cases of Roe v. Wade, 410 U.S. 113 (1973) and 
     Doe v. Bolton, 410 U.S. 179 (1973) the Supreme Court erred in 
     not recognizing the humanity of the unborn child and the 
     compelling interest of the States in protecting the life of 
     each person before birth.

     SEC. 3. PROHIBITION ON USE OF FUNDS FOR ABORTION.

       No funds appropriated by Congress shall be used to take the 
     life of an unborn child, except that such funds may be used 
     only for those medical procedures required to prevent the 
     death of either the pregnant woman or her unborn child so 
     long as every reasonable effort is made to preserve the life 
     of each.

     SEC. 4. PROHIBITION ON USE OF FUNDS TO ENCOURAGE OR PROMOTE 
                   ABORTION.

       No funds appropriated by Congress shall be used to promote, 
     encourage, counsel for, refer for, pay for (including travel 
     expenses), or do research on, any procedure to take the life 
     of an unborn child, except that such funds may be used in 
     connection with only those medical procedures required to 
     prevent the death of either the pregnant woman or her unborn 
     child so long as every reasonable effort is made to preserve 
     the life of each.

     SEC. 5. PROHIBITION ON ENTERING INTO CERTAIN INSURANCE 
                   CONTRACTS.

       Neither the United States, nor any agency or department 
     thereof shall enter into any contract for insurance that 
     provides for payment or reimbursement for any procedure to 
     take the life of an unborn child, except that the United 
     States, or an agency or department thereof may enter into 
     contracts for payment or reimbursement for only those medical 
     procedures required to prevent the death of either the 
     pregnant woman or her unborn child so long as every 
     reasonable effort is made to preserve the life of each.

     SEC. 6. LIMITATIONS ON RECIPIENTS OF FEDERAL FUNDS.

       No institution, organization, or other entity receiving 
     Federal financial assistance shall--
       (1) discriminate against any employee, applicant for 
     employment, student, or applicant for admission as a student 
     on the basis of such person's opposition to procedures to 
     take the life of an unborn child or to counseling for or 
     assisting in such procedures;
       (2) require any employee or student to participate, 
     directly or indirectly, in a health insurance program which 
     includes procedures to take the life of an unborn child or 
     which provides counseling or referral for such procedures; or
       (3) require any employee or student to participate, 
     directly or indirectly, in procedures to take the life of an 
     unborn child or in counseling, referral, or any other 
     administrative arrangements for such procedures.

     SEC. 7. LIMITATION ON CERTAIN ATTORNEY'S FEES.

       Notwithstanding any other provision of Federal law, 
     attorneys' fees shall not be allowable in any civil action in 
     Federal court involving, directly or indirectly, a law, 
     ordinance, regulation, or rule prohibiting or restricting 
     procedures to take the life of an unborn child.

     SEC. 8. APPEALS OF CERTAIN CASES.

       Between the first and second paragraphs of section 1252 of 
     title 28, United States Code, insert the following new 
     paragraph:
       ``Notwithstanding the absence of the United States as a 
     party, if any State or any subdivision of any State enforces 
     or enacts a law, ordinance, regulation, or rule prohibiting 
     procedures to take the life of an unborn child, and such law, 
     ordinance, regulation, or rule is declared unconstitutional 
     in an interlocutory or final judgment, decree, or order of 
     any court of the United States, any party in such a case may 
     appeal such case to the Supreme Court, notwithstanding any 
     other provision of law.''.
                                 ______

      By Mr. HELMS:
  S. 29. A bill to amend title X of the Public Health Service Act to 
permit family planning projects to offer adoption services, and for 
other purposes; read the first time.


                 federal adoption services act of 1995

  Mr. HELMS. Mr. President, a significant question about the use of the 
American taxpayers' money is: should family planning clinics, funded 
under Title X of the Public Health Services Act, be forbidden to offer 
adoption services to pregnant women?
  My own answer is: Absolutely not. To the contrary such clinics should 
regard the advocacy of adopting babies, instead of deliberately 
destroying them, their number one responsibility. And there are 
numerous polls indicating that the vast majority of Americans agree.
  With this in mind, I offer today the Federal Adoption Services Act of 
1995, a bill that proposes to amend Title X of the Public Health 
Services Act to permit federally-funded family planning services to 
provide adoption services based on two factors: (1) the needs of the 
community in which the clinic is located, and (2) the ability of an 
individual clinic to provide such services.
  Mr. President, those familiar with the many Senate debates of the 
past regarding Title X will recall the excessive emphasis placed on 
preventing and/or spacing of pregnancies, and limiting the size of the 
American family.
  I hope that this year, we can refocus this debate, to shift the 
emphasis to the need to affirm life rather than preventing or 
terminating it.
  Sure, the radical feminists and other pro-abortionists will voice 
their usual hysterical outcries. So before they raise their voices, 
let's make clear what this legislation will not do. For example:
  No woman will be threatened or cajoled into giving up her child for 
adoption. Family planning clinics will not be required to provide 
adoption services. Rather, this legislation will make it clear that 
federal policy will allow, even encourage adoption as a means of family 
planning to help assure women who use Title X services--one-third of 
whom are teenagers--will be in a better position to make informed, 
compassionate judgments about the as yet unborn children they are 
carrying.
  Mr. President, adoption has rightly been called ``the loving 
adoption''. It brought joy to my own family as well as to countless 
others. In a world where hundreds of children are destroyed every day--
some because their mothers prefer another gender--is it not time to 
stop and ponder the question: Why not give life a chance?
  Is it not the responsibility of civilized society to protect the most 
innocent, most helpless among us?
  Mr. President, I ask unanimous consent that the text of the Federal 
Adoption Services Act of 1995 be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 29

       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 ``Federal Adoption Services 
     Act of 1995''.

     SEC. 2. ADOPTION SERVICES.

       Section 1001(a) of the Public Health Service Act (42 U.S.C. 
     300(a)) is amended by inserting after the first sentence the 
     following new sentences: ``Such projects may also offer 
     adoption services. Any adoption services provided under such 
     projects shall be nondiscriminatory as to race, color, 
     religion, or national origin.''.
                                 ______

      By Mr. McCAIN (for himself, Mr. Bryan, Mr. Coats, Mr. Gorton, Mr. 
        Heflin, Mr. Helms, Mr. Kyl, Mr. Lott, Mr. Mack, Mr. Reid, Mr. 
        Shelby, Mr. Smith, Mr. Stevens, Mr. Warner, and Mr. Gramm):
  S. 31. A bill to amend title II of the Social Security Act to 
eliminate the earnings test for individuals who have attained 
retirement age; to the Committee on Finance.


                  older americans freedom to work act

 Mr. McCAIN. Mr. President, I am pleased to be joined by my colleagues, 
Senators Bryan, Coats, Gorton, Heflin, Kyl, Lott, Mack, Reid, Shelby, 
Smith, Stevens, and Warner in introducing this bill, the Older 
Americans Freedom to Work Act, to fully repeal the Social Security 
Earnings Test for older Americans between the ages of 65 and 69. This 
legislation would provide freedom, opportunity and fairness for our 
Nation's senior citizens.
  Most people are amazed to find that older Americans are actually 
penalized for their productivity. For every $3 earned by a retiree over 
the $11,160 limit, they lose $1 in Social Security benefits. Due to 
this cap on earnings, our senior citizens, many of whom exist on low 
incomes, are effectively burdened with a 33.3 percent tax. Combined 
with Federal, State and other Social Security taxes, it will amount to 
a shocking 55-65 percent tax bite, and sometimes even more: Federal 
tax--15 percent, FICA--7.65 percent, earnings test penalty--33.3 
percent, State and local tax--5 percent. Obviously, this earnings cap 
is a tremendous disincentive to work. No one who is struggling along at 
$11,000 a year wants to face an effective marginal tax rate which 
exceeds 55 percent.
  Mr. President, this is unquestionably an issue of fairness. No 
American should be discouraged from working. Unfortunately, as a result 
of the earnings test, Americans over the age of 65 are being punished 
for attempting to be 
[[Page S226]] productive. The earnings test does not take into account 
an individual's desire or ability to contribute to society. It 
arbitrarily mandates that a person retire at age 65 or face losing 
benefits. It is plainly age discrimination; it is plainly wrong.
  There are more than 40 million Americans age 60 or older who have 
over 1 billion years of cumulative work experience--all going to waste. 
Three out of five of these people do not have any disability that would 
preclude them against working. Furthermore, almost half a million 
elderly individuals who do work earn annual incomes within 10 percent 
of the earnings limit. They are struggling to get ahead without hitting 
the limit. If not for the earnings test, many more seniors would work, 
but the system is coercing them into retirement and idleness.
  Perhaps most importantly, the earnings cap is a serious threat to the 
welfare of low-income senior citizens. Once the earnings cap has been 
met, a person with a job providing just $5 an hour would find the after 
tax value of that wage dropping to only $2.20. A person with no private 
pension or liquid investments--which, by the way, are not counted as 
``earnings''--from his or her working years may need to work in order 
to meet the most basic expenses, such as shelter and food. Health care 
costs, rising at an astronomical rate, are another expense many elderly 
Americans have trouble meeting. There is also a myth that repeal of the 
earnings test would only benefit the rich. Nothing could be further 
from the truth. The highest effective marginal rates are imposed on the 
middle income elderly who must work to supplement their income.
  Finally, it is simply outrageous to pursue a policy that keeps people 
out of the work force who are experienced and want to work. We have 
been warned to expect a labor shortage. Why should we discourage our 
senior citizens from meeting that challenge? As the U.S. Chamber of 
Commerce, which strongly supports this legislation, has pointed out, 
``retraining older workers already is a priority in labor intensive 
industries, and will become even more critical as we approach the year 
2000.''
  We have a massive Federal deficit. Studies have found that repealing 
the earnings test could net $140 million in extra Federal revenue. 
Furthermore, the earnings test is costing us $15 billion a year in 
reduced production. Taxes on that lost production would go a long way 
toward reducing the budget deficit. Nor, as it continues to become 
tougher to compete globally, can America afford to pursue any policy 
that adversely affects production or effectively prevents our citizens 
from working.
  Repeal would also save the taxpayer over $200 million a year in 
reduced compliance costs. According to the Social Security 
Administration, the earnings test is the largest administrative burden. 
Sixty percent of all overpayment and 45 percent of benefit underpayment 
are attributable to the earnings test.
  Several of our Nation's largest seniors organizations strongly 
support this particular bill: National Committee to Preserve Social 
Security and Medicare, Seniors Coalition, National Alliance of Senior 
Citizens, Retired Officers Association, and the National Association of 
Retired Federal Employees.
  I can say, in closing, that America cannot afford to continue to 
pursue a policy that adversely effects production or effectively 
prevents our citizens from working. Our Nation would be better served 
if we eliminate the burdensome earnings test and allow our Nation's 
senior citizens to return to the work force.
  Mr. BRYAN. Mr. President, today I am pleased to join as an original 
cosponsor of Senator John McCain's ``Older Americans' Freedom to Work 
Act'' to repeal the Social Security earnings limitation test.
  I understand the frustration of seniors who want to work without 
being penalized by a reduction in their Social Security earnings 
limitation test, and since coming to the Senate in 1988, I have 
supported efforts to repeal this test. During the last Congress, 
Senator McCain tried to add this same bill as an amendment to the 
Unemployment Compensation Act. Unfortunately, only 45 Senators joined 
me in voting in favor of the amendment.
  As seniors live healthier and longer lives, we have a tremendous 
human resource that wants to continue to play a positive role in our 
workforce. These seniors represent incredible knowledge and work 
experience, skills our Nation very much needs to remain competitive 
both at home and abroad. But for those seniors, ages 65 through 69, who 
want to contribute by continuing to work, their decision to remain in 
the workplace means they face reduced Social Security benefits because 
of the Social Security earnings limitation test. We should not place 
such financial penalties in their way. The Social Security earnings 
limitation test must go.
  The Social Security earnings limitation test reduces the Social 
Security benefits of senior beneficiaries, if their earned income from 
work is above a certain sum. After Social Security beneficiaries reach 
age 70, they are no longer subject to the test. In 1995, the maximum 
amount of money that beneficiaries, between the ages 65 and 69, can 
earn without reducing the amount of their Social Security benefits is 
$11,280. For every $3 a person earns over this limit, $1 is withheld 
from his or her benefit. The exempt amounts are currently adjusted each 
year to rise in proportion to average wages in the economy.
  I am optimistic this Congress will pass and enact this important 
legislation to repeal this earnings limitation test. I encourage my 
colleagues to join with me in this effort to free seniors to continue 
to work, without penalty, for as long as they choose.
                                 ______

      Mr. BREAUX (for himself and Mr. Johnson):
  S. 32. A bill to amend the Internal Revenue Code of 1986 to provide a 
tax credit for the production of oil and gas from existing marginal oil 
and gas wells and from new oil and gas wells; to the Committee on 
Finance.
  S. 33. A bill to amend the Oil Pollution Act of 1990 to clarify the 
financial responsibility requirements for offshore facilities.
  S. 34. A bill to amend the Internal Revenue Code of 1986 to treat 
geological, geophysical, and surface casing costs like intangible 
drilling and development costs, and for other purposes; to the 
Committee on Finance.
  S. 35. A bill to amend the Internal Revenue Code of 1986 to allow a 
tax credit for fuels produced from offshore deep-water projects; to the 
Committee on Finance.


    HIGH TECH JOB GROWTH AND DOMESTIC ENERGY PRODUCTION LEGISLATION

  Mr. BREAUX. Mr. President, I rise today to introduce four separate 
bills that will help create jobs in the U.S. domestic energy industry 
and will help achieve domestic energy security. These four bills are: 
deepwater production tax incentives, clarification of the tax treatment 
of geological and geophysical costs, marginal well production tax 
incentives, and clarification of the financial responsibility 
requirements under the Oil Pollution Act of 1990.
  Mr. President, oil imports are still too high. We continue to import 
over 50 percent of our oil needs. The warning signals are here. We can 
change politics as usual--the politics of crisis management--and we can 
work now to avert an energy crisis in the future.
  The domestic energy industry continues to decline. Thousands of oil 
industry workers have been laid off and it looks like many more may 
become unemployed in the near future. Over 400,000 jobs have been lost 
in the oil and gas industry in the last 10 years; by some estimates, 
40,000 to 50,000 may have been lost in 1992 alone.
  Our national security depends on access to dependable domestic energy 
reserves. Unfortunately, our domestic oil and gas industry cannot turn 
on a dime. There is no magic spigot that can be turned on when the need 
for secure domestic oil reserves become acute. The expertise needed to 
develop oil and gas is highly skilled and trained, particularly now 
that the remaining domestic reserves are increasingly more difficult to 
recover.
  Unless we take steps today to help preserve a viable domestic 
industry, the next energy crisis may be chronic and very damaging to 
our economy. Unless we act to preserve a core of talent and capital in 
the United States, the domestic industry may not be able 
[[Page S227]] to deploy the necessary capital investment and trained 
labor necessary to quickly add large increments to our overall domestic 
supply of oil and petroleum products.
  The jobs in the oil industry today are very different than those of 
yesterday. The reserves that are fast and easy to recover through 
simple hard labor are no more. Increasingly extraction of oil and gas 
requires very sophisticated technology that requires skilled and highly 
educated work force. The energy industry of today creates the kinds of 
jobs we want for tomorrow--high technology, high paying jobs.
  This country would never allow us to import over 50 percent of our 
food supply. Why is our energy supply any less important? Let's not 
forget the oil shocks of the 70's and let's not forget that several 
years ago we sent our young Americans to the Persian Gulf to protect 
our strategic interest in the oil there.
  These four bills are simple and easy steps that can be accomplished 
now that can help maintain a viable domestic energy industry. This is 
not just an oil and gas state issue. This is a national interest 
concern. Energy fuels our cars, heats our
  homes, runs our factories in every part of the country. Also, let's 
not forget the thousands of jobs that are created in other non-energy 
related sectors to service the energy industry: computers, metals, 
transportation, financial and other service industries. When domestic 
oil and gas producing increases so do the jobs created in all of these 
sectors.

  My bills address four major areas. First, to encourage production in 
the frontier areas of production, I am introducing legislation to 
provide a tax credit for deepwater Outer Continental Shelf [OCS] 
production, especially in the Gulf of Mexico. Second, to help all 
producers afford sophisticated exploration technology, I am introducing 
legislation to allow for the immediate expending of geophysical and 
geological costs. Third, to prevent the needless plugging of marginal 
and stripper wells and to encourage new stripper and marginal well 
production, I am introducing legislation to provide tax incentives for 
existing and new marginal well production. Finally, to prevent the 
shutting down of onshore and offshore oil and gas producers because 
they cannot meet onerous Federal financial responsibility standards, I 
am introducing legislation to clarify the financial responsibility 
requirements of the Oil Pollution Act of 1990. More detail on each of 
these bills will follow.


                    deepwater production incentives

  The first bill I am introducing today would provide a $5-per barrel 
tax credit for oil and gas produced from deep water production--defined 
as 400 meters or more. This legislation is vitally needed to reduce our 
reliance on foreign oil, reduce the trade deficit, maintain a vital 
infrastructure, create jobs, and minimize the risk of oil spills.
  An important part of our strategy to assure the availability of 
domestic supply is the development of the Outer Continental Shelf 
[OCS], in particular areas in the deep water, well over 1,200 feet. The 
OCS contains almost one quarter of all estimated remaining domestic oil 
and gas reserves; much of the reserves are in deep water. According to 
estimates from the Department of the Interior, there are 11 billion 
barrels of oil equivalent in the Gulf of Mexico in waters of a depth of 
200 meters or more. The costs of finding and producing oil and gas in 
deep water areas is astronomical; for example, a state-of-the-art rig 
in deep water, over 3,000 feet, can cost more than $1 billion, as 
opposed to $300 million for a conventional fixed leg platform in 800 
feet of water.
  Based on similar large-scale projects, the development of the deep 
water of the Gulf of Mexico would create tens of thousands of jobs in 
the oil industry and a multiple of that in the general economy. The 
investment required to find, develop, and produce 5 to 10 billion 
barrels of oil could range from 50 to 100 billion dollars. Since 
various studies have estimated that every billion dollars worth of 
investment could create 20,000 jobs; a large scale effort could 
ultimately create up to one million jobs.
  Under current economic conditions, most oil and gas
   potential in the deep water Gulf of Mexico will not attract 
investment, due to the high cost of finding and producing hydrocarbons 
in a hostile deep water environment. Therefore, I am introducing 
legislation to provide a $5-per-barrel credit for production of 
qualified fuels, defined as domestic crude and natural gas produced 
from a property located under at least 400 meters of water. Unlike the 
general business credit, the deep water credit cannot be carried back 3 
years. Unused credits can be carried forward 15 years. The credit could 
be used to offset the corporate alternative minimum tax since many 
companies in the oil production and services industries are subject to 
the minimum tax.

  Mr. President, I must emphasize that I have designed the credit to 
minimize revenue loss to the Government. Since there is typically 5 to 
8 years between discovery and production of oil and gas in commercial 
quantities, there should not be a negative near-term impact on tax 
revenues. In fact, in the first years, the deep water credit could 
raise revenue. During this interim time period, significant investments 
will be made to assure that the oil and gas be brought to market. 
Suppliers, contractors, and employers will pay taxes on the additional 
income generated by these development activities. Their increased 
spending will increase the earnings and stimulate employment in many 
industries throughout the United States.
  Also, contrary to popular belief, oil and gas production on the Outer 
Continental Shelf is environmentally sound. The most recent data 
obtained from the Minerals Management Survey shows that only 2 percent 
of the world's oil spills are the result of Outer Continental Shelf 
[OCS] development. In contrast, 45 percent of the world's oil spills 
come from transportation related, or tanker spills. The more we import, 
the higher risk there is of large oil spills.


                  geological and geophysical expenses

  One very important fact about the domestic oil and gas industry that 
is too often overlooked, is that it is an extremely high-technology 
industry. Particularly now that reserves are harder to recover, 
exploring and producing these remaining reserves requires very 
sophisticated technology. Some of the most sophisticated technology 
used in any industry, even more sophisticated than that used in the air 
and space industry, is the use of 3-D seismic technology by the oil and 
gas industry. The basic purpose of these tools are to survey and 
interpret subsurface geology.
  Obviously, this very sophisticated technology is extremely costly. 
Currently, this kind of technology is the most economically viable for 
the major oil and gas producers. Independent oil and gas producers, who 
produce 31 percent of domestic crude oil and about 60 percent of 
domestic natural gas production, need greater financial access to this 
type of equipment.
  Therefore, this legislation that I am introducing today would allow 
oil and gas producers that incur geological and geophysical [G&G] costs 
to expense those costs rather than
 capitalize them regardless of whether a will is producing or dry. I 
understand the administration is also considering supporting a similar 
initiative on which I hope to work with them.


                        marginal well production

  Last spring, a bipartisan group of House and Senate Members met with 
President Clinton to outline our concerns about the domestic energy 
industry. The president was given a list of proposals that was 
developed in consultation with the energy industry. That list included 
the deepwater credit, the G&G proposal and also a new idea for a 
marginal well production credit for new and existing wells.
  The third bill I am introducing today would create a new set of tax 
incentives for marginal production. Mr. President of the nation's 
600,000 oil wells, more than 450,000 produce less than 3 barrels per 
day. These small wells are extremely sensitive to oil prices. Between 
October 1993 and March 1994, oil prices plunged more than 40 percent 
placing in jeopardy these wells. Energy policy is needed that protects 
this vital source of production during periods of low prices.
  There are two main elements of this proposal. First, for existing 
wells, the bill would provide a maximum $3 per barrel tax credit for 
the first 3 barrels of daily production from an existing marginal 
well--a well that produces less than 15 barrels per day or produces 
[[Page S228]] heavy oil. For natural gas, the bill would provide a 
maximum $0.50 per thousand cubic feet [MCF] tax credit for the first 18 
MCF of natural gas produced per day from a marginal gas well--a well 
that produces less than 90 MCF per day. In addition, the definition of 
marginal wells would be expanded to include high water cut property.
  The second major element of this bill is the creation of a new credit 
for newly drilled marginal wells. For those wells drilled after 
December 31, 1994 the following new credits would apply. Oil production 
would receive a maximum $3 per barrel for the first 15 barrels of daily 
oil production. Natural gas production would receive a maximum credit 
of $.50 per MCF for the first 90 MCF of daily natural gas production.
  To make sure that the tax incentives are truly targeted to when the 
price of oil and gas are the most threatening to domestic production, 
the benefit of these credits would phase out for oil when the price of 
oil is between $14 and $20 per barrel and for natural gas when gas 
prices reach between $2.49 and $3.55.


 financial responsibility requirements of the oil pollution act of 1990

  The Oil Pollution Act of 1990 was passed in response to the Exxon 
Valdez oil spill and was designed to prevent oil spills and if oil 
spills do occur to make sure sufficient financial resources are 
available to clean up those spills. The statute establishes liability 
limits and requirements of financial responsibility to meet those 
limits. However, recent interpretation of the statute by the Department 
of the Interior
 indicates that legislative changes are needed to meet congressional 
intent in the area of financial responsibility for onshore facilities 
and to correct the overly burdensome financial responsibility 
requirements for offshore facilities that threaten the viability of 
many offshore producers.

  When the Congress adopted the Oil Pollution Act, it clearly intended 
that onshore facilities would not have to demonstrate evidence of 
financial responsibility. However, a recent Interior Department 
Solicitor's opinion indicates that due to the interrelationship of 
several definitions in the act, that they interpret the statute to 
require financial responsibility be demonstrated by onshore facilities. 
Mr. President, clearly, Congress did not and does not want to require 
small marina operators or other onshore facilities to demonstrate $150 
million of financial responsibility. Therefore, the bill I am 
introducing today clarifies the congressional intent on the law with 
respect to financial responsibility for onshore facilities.
  Also, I have proposed to give the Minerals Management Service the 
authority to require evidence of financial responsibility between $35 
million and $150 million based on the amount of environmental risk 
posed by the facility. Current law is inflexible on this point, all 
offshore facilities must provide evidence of $150 million regardless of 
the amount of oil they handle, their history of oil spills, or other 
factors that would determine the true risk of oil spill. In addition, 
my bill would provide that any producer that handles less than 1,000 
barrels of oil at any one time would be exempt from the financial 
responsibility requirement. Both the $35 million financial 
responsibility level and the 1,000 barrels were included in prior law--
the Outer Continental Shelf Lands Act. Unless, this flexibility is 
provided for offshore facilities, the Oil Pollution Act requirements 
will freeze out small and independent companies that drill the majority 
of wells offshore. These onerous requirements, unless fixed, will lead 
to a loss of jobs in the oil and gas industry.
  This bill is a starting point. I expect the Domestic Petroleum 
Council to develop specific recommendations on the issue raised by the 
Oil Pollution Act in the near future. I look forward to seeing those 
and to working to further revise this legislation. There are other 
issues that we may have to address such as self-insurance, guarantor 
liability on which I hope we can get specific recommendations by the 
council.
  Mr. President, I hope my colleagues will have an opportunity to 
support this legislation so that we can act on these proposals during 
this Congress.
                                 ______

      By Mr. KOHL:
  S. 36. A bill to replace the Aid to Families with Dependent Children 
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

 Mr. KOHL. Mr. President, today I am reintroducing a welfare reform 
proposal that I introduced in the 103d Congress. My 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. My bill 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.
  I think there is a better way. A simple, common sense approach, that 
is consistent with American values. This 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.
  My 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, children care, transportation assistance, earnings 
supplements, public service jobs, etc.
  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.
  My 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 re-orient their systems away from check-writing 
and toward helping people find jobs, we can make big strides in getting 
people to work.
  Another reason I have proposed keeping 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 
[[Page S229]] 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 I'm bashing the Federal Government when I say 
that I don't think it can solve this problem. I'm not. I'm 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 my 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. I 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, I 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. My 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 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. 36

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Welfare to 
     Work Act of 1995''.
       (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 1996.--An application for a grant to 
     operate a State welfare to work program during fiscal year 
     1996 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 1997 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 1997.--An application for a grant to operate a State 
     welfare to work program during fiscal year 1997 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 1996 and 1997.--The Secretary shall 
     approve each application for a grant to operate a State 
     welfare to work program--
       (A) during fiscal year 1996, if the application contains 
     the information described in subsection (b)(1); and
       (B) during fiscal year 1997, 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 
     1998 and each succeeding fiscal year if the State's 
     application reports that--
     [[Page S230]]   (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 1996, 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 1996;
       (2) during fiscal year 1997 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 1996, 100 percent of the State's base 
     amount;
       (2) in fiscal year 1997, 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 1998, 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 1999, 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 2000, 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 2001 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 1996, 100 percent of the amount 
     determined under paragraph (2); and
       (B) for fiscal year 1997 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 1995; 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 1995 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 1995 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 1997, 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, 1995.''.
       (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, 1995.''.
       (b) Food Stamp Program To Serve Only Elderly and Disabled 
     Individuals.--
     [[Page S231]]   (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, 1995.
       (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 1995.''.
       (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, 1995.

     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.
                                 ______

      By Mr. FEINGOLD (for himself and Mr. Kohl):
  S. 37. A bill to terminate the Extremely Low Frequency Communication 
System of the Navy; to the Committee on Armed Services.


 extremely low frequency communication system termination and deficit 
                             reduction act

 Mr. FEINGOLD. Mr. President, today I am reintroducing legislation for 
myself and Senator Kohl which we offered during the 103d Congress to 
terminate the Extremely Low Frequency Communications System, located in 
Clam Lake, WI., and Republic, MI. This project has been opposed by 
residents of Wisconsin since its inception, but for years, we were told 
that the national security considerations of the cold war outweighed 
our concerns about this installation in our State. This year, as the 
Department of Defense is scrambling to meet a tighter budget, and with 
the Base Closure Commission making its final recommendations, Project 
ELF should be closed down. If enacted, my bill would save $9 to $20 
million a year.
  Project ELF was developed in the late 1970's as an added protection 
against the Soviet naval nuclear deployment. It is an electromagnetic 
messenger system--otherwise known as a bell ringer--which only tells a 
deeply submerged Trident submarine that it needs to come to shallow 
water to retrieve a message. Because it communicates through very 
primitive pulses, called phonetic-letter-spelled-out [PLSO] messages, 
ELF's radiowaves cannot transmit any messages themselves. Thus, in the 
case of a nuclear attack, ELF is not useful because during a nuclear 
attack a Trident would not surface at all. And, in the absence of a 
Soviet naval nuclear threat from which to hide, its usefulness is even 
more difficult to justify.
  Since its major justification has apparently disappeared, Project ELF 
itself becomes hard to justify. Trident submarines no longer need to 
take that extra precaution against Soviet nuclear forces. They can now 
surface on a regular basis with less danger of detection or attack. 
They can also receive more complicated messages through very low 
frequency [VLF] radiowaves, or lengthier messages through satellite 
systems, if it can be done more cheaply.
  Not only do many Wisconsinites think the mission of Project ELF is 
unnecessary and anachronistic, but they are also concerned about 
possible environmental and public health hazards associated with it. 
While I have heard some ELF supporters say there is no apparent 
environmental impact of Project ELF, we can only conclude that we do 
not know that: in fact, we do not know much about its affects at all.
  The Navy itself has yet to conclude definitively that operating 
Project ELF is safe for the residents living near the site. If you are 
a resident in Clam Lake, that is unsettling news. In 1982, the Illinois 
Institute of Technology Research Institute undertook a study of ELF's 
health effects. The results have thus far proven inconclusive, and are 
still being reviewed and analyzed by the National Academy of Sciences. 
After the NAS reviews the data, it will, at my request, be forwarded to 
the Office of Management and Budget and the Office of Technology 
Assessment.
  We also know that other studies give Wisconsinites reason to be 
concerned. In 1992, a Swedish study found that children exposed to 
relatively weak magnetic fields from powerlines develop leukemia at 
almost four times the expected rate. We also know that in 1984, a U.S. 
district court ruling on State of Wisconsin versus Weinberger ordered 
Project ELF to be shut down because the Navy paid inadequate attention 
to the system's possible health effects, and violated the National 
Environmental Policy Act. That decision was overturned on appeal, 
however, in a ruling that claimed national security interests at the 
time prevailed over environmental concerns. I would hope that in post-
cold-war 1995 that conclusion would be reconsidered.
  Last session, I worked with the Senator from Georgia [Senator Nunn] 
to include an amendment in the National 
[[Page S232]] Defense Authorization Act for fiscal year 1994 requiring 
a report by the Secretary of Defense on the benefits and costs of 
continued operation of Project ELF. The report issued by DOD was 
particularly disappointing because it basically argued that because 
Project ELF may have had a purpose during the cold war, it should 
continue to operate after the cold war as part of the complete 
complement of command and control links configured for the cold war. I 
am hoping that OTA will also issue an independent assessment of the 
strategic capabilities of Project ELF, as described in the Senate-
passed amendment in 1993.
  I have also proposed that the Base Closure Commission [BRAC] look at 
Project ELF this year. I understand that in addition to military value, 
the BRAC will consider recommendations according to four other 
criteria: return on investment; the economic impact on the community; 
the ability of both the existing and potential receiving communities' 
infrastructure to support forces, missions and personnel; and 
environmental impact. On all these grounds, ELF qualifies as a 
candidate for closure.
  Did Project ELF play a role in helping to minimize the Soviet threat? 
Perhaps. Did it do so at risk to the community? Perhaps. Does it 
continue to play a vital security role to the Nation? No.
  Most of us in Wisconsin don't want it anymore. Many of my 
constituents have opposed Project ELF since its inception, and my 
constituent mail today runs 8-1 against it. Congressman David Obey has 
consistently sought to terminate Project ELF, and in fact, we have him 
to thank in part for getting ELF scaled down from the large-scale 
project first conceived by the Carter administration. I look forward to 
continue working with him on this issue when he introduces a similar 
measure in the House this year.
  As the Department of Defense and the Armed Services Committee 
consider what they say are very tight defense budgets for fiscal year 
1996, I hope they will zero out the ELF transmitter system, as I 
propose in this bill, and save the taxpayer $9 to $20 million a year. 
Given both its apparently diminished strategic value and the potential 
environmental and public health hazards, Project ELF is a perfect 
target for termination. I can only echo the words of an October 2 
editorial in the Wausau Daily Herald: ``ELF isn't needed. It isn't 
wanted. It's an unwarranted expense.''
  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. 37

       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 ``Extremely Low Frequency 
     Communication System Termination and Deficit Reduction Act of 
     1995''.

     SEC. 2. PROHIBITION OF FURTHER FUNDING OF THE EXTREMELY LOW 
                   FREQUENCY COMMUNICATION SYSTEM.

       (a) Prohibition on Use of Funds.--Except as provided in 
     subsection (b), funds appropriated on or after the date of 
     the enactment of this Act to or for the use of the Department 
     of Defense may not be obligated or expended for the Extremely 
     Low Frequency Communication System of the Navy.
       (b) Limited Exception for Termination Costs.--Subsection 
     (a) does not apply to expenditures solely for termination of 
     the Extremely Low Frequency Communication System.
                                 ______

      By Mr. HATCH (for himself, Mr. Dole, Mr. Thurmond, Mr. Simpson, 
        Mr. Grassley, Mr. Kyl, Mr. Abraham, Mr. Nickles, Mr. Gramm, Mr. 
        Santorum, and Mr. Ashcroft):
  S. 38. A bill to amend the Violent Crime Control and Law Enforcement 
Act of 1994, and for other purposes; to the Committee on the Judiciary.


        VIOLENT CRIME CONTROL AND LAW ENFORCEMENT AMENDMENTS ACT

  Mr. HATCH. Mr. President, I rise today to introduce the Violent Crime 
Control and Law Enforcement Amendments Act of 1995. This legislation 
corrects the most glaring flaws in the 1994 Crime bill, and is intended 
as only a first step in enacting the comprehensive anti-crime laws the 
American people are demanding. Each of the provisions of this bill is 
also included in our comprehensive Crime bill, S. 3, introduced earlier 
today. As with S. 3, I am pleased to be joined in this effort by the 
distinguished majority leader. I am also pleased that Senators 
Thurmond, Simpson, Grassley, Kyl, Abraham, Nickles, Gramm, Santorum, 
and Ashcroft have joined me as cosponsors of this bill as well.
  The people of Utah and across our Nation understand that the best 
crime prevention program is to ensure the swift apprehension of 
criminals and their certain and lengthy imprisonment. My earlier 
statement today set forth the details of our crime problem. Congress 
can do better than the legislation it passed last year. That bill 
wasted billions on duplicative social spending programs, devoted 
insufficient resources to the needed emergency build-up in prison 
space, failed to enact tough penalties for Federal violent and drug 
crimes, weakened mandatory minimum sentences for drug trafficking, and 
failed to ensure that violent criminals are ordered to pay restitution 
to their victims.
  Now the American people expect us to fix these flaws, and this bill 
begins that task with several straight-forward provisions first 
proposed during the last Congress. A number of these overwhelmingly 
passed this body, only to be scrapped during the conference on last 
year's Crime bill.
  First, it eliminates the wasteful social programs passed in the 1994 
Crime bill, including the Local Partnership Act, the National Community 
Economic Partnership Act and the Family Unity Demonstration Project, 
among many others. These programs would have wasted billions of dollars 
on duplicative, top-down spending programs without reducing violent 
crime. Having Washington bureaucrats impose untested programs on the 
States would do little to prevent crime.
  Of the over $4.5 billion saved by eliminating these programs, 
approximately $1 billion is redirected to prison construction and 
operation grants.
  Second, in addition to increasing the amount authorized for state 
prison grants, our bill also ensures that these grants will be used for 
the construction and operation of brick-and-mortar prisons. The bill 
removes conditions requiring the states to adopt specified corrections 
plans in order to qualify for the Federal funds. Our bill also 
eliminates wasteful grants for ``alternative sanctions'' for young 
offenders, saving the taxpayers another $150 million.
  Third, our bill also includes several tough Federal criminal 
penalties either omitted from or weakened in the 1994 Crime bill. For 
instance, it includes the provisions requiring tough
 mandatory minimum sentences for Federal crimes committed with a 
firearm, for the sale of drugs to minors or the use of a minor in the 
commission of a drug crime, and for violations of drug-free zones.

  Our bill also replaces the overly broad reform of mandatory minimum 
sentences with an approach that will insure the just imposition of 
those sentences. Thus, while providing less leeway to judges to avoid 
imposing minimum mandatory sentences than the 1994 Crime bill, it 
allows such discretion where it is merited. The truly first-time, non-
violent, low-level offender deserving some measure of leniency will be 
treated more justly under our legislation, without providing a windfall 
to career drug dealers. I should note that our provision was 
overwhelmingly supported by the Senate in the last Congress.
  Lastly, we also include in our bill provisions for restitution to 
victims of federal crimes to ensure that crime victims receive the 
restitution they are due from those who have preyed on them.
  With this legislation, we have an opportunity to begin to fulfill our 
commitment to the American people. It is only a start, but it is a 
measure that I believe this body could pass quickly. We must at the 
same time continue our efforts to pass a more comprehensive crime bill 
that addresses the American people's concern over rampant violent crime 
in a way that empowers them and that respects the competencies and 
powers of the State and Federal spheres of government. Additionally, we 
must remain committed to ensuring that our legislation does not 
increase the Federal deficit.
  [[Page S233]] I believe that the bills we have introduced today will 
give the American people the crime control legislation they demand and 
deserve. I urge the support of my colleagues for this important 
legislation.
  Mr. President, I ask unanimous consent that a section-by-section 
summary of this bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
      The Violent Crime Control and Law Enforcement Amendments Act

       This legislation is based on Republican proposals 
     championed during the debate on the Conference Report on the 
     1994 Crime Bill. The bill eliminates much of the ``pork'' 
     contained in the 1994 Crime Bill and strengthens prison and 
     sentencing provisions.
       Should you have questions about the bill not answered by 
     this summary, please call Mike O'Neill or Mike Kennedy of the 
     Judiciary Committee staff of extension 4-5225.


                      SECTION-BY-SECTION ANALYSIS
       Sec. 1. Short Title.
       The short title of the bill is the Violent Crime Control 
     and Law Enforcement Amendments Act of 1995.
       Sec. 2. Elimination of Ineffective Programs.
       Section 2 eliminates the wasteful social programs passed in 
     the 1994 Crime Bill, including the Local Partnership Act, the 
     National Community Economic Partnership Act and the Family 
     Unity Demonstration Project, among many others. These 
     programs would have wasted billions of dollars on 
     duplicative, top-down spending programs without reducing 
     violent crime.
       Of the over $4.5 billion dollars saved by eliminating these 
     programs, approximately $1 billion is redirected to prison 
     construction and operation grants.
       Sec. 3. Amendment of Violent Offender Incarceration And 
     Truth In Sentencing Incentive Grant Program.
       Section 3 amends the prisons grants included in the 1994 
     Crime Bill to insure that the funds are spent on the actual 
     construction and operation of prisons for violent offenders 
     and would also remove provisions tying the funds to federal 
     mandates on state corrections systems. Specifically, the 
     proposal would make the following changes:
       The Act currently allows prison funds to be spent on 
     alternative correctional facilities in order ``to free 
     conventional prison space.'' This section requires that 
     prison grants be spent on conventional prisons to house 
     violent offenders, not on alternative facilities.
       The proposal removes from the Act a provision which would 
     have conditioned state receipt of the prison grants on 
     adoption of a comprehensive correctional plan that would 
     include diversion programs, jobs skills programs for 
     prisoners, and post-release assistance. Accordingly, these 
     grants will be used exclusively to build and operate prisons.
       The proposal amends the prisons grant allocation provisions 
     of the Act by increasing the minimum per-state allocation and 
     removing the Attorney General's discretionary grant 
     authority.
       Sec. 4. Punishment For Young Offenders.
       Section 4 repeals Subtitle B of title II of the 1994 Crime 
     Bill, which authorized $150 million in discretionary grants 
     for alternate sanctions for criminal juveniles.
       Sec. 5. Increased Mandatory Minimum Sentences For Criminals 
     Using Firearms.
       Section 5 establishes a mandatory minimum penalty of 10 
     years' imprisonment for anyone who uses or carries a firearm 
     during a federal crime of violence or federal drug 
     trafficking crime. If the firearm is discharged, the person 
     faces a mandatory minimum penalty of 20 years' imprisonment. 
     If death results, the penalty is death or life imprisonment.
       Sec. 6. Mandatory Minimum Prison Sentences For Those Who 
     Use Minors in Drug Trafficking Activities.
       Section 6 establishes a mandatory minimum sentence of 10 
     years' imprisonment for anyone who employs a minor in drug 
     trafficking activities. The section also establishes a 
     sentence of mandatory life imprisonment for a second offense.
       Sec. 7. Mandatory Minimum Sentences For Persons Convicted 
     Of Distribution Of Drugs To Minors.
       Section 7 establishes a mandatory minimum sentence of 10 
     years' imprisonment for anyone 21 years of age or older who 
     sells drugs to a minor. The section also establishes a 
     sentence of mandatory life imprisonment for a second offense.
       Sec. 8. Penalties For Drug Offenses In Drug-Free Zones.
       Section 8 establishes new mandatory minimum sentences for 
     drug offenses in drug-free zones which were omitted from the 
     1994 Crime Bill.
       Sec. 9. Flexibility In Application of Mandatory Minimum 
     Sentence Provisions In Certain Circumstances.
       Section 9 includes a narrowly circumscribed mandatory 
     minimum reform measure that returns a small degree of 
     discretion to the federal courts in the sentencing of truly 
     first-time, non-violent low-level drug offenders. To deviate 
     from the mandatory minimum, the court would have to find that 
     the defendant did not finance the drug sale, did not sell the 
     drugs, and did not act as a leader or organizer.
       Sec. 10. Mandatory Restitution To Victims Of Violent Crime.
       Section 10 amends 18 U.S.C. 3663 by mandating Federal 
     judges to enter orders requiring defendants to provide 
     restitution to the victims of their crimes.
                                 ______

      By Mr. STEVENS (for himself, Mr. Kerry, and Mr. Murkowski):
  S. 39. A bill to amend the Magnuson Fishery Conservation and 
Management Act to authorize appropriations, to provide for sustainable 
fisheries, and for other purposes; to the Committee on Commerce, 
Science, and Transportation.


                     the sustainable fisheries act

  Mr. STEVENS. Mr. President, I am pleased on this first day of the 
104th Congress to introduce with my colleagues from Massachusetts and 
Alaska a bill to significantly strengthen and improve the Magnuson 
Fishery Conservation and Management Act.
  The bill we introduce today is a continuation of the effort Senator 
Kerry and I began in the 103rd Congress to reauthorize the Magnuson 
Act--one of the most important federal laws in our home states.
  Our bill includes a number of important new protections for our 
fishery resources and for the fishermen who depend upon them. These 
include: (1) significant new across-the-board mandates to reduce waste 
in U.S. fisheries; (2) a new section specifically mandating the 
reduction of fishery waste in the fisheries off Alaska--with a specific 
time frame that the North Pacific Council must follow; (3) new 
conflict-of-interest and recusal requirements for fishery management 
council members, as well as other reforms to the Council process; (4) 
guidelines for individual transferable quotas, or ITQs, to help define 
and ensure the fairness in the use of this relatively new management 
tool; and (5) a new National Standard to ensure that conservation and 
management measures take into account the importance of the harvest of 
fish to fishery dependent communities, such as the many communities 
along our Alaska coasts.
  These are just a few of the improvements we are proposing that will 
help ensure the sustainability of our fishery resources for generations 
to come.
  As chairman of the new Oceans Subcommittee, I intend to hold 
oversight hearings on this legislation early in the session, and look 
forward to working with my colleagues to complete the reauthorization 
process before the end of the summer.
  I would like to ask that the remainder of my statement describing the 
bill be printed in the Record as if read, along with the text of the 
bill.


                            Waste Reduction

  The bill incorporates virtually all of the operative provisions of S. 
2022, the bill I introduced last year to address the problems of 
fishery waste in the North Pacific.
  The bill would add specific definitions for ``bycatch,'' ``economic 
discards'' and ``regulatory discards'' (which we in the North Pacific 
call prohibited species) to the Magnuson Act in order to clearly 
delineate between specific types of waste which may require different 
solutions.
  The bill requires each Council to assess bycatch and to minimize the 
mortality caused by economic and regulatory discards in each fishery 
which is managed by that Council.
  For the North Pacific, the bill also requires the Council to 
incorporate provisions in its fishery management plans to reduce 
bycatch, economic and regulatory discards, as well as to reduce 
``processing waste'' and to achieve full retention and full utilization 
by specific dates. These are the same mandates for the North Pacific 
and the same basic definitions as those that I included in S. 2022 last 
year.
  The bill directs the Council to take additional steps to ensure that 
the valuable fishery resources off Alaska are available for future 
generations.
  In addition to provisions from S. 2022, we've also added a definition 
of ``overfishing'' to the Magnuson Act. The bill requires each Council 
to include in each fishery management plan specific criteria for 
determining when a fishery under that Council's jurisdiction is 
overfished or is approaching such a condition.
  [[Page S234]] The intent is to get the Councils to establish a 
mechanism to provide sufficient warning so that preventive measures can 
be put in place before any additional fisheries become overfished.
  The Secretary of Commerce (Secretary) will use the criteria to report 
to Congress (and back to the Councils) on the fisheries within each 
Council's geographical area that are overfished or approaching a 
condition of being overfished. Each Council will have one year to 
submit appropriate fishery management plans, amendments or regulations 
to prevent the overfishing of fisheries approaching that condition, and 
to stop overfishing and begin to rebuild
 fisheries that are already overfished.

  If the Council fails to take action to begin this process within one 
year, the Secretary will be required to prepare an appropriate fishery 
management plan or plan amendment.
  We know from current National Marine Fisheries Service data that our 
fisheries in Alaska are not overfished. These new provisions in the 
Magnuson Act will make sure Alaska's fisheries remain healthy for 
generations to come.


                             council reform

  The bill includes measures to reform the Council process, perhaps the 
most difficult issue we've dealt with in our review of the Magnuson 
Act.
  Our bill would prevent Council members from voting on certain matters 
that benefit them financially, but it does not require such widespread 
recusal by Council members that the Councils would be rendered 
ineffective.
  I still believe in the basic goal Senator Magnuson and I had for the 
original Act--that the councils should be made up of the people 
directly affected by fishery management decisions.
  Senator Kerry and I have incorporated valuable portions of other 
proposals, including the Administration's proposal (which was based on 
the existing Alaska Board of Fisheries recusal process) and Senator 
Breaux's proposal, in the recusal section of our bill.
  The bill requires Council members to recuse themselves from voting on 
Council decisions that would have a ``significant and predictable 
effect`` on their financial interests. A Council decision would be 
considered to have a ``significant and predictable effect'' if there is 
``a close causal link between the Council decision and an expected 
disproportionate benefit, shared only by a minority of persons within 
the same industry sector or gear group, to the financial interest'' of 
the Council member.
  This language will prevent Council members from voting on decisions 
that give a disproportionate benefit only to themselves or a minority 
in their gear group, but will not prevent them from expressing views or 
from voting on most matters on which they have expertise.
  The Secretary, with the concurrence of a majority of the voting 
members of the Council, will select a ``designated official'' with 
Federal conflict-of-interest experience to attend Council meetings and 
make determinations regarding the financial interests of members. These 
determinations will occur at the request of the affected Council member 
or at the initiative of the designated official.
  Any Council member can ask for a review by the Secretary of a 
determination, but this review will not be treated as cause for the 
invalidation or reconsideration by the Secretary of a Council decision. 
At its own discretion, the Council could decide to postpone voting on a 
matter until receiving the result from the Secretary's review of a 
determination, or could decide to reconsider a vote that had occurred 
if the Secretary's review was different than the designation official's 
determination had been.
  This bill also increases Council reporting requirements, and includes 
a provision to require a roll call vote for the record at the request 
of any Council member.


                                  itqs
  This bill establishes a definition and sets out general requirements 
for any individual transferable quota (ITQ) system. The bill prohibits 
the Secretary from approving any more ITQ plans until ITQ guidelines 
are completed based on these requirements. The Secretary would convene 
an advisory panel to provide recommendations for the ITQ guidelines.
  The bill requires the guidelines to, among other things: (1) provide 
for the fair and equitable allocation of fishing privileges; (2) 
provide for the collection of fees of up to four percent annually of 
the value of the fish harvested or processed under an ITQ, and an 
additional one percent of the value of fish harvested or processed by a 
person receiving an initial quota or transferring a quota; (3) address 
methods for providing for new entrants, including, in fisheries where 
appropriate, mechanisms to provide a portion of the annual harvest for 
entry-level fishermen or small vessel owners who do not hold an ITQ; 
and (4) provide requirements for the effective monitoring and 
enforcement of ITQ systems, and provide for penalties, including the 
revocation of fishing privileges under ITQ systems.
  The bill clearly states that an ITQ does not constitute a property 
right, and that no provision of law shall be construed to limit the 
ability of the Secretary to terminate or limit an ITQ at any time and 
without compensation.
  The bill also specifies that holders of an ITQ may include fishing 
vessel owners, fishermen, crew members or other citizens of the United 
States, as well as United States fish processors.
  Upon reviewing the October 7, 1994 version of our bill (S. 2538), a 
number of Alaskans expressed concerns to me about the effect of these 
ITQ provisions on the halibut and sablefish individual fishing quota 
(IFQ) plan off Alaska.
  The primary concerns were related to the mistaken impression that the 
ITQ provisions of the bill would require a reallocation of halibut/
sablefish quota shares (i.e. to crew members, skippers, etc.) after the 
initial allocation (which is taking place now), and that the bill would 
require the halibut/sablefish plan to include processor quotas.
  Neither S. 2538, nor the bill we are introducing today, requires 
these things.
  While the bill defines ITQs to allow the Councils to include 
processor shares (in addition to harvesting shares), it does not 
require ITQ plans to include processor shares.
  Processor quotas were added because the North Pacific Council is 
exploring their use for the Bering Sea pollock fishery, and because 
doubt has been expressed by the National Oceanic and Atmospheric 
Administration about the Council's current authority to create 
processor quotas. Our bill simply clarifies that the Councils have this 
tool to use at their discretion--it does not require their use.
  The concern that the bill would require a reallocation of halibut and 
sablefish quota to skippers and crew members is also without basis.
  The bill specifies that holders of ITQs may include crewmen (as well 
as skippers), but does not require that crewmen (or skippers) receive 
an initial allocation.
  While I share the concern of skippers and other crewmen--as well as 
future generations of Alaskans--who were left out of the initial 
halibut/sablefish allocation, it would not be feasible or appropriate 
to require the North Pacific council to adopt a wholesale reallocation, 
particularly when shares will already have been purchased and sold 
before any reallocation could take place.
  As I have mentioned, the bill we are introducing today does require 
the Secretary of Commerce to complete ITQ guidelines to: (1) ensure the 
fair and equitable allocation of fishing privileges, and (2) to provide 
methods for allowing new entrants into ITQ fisheries.
  It also requires existing ITQ plans to comply with these guidelines 
within 3 years.
  The halibut/sablefish plan in Alaska already includes provisions to 
meet most of these requirements.
  The plan includes provisions to restrict the transfer of quota shares 
between vessel size categories, and to prevent the consolidation of 
initial quota blocks--two mechanisms which help provide for new 
entrants.
  The ``fair and equitable allocation'' requirement for ITQs in our 
bill is already a general requirement in the National Standards section 
of the existing Magnuson Act. Because the Secretary has already 
approved the qualifying criteria for the halibut/sablefish plan under 
this National Standard, it would also be approved under the specific 
``fair and equitable'' requirement we have added for ITQs.
   [[Page S235]] The bill we are introducing today provides for 
increased fees to be assessed on any ITQ in order to, among other 
things, allow the Secretary to recoup the increased enforcement costs 
of ITQ systems, and to extract from ITQ holders an increased rent 
commensurate with the increased privilege received form ITQs.


                     fishery dependent communities

  The bill defines the term, ``fishery dependent community'' for 
purposes of its use in the Magnuson Act as part of a new national 
standard and for purposes of defining who is eligible for programs 
included in new sections 315 and 316 of the Magnuson Act.
  A new National Standard is added to the Magnuson Act which requires 
all Councils ``to take into account the importance of the harvest of 
fishery resources to fishery dependent communities'' in recommending 
conservation and management measures under each fishery management 
plan.
  This new standard has been included in the bill as a means of 
ensuring that all of the Councils consider measures like the closure of 
the Gulf of Alaska pollock fishery to certain vessels, community 
development quotas (CDQs), and the allocation of Pacific whiting to 
shore plants that have already been included in fishery management 
plans by the North Pacific Council and the Pacific Council in order to 
address the needs of certain fishery dependent communities.
  Another provision requires consideration be given to fishery 
dependent communities in developing any limiting access systems, 
including ITQ systems.
  By including these new provisions we intend to increase the Councils' 
consideration of the needs of coastal communities dependent on fishery 
resources.
  I agree with Judge Singleton's recent ruling in Alliance Against IFQs 
v. Ronald H. Brown that National Standard Four of the Magnuson Act 
(which prohibits conservation and management measures form 
discriminating between residents of
 different states) does not apply to the CDQ program, and with his 
affirmation of the North Pacific Council's and Secretary's existing 
authority to create CDQs.

  CDQs are one of the appropriate tools the North Pacific Council and 
Secretary have already used to help address the needs of fishery 
dependent communities.


           vessel and permit buyout programs/emergency relief

  The bill contains important new sections authorizing vessel and 
permit buy-back programs, and creating a relief program for commercial 
fishery failures which occur beyond the control of the fishery 
management councils, or for unknown reasons.
  Section 315 of the bill authorizes the Secretary, with the 
concurrence of a majority of the appropriate Council, to develop and 
implement a program to buy out fishing vessels or permits.
  The bill would require that any buyout program ensure that vessels or 
permits cannot reenter the fishery.
  This buyout section authorizes Councils to implement a fee system to 
pay for the buyout, but also authorizes the Federal Government to pay 
for up to 50 percent of a buyout.
  Section 316 of the bill authorizes the Secretary, at his or her own 
discretion or at the request of a Governor or affected fishery 
dependent community, to declare a commercial fishery failure, and to 
then make money available to restore the fishery and to assist fishery 
dependent communities affected by the failure.
  The Federal Government could pay for up to 75 percent of this type of 
relief.
  Recently, the Secretary of Commerce used existing authority to 
provide relief to New England and Pacific Northwest fishermen.
  These new Magnuson Act provisions, in addition to providing needed 
guidance for such relief, would help to ensure that affected States and 
fishermen also contribute to relief efforts and buyout programs.
  I am aware of the concerns of some of my colleagues about these 
particular provisions, and look forward to working with them to address 
their concerns before the Commerce Committee marks up this bill.


                            other provisions

  I will briefly mention some of the other improvements to the Magnuson 
Act included in our bill.
  The bill simplifies the review process by the Secretary of fishery 
management plans and amendments by eliminating a preliminary evaluation 
required under current law.
  The bill also would provide a framework for Secretarial review of 
proposed regulations, giving the Councils greater certainty that 
proposed regulations and regulatory amendments will be implemented in a 
timely manner.
  The bill also includes provisions providing for the increased 
protection of fishery habitat essential to the life cycles of fish 
stocks.
  I look forward to working with Senator Kerry, our new Commerce 
Committee Chairman and Ranking Member, and with our other colleagues to 
complete this reauthorization process.
  I ask that the complete text of the sustainable Fisheries Act be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 39

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Sustainable Fisheries Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
TITLE I--CONSERVATION AND MANAGEMENT
Sec. 101. Amendment of the Magnuson Fishery Conservation and Management 
              Act.
Sec. 102. Findings; purposes; policy.
Sec. 103. Definitions.
Sec. 104. Authorization of appropriations.
Sec. 105. Highly migratory species.
Sec. 106. Foreign fishing.
Sec. 107. Permits for foreign fishing.
Sec. 108. Large-scale driftnet fishing.
Sec. 109. National standards.
Sec. 110. Regional fishery management councils.
Sec. 111. Fishery management plans.
Sec. 112. Plan review and implementation.
Sec. 113. Ecosystem management.
Sec. 114. State jurisdiction.
Sec. 115. Prohibited acts.
Sec. 116. Civil penalties and permit sanctions.
Sec. 117. Enforcement.
Sec. 118. North Pacific fisheries conservation.
Sec. 119. Transition to sustainable fisheries.
TITLE II--FISHERY MONITORING AND RESEARCH
Sec. 201. Change of title.
Sec. 202. Registration and data management.
Sec. 203. Data collection.
Sec. 204. Observers.
Sec. 205. Fisheries research.
Sec. 206. Incidental harvest research.
Sec. 207. Repeal.
Sec. 208. Clerical amendments.
TITLE III--FISHERIES STOCK RECOVERY FINANCING
Sec. 301. Short title.
Sec. 302. Fisheries stock recovery refinancing.
Sec. 303. Federal financing bank relating to fishing vessels and 
              fishery facilities.
Sec. 304. Fees for guaranteeing obligations.
Sec. 305. Sale of acquired collateral.
                  TITLE I--CONSERVATION AND MANAGEMENT

     SEC. 101. AMENDMENT OF MAGNUSON FISHERY CONSERVATION AND 
                   MANAGEMENT ACT.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Magnuson Fishery Conservation and 
     Management Act (16 U.S.C. 1801 et seq.).

     SEC. 102. FINDINGS; PURPOSES; POLICY.

       Section 2 (16 U.S.C. 1801) is amended--
       (1) by striking subsection (a)(2) and inserting the 
     following:
       ``(2) Certain stocks of fish have declined to the point 
     where their survival is threatened, and other stocks of fish 
     have been so substantially reduced in number that they could 
     become similarly threatened as a consequence of (A) increased 
     fishing pressure, (B) the inadequacy of fishery resource 
     conservation and management practices and controls, or (C) 
     direct and indirect habitat losses which have resulted in a 
     diminished capacity to support existing fishing levels.'';
       (2) by inserting ``to facilitate long-term protection of 
     essential fish habitats,'' in subsection (a)(6) after 
     ``conservation,'';
       (3) by adding at the end of subsection (a) the following:
       ``(9) One of the greatest long-term threats to the 
     viability of commercial and recreational fisheries is the 
     continuing loss of marine, estuarine, and other aquatic 
     habitats on a national level. Habitat considerations should 
     receive increased attention for 
     [[Page S236]] the conservation and management of fishery 
     resources of the United States.'';
       (4) by inserting ``in a non-wasteful manner'' in subsection 
     (b)(6) after ``such development''; and
       (5) by adding at the end of subsection (b) the following:
       ``(7) to promote the protection of essential fish habitat 
     in the review of projects conducted under Federal permits, 
     licenses, or other authorities that affect or have the 
     potential to affect such habitat.''.

     SEC. 103. DEFINITIONS.

       Section 3 (16 U.S.C. 1802) is amended--
       (1) by redesignating paragraphs (2) through (32) as 
     paragraphs (3) through (33) respectively, and inserting after 
     paragraph (1) the following:
       ``(2) The term `bycatch' means fish which are harvested by 
     a fishing vessel, but which are not sold or kept for personal 
     use, including, but not limited to, economic and regulatory 
     discards.'';
       (2) by redesignating paragraphs (7) through (33) (as 
     redesignated) as paragraphs (9) through (35), respectively, 
     and inserting after paragraph (6) (as redesignated) the 
     following:
       ``(7) The term `economic discards' means fish which are the 
     target of a fishery, but which are not retained by the 
     fishing vessel which harvested them because they are of an 
     undesirable size, sex or quality, or for other economic 
     reasons.
       ``(8) The term `essential fish habitat' means any area 
     essential to the life cycle of a stock of fish, or to the 
     production of maximum sustainable yield of one or more 
     fisheries managed under this Act.'';
       (3) by redesignating paragraphs (12) through (35) (as 
     redesignated) as paragraphs (13) through (36), respectively, 
     and inserting after paragraph (11) (as redesignated) the 
     following:
       ``(12) The term `fishery dependent community' means a 
     community which is substantially dependent on the harvest of 
     fishery resources to meet social and economic needs.'';
       (4) by redesignating paragraphs (19) through (36) (as 
     redesignated) as paragraphs (20) through (37), respectively, 
     and inserting after paragraph (18) (as redesignated) the 
     following:
       ``(19) The term `individual transferable quota' means a 
     revocable Federal authorization to harvest or process a 
     quantity of fish under a unit or quota share that represents 
     a percentage of the total allowable catch of a stock of fish, 
     that may be received or held by a specific person or persons 
     for their exclusive use, and that may be transferred in whole 
     or in part by the holder to another person or persons for 
     their exclusive use.'';
       (5) by redesignating paragraphs (22) through (37) (as 
     redesignated) as paragraphs (23) through (38), respectively, 
     and inserting after paragraph (21) (as redesignated) the 
     following:
       ``(22) The term `limited access system' means any system 
     for controlling fishing effort which includes such measures 
     as license limitations, individual transferable quotas, and 
     non-transferable quotas.'';
       (6) by striking ``Pacific Marine Fisheries Commission'' in 
     paragraph (23), as redesignated, and inserting ``Pacific 
     States Marine Fisheries Commission'';
       (7) by striking paragraph (27), as redesignated, and 
     inserting the following:
       ``(27) The term `optimum', with respect to the yield from a 
     fishery, means the amount of fish which--
       ``(A) will provide the greatest overall benefit to the 
     Nation, with particular reference to food production and 
     recreational opportunities, and taking into account the 
     protection of marine ecosystems;
       ``(B) is prescribed on the basis of the maximum sustainable 
     yield from a fishery, as modified by any relevant social, 
     economic, or ecological factor; and
       ``(C) provides for the rebuilding of an overfished fishery 
     to a level consistent with producing the maximum sustainable 
     yield.'';
       (8) by redesignating paragraphs (28) through (38) (as 
     redesignated) as paragraphs (29) through (39), respectively, 
     and inserting after paragraph (27) (as redesignated) the 
     following:
       ``(28) The terms `overfishing' and `overfished' mean a 
     level or rate of fishing mortality that jeopardizes the 
     capacity of a fishery to produce the maximum sustainable 
     yield on a continuing basis.'';
       (9) by redesignating paragraphs (30) through (39) (as 
     redesignated) as paragraphs (31) through (40), respectively, 
     and inserting after paragraph (29) (as redesignated) the 
     following:
       ``(30) The term `regulatory discards' means fish caught in 
     a fishery which fishermen are required by regulation to 
     discard whenever caught, or are required by regulation to 
     retain but not sell.'';
       (10) by striking ``for which a fishery management plan 
     prepared under title III or a preliminary fishery management 
     plan prepared under section 201(h) has been implemented'' in 
     paragraph (38), as redesignated, and inserting ``regulated 
     under this Act''; and
       (11) by redesignating paragraph (40), as redesignated, as 
     (41), and inserting after paragraph (39) the following:
       ``(40) The term `vessel subject to the jurisdiction of the 
     United States' has the same meaning as in section 3(c) of the 
     Maritime Drug Law Enforcement Act (46 U.S.C. App. 
     1903(c)).''.

     SEC. 104. AUTHORIZATION OF APPROPRIATIONS.

       The Act is amended by inserting after section 3 the 
     following:

     ``SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to the Secretary 
     for the purposes of carrying out the provisions of this Act, 
     not to exceed the following sums (of which 15 percent in each 
     fiscal year shall be used for enforcement activities):
       ``(1) $102,000,000 for fiscal year 1993;
       ``(2) $106,000,000 for fiscal year 1994;
       ``(3) $143,000,000 for fiscal year 1995;
       ``(4) $147,000,000 for fiscal year 1996;
       ``(5) $151,000,000 for fiscal year 1997;
       ``(6) $155,000,000 for fiscal year 1998; and
       ``(7) $159,000,000 for fiscal year 1999.''.

     SEC. 105. HIGHLY MIGRATORY SPECIES.

       Section 102 (16 U.S.C. 1812) is amended by striking 
     ``promoting the objective of optimum utilization'' and 
     inserting ``shall promote the achievement of optimum yield''.

     SEC. 106. FOREIGN FISHING.

       Section 201 (16 U.S.C. 1821) is amended--
       (1) by inserting a comma and ``or is approved under section 
     204(b)(6)(A)(ii)'' before the semicolon in subsection (a)(1);
       (2) by striking ``(g)'' in subsection (a)(2) and inserting 
     ``(f)'';
       (3) by striking ``(i)'' in subsection (c)(2)(D) and 
     inserting ``(h)'';
       (4) by striking ``, including any regulations promulgated 
     to implement any applicable fishery management plan or any 
     preliminary fishery management plan'' in subsection (c); and
       (5) by striking subsection (f) and redesignating 
     subsections (g), (h), (i), and (j) as (f), (g), (h), and (i), 
     respectively.

     SEC. 107. PERMITS FOR FOREIGN FISHING.

       (a) So much of section 204(b) (16 U.S.C. 1824(b)) as 
     precedes paragraph (2) is amended to read as follows:
       ``(b) Applications and Permits.--
       ``(1) Eligibility.--
       ``(A) Each foreign nation with which the United States has 
     entered into a governing international fishery agreement 
     shall submit an application to the Secretary of State each 
     year for a permit for each of its fishing vessels that wishes 
     to engage in fishing described in subsection (a).
       ``(B) An owner of a vessel, other than a vessel of the 
     United States, who wishes to engage in the transshipment at 
     sea of fish products in the exclusive economic zone or within 
     the boundary of any State, may submit an application to the 
     Secretary each year for a permit for a vessel belonging to 
     that owner, whether or not such vessel is subject to an 
     international fishery agreement described in section 201(b) 
     or (c).
       ``(C) No permit issued under this section may be valid for 
     longer than a year. Section 558(c) of title 5, United States 
     Code, does not apply to the renewal of any such permit.''.
       (b) Section 204(b)(4) (16 U.S.C. 1824(b)(4)) is amended--
       (1) by inserting ``(A)'' after the caption;
       (2) by inserting ``submitted under paragraph (1)(A)'' after 
     ``any application'';
       (3) by redesignating subparagraphs (A), (B), and (C) as 
     clauses (i), (ii), and (iii), respectively; and
       (4) by inserting at the end thereof the following:
       ``(B) Upon receipt of any application submitted under 
     paragraph (1)(B) which complies with the requirements of 
     paragraph (3), the Secretary shall promptly transmit copies 
     of the application or summary as indicated under 
     subparagraphs (A)(ii) and (iii), and shall also promptly 
     transmit such application or summary to States bordering the 
     exclusive economic zone where such transshipment is proposed 
     to occur.''.
       (c) Section 204(b)(5) (16 U.S.C. 1824(b)(5)) is amended by 
     striking ``under paragraph (4)(C)'' and inserting ``submitted 
     under paragraph (1)''.
       (d) Section 204(b)(6) (16 U.S.C. 1824(b)(6)) is amended--
       (1) by striking ``transmitted under paragraph (4)(A)'' in 
     subparagraph (A) and inserting ``submitted under paragraph 
     (1)(A)'';
       (2) by inserting ``(i)'' before ``After'' in subparagraph 
     (A); and
       (3) by inserting before subparagraph (B) the following:
       ``(ii) In the case of any application submitted under 
     paragraph (1)(B), the Secretary, after taking into 
     consideration any comments submitted by the Council under 
     paragraph (5) or any affected State, may approve the 
     application upon determining that the activity described in 
     the application will be in the interest of the United States 
     and will meet the applicable requirements of this Act, and 
     that the owners or operators have agreed to comply with 
     requirements set forth in section 201(c)(2) and have 
     established any bonds or financial assurances that may be 
     required by the Secretary; or the Secretary may disapprove 
     all or any portion of the application.''.
       (e) Section 204(b)(8) (16 U.S.C. 1824(b)(8)) is amended--
       (1) by inserting a comma and ``or the agent for the foreign 
     vessel owner for any application submitted under paragraph 
     (1)(B)'' before the semicolon at the end of subparagraph (A); 
     and
       (2) by inserting ``and any affected State'' before the 
     period at the end of subparagraph (C).
       (f) Section 204(b)(9) (16 U.S.C. 1824(b)(9)) is amended--
       (1) by inserting ``paragraph (1)(A) of'' after ``by a 
     foreign nation under'';
       (2) by inserting ``(A)'' after the heading in paragraph 
     (9); and
      [[Page S237]]   (3) by adding at the end thereof the 
     following:
       ``(B) If the Secretary does not approve any application 
     submitted by a foreign vessel owner under paragraph (1)(B) of 
     this subsection, the Secretary shall promptly inform the 
     vessel owner of the disapproval and the reasons therefore. 
     The owner, after taking into consideration the reasons for 
     disapproval, may submit a revised application under this 
     subsection.''.
       (g) Section 204(b)(11) (16 U.S.C. 1824(b)(11)) is amended--
       (1) by inserting ``(A)'' after the paragraph heading,
       (2) by inserting ``submitting an application under 
     paragraph (1)(A)'' after ``If a foreign nation''; and
       (3) adding at the end thereof the following:
       ``(B) If the vessel owner submitting an application under 
     paragraph (1)(B) notifies the Secretary of acceptance of the 
     conditions and restrictions established by the Secretary 
     under paragraph (7), and upon payment of the applicable fees 
     established pursuant to paragraph (10) and confirmation of 
     any bonds or financial assurances that may be required for 
     such transshipment of fish, the Secretary shall thereupon 
     issue a permit for the vessel.''.
       (h) Section 204 (16 U.S.C. 1824) is amended by adding at 
     the end thereof the following:
       ``(d) Prohibition on Permit Issuance.--Notwithstanding any 
     other provision of this Act, the Secretary is prohibited from 
     issuing, before December 1, 1999, any permit to authorize the 
     catching, taking, or harvesting of Atlantic mackerel or 
     Atlantic herring by foreign fishing vessels within the 
     exclusive economic zone. This subsection shall not apply to 
     permits to authorize foreign fish processing vessels to 
     process Atlantic mackerel or Atlantic herring harvested by 
     fishing vessels of the United States.''.

     SEC. 108. LARGE-SCALE DRIFTNET FISHING.

       (a) Section 206(e) (16 U.S.C. 1826(e)) is amended by 
     striking paragraphs (3) and (4), and redesignating paragraphs 
     (5) and (6) as (3) and (4), respectively.
       (b) Section 206(f) (16 U.S.C. 1826(f)) is amended by 
     striking ``(6)'' and inserting ``(4)''.

     SEC. 109. NATIONAL STANDARDS.

       (a) Paragraph (1) of section 301(a) (16 U.S.C. 1851(a)) is 
     amended to read as follows:
       ``(1) Conservation and management measures shall prevent 
     overfishing and rebuild overfished fishery resources while 
     achieving, on a continuing basis, the optimum yield from each 
     fishery.''.
       (b) Section 301(a)(5) (16 U.S.C. 1851(a)(5)) is amended by 
     striking ``promote'' and inserting ``consider''.
       (c) Section 301(a) (16 U.S.C. 1851(a)) is amended by adding 
     at the end thereof the following:
       ``(8) Conservation and management measures shall take into 
     account the importance of the harvest of fishery resources to 
     fishery dependent communities.''.

     SEC. 110. REGIONAL FISHERY MANAGEMENT COUNCILS.

       (a) Section 302(a) (16 U.S.C. 1852(a)) is amended--
       (1) by inserting ``(1)'' after the subsection heading;
       (2) by redesignating paragraphs (1) through (7) as 
     subparagraphs (A) through (H);
       (3) by striking ``section 304(f)(3)'' wherever it appears 
     and inserting in lieu thereof ``paragraph (3)'';
       (4) by striking paragraph (1)(F), as redesignated, and 
     inserting the following:
       ``(F) Pacific Council.--The Pacific Fishery Management 
     Council shall consist of the States of California, Oregon, 
     Washington, and Idaho and shall have authority over the 
     fisheries in the Pacific Ocean seaward of such States. The 
     Pacific Council shall have 13 voting members, including 7 
     appointed by the Secretary in accordance with subsection 
     (b)(2) (at least one of whom shall be appointed from each 
     such State), and including one appointed from an Indian tribe 
     with Federally recognized fishing rights from California, 
     Oregon, Washington, or Idaho in accordance with subsection 
     (b)(5).'';
       (5) by indenting the sentence at the end thereof and 
     inserting ``(2)'' in front of ``Each Council'', and by 
     inserting ``The Secretary shall establish the boundaries 
     between the geographical areas of authority of adjacent 
     Councils.'' after ``authority.''; and
       (6) by adding at the end the following:
       ``(3) The Secretary shall have authority over any highly 
     migratory species fishery that is within the geographical 
     area of authority of more than one of the following Councils: 
     New England Council, Mid-Atlantic Council, South Atlantic 
     Council, Gulf Council, and Caribbean Council.''.
       (b) Section 302(b) (16 U.S.C. 1852(b)) is amended--
       (1) by striking subparagraph (C) of subsection (b)(1) and 
     inserting the following:
       ``(C) The members required to be appointed by the Secretary 
     in accordance with subsections (b)(2) and (5).'';
       (2) by redesignating paragraph (5) as paragraph (6), and 
     inserting after paragraph (4) the following:
       ``(5)(A) The Secretary shall appoint to the Pacific Fishery 
     Management Council one representative of an Indian tribe with 
     Federally recognized fishing rights from California, Oregon, 
     Washington, or Idaho, from a list of not less than 3 
     individuals submitted by the tribal governments. The 
     representative shall serve for a term of 3 years and may not 
     serve more than 3 consecutive terms. The Secretary, in 
     consultation with the Secretary of the Interior and tribal 
     governments, shall establish by regulation the procedure for 
     submitting lists under this subparagraph.
       ``(B) Representation shall be rotated among the tribes 
     taking into consideration--
        ``(i) the qualifications of the individuals on the list 
     referred to in subparagraph (A),
        ``(ii) the various treaty rights of the Indian tribes 
     involved and judicial cases that set forth how those rights 
     are to be exercised, and
        ``(iii) the geographic area in which the tribe of the 
     representative is located.
       ``(C) A vacancy occurring prior to the expiration of any 
     term shall be filled in the same manner set out in 
     subparagraphs (A) and (B), except that the Secretary may use 
     the list from which the vacating representative was 
     chosen.''; and,
       (3) by striking ``subsection (b)(2)'' in paragraph (6), as 
     redesignated, and inserting ``subsections (b)(2) and (5)''.
       (c) Section 302(e) (16 U.S.C. 1852(e)) is amended by adding 
     at the end the following:
       ``(5) At the request of any voting member of a Council, the 
     Council shall hold a roll call vote on any matter before the 
     Council. The official minutes and other appropriate records 
     of any Council meeting shall identify all roll call votes 
     held, the name of each voting member present during each roll 
     call vote, and how each member voted on each roll call 
     vote.''.
       (d) Section 302(g) (16 U.S.C. 1852(g)) is amended by 
     redesignating paragraph (4) as (5), and by inserting after 
     paragraph (3) the following:
       ``(4) The Secretary shall establish advisory panels to 
     assist in--
       ``(A) the collection and evaluation of information relevant 
     to the development of or amendment to any fishery management 
     plan under section 303(e)(2); and
       ``(B) carrying out the purposes of section 303(f).''.
       (e) Section 302(h) (16 U.S.C. 1852(h)) is amended--
       (1) by striking ``section 304(f)(3)'' in paragraphs (1) and 
     (5) and inserting ``subsection (a)(3)''; and
       (2) by striking ``204(b)(4)(C)'' in paragraph (2) and 
     inserting ``204(b)(4)(A)(iii)''.
       (f) Section 302(i) (16 U.S.C. 1852(i)) is amended to read 
     as follows:
       ``(i) Negotiated Conservation and Management Measures.--
       ``(1) A Council may, in consultation with the Secretary, 
     establish a negotiation panel to assist in the development of 
     specific conservation and management measures for a fishery 
     under authority of such Council. In making the decision to 
     establish such panel, the Council shall consider whether--
       ``(A) there are a finite number of identifiable interests 
     that will be significantly affected by the development of 
     such measures;
       ``(B) there is a reasonable likelihood that a negotiation 
     panel can be convened with a balanced representation of 
     persons who--
       ``(i) can adequately represent the interests identified 
     under subparagraph (A); and
       ``(ii) are willing to act in good faith to reach a 
     consensus on the development of a such measures;
       ``(C) there is reasonable likelihood that a negotiation 
     panel will contribute to the development of such measures 
     within a fixed period of time; and
       ``(D) the process under this subsection will not 
     unreasonably delay the development of any conservation and 
     management measure or its submission to the Secretary.
       ``(2) If the Council decides to establish a negotiation 
     panel it shall notify all identifiable interests of its 
     intention to convene such panel at least 30 calendar days 
     prior to the appointment of members. Such notification shall 
     be published in accordance with subsection (j)(2)(C) of this 
     section and shall include--
       ``(A) a description of the subject and scope of the 
     measures to be developed and the issues to be considered;
       ``(B) a list of interests likely to be significantly 
     affected by the measures to be developed;
       ``(C) a list of the persons proposed to represent such 
     interests, the person or persons proposed to represent the 
     Council, and the person or persons proposed to be nominated 
     as facilitator;
       ``(D) an explanation of how a person may apply or nominate 
     another person for membership on the negotiation panel; and
       ``(E) a proposed agenda and schedule for completing the 
     work of the negotiation panel.
       ``(3) No more than 45 calendar days after providing this 
     notification the Council shall make appointments to the 
     negotiation panel in such a manner as to achieve balanced 
     representation of all significant interests to the 
     conservation and management measures. Such interests shall 
     include, where appropriate, representatives from the fishing 
     industry, consumer groups, the scientific community, tribal 
     organizations, conservation organizations and other public 
     interest organizations, and Federal and State fishery 
     managers.
       ``(4) Each negotiation panel established under this section 
     shall attempt to reach a consensus concerning specific 
     conservation and management measures and any other issue such 
     panel determines is relevant to such measures. The Council, 
     to the maximum extent possible consistent with its legal 
     obligations and the best scientific information available, 
     will use the consensus of the negotiation panel, with respect 
     to 
     [[Page S238]] such measures, as the basis for the development 
     of the conservation and management measures to be adopted by 
     the Council for submission by the Council to the Secretary in 
     accordance with this Act.
     ``(5) The person or persons representing the Council on a 
     negotiation panel shall participate in the deliberations and 
     activities of such panel with the same rights and 
     responsibilities as other panel members.
       ``(6) Any facilitator nominated by the Council to a 
     negotiation panel must be approved by the panel by consensus. 
     If the panel does not approve a facilitator nominated by the 
     Council the panel shall select by consensus another person to 
     serve as facilitator. No person appointed by the Council to 
     the negotiation panel to represent any interest on the 
     Council may serve as facilitator or otherwise chair such 
     panel.
       ``(7) A facilitator approved or selected by a negotiation 
     panel shall--
       ``(A) chair the meetings of such panel in an impartial 
     manner;
       ``(B) impartially assist the panel members in conducting 
     discussions and negotiations; and
       ``(C) manage the keeping of any minutes or records, (except 
     that any personal notes and materials of the facilitator or 
     the panel members shall not be subject to disclosure, except 
     upon order of a court).
       ``(8) A negotiation panel may adopt any additional 
     procedures for the operation of the negotiation panel not in 
     conflict with those specified in this section.
       ``(9) At the conclusion of the negotiation process, if the 
     negotiation panel reaches a consensus on proposed 
     conservation and management measures, such panel shall 
     transmit to the Council, and present to the Council at the 
     next scheduled meeting of the Council, a report containing 
     the proposed conservation and management measures. If the 
     negotiation panel does not reach consensus on proposed 
     conservation and management measures, such panel shall 
     transmit to the Council, and present to the Council at the 
     next scheduled meeting of the Council, a report specifying 
     its recommendations and describing the areas in which the 
     negotiation panel reached consensus and the areas in which 
     consensus was not achieved. The negotiation panel may include 
     in a report any other information or materials that such 
     panel considers appropriate. Any panel member may include, as 
     an addendum to the report, additional information or 
     materials.
       ``(10) A negotiation panel shall terminate upon transmittal 
     and presentation to the Council of the report required under 
     paragraph (9) unless the Council in consultation with the 
     panel specifies an alternative termination date.
       ``(11) For the purposes of this subsection--
       ``(A) The term `negotiation panel' means an advisory panel 
     established by a Council under section (g)(2) to assist in 
     the development of specific conservation and management 
     measures through the process established under this 
     subsection.
       ``(B) The term `consensus' means general but not unanimous 
     concurrence among the interests represented unless such 
     panel--
       ``(i) agrees by consensus to define such term to mean a 
     unanimous concurrence; or
       ``(ii) agrees by consensus upon another specified 
     definition.
       ``(C) The term `facilitator' means a person experienced or 
     trained in group mediation and negotiation who impartially 
     aids in the discussions and negotiations among the members of 
     a negotiation panel.
       ``(D) The term `interest' means, with respect to this 
     subsection, multiple persons or parties who have a similar 
     point of view or which are likely to be affected in a similar 
     manner.''.
       (g) Section 302(j) (16 U.S.C. 1852(j)) is amended--
       (1) by striking ``of the Councils'' in paragraph (1) and 
     inserting ``established under subsection (g)''; and
       (2) by striking ``of a Council:'' in paragraph (2) and 
     inserting ``established under subsection (g):''.
       (3) by adding the following at the end of paragraph (2)(C): 
     ``Interested persons may propose to modify the published 
     agenda of a meeting by submitting to a Council, panel or 
     committee within 14 calendar days of the published date of 
     the meeting a notice containing a written description of the 
     proposed modification signed by not less than two Council 
     members.'';
       (4) by adding the following at the end of paragraph (2)(D): 
     ``All written data submitted to a Council by an interested 
     person shall include a statement of the source and date of 
     such information. Any oral or written statement shall include 
     a brief description of the qualifications and interests of 
     the person in the subject of the oral or written 
     statement.'';
       (5) by amending paragraph (2)(E) to read as follows:
       ``(E) Detailed minutes of each meeting of the Council shall 
     be kept and shall contain a record of the persons present, a 
     complete and accurate description of matters discussed and 
     conclusions reached, and copies of all statements filed, 
     issued, or approved by the Council. The Chairman shall 
     certify the accuracy of the minutes of each meeting and 
     submit a copy thereof to the Secretary. The minutes shall be 
     made available to any court of competent jurisdiction.''; and
       (6) by striking ``303(d)'' in paragraph (2)(F) and 
     inserting ``402(b)''.
       (g) Section 302(k) (16 U.S.C. 1852(k)) is amended--
       (1) by inserting ``and recusal'' in the subsection heading;
       (2) by striking paragraph (1) and inserting the following:
       ``(1) For the purposes of this subsection--
       ``(A) the term `affected individual' means an individual 
     who--
       ``(i) is nominated by the Governor of a State for 
     appointment as a voting member of a Council in accordance 
     with subsection (b)(2); or
       ``(ii) is a voting member of a Council appointed under 
     subsection (b)(2); and
       ``(B) the term `designated official' means a person with 
     expertise in Federal conflict-of-interest requirements who is 
     designated by the Secretary, with the concurrence of a 
     majority of the voting members of the Council, to attend 
     Council meetings and make determinations under paragraph 
     (7)(B).'';
       (3) by striking ``(1)(A)'' in paragraph (3)(A) and 
     inserting ``(1)(A)(i)'';
       (4) by striking ``(1)(B) or (C)'' in paragraph (3)(B) and 
     inserting ``(1)(A)(ii)'';
       (5) by striking ``(1)(B) or (C)'' in paragraph (4) and 
     inserting ``(1)(A)(ii)'';
       (6)(A) by striking ``and'' at the end of paragraph (5)(A);
       (B) by striking the period at the end of paragraph (5)(B) 
     and inserting a semicolon and the word ``and''; and
       (C) by adding at the end of paragraph (5) the following:
       ``(C) be kept on file by the Secretary for use in reviewing 
     determinations under paragraph (7)(B) and made available for 
     public inspection at reasonable hours.'';
       (7) by striking ``(1)(B) or (C)'' in paragraph (6) and 
     inserting ``(1)(A)(ii)'';
       (8) by redesignating paragraph (7) as (8) and inserting 
     after paragraph (6) the following:
       ``(7)(A) An affected individual required to disclose a 
     financial interest under paragraph (2) shall not vote on a 
     Council decision which would have a significant and 
     predictable effect on such financial interest. A Council 
     decision shall be considered to have a significant and 
     predictable effect on a financial interest if there is a 
     close causal link between the Council decision and an 
     expected and disproportionate benefit, shared only by a 
     minority of persons within the same industry sector or gear 
     group, to the financial interest. An affected individual who 
     may not vote may participate in Council deliberations 
     relating to the decision after notifying the Council of the 
     voting recusal and identifying the financial interest that 
     would be affected.
       ``(B) At the request of an affected individual, or at the 
     initiative of the appropriate designated official, the 
     designated official shall make a determination for the record 
     whether a Council decision would have a significant and 
     predictable effect on a financial interest.
       ``(C) Any Council member may submit a written request to 
     the Secretary to review any determination by the designated 
     official under subparagraph (B) within 10 days of such 
     determination. Such review shall be completed within 30 days 
     of receipt of the request.
       ``(D) Any affected individual who does not participate in a 
     Council decision in accordance with this subsection shall 
     state for the record how he or she would have voted on such 
     decision if he or she had voted.
       ``(E) If the Council makes a decision before the Secretary 
     has reviewed a determination under subparagraph (C), the 
     eventual ruling may not be treated as cause for the 
     invalidation or reconsideration by the Secretary of such 
     decision.
       ``(F) No later than December 1, 1995, the Secretary, in 
     consultation with the Councils, shall issue guidelines with 
     respect to voting recusals under subparagraph (A) and the 
     making of determinations under subparagraph (B).''; and
       (9) by striking ``(1)(B) or (C)'' in paragraph (8), as 
     redesignated, and inserting ``(1)(A)(ii)''.

     SEC. 111. FISHERY MANAGEMENT PLANS.

       (a) Section 303(a) (16 U.S.C. 1853(a)) is amended--
       (1) by striking paragraph (6) and inserting the following:
       ``(6) consider and provide for, after consultation with the 
     Coast Guard and persons participating in the fishery and to 
     the extent practicable without adversely affecting 
     conservation efforts in other fisheries or discriminating 
     among participants in the affected fishery--
       ``(A) safety of life and property at sea;
       ``(B) temporary adjustments regarding access to the fishery 
     for vessels otherwise prevented from harvesting because of 
     weather or other ocean conditions affecting the safe conduct 
     of the fishery; and
       ``(C) effective enforcement measures (including an estimate 
     of the resources necessary for such measures).'';
       (2) by striking paragraph (7) and inserting the following:
       ``(7) facilitate the protection of essential fish habitat 
     by--
       ``(A) summarizing available information on the significance 
     of such habitat to the fishery and the effects of changes to 
     such habitat on the fishery; and
       ``(B) identifying Federal actions that should be considered 
     to promote the long-term protection of essential fish 
     habitats.'';
       (3) by striking ``and'' at the end of paragraph (8);
       (4) by striking the period at the end of paragraph (9) and 
     inserting a semicolon; and
       (5) by adding at the end the following:
       ``(10) specify objective and measurable criteria for 
     classifying when the fishery to 
     [[Page S239]] which the plan applies would be or is 
     overfished, with an analysis of how the criteria were 
     determined and the relationship of the criteria to the 
     reproductive potential of stocks of fish in that fishery;
       ``(11) assess the level of bycatch occurring in the 
     fishery, and to the extent practicable, assess and specify 
     the effect of the fishery on stocks of fish to which the plan 
     does not apply, but which are associated with the ecosystem 
     of the fishery; and
       ``(12) to the extent practicable, minimize mortality caused 
     by economic and regulatory discards in the fishery.''.
       (b) Section 303(b) (16 U.S.C. 1853(b)) is amended--
       (1) by striking paragraph (6) and inserting the following:
       ``(6) establish a limited access system for the fishery in 
     order to achieve optimum yield if--
       ``(A) in developing such system, the Council and the 
     Secretary take into account present participation in the 
     fishery, historical fishing practices in and dependence on 
     the fishery, the economics of the fishery, the capability of 
     fishing vessels used in the fishery to engage in other 
     fisheries, the cultural and social framework relevant to the 
     fishery and fishery dependent communities, and any other 
     relevant considerations; and
       ``(B) in the case of any system that provides for 
     individual transferable quotas, such system also complies 
     with the guidelines and fee requirements established under 
     section 303(f);''; and
       (2) by striking ``and'' at the end of paragraph (9);
       (3) by striking the period at the end of paragraph (10) and 
     inserting a semicolon and ``and''; and
       (4) by adding at the end the following:
       ``(11) include, consistent with the other provisions of 
     this Act, conservation and management measures that provide a 
     harvest preference or other incentives for fishing vessels 
     within each gear group that employ fishing practices 
     resulting in lower levels of bycatch.''.
       (c) Section 303 (16 U.S.C. 1853) is amended by striking 
     subsection (c) and all thereafter and inserting the 
     following:
       ``(c) Regulations to Implement a Fishery Management Plan.--
     Proposed regulations which the Council deems necessary or 
     appropriate for the purposes of implementing a fishery 
     management plan or amendment to a plan may be submitted to 
     the Secretary for action under section 304--
       ``(1) simultaneously with submission of the plan or 
     amendment to the Secretary for action under section 304; or
       ``(2) at any time after the plan or amendment is approved.
       ``(d) Fisheries Under Authority of More Than One Council.--
       ``(1) Except as provided in section 302(a)(3), if any 
     fishery extends beyond the geographical area of authority of 
     any one Council, the Secretary may--
       ``(A) designate which Council shall prepare the fishery 
     management plan for such fishery and any amendment to such 
     plan, as well as any proposed regulations for such fishery; 
     or
       ``(B) require that the plan, amendment, and proposed 
     regulations be prepared jointly by the Councils concerned.
       ``(2) No jointly prepared fishery management plan, 
     amendment, or proposed regulations may be submitted to the 
     Secretary unless approved by a majority of the voting 
     members, present and voting, of each Council concerned.
       ``(e) Preparation by the Secretary.--
       ``(1) The Secretary shall prepare a fishery management plan 
     with respect to any fishery (other than a fishery to which 
     section 302(a)(3) applies), or any amendment to any such 
     plan, in accordance with the national standards, the other 
     provisions of this Act, and any other applicable law, if--
       ``(A) the appropriate Council fails to develop and submit 
     to the Secretary, after a reasonable period of time, a 
     fishery management plan for such fishery, or any necessary 
     amendment to such plan, if such fishery requires conservation 
     and management and the Secretary provides written notice to 
     the Council of the need for such conservation and management;
       ``(B) the Secretary disapproves or partially disapproves 
     any such plan or amendment, or disapproves a revised plan or 
     amendment, and the Council involved fails, after a reasonable 
     period of time, to take final action on a revised or further 
     revised plan or amendment, as the case may be; or
       ``(C) the Secretary determines that the appropriate Council 
     has failed to take sufficient action on a fishery management 
     plan, a plan amendment or proposed regulations to rebuild an 
     overfished fishery pursuant to section 305(b) within 1 year 
     after determining that such fishery is overfished.
       ``(2) The Secretary shall prepare a fishery management plan 
     with respect to any highly migratory species fishery to which 
     section 302(a)(3) applies that requires conservation and 
     management, or any amendment to any such plan, in accordance 
     with the national standards, the other provisions of this 
     Act, and any other applicable law. In preparing and 
     implementing any such plan or amendment, the Secretary 
     shall--
       ``(A) conduct public hearings, at appropriate times and in 
     appropriate locations in the geographical areas concerned, so 
     as to allow interested persons an opportunity to be heard in 
     the preparation and amendment of the plan and any regulations 
     implementing the plan;
       ``(B) consult with and consider the comments and views of 
     affected Councils, as well as commissioners and advisory 
     groups appointed under Acts implementing relevant 
     international fishery agreements pertaining to highly 
     migratory species;
       ``(C) establish an advisory panel under section 302(g) for 
     each fishery management plan to be prepared under this 
     paragraph, which shall consist of a balanced number of 
     representatives (but not less than 7) who are knowledgeable 
     and experienced with respect to the fishery concerned 
     selected from among members of advisory groups appointed 
     under Acts implementing relevant international fishery 
     agreements pertaining to highly migratory species and other 
     interested parties;
       ``(D) evaluate the likely effects, if any, of conservation 
     and management measures on participants in the affected 
     fisheries and minimize, to the extent practicable, any 
     disadvantage to United States fishermen in relation to 
     foreign competitors;
       ``(E) with respect to a highly migratory species for which 
     the United States is authorized to harvest an allocation or 
     quota or fishing mortality level under a relevant 
     international fishery agreement, provide fishing vessels of 
     the United States with a reasonable opportunity to harvest 
     such allocation, quota, or fishing mortality level;
       ``(F) review, on a continuing basis (and promptly whenever 
     a recommendation pertaining to fishing for highly migratory 
     species has been made under a relevant international fishery 
     agreement), and revise as appropriate, the conservation and 
     management measures included in the plan;
       ``(G) diligently pursue, through international entities 
     (such as the International Commission for the Conservation of 
     Atlantic Tunas), comparable international fishery management 
     measures with respect to fishing for highly migratory 
     species; and
       ``(H) ensure that conservation and management measures 
     adopted under this paragraph--
       ``(i) promote international conservation of the affected 
     fishery;
       ``(ii) take into consideration traditional fishing patterns 
     of fishing vessels of the United States and the operating 
     requirements of the fisheries; and
       ``(iii) are fair and equitable in allocating fishing 
     privileges among United States fishermen and not have 
     economic allocation as the sole purpose.
       ``(3) In preparing any plan or amendment under this 
     subsection, the Secretary shall consult with the Secretary of 
     State with respect to foreign fishing and with the Secretary 
     of the department in which the Coast Guard is operating with 
     respect to enforcement at sea.
       ``(4) The Secretary may not include in any fishery 
     management plan, or any amendment to any such plan, prepared 
     by the Secretary under paragraph (1), a provision 
     establishing a limited access system, unless such system is 
     first approved by a majority of the voting members of each 
     appropriate Council.
       ``(f) Individual Transferable Quotas.--
       ``(1) The Secretary may not approve a fishery management 
     plan that includes individual transferable quotas until the 
     Secretary has promulgated guidelines under paragraph (2). 
     Thereafter, the Secretary may approve a fishery management 
     plan or amendment that includes individual transferable 
     quotas only if the plan or amendment is consistent with the 
     guidelines promulgated under paragraph (2).
       ``(2) The Secretary shall promulgate, after consultation 
     with the Councils and public notice and comment, mandatory 
     guidelines for the establishment of any individual 
     transferable quota system. The guidelines shall--
       ``(A) ensure that any individual transferable quota 
     system--
       ``(i) is consistent with the requirements for limited 
     access systems under section 303(b)(6),
       ``(ii) promotes conservation,
       ``(iii) requires collection of fees from holders of 
     individual transferable quotas under section 304(f)(2),
       ``(iv) provides for the fair and equitable allocation of 
     fishing privileges, and minimizes negative social and 
     economic impacts on fishery dependent communities;
       ``(v) establishes a national lien registry system for the 
     identification, perfection, determination of lien priorities, 
     and nonjudicial foreclosure of encumbrances or individual 
     transferable quotas; and
       ``(vi) facilitates a reduction in excessive fishing 
     capacity in the fishery;
       ``(B) address the characteristics of fisheries that are 
     relevant to the design of suitable individual transferable 
     quota systems, the nature and extent of the privilege 
     established under an individual transferable quota system, 
     factors in making initial allocations and determining 
     eligibility for ownership of individual transferable quotas, 
     limitations on the consolidation of individual transferable 
     quotas, and methods of providing for new entrants, including, 
     in fisheries where appropriate, mechanisms to provide a 
     portion of the annual harvest for entry-level fishermen or 
     small vessel owners who do not hold individual transferable 
     quotas;
       ``(C) provide for effective monitoring and enforcement of 
     individual transferable quota 
     [[Page S240]] systems, including providing for the inspection 
     of fish harvested under such systems before the fish is 
     transported beyond the geographic area under a Council's 
     jurisdiction or the jurisdiction of the United States;
       ``(D) provide for appropriate penalties for violations of 
     individual transferable quota systems, including the 
     revocation of individual transferable quotas for such 
     violations; and
       ``(E) include recommendations for potential management 
     options related to individual transferable quotas, including 
     the authorization of individual units or quotas that may not 
     be transferred by the holder, and the use of leases or 
     auctions by the Federal government in the establishment or 
     allocation of individual transferable or nontransferable 
     units or quotas.
       ``(3) Any fishery management plan which includes individual 
     transferable quotas that the Secretary approved on or before 
     the date of enactment of the Sustainable Fisheries Act shall 
     be amended within 3 years after that date to be consistent 
     with this subsection and any other applicable provisions of 
     this Act.
       ``(4) No later than 60 days after the date of enactment of 
     the Sustainable Fisheries Act, the Secretary shall establish 
     an advisory panel on individual transferable quotas under 
     section 302(g)(3) which shall be comprised of fishery 
     scientists and representatives of the Councils, 
     representatives of affected States and fishery dependent 
     communities, fishery participants and conservation 
     organizations. Such advisory panel shall provide 
     recommendations on the guidelines required under paragraph 
     (2), a list of all United States fisheries that may be suited 
     for the development of limited access systems that include 
     individual transferable quotas, and other information as the 
     Secretary or the advisory panel deem appropriate.
       ``(5) An individual transferable quota does not constitute 
     a property right. Nothing in this section or in any other 
     provision of law shall be construed to limit the authority of 
     the Secretary to terminate or limit such individual 
     transferable quota at any time and without compensation to 
     the holder of such quota. The term `holder of an individual 
     transferable quota' includes (A) fishing vessel owners, 
     fishermen, crew members or other citizens of the United 
     States, and (B) United States fish processors.''.

     SEC. 112. PLAN REVIEW AND IMPLEMENTATION.

       Section 304 (16 U.S.C. 1854) is amended to read as follows:

     ``SEC. 304. PLAN REVIEW AND IMPLEMENTATION.

       ``(a) Action by the Secretary After Receipt of Plan.--
       ``(1) Upon transmittal by the Council to the Secretary of a 
     fishery management plan, or amendment to such plan, the 
     Secretary shall--
       ``(A) immediately commence a review of the management plan 
     or amendment to determine whether it is consistent with the 
     national standards, the other provisions of this Act, and any 
     other applicable law; and
       ``(B) immediately publish in the Federal Register a notice 
     stating that the plan or amendment is available and that 
     written data, views, or comments of interested persons on the 
     document or amendment may be submitted to the Secretary 
     during the 60-day period beginning on the date the notice is 
     published.
       ``(2) In undertaking the review required under paragraph 
     (1), the Secretary shall--
       ``(A) take into account the data, views, and comments 
     received from interested persons;
       ``(B) consult with the Secretary of State with respect to 
     foreign fishing; and
       ``(C) consult with the Secretary of the department in which 
     the Coast Guard is operating with respect to enforcement at 
     sea and to fishery access adjustments referred to in section 
     303(a)(6).
       ``(3) The Secretary shall approve, disapprove, or partially 
     approve a plan or amendment within 30 days of the end of the 
     comment period under paragraph (1) by written notice to the 
     Council. A notice of disapproval or partial approval shall 
     specify--
       ``(A) the applicable law with which the plan or amendment 
     is inconsistent;
       ``(B) the nature of such inconsistencies; and
       ``(C) recommendations concerning the actions that could be 
     taken by the Council to conform such plan or amendment to the 
     requirements of applicable law.
       ``(4) If the Secretary disapproves or partially approves a 
     plan or amendment, the Council may submit a revised plan or 
     amendment to the Secretary for review under this subsection.
       ``(b) Action on Regulations.--
       ``(1) Upon transmittal by the Council to the Secretary of 
     proposed regulations prepared under section 303(c), the 
     Secretary shall immediately initiate an evaluation of the 
     proposed regulations to determine whether they are consistent 
     with the fishery management plan, this Act and other 
     applicable law. Within 15 days of initiating such evaluation 
     the Secretary shall make a determination and--
       ``(A) if that determination is affirmative, the Secretary 
     shall publish such regulations, with such technical changes 
     as may be necessary for clarity and an explanation of those 
     changes, in the Federal Register for a public comment period 
     of 15 to 60 days; or
       ``(B) if that determination is negative, the Secretary 
     shall notify the Council in writing of the inconsistencies 
     and provide recommendations on revisions that would make the 
     proposed regulations consistent with the fishery management 
     plan, this Act, and other applicable law.
       ``(2) Upon receiving a notification under paragraph (1)(B), 
     the Council may revise the proposed regulations and submit 
     them to the Secretary for reevaluation under paragraph (1).
       ``(3) The Secretary shall promulgate final regulations 
     within 30 days after the end of the comment period under 
     paragraph (1)(A). The Secretary shall consult with the 
     Council before making any revisions to the proposed 
     regulations, and must publish in the Federal Register an 
     explanation of any differences between the proposed and final 
     regulations.
       ``(c) Definition.-- For purposes of subsections (a) and 
     (b), the term `immediately' means on or before the 5th day 
     after the day on which a Council transmits to the Secretary a 
     plan, amendment, or proposed regulation that the Council 
     characterizes as final.
       ``(d) Secretarial Plan Review.--
       ``(1)(A) Whenever, under section 303(e), the Secretary 
     prepares a fishery management plan or amendment, the 
     Secretary shall immediately--
       ``(i) for a plan or amendment prepared under section 
     303(e)(1), submit such plan or amendment to the appropriate 
     Council for consideration and comment; and
       ``(ii) publish in the Federal Register a notice stating 
     that the plan or amendment is available and that written 
     data, views, or comments of interested persons on the plan or 
     amendment may be submitted to the Secretary during the 60-day 
     period beginning on the date the notice is published.
       ``(B) Whenever a plan or amendment is submitted under 
     subsection (1)(A)(i), the appropriate Council must submit its 
     comments and recommendations, if any, regarding the plan or 
     amendment to the Secretary before the close of the 60-day 
     period referred to in subparagraph (A)(ii). After the close 
     of such 60-day period, the Secretary, after taking into 
     account any such comments and recommendations, as well as any 
     views, data, or comments submitted under subparagraph 
     (A)(ii), may adopt such plan or amendment.
       ``(2) The Secretary may propose regulations in the Federal 
     Register to implement any plan or amendment prepared by the 
     Secretary. The comment period on proposed regulations shall 
     be 60 days, except that the Secretary may shorten the comment 
     period on minor revisions to existing regulations.
       ``(3) The Secretary shall promulgate final regulations 
     within 30 days after the end of the comment period under 
     paragraph (3). The Secretary must publish in the Federal 
     Register an explanation of any substantive differences 
     between the proposed and final rules. All final regulations 
     must be consistent with the plan, with the national standards 
     and other provisions of this Act, and with any other 
     applicable law.
       ``(e) Judicial Review.--
       ``(1) Regulations promulgated by the Secretary under this 
     Act and actions described in paragraph (2) shall be subject 
     to judicial review to the extent authorized by, and in 
     accordance with, chapter 7 of title 5, United States Code, if 
     a complaint for such review is filed within 30 days after the 
     date on which the regulations are promulgated or the action 
     is published in the Federal Register, as applicable; except 
     that--
       ``(A) section 705 of such title is not applicable, and
       ``(B) the appropriate court shall only set aside any such 
     regulation or action on a ground specified in section 
     706(2)(A), (B), (C), or (D) of such title.
       ``(2) The actions referred to in paragraph (1) are actions 
     that are taken by the Secretary under regulations which 
     implement a fishery management plan, including but not 
     limited to actions that establish the date of closure of a 
     fishery to commercial or recreational fishing.
       ``(3) (A) Notwithstanding any other provision of law, the 
     Secretary shall file a response to any complaint filed in 
     accordance with paragraph (1) not later than 45 days after 
     the date the Secretary is served with that complaint, except 
     that the appropriate court may extend the period for filing 
     such a response upon a showing by the Secretary of good cause 
     for that extension.
       ``(B) A response of the Secretary under this paragraph 
     shall include a copy of the administrative record for the 
     regulations that are the subject of the petition.
       ``(4) Upon a motion by the person who files a complaint 
     under this subsection, the appropriate court shall assign the 
     matter for hearing at the earliest possible date and shall 
     expedite the matter in every possible way.
       ``(f) Establishment of Fees.--
       ``(1) The Secretary shall by regulation establish the level 
     of any fees that are authorized to be charged pursuant to 
     section 303(b)(1). The Secretary may enter into a cooperative 
     agreement with the States concerned under which the States 
     administer the permit system and the agreement may provide 
     that all or part of the fees collected under the system shall 
     accrue to the States. The level of fees charged under this 
     paragraph shall not exceed the administrative costs incurred 
     in issuing the permits.
       ``(2)(A) Notwithstanding paragraph (1), the Secretary shall 
     collect a fee from each person holding an individual 
     transferable quota pursuant to a limited access system 
     established under section 303(b)(6). Fees assessed under this 
     paragraph shall be sufficient to recover the cost of managing 
     the fishery to 
     [[Page S241]] which the quota applies, including reasonable 
     costs for salaries, training, data analysis and other costs 
     directly related to fishery management and enforcement, up 
     to--
       ``(i) four percent annually of the value of fish harvested 
     or processed in that year under the individual transferable 
     quota; and
       ``(ii) an additional 1 percent of the value of fish 
     authorized to be harvested or processed for that year under 
     the individual transferable quota to be assessed on a person 
     receiving an initial quota or transferring a quota.
       ``(B) The Secretary, in consultation with the Councils, 
     shall promulgate regulations, prescribing the method of 
     determining the value of fish authorized to be taken, the 
     amount of each fee, and the method of collecting fees. Fees 
     collected under this paragraph shall meet the requirements of 
     section 9701(b) of title 31, United States Code. Fees 
     collected under this paragraph shall be an offsetting 
     collection and shall be available only to the Secretary for 
     the purposes of administering and implementing this Act in 
     the region in which the fees were collected.
       ``(C) Persons holding individual transferable quota 
     pursuant to limited access systems established in the surf 
     clam and ocean quahog fishery or in the wreckfish fishery are 
     exempt from the collection of fees under this paragraph for a 
     period ending 5 years after the date of enactment of the 
     Sustainable Fisheries Act.
       ``(g) Effect of Certain Laws on Certain Time 
     Requirements.--The Secretary shall comply with any applicable 
     provisions of chapter 35 of title 44, United States Code, 
     chapter 6 of title 5, United States Code, and Executive Order 
     Numbered 12866, dated September 30, 1993, within the time 
     limitations specified in subsections (a) and (b).
       ``(h) Responsibility of the Secretary.--The Secretary shall 
     have general responsibility to carry out the provisions of 
     this Act. The Secretary may promulgate such regulations, in 
     accordance with section 553 of title 5, United States Code, 
     as may be necessary to discharge such responsibility.''.

     SEC. 113. ECOSYSTEM MANAGEMENT.

       Section 305 (16 U.S.C. 1855) is amended to read as follows:

     ``SEC. 305. ECOSYSTEM MANAGEMENT.

       ``(a) Report on Status of Fisheries.--The Secretary shall 
     report annually to the Congress and the Councils on the 
     status of fisheries within each Council's geographical area 
     of authority and identify those fisheries that are 
     approaching a condition of being overfished or are 
     overfished. For those fisheries managed under a fishery 
     management plan, the status shall be assessed using the 
     criteria for overfishing specified by the appropriate Council 
     under section 303(a)(10). A fishery shall be classified as 
     approaching a condition of being overfished if, based on 
     trends in fishing effort, fishery resource size, and other 
     appropriate factors, the Secretary estimates that the fishery 
     will become overfished within 2 years. Any fishery determined 
     to be a commercial fishery failure under section 316, shall 
     be deemed to be overfished for the purposes of subsections 
     (a) and (b).
       ``(b) Fishery Recovery Effort.--
       ``(1) The Council shall take immediate action to prepare a 
     fishery management plan, a plan amendment, or proposed 
     regulations for fisheries under such Council's authority--
       ``(A) to prevent overfishing of a fishery from occurring 
     whenever such fishery is classified under subsection (a) as 
     approaching an overfished condition, or
       ``(B) to stop overfishing of a fishery whenever such 
     fishery is classified under subsection (a) as overfished, and 
     to rebuild affected stocks of fish.
       ``(2) The Council shall submit a fishery management plan, 
     amendment or proposed regulations required under paragraph 
     (1) to the Secretary within 1 year from the date of 
     transmittal of the report on the status of stocks under 
     subsection (a). For a fishery that is overfished, such 
     fishery management plan, amendment or proposed regulations 
     shall specify a time period for stopping overfishing and 
     rebuilding the fishery. The time period shall be as short as 
     possible, taking into account the status and biology of the 
     overfished stock of fish, the needs of fishery-dependent 
     communities, and the interaction of the overfished stock of 
     fish within the marine ecosystem. The time period may not be 
     more than 10 years, except under extraordinary circumstances.
       ``(3) During the development of a fishery management plan, 
     a plan amendment, or proposed regulations under this 
     subsection, the Council may request that the Secretary 
     promulgate emergency regulations under subsection (e)(2) to 
     reduce overfishing. Any request by the Council under this 
     paragraph shall be deemed an emergency.
       ``(c) Fish Habitat.--
       ``(1) The Secretary, in cooperation with the Councils and 
     the Secretary of the Interior, after notice and public 
     comment, shall identify the essential fish habitat for each 
     fishery for which a fishery management plan is in effect. The 
     identification shall be based on the description of essential 
     fish habitat contained in the plan.
       ``(2) Each Council--
       ``(A) may comment on and make recommendations concerning 
     any activity undertaken, or proposed to be undertaken, by any 
     Federal or State agency that, in the view of the Council, may 
     have an adverse effect on essential fish habitat of a fishery 
     under its authority; and
       ``(B) shall comment on and make recommendations to any 
     Federal or State department or agency concerning any such 
     activity that, in the view of the Council is likely to 
     substantially affect the habitat of an anadromous fishery 
     resource under its jurisdiction.
       ``(3) If the Secretary receives information from a Council 
     or determines from other sources that an action authorized, 
     funded, carried out, or proposed to be carried out by any 
     Federal agency may result in the destruction or adverse 
     modification of any essential fish habitat identified under 
     paragraph (1), the Secretary shall comment on and make 
     recommendations to the Federal agency concerning that action.
       ``(4) Within 45 days after receiving a comment or 
     recommendation under paragraphs (2) or (3) from a Council or 
     the Secretary, a Federal agency shall provide a detailed 
     response, in writing, to the commenting Council and the 
     Secretary regarding the matter. The response shall include a 
     description of measures being considered by the agency for 
     avoiding, mitigating, or offsetting the impact of the 
     activity on such habitat. In the case of a response that is 
     inconsistent with a recommendation from any Council or the 
     Secretary, the Federal agency shall explain its reasons for 
     not following the recommendations.
       ``(d) Gear Evaluation and Notification of Entry.--
       ``(1) Each Council shall submit to the Secretary by June 1, 
     1996, information describing (A) all fishing technologies 
     employed under such Council's authority; and (B) all 
     fisheries under the authority of such Council. The Secretary 
     shall compile such information, along with information to 
     comply with both (A) and (B) for fisheries to which section 
     302(a)(3) applies.
       ``(2) By July 15, 1996, the Secretary shall publish a 
     proposed list of all technologies and fisheries, for each 
     Council and for fisheries to which section 302(a)(3) applies, 
     in the Federal Register for a public comment period of not 
     less than 60 days. The Secretary shall include with such list 
     specific guidelines for determining when a technology or 
     fishery is sufficiently different from those listed as to 
     require notification under paragraph (3). Within 30 days 
     after the close of the public comment period the Secretary 
     shall publish in the Federal Register a final list (including 
     the guidelines), after taking into account any public comment 
     received.
       ``(3) Beginning on the date that is 180 days after the date 
     of the publication of the final list required under paragraph 
     (2), no person or vessel shall employ a fishing technology or 
     engage in a fishery that is not included on the final list 
     for the appropriate Council or for fisheries to which section 
     302(a)(3) applies without first giving 90 days advance 
     written notice of the intent to employ such unlisted 
     technology or engage in such unlisted fishery to the 
     appropriate Council, or the Secretary with respect to a 
     fishery to which section 302(a)(3) applies. Such notice shall 
     be by first class mail, return receipt requested, and shall 
     include information on the use of the unlisted technology in 
     other fisheries, if any, and a detailed description, 
     including drawings, maps or diagrams if appropriate, of the 
     unlisted technology or unlisted fishery which such person or 
     vessel seeks to employ or engage in.
       ``(4) A Council may submit to the Secretary amendments to 
     the final list published under paragraph (2) to reflect any 
     substantial changes in the fishing technologies employed or 
     fisheries engaged in under the authority of such Council. The 
     Secretary may submit any amendments for fisheries to which 
     section 302(a)(3) applies. The Secretary shall publish any 
     such amendments in the Federal Register as proposed 
     amendments (along with any proposed revisions to the 
     guidelines) to the final list for a public comment period of 
     not less than 60 days. Within 45 days of the close of the 
     comment period, the Secretary shall publish a revised final 
     list incorporating such proposed amendments, after taking 
     into account any public comments received.
       ``(5) A Council may request the Secretary to promulgate 
     emergency regulations under subsection (e) prohibiting any 
     persons or vessels from employing an unlisted technology or 
     engaging in an unlisted fishery if the appropriate Council, 
     or the Secretary for fisheries to which section 302(a)(3) 
     applies, determines that use of such technology or entry into 
     such fishery would compromise the effectiveness of 
     conservation and management efforts under this Act.
       ``(6) If, after providing the notice required under 
     paragraph (3), no emergency regulations are implemented under 
     paragraph (5), the person or vessel submitting notice under 
     paragraph (3) may, after the required 90 day period has 
     lapsed, employ the unlisted technology or enter the unlisted 
     fishery to which such notice applies. The signed return 
     receipt shall constitute adequate evidence of the submittal 
     of such notice and the date upon which the 90-day period 
     begins.
       ``(7) A violation of this subsection shall be considered a 
     violation of section 307, punishable under section 308.
       ``(e) Emergency Actions.--
       ``(1) If the Secretary finds that an emergency exists 
     involving any fishery, he may promulgate emergency 
     regulations necessary to address the emergency, without 
     regard to whether a fishery management plan exists for such 
     fishery.
       ``(2) If a Council finds that an emergency exists involving 
     any fishery within its jurisdiction, whether or not a fishery 
     management plan exists for such fishery--
      [[Page S242]]   ``(A) the Secretary shall promulgate 
     emergency regulations under paragraph (1) to address the 
     emergency if the Council, by unanimous vote of the voting 
     members of the Council, requests the taking of such action; 
     and
       ``(B) the Secretary may promulgate emergency regulations 
     under paragraph (1) to address the emergency if the Council, 
     by less than a unanimous vote, requests the taking of such 
     action.
       ``(3) Any emergency regulation which changes an existing 
     fishery management plan shall be treated as an amendment to 
     such plan for the period in which such regulation is in 
     effect. Any emergency regulation promulgated under this 
     subsection--
       ``(A) shall be published in the Federal Register together 
     with the reasons therefor;
       ``(B) shall, except as provided in subparagraph (C), remain 
     in effect for not more than 180 days after the date of 
     publication, and may be extended by publication in the 
     Federal Register for an additional period of not more than 
     180 days, provided the public has had an opportunity to 
     comment on the emergency regulation, and, in the case of a 
     Council recommendation for emergency regulations, the Council 
     is actively preparing a fishery management plan, amendment, 
     or proposed regulations to address the emergency on a 
     permanent basis;
       ``(C) that responds to a public health emergency may remain 
     in effect until the circumstances that created the emergency 
     no longer exist, provided that the Secretary of Health and 
     Human Services concurs with the Secretary's action and the 
     public has an opportunity to comment after the regulation is 
     published;
       ``(D) that reduces overfishing may be approved without 
     regard to the requirements of section 301(a)(1); and
       ``(E) may be terminated by the Secretary at an earlier date 
     by publication in the Federal Register of a notice of 
     termination, except for emergency regulations promulgated 
     under paragraph (2) in which case such early termination may 
     be made only upon the agreement of the Secretary and the 
     Council concerned.
       ``(4) The Secretary may, pursuant to guidelines established 
     by a Council in a fishery management plan, close or restrict 
     a particular fishery covered by such fishery management plan 
     in order to prevent overfishing or reduce bycatch. Any such 
     guidelines shall specify appropriate means for providing 
     timely notice to fishermen of any closure or restriction. In 
     exercising the authority granted under this paragraph, the 
     Secretary shall not be required to provide an opportunity for 
     notice and comment if such closure or restriction is done in 
     accordance with the fishery management plan guidelines and 
     does not extend beyond the end of the current fishing period 
     established for that fishery by the fishery management 
     plan.''.

     SEC. 114. STATE JURISDICTION.

       (a) Section 306(b) (16 U.S.C. 1856(b)) is amended by adding 
     at the end the following:
       ``(3) If the State involved requests that a hearing be held 
     pursuant to paragraph (1), the Secretary shall conduct such 
     hearing prior to taking any action under paragraph (1).''.
       (b) Section 306(c)(1) (16 U.S.C. 1856(c)(1)) is amended--
       (1) by striking ``and'' in subparagraph (A);
       (2) by striking the period at the end of subparagraph (B) 
     and inserting a semicolon and the word ``and''; and
       (3) by inserting after subparagraph (B) the following:
       ``(C) the owner or operator of the vessel submits reports 
     on the tonnage of fish received from U.S. vessels and the 
     locations from which such fish were harvested, in accordance 
     with such procedures as the Secretary by regulation shall 
     prescribe.''.

     SEC. 115. PROHIBITED ACTS.

       (a) Section 307(1)(J)(i) (16 U.S.C. 1857(1)(J)(i)) is 
     amended by striking ``American Lobster Fishery Management 
     Plan, as implemented by'' and ``, or any successor to that 
     plan, implemented under this title''.
       (b) Section 307(1)(L) (16 U.S.C. 1857(1)(L)) is amended to 
     read as follows:
       ``(L) to forcibly assault, resist, oppose, impede, 
     intimidate, sexually harass, or interfere with any observer 
     on a vessel under this Act, or any data collector employed by 
     or under contract to the National Marine Fisheries 
     Service;''.
       (c) Section 307(1)(M) (16 U.S.C. 1857(1)(M)) is amended to 
     read as follows:
       ``(M) to engage in large-scale driftnet fishing on a vessel 
     of the United States or a vessel subject to the jurisdiction 
     of the United States upon the high seas beyond the exclusive 
     economic zone of any nation or within the exclusive economic 
     zone of the United States, (and any vessel that is shoreward 
     of the outer boundary of the exclusive economic zone of the 
     United States or beyond the exclusive economic zone of any 
     nation, and that has onboard gear that is capable of use for 
     large-scale driftnet fishing, shall be presumed to be engaged 
     in such fishing, but that presumption may be rebutted); or''.
       (d) Section 307(2)(A) (16 U.S.C. 1857(2)(A)) is amended to 
     read as follows:
       ``(A) in fishing within the boundaries of any State, 
     except--
       ``(i) recreational fishing permitted under section 201(i),
       ``(ii) fish processing permitted under section 306(c), or
       ``(iii) transshipment at sea of fish products within the 
     boundaries of any State in accordance with a permit approved 
     under section 204(b)(6)(A)(ii);''.
       (e) Section 307(2)(B) (16 U.S.C. 1857(2)(B)) is amended by 
     striking ``201(j)'' and inserting ``201(i)''.
       (f) Section 307(3) (16 U.S.C. 1857(3)) is amended to read 
     as follows:
       ``(3) for any vessel of the United States, and for the 
     owner or operator of any vessel of the United States, to 
     transfer at sea directly or indirectly, or attempt to so 
     transfer at sea, any United States harvested fish to any 
     foreign fishing vessel, while such foreign vessel is within 
     the exclusive economic zone or within the boundaries of any 
     State except to the extent that the foreign fishing vessel 
     has been permitted under section 204(b)(6)(B) or section 
     306(c) to receive such fish;''.
       (g) Section 307(4) (16 U.S.C. 1857(4)) is amended by 
     inserting ``or within the boundaries of any State'' after 
     ``zone''.

     SEC. 116. CIVIL PENALTIES AND PERMIT SANCTIONS.

       (a) The first sentence of section 308(b) (16 U.S.C. 
     1858(b)) is amended to read as follows: ``Any person against 
     whom a civil penalty is assessed under subsection (a), or 
     against whom a permit sanction is imposed under subsection 
     (g) (other than a permit suspension for nonpayment of penalty 
     or fine), may obtain review thereof in the United States 
     district court for the appropriate district by filing a 
     complaint against the Secretary in such court within 30 days 
     from the date of such order.''.
       (b) Section 308(g)(1)(C) (16 U.S.C. 1858(g)(1)(C)) is 
     amended by striking the matter from ``(C) any'' through 
     ``overdue,'' and inserting the following: ``(C) any amount in 
     settlement of a civil forfeiture imposed on a vessel or other 
     property, or any civil penalty or criminal fine imposed on a 
     vessel or owner or operator of a vessel or any other person 
     who has been issued or has applied for a permit under any 
     marine resource law enforced by the Secretary, has not been 
     paid and is overdue,''.
       (c) Section 308(16 U.S.C. 1858) is amended by inserting at 
     the end thereof the following:
       ``(h) After deduction for any administrative or enforcement 
     costs incurred or other expenditures authorized under this 
     Act, all funds collected under this section shall be 
     deposited in a separate account of the Ocean Conservation 
     Trust Fund established under section 315.''.

     SEC. 117. ENFORCEMENT.

       (a) Section 311(e)(1) (16 U.S.C. 1861(e)(1)) is amended--
       (1) by striking ``fishery'' each place it appears and 
     inserting ``marine'';
       (2) by inserting ``of not less than 20 percent of the 
     penalty collected'' after ``reward'' in subparagraph (B), and
       (3) by striking subparagraph (E) and inserting the 
     following:
       ``(E) claims of parties in interest to property disposed of 
     under section 612(b) of the Tariff Act of 1930 (19 U.S.C. 
     1612(b)), as made applicable by section 310(c) of this Act or 
     by any other marine resource law enforced by the Secretary, 
     to seizures made by the Secretary, in amounts determined by 
     the Secretary to be applicable to such claims at the time of 
     seizure; and''.
       (b) Section 311(e)(2) (16 U.S.C. 1861(e)(2)) is amended to 
     read as follows:
       ``(2) Any person found in an administrative or judicial 
     proceeding to have violated this Act or any other marine 
     resource law enforced by the Secretary shall be liable for 
     the cost incurred in the sale, storage, care, and maintenance 
     of any fish or other property lawfully seized in connection 
     with the violation.''.
       (c) Section 311 (16 U.S.C. 1861) is amended by 
     redesignating subsection (f) as subsection (h), and by 
     inserting the following after subsection (e):
       ``(f) Annual Report on Enforcement.--Each year at the time 
     the President's budget is submitted to the Congress, the 
     Secretary and the Secretary of the Department in which the 
     Coast Guard is operating shall, after consultation with the 
     Councils, submit a report on the effectiveness of the 
     enforcement of fishery management plans and regulations to 
     implement such plans under the jurisdiction of each Council, 
     including--
       ``(1) an analysis of the adequacy of federal personnel and 
     funding resources related to the enforcement of fishery 
     management plans and regulations to implement such plans; and
       ``(2) recommendations to improve enforcement that should be 
     considered in developing amendments to plans or to 
     regulations implementing such plans.
       ``(g) Fishermen's Information Networks.--The Secretary, in 
     consultation with the Secretary of the department in which 
     the Coast Guard is operating, shall conduct a program to 
     encourage the formation of volunteer networks, to be 
     designated as Fishermen's Information Networks, to advise on 
     and assist in the monitoring, reporting, and prevention of 
     violations of this Act.''.

     SEC. 118. NORTH PACIFIC FISHERIES CONSERVATION.

       Section 313 (16 U.S.C. 1862) is amended--
       (1) by striking ``research plan'' in the section heading 
     and inserting ``conservation''; and
       (b) by adding at the end the following:
       ``(f) Reduction of Waste.--
       ``(1) No later than June 1, 1996, the North Pacific Fishery 
     Management Council shall include in each fishery management 
     plan under its jurisdiction conservation and management 
     measures, including fees or other 
     [[Page S243]] incentives, to reduce bycatch in each fishery. 
     Notwithstanding section 304(d), in implementing this 
     subsection the Council may recommend, and the Secretary may 
     approve and implement any such recommendation, consistent 
     with the other provisions of this Act, a system of fees to 
     provide an incentive to reduce bycatch, and, in particular, 
     economic and regulatory discards. Any such system of fees or 
     incentives shall be fair and equitable to all fishermen and 
     United States fish processors, and shall not have economic 
     allocation as its sole purpose.
       ``(2) Not later than January 1, 1997, the North Pacific 
     Fishery Management Council shall recommend, and the Secretary 
     may approve and implement any such recommendation, consistent 
     with the other provisions of this Act, conservation and 
     management measures to ensure total catch measurement in each 
     fishery under the Council's jurisdiction. Such conservation 
     and management measures shall ensure the accurate enumeration 
     of target species, economic discards, and regulatory 
     discards.
       ``(3) Beginning on January 1, 1998, such conservation and 
     management measures shall include a harvest preference or 
     other incentives to fishing and processing practices within 
     each gear group that result in the lowest levels of economic 
     discards, processing waste, regulatory discards, and other 
     bycatch. In determining which practices shall be given 
     priority, the reduction of economic discards shall be given 
     the greatest weight, followed by processing waste (where 
     applicable), regulatory discards and other bycatch, in that 
     order.
       ``(4) In determining the level of target species catch, 
     economic discards, regulatory discards, other bycatch, and 
     processing waste, the Council and Secretary shall base such 
     determinations on observer data or the best available 
     information.
       ``(5) In the case of fisheries occurring under an 
     individual transferable quota system under the jurisdiction 
     of the North Pacific Fishery Management Council after January 
     1, 1998--
       ``(A) the Council shall designate non-target species, 
     bycatch species, and regulatory discards for each such 
     fishery;
       ``(B) the Council may not recommend, and the Secretary may 
     not approve, any assignment or allocation of individual 
     transferable quotas for regulatory discards, or non-target 
     species for those fisheries, other than for each individual 
     fishing season on an annual basis pursuant to subparagraph 
     (C) of this paragraph; and
       ``(C) any harvest preference required under paragraph (3) 
     shall be implemented by giving priority in the allocation of 
     quotas for regulatory discards and non-target species and to 
     fishing practices that result in the lowest levels of 
     economic discards, regulatory discards, processing waste, and 
     other bycatch.
       ``(6) Nothing in this section shall be construed to 
     preclude the North Pacific Fishery Management Council from 
     allocating a portion of any quota for a directed fishery for 
     use as bycatch in another fishery or fisheries, if the 
     Council determines such allocation is necessary to prosecute 
     a fishery, after taking into account the requirements of this 
     section regarding reduction of bycatch and processing waste.
       ``(g) Full Retention and Full Utilization.--
       ``(1) The North Pacific Fishery Management Council shall, 
     consistent with the other provisions of this Act, submit to 
     the Secretary by January 1, 1997, a plan to phase-in by 
     January 1, 2000, to the maximum extent practicable, fishery 
     management plan amendments to require full retention by 
     fishing vessels and full utilization by United States fish 
     processors of all fishery resources, except regulatory 
     discards, caught under the jurisdiction of such Council if 
     such fishery resources cannot be quickly returned alive to 
     the sea with the expectation of extended survival.
       ``(2) The plan shall include conservation and management 
     measures to minimize processing waste and ensure the optimum 
     utilization of target species, including standards setting 
     minimum percentages of target species harvest which must be 
     processed for human consumption.
       ``(3) In determining the maximum extent practicable, the 
     North Pacific Fishery Management Council shall consider--
       ``(A) the state of available technology;
       ``(B) the extent to which species brought on board can be 
     safely returned alive, with the expectation of extended 
     survival, to the sea;
       ``(C) the extent to which each species is fully utilized as 
     a target species by United States fishermen;
       ``(D) the impact of different processing practices on the 
     price paid to fishermen and processors;
       ``(E) the nature and economic costs of each specific 
     fishery; and
       ``(F) the effect of a full retention or full utilization 
     requirement in a given fishery on other fisheries when 
     compared with the beneficial effect of reducing economic 
     discards and processing waste.
       ``(4) Notwithstanding section 304(f), the North Pacific 
     Fishery Management Council may propose, and the Secretary may 
     approve and implement any such recommendation, consistent 
     with the other provisions of this Act, a system of fines or 
     other incentives to implement this section. Any such fines or 
     incentive system shall be fair and equitable to all fishing 
     vessels and United States fish processors, and shall not have 
     economic allocation as its sole purpose.
       ``(h) Regulatory Discards.--
       ``(1) Regulatory discards shall not be considered an 
     economic discard for purposes of this section, however, the 
     North Pacific Fishery Management Council shall seek to reduce 
     the incidental catch of regulatory discards to the maximum 
     extent practicable while allowing for the prosecution of 
     fisheries under its jurisdiction.
       ``(2) Not later than June 1, 1996, the North Pacific 
     Fishery Management Council shall propose, and the Secretary 
     may approve and implement any such recommendation, consistent 
     with the other provisions of this Act, for each groundfish 
     fishery under the Council's jurisdiction, conservation and 
     management measures to reduce the incidental harvest of 
     regulatory discards to the minimum level necessary to 
     prosecute directed fisheries for designated target species, 
     and to otherwise meet the requirements of this section. 
     Notwithstanding section 304(f), such conservation and 
     management measures may include a system of fines, caps, or 
     other incentives to reduce the incidental harvest of 
     regulatory discards. Any system of fines or incentives under 
     this section shall be fair and equitable to all fishing 
     vessels and United States fish processors, and shall not have 
     economic allocation as its sole purpose.
       ``(3) The North Pacific Fishery Management Council shall 
     establish for each fishery which incidentally harvests 
     regulatory discards under the Council's jurisdiction a cap 
     which prevents such regulatory discards from being overfished 
     or from being placed in risk of being overfished. Upon 
     reaching such cap, the commercial fishery in which such 
     regulatory discards are incidentally caught shall be closed 
     for that season.
       ``(i) Observer Program.--
       ``(1) Beginning June 1, 1996, the North Pacific Fishery 
     Management Council shall require under the authority granted 
     to it by subsection (a)--
       ``(A) 100 percent observer coverage on all fishing vessels 
     which can safely accommodate an observer or observers, and at 
     all United States fish processors to the extent that funding 
     for such coverage is available, and
       ``(B) for vessels which cannot safely accommodate an 
     observer, statistically reliable sampling of a fishing 
     vessel's effort in each fishery in which that fishing vessel 
     participates,

     when such vessel or processor is fishing in a fishery under 
     the North Pacific Fishery Management Council's jurisdiction. 
     In implementing subparagraph (A) the North Pacific Fishery 
     Management Council shall require that more than one observer 
     be stationed on a fishing vessel or at a United States fish 
     processor whenever the Council determines that more than one 
     such observer is necessary to accurately monitor that vessel 
     or processor's operation.
       ``(2) Observers stationed on fishing vessels or at United 
     States fish processors under the authority of this section 
     shall be paid by the Secretary using funds deposited in the 
     North Pacific Fishery Observer Fund. Such payment shall not 
     make an observer an employee of the Federal Government, 
     unless such observer is otherwise employed by an agency of 
     the United States.
       ``(3) Failure to pay the fee established by the North 
     Pacific Fishery Management Council under subsection (a) shall 
     be a considered a violation of section 307, punishable under 
     section 308. Any fines collected pursuant to the authority 
     granted by this subsection shall be deposited in the North 
     Pacific Fishery Observer Fund account in the United States 
     Treasury, and shall remain available until expended under the 
     terms of that fund.
       ``(4) Notwithstanding sections 304(f) and subsection (b), 
     the Secretary is authorized to recover from vessels 
     participating in a fishery under an individual fishing quota 
     regime or other limited access program established by the 
     North Pacific Fishery Management Council, the full cost of 
     any observers stationed on such vessel (including all costs 
     for salaries, expenses, equipment, food and lodging, 
     transportation, insurance, and analysis of observer data, 
     plus reasonable costs for training and administrative 
     overhead). Each participant in an individual fishing quota 
     regime shall only be required to contribute the same 
     proportion of the costs as that participant's quota shares 
     represent to the total number of quota shares in such regime. 
     To the extent that the costs recovered under this paragraph 
     exceed the fee established by the Council under subsection 
     (b), the Secretary shall deduct any payment by a vessel under 
     subsection (b) from the amount owed by such vessel under this 
     paragraph. The Secretary shall deposit any fees collected 
     under this paragraph in the North Pacific Fishery Observer 
     Fund account in the United States Treasury.
       ``(j) Industry Assistance.--
       ``(1) The Secretary shall submit a plan by January 1, 1996, 
     to the Committee on Commerce, Science, and Transportation of 
     the Senate and the Committee on Resources of the House of 
     Representatives to develop jointly with industry accurate 
     methods of weighing the fish harvested by U.S. fishing 
     vessels in fisheries under the jurisdiction of the North 
     Pacific Fishery Management Council. Such plan shall include 
     methods for assessing contributions from industry to fund 
     such development, as well as recommendations from the 
     Secretary concerning the level of funds needed to 
     successfully implement the plan in fiscal year 1997.
      [[Page S244]]   ``(2) The Secretary shall submit by January 
     1, 1996, to the Committee on Commerce, Science, and 
     Transportation of the Senate and the Committee on Resources 
     of the House of Representatives a plan to develop markets and 
     harvesting and processing techniques for arrowtooth flounder. 
     The Secretary shall include in such plan recommendations 
     concerning the level of funds needed to successfully 
     implement the plan in fiscal year 1997.
       ``(3) For fiscal years 1996, 1997, 1998, and 1999, $50,000 
     is authorized to be appropriated for the purposes of 
     implementing paragraph (1), and $250,000 is authorized to be 
     appropriated for programs to implement paragraph (2).
       ``(k) Definition.--For the purposes of this section, 
     `processing waste' means that portion of a fish which is 
     processed and which could be used for human consumption or 
     other commercial use, but which is not so used.''.

     SEC. 119. TRANSITION TO SUSTAINABLE FISHERIES.

       (a) The Act is amended by adding at the end of title III 
     the following:

     ``SEC. 315. TRANSITION TO SUSTAINABLE FISHERIES.

       ``(a) Sustainable Development Strategy.--
       ``(1) At the discretion of the Secretary or at the request 
     of the Governor of an affected State or a fishery dependent 
     community, the Secretary, in consultation with the Councils 
     and Federal agencies, as appropriate, may work with regional 
     authorities, affected States, fishery dependent communities, 
     the fishing industry, conservation organizations, and other 
     interested parties, to develop a sustainable development 
     strategy for any fishery classified as overfished under 
     section 305(a) or determined to be a commercial fishery 
     failure under section 316.
       ``(2) Such sustainable development strategy shall--
       ``(A) take into consideration the economic, social, and 
     ecological factors affecting the fishery and provide 
     recommendations for addressing such factors in the 
     development of a fishery recovery effort under section 
     305(b);
       ``(B) identify Federal and State programs which can be used 
     to provide assistance to fishery dependent communities during 
     development and implementation of a fishery recovery effort;
       ``(C) develop a balanced and comprehensive long-term plan 
     to guide the transition to a sustainable fishery, identifying 
     alternative economic opportunities and establishing long-term 
     objectives for the fishery including vessel types and sizes, 
     harvesting and processing capacity, and optimal fleet size;
       ``(D) establish procedures to implement such a plan and 
     facilitate consensus and coordination in regional decision-
     making; and
       ``(E) include any program established under subsection (b) 
     to reduce the number of vessels or level of capital 
     investment in the fishery.
       ``(2) Report.--The Secretary shall complete and submit to 
     the Congress a report on any sustainable development strategy 
     developed under this section within 6 months and annually 
     thereafter.
       ``(b) Buy-out Program.--
       ``(1) The Secretary, in consultation with the appropriate 
     Council, may develop and implement a buy-out program for 
     fishing vessels or permits in a fishery for the purpose of 
     reducing the number of fishing vessels and fishing effort in 
     such fishery, if the Secretary, with the concurrence of the 
     majority of the voting members of such Council, determines 
     that a buy-out program is necessary for the development and 
     implementation of a fishery recovery effort under section 
     305(b).
       ``(2) Any buy-out program developed or implemented in a 
     fishery shall--
       ``(A) require a fishery management plan to be in place for 
     such fishery that is adequate to limit access to the fishery 
     and prevent the replacement of fishing effort removed by the 
     buy-out program;
       ``(B) require fishing vessels or permits acquired under 
     such program to be disposed of in a manner ensuring that such 
     vessels or permits do not re-enter the fishery or contribute 
     to excess fishing effort in other fisheries;
       ``(C) establish criteria for determining types and numbers 
     of vessels which are eligible for participation in such 
     program consistent with--
       ``(i) any strategy developed under subsection (a);
       ``(ii) the requirements of applicable fishery management 
     plans; and
       ``(iii) the need to minimize program costs;
       ``(D) establish procedures (such as submission of owner bid 
     under an auction system or fair market-value assessment) to 
     be used in determining the level of payment for fishing 
     vessels or permits acquired under the program; and
       ``(E) identify Federal and non-Federal mechanisms for 
     funding the buy-out program, consistent with paragraphs (3) 
     and (4).
       ``(3) The Federal share of the cost of a buy-out program 
     implemented under this section shall not exceed 50 percent of 
     the cost of that program. Such Federal share may be provided 
     from monies deposited in the Ocean Conservation Trust under 
     section 308(h) or monies made available under section 316(b) 
     of this Act or under section 2(b) of the Act of August 11, 
     1939 (15 U.S.C. 713c-3(b)).
       ``(4) Notwithstanding section 305(f)(1), the Secretary, 
     with the concurrence of a majority of the voting members of 
     the affected Council, may establish a fee system to collect 
     those funds required for the non-Federal share of such 
     program that are not available from other non-Federal 
     sources. Under such fee system, the Secretary may assess an 
     annual fee on holders of fishing permits in the fishery for 
     which the buy-out program is established which may not exceed 
     5 percent annually of the value of the fish harvested under 
     the fishing permit. Assessments may not be used to pay any 
     costs of administrative overhead or other costs not directly 
     incurred in carrying out the specific buy-out program under 
     which they are collected. Assessments shall be deposited in 
     the Ocean Conservation Trust fund established under 
     subsection (d) and shall be considered part of the non-
     Federal share of the cost of a buyout program.
       ``(5)(A) Upon completion of a proposal for a buy-out 
     program (including any fee system to be established under 
     this subsection), the Secretary shall immediately--
       ``(i) submit the proposed program and regulations necessary 
     for its implementation to the appropriate Council for 
     consideration and comment; and
       ``(ii) publish in the Federal Register a notice stating 
     that the proposed program and regulations are available and 
     that written data, views, or comments of interested persons 
     on the proposed program and regulations may be submitted to 
     the Secretary during the 60-day period beginning on the date 
     the notice is published.
       ``(B) During the 60-day public comment period--
       ``(i) the Secretary shall conduct a public hearing in each 
     State affected by the proposed buy-out program; and
       ``(ii) the appropriate Council shall submit its comments 
     and recommendations, if any, regarding the proposed program 
     and regulations.
       ``(C) Within 45 days after the close of the public comment 
     period, the Secretary, in consultation with the affected 
     Council, shall analyze the public comment received and 
     publish a final buy-out program and regulations for its 
     implementation. The Secretary shall include an explanation of 
     any substantive differences between the proposed and final 
     program and regulations.
       ``(c) Task Force.--The Secretary shall establish a task 
     force to assist in the development of a sustainable 
     development strategy or a buy-out program under this section. 
     Such task force shall, at a minimum, consist of members of 
     the affected communities and individuals with expertise in 
     fishery management and conservation, economics, and 
     sociology. Members of the task force are authorized to 
     receive per diem and travel expenses consistent with section 
     302 of this Act.
       ``(d) Ocean Conservation Trust Fund.--There is established 
     in the Treasury an Ocean Conservation Trust Fund. The Fund 
     shall be available, without appropriation or fiscal year 
     limitation, only to the Secretary for the purpose of carrying 
     out the provisions of this section subject to the 
     restrictions of this Act. This fund shall consist of all 
     monies deposited into it in accordance with this section and 
     section 308(h). Sums in the Fund that are not currently 
     needed for the purpose of this section shall be kept on 
     deposit or invested in obligations of, or guaranteed by, the 
     United States.

     ``SEC. 316. FISHERIES DISASTER RELIEF.

       ``(a) Determination of Failure.--At the discretion of the 
     Secretary or at the request of the Governor of an affected 
     State or a fishery dependent community, the Secretary shall 
     determine whether there is a commercial fishery failure due 
     to a fishery resource disaster as a result of--
       ``(1) natural causes;
       ``(2) man-made causes beyond the control of fishery 
     managers to mitigate through conservation and management 
     measures; or
       ``(3) undetermined causes.
       ``(b) Economic Assistance.--
       ``(1) Upon the determination under subsection (a) that 
     there is a commercial fishery failure, the Secretary is 
     authorized to make sums available to be used by the affected 
     State, fishery dependent community, or by the Secretary in 
     cooperation with the affected State or fishery dependent 
     community for--
       ``(A) assessing the economic and social effects of the 
     commercial fishery failure; and
       ``(B) any activity that the Secretary determines is 
     appropriate to restore the fishery or prevent a similar 
     failure in the future and to assist a fishery dependent 
     community affected by such failure.
       ``(2) Before making funds available for an activity 
     authorized under this section, the Secretary shall make a 
     determination that such activity will not expand the size or 
     scope of the commercial fishery failure into other fisheries 
     or other geographic regions.
       ``(c) Federal Cost-sharing.--The Federal share of the cost 
     of any activity carried out under the authority of this 
     section shall not exceed 75 percent of the cost of that 
     activity.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary such sums as 
     are necessary for each of the fiscal years 1995, 1996, 1997, 
     1998 and 1999, provided that such sums are designated by 
     Congress as an emergency requirement pursuant to section 
     251(b)(2)(D)(i) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985.''.
       (b)Section 2(b)(1)(A) of the Act of August 11, 1939 (15 
     U.S.C. 713c-3(b)(1)(A)) is amended--
       (1) by striking ``and'' at the end of clause (ii); and
      [[Page S245]]   (2) by adding at the end the following new 
     clause:
       ``(iii) to fund the Federal share of a buy-out program 
     established under section 315(b) of the Magnuson Fishery 
     Conservation and Management Act.''.
               TITLE II--FISHERY MONITORING AND RESEARCH

     SEC. 201. CHANGE OF TITLE.

       The heading of title IV (16 U.S.C. 1881 et seq.) is amended 
     to read as follows:
             ``TITLE IV--FISHERY MONITORING AND RESEARCH''.

     SEC. 202. REGISTRATION AND DATA MANAGEMENT.

       Title IV (16 U.S.C. 1881 et seq.) is amended by inserting 
     after the title heading the following:

     ``SEC. 401. REGISTRATION AND DATA MANAGEMENT.

       ``(a) Standardized Fishing Vessel Registration and Data 
     Management System.--The Secretary shall, in cooperation with 
     the Secretary of the department in which the Coast Guard is 
     operating, the States, the Councils, and Marine Fisheries 
     Commissions, develop recommendations for implementation of a 
     standardized fishing vessel registration and data management 
     system on a regional basis. The proposed system shall be 
     developed after consultation with interested governmental and 
     nongovernmental parties and shall--
       ``(1) be designed to standardize the requirements of vessel 
     registration and data collection systems required by this 
     Act, the Marine Mammal Protection Act (16 U.S.C. 1361 et 
     seq.), and any other marine resource law implemented by the 
     Secretary;
       ``(2) integrate programs under existing fishery management 
     plans into a nonduplicative data collection and management 
     system;
       ``(3) avoid duplication of existing state, tribal, or 
     federal systems (other than a federal system under paragraph 
     (1)) and utilize, to the maximum extent practicable, 
     information collected from existing systems;
       ``(4) provide for implementation through cooperative 
     agreements with appropriate State, regional, or tribal 
     entities and Marine Fisheries Commissions;
       ``(5) establish standardized units of measurement, 
     nomenclature, and formats for the collection and submission 
     of information;
       ``(6) minimize the paperwork required for vessels 
     registered under the system;
       ``(7) include all species of fish within the geographic 
     areas of authority of the Councils and all fishing vessels, 
     except for private recreational fishing vessels used 
     exclusively for pleasure; and
       ``(8) prescribe procedures necessary to ensure the 
     confidentiality of information collected under this section.
       ``(b) Fishing Vessel Information.--The registration and 
     data management system should, at a minimum, obtain the 
     following information for each fishing vessel--
       ``(1) the name and official number or other identification, 
     together with the name and address of the owner or operator 
     or both;
       ``(2) vessel capacity, type and quantity of fishing gear, 
     mode of operation (catcher, catcher processor or other), and 
     such other pertinent information with respect to vessel 
     characteristics as the Secretary may require;
       ``(3) identification of the fisheries in which the fishing 
     vessel participates;
       ``(4) estimated amounts of fish caught, and processed (if 
     applicable) in each fishery; and
       ``(5) the geographic area of operations and the season or 
     period during which the fishing vessel operates.
       ``(c) Fishery Information.--The registration and data 
     management system should, at a minimum, provide basic 
     fisheries performance data for each fishery, including--
       ``(1) the number of vessels participating in the fishery;
       ``(2) the time period in which the fishery occurs;
       ``(3) the approximate geographic location, or official 
     reporting area where the fishery occurs;
       ``(4) a description of fishery gear used in the fishery, 
     including the amount of such gear and the appropriate unit of 
     fishery effort;
       ``(5) catch and ex-vessel value of the catch for each stock 
     of fish in the fishery; and
       ``(6) the amount and types of economic and regulatory 
     discards, and an estimate of any other bycatch.
       ``(d) Public Comment.--Within one year after the date of 
     enactment of the Sustainable Fisheries Act, the Secretary 
     shall publish in the Federal Register for a 60-day public 
     comment period, a proposal that would provide for 
     implementation of a standardized fishing vessel registration 
     and data collection system that meets the requirements of 
     subsections (a) through (c). The proposal shall include--
       ``(1) a description of the arrangements for consultation 
     and cooperation with the department in which the Coast Guard 
     is operating, the States, the Councils, Marine Fisheries 
     Commissions, the fishing industry and other interested 
     parties; and
       ``(2) proposed regulations and legislation necessary to 
     implement the proposal.
       ``(e) Congressional Transmittal.--Within 60 days after the 
     end of the comment period and after consideration of comments 
     received under subsection (d), the Secretary shall transmit 
     to the Committee on Commerce, Science, and Transportation of 
     the Senate and the Committee on Resources of the House of 
     Representatives a proposal for implementation of a national 
     fishing vessel registration system that includes--
       ``(1) any modifications made after comment and 
     consultation;
       ``(2) a proposed implementation schedule; and
       ``(3) recommendations for any such additional legislation 
     as the Secretary considers necessary or desirable to 
     implement the proposed system.
       ``(f) Report to Congress.--Within 15 months after the date 
     of enactment of the Sustainable Fisheries Act, the Secretary 
     shall report to Congress on the need to include private 
     recreational fishing vessels used exclusively for pleasure 
     into a national fishing vessel registration and data 
     collection system. In preparing its report, the Secretary 
     shall cooperate with the Secretary of the department in which 
     the Coast Guard is operating, the States, the Councils, and 
     Marine Fisheries Commissions, and consult with governmental 
     and nongovernmental parties.''.

     SEC. 203. DATA COLLECTION.

       Section 402 is amended to read as follows:

     ``SEC. 402. DATA COLLECTION.

       ``(a) Council Requests.--If a Council determines that 
     additional information and data (other than information and 
     data that would disclose proprietary or confidential 
     commercial or financial information regarding fishing 
     operations or fish processing operations) would be beneficial 
     for developing, implementing, or revising a fishery 
     management plan or for determining whether a fishery is in 
     need of management, the Council may request that the 
     Secretary implement a data collection program for the fishery 
     which would provide the types of information and data (other 
     than information and data that would disclose proprietary or 
     confidential commercial or financial information regarding 
     fishing operations or fish processing operations) specified 
     by the Council. The Secretary shall approve such a data 
     collection program if he determines that the need is 
     justified, and shall promulgate regulations to implement the 
     program within 60 days after such determination is made. If 
     the Secretary determines that the need for a data collection 
     program is not justified, the Secretary shall inform the 
     Council of the reasons for such determination in writing. The 
     determinations of the Secretary under this subsection 
     regarding a Council request shall be made within a reasonable 
     period of time after receipt of that request.
       ``(b) Confidentiality of Information.--Any information 
     submitted to the Secretary by any person in compliance with 
     any requirement under this Act shall be confidential and 
     shall not be disclosed if disclosure would significantly 
     impair the commercial interests of the person from whom the 
     information was obtained, except--
       ``(1) to Federal employees and Council employees who are 
     responsible for fishery management plan development and 
     monitoring;
       ``(2) to State or Marine Fisheries Commission employees 
     pursuant to an agreement with the Secretary that prevents 
     public disclosure of the identity or business of any person;
       ``(3) when required by court order;
       ``(4) when such information is used to verify catch under 
     an individual transferable quota system; or
       ``(5) unless the Secretary has obtained written 
     authorization from the person submitting such information to 
     release such information and such release does not violate 
     other requirements of this subsection.

     The Secretary shall, by regulation, prescribe such procedures 
     as may be necessary to preserve such confidentiality, except 
     that the Secretary may release or make public any such 
     information in any aggregate or summary form which does not 
     directly or indirectly disclose the identity or business of 
     any person who submits such information. Nothing in this 
     subsection shall be interpreted or construed to prevent the 
     use for conservation and management purposes by the 
     Secretary, or with the approval of the Secretary, the 
     Council, of any information submitted in compliance with 
     regulations promulgated under this Act.
       ``(c) Restriction on Use of Certain Data.--
       ``(1) The Secretary shall promulgate regulations to 
     restrict the use, in civil enforcement or criminal 
     proceedings under this Act, the Marine Mammal Protection Act 
     of 1972 (16 U.S.C. 1361 et seq.), or the Endangered Species 
     Act (16 U.S.C. 1531 et seq.), of information collected by 
     voluntary fishery data collectors, including sea samplers, 
     while aboard any vessel for conservation and management 
     purposes if the presence of such a fishery data collector 
     aboard is not required by any of such Acts or regulations 
     thereunder.
       ``(2) The Secretary may not require the submission of a 
     Federal or State income tax return or statement as a 
     prerequisite for issuance of a Federal fishing permit until 
     such time as the Secretary has promulgated regulations to 
     ensure the confidentiality of information contained in such 
     return or statement, to limit the information submitted to 
     that necessary to achieve a demonstrated conservation and 
     management purpose, and to provide appropriate penalties for 
     violation of such regulations.''.

     SEC. 204. OBSERVERS.

       Title IV of the Act (16 U.S.C. 1882) is amended by adding 
     the following new section 403:
     [[Page S246]] ``SEC. 403. OBSERVERS.

       ``(a) Guidelines for Carrying Observers.--Within one year 
     of the date of enactment of the Sustainable Fisheries Act, 
     the Secretary shall promulgate regulations, after notice and 
     public comment, for fishing vessels that are required to 
     carry observers. The regulations shall include guidelines for 
     determining--
       ``(1) when a vessel is not required to carry an observer on 
     board because the facilities of such vessel for the 
     quartering of an observer, or for carrying out observer 
     functions, are so inadequate or unsafe that the health or 
     safety of the observer or the safe operation of the vessel 
     would be jeopardized; and
       ``(2) actions which vessel owners or operators may 
     reasonably be asked to take to render such facilities 
     adequate and safe.
       ``(b) Training.--The Secretary, in cooperation with State 
     programs and the National Sea Grant College Program, shall--
       ``(1) establish programs to ensure that each observer 
     receives adequate training in collecting and analyzing data 
     necessary for the conservation and management purposes of the 
     fishery to which such observer is assigned; and
       ``(2) require that an observer demonstrate competence in 
     fisheries science and statistical analysis at a level 
     sufficient to enable such person to fulfill the 
     responsibilities of the position.
       ``(c) Wages as Maritime Liens.--Claims for observers' wages 
     shall be considered maritime liens against the vessel and be 
     accorded the same priority as seamen's liens under admiralty 
     and general maritime law.''.

     SEC. 205. FISHERIES RESEARCH.

       Section 404 is amended to read as follows:

     ``SEC. 404. FISHERIES RESEARCH.

       ``(a) In General.--The Secretary shall initiate and 
     maintain, in cooperation with the Councils, a comprehensive 
     program of fishery research to carry out and further the 
     purposes, policy, and provisions of this Act. Such program 
     shall be designed to acquire knowledge and information, 
     including statistics, on fishery conservation and management 
     and on the economics of the fisheries.
       ``(b) Strategic Plan.--Within one year after the date of 
     enactment of the Sustainable Fisheries Act, and at least 
     every 3 years thereafter, the Secretary shall develop and 
     publish in the Federal Register a strategic plan for 
     fisheries research for the five years immediately following 
     such publication. The plan shall--
       ``(1) identify and describe a comprehensive program with a 
     limited number of priority objectives for research in each of 
     the areas specified in subsection (c);
       ``(2) indicate the goals and timetables for the program 
     described in paragraph (1); and
       ``(3) provide a role for commercial fishermen in such 
     research, including involvement in field testing.
       ``(c) Areas of Research.--The areas of research referred to 
     in subsection (a) are as follows:
       ``(1) Research to support fishery conservation and 
     management, including but not limited to, research on the 
     economics of fisheries and biological research concerning the 
     abundance and life history parameters of stocks of fish, the 
     interdependence of fisheries or stocks of fish, the 
     identification of essential fish habitat, the impact of 
     pollution on fish populations, the impact of wetland and 
     estuarine degradation, and other matters bearing upon the 
     abundance and availability of fish.
       ``(2) Conservation engineering research, including the 
     study of fish behavior and the development and testing of new 
     gear technology and fishing techniques to minimize bycatch 
     and any adverse effects on essential fish habitat and promote 
     efficient harvest of target species.
       ``(3) Information management research, including the 
     development of a fishery information base and an information 
     management system that will permit the full use of data in 
     the support of effective fishery conservation and management.
       ``(d) Public Notice.--In developing the plan required under 
     subsection (a), the Secretary shall consult with relevant 
     Federal, State, and international agencies, scientific and 
     technical experts, and other interested persons, public and 
     private, and shall publish a proposed plan in the Federal 
     Register for the purpose of receiving public comment on the 
     plan. The Secretary shall ensure that affected commercial 
     fishermen are actively involved in the development of the 
     portion of the plan pertaining to conservation engineering 
     research. Upon final publication in the Federal Register, the 
     plan shall be submitted by the Secretary to the Committee on 
     Commerce, Science, and Transportation of the Senate and the 
     Committee on Resources of the House of Representatives.''.

     SEC. 206. INCIDENTAL HARVEST RESEARCH.

       Section 405 is amended to read as follows:

     ``SEC. 405. INCIDENTAL HARVEST RESEARCH.

       ``(a) Collection of Data.--Within 9 months after the date 
     of enactment of the Sustainable Fisheries Act, the Secretary 
     shall, after consultation with the Gulf of Mexico Fishery 
     Management Council and South Atlantic Fishery Management 
     Council, conclude the collection of data in the program to 
     assess the impact on fishery resources of incidental harvest 
     by the shrimp trawl fishery within the authority of such 
     Councils. Within the same time period, the Secretary shall 
     make available to the public aggregated summaries of data 
     collected prior to June 30, 1994 under such program.
       ``(b) Identification of Stock.--The program concluded 
     pursuant to subsection (a) shall provide for the 
     identification of stocks of fish which are subject to 
     significant incidental harvest in the course of normal shrimp 
     trawl fishing activity.
       ``(c) Collection and Assessment of Specific Stock Data.--
     For stocks of fish identified pursuant to subsection (b), 
     with priority given to stocks which (based upon the best 
     available scientific information) are considered to be 
     overfished, the Secretary shall conduct--
       ``(1) a program to collect and evaluate data on the nature 
     and extent (including the spatial and temporal distribution) 
     of incidental mortality of such stocks as a direct result of 
     shrimp trawl fishing activities;
       ``(2) an assessment of the status and condition of such 
     stocks, including collection of information which would allow 
     the estimation of life history parameters with sufficient 
     accuracy and precision to support sound scientific evaluation 
     of the effects of various management alternatives on the 
     status of such stocks; and
       ``(3) a program of data collection and evaluation for such 
     stocks on the magnitude and distribution of fishing mortality 
     and fishing effort by sources of fishing mortality other than 
     shrimp trawl fishing activity.
       ``(d) Incidental Mortality Reduction Program.--The 
     Secretary shall, in cooperation with affected interests, 
     commence a program to design and evaluate the efficacy of 
     technological devices and other changes in fishing technology 
     for the reduction of incidental mortality of nontarget 
     fishery resources in the course of shrimp trawl fishing 
     activity which are designed to be inexpensive to operate and 
     which cause insignificant loss of shrimp. Such program shall 
     take into account local conditions and include evaluation of 
     any reduction in incidental mortality, as well as any 
     reduction or increase in the retention of shrimp in the 
     course of normal fishing activity.
       ``(e) Report to the Congress.--The Secretary shall, within 
     one year of completing the programs required by this 
     subsection, submit a detailed report on the results of such 
     programs to the Committee on Commerce, Science, and 
     Transportation of the Senate and the Committee on Resources 
     of the House of Representatives.
       ``(f) Implementation Criteria.--Any measure implemented 
     under this Act to reduce the incidental mortality of 
     nontarget fishery resources in the course of shrimp trawl 
     fishing shall, to the extent practicable,--
       ``(1) apply to such fishing throughout the range of the 
     nontarget fishery resource concerned; and
       ``(2) be implemented first in those areas and at those 
     times where the greatest reduction of such incidental 
     mortality can be achieved.''.

     SEC. 207. REPEAL.

       Section 406 (16 U.S.C. 1882) is repealed.

     SEC. 208. CLERICAL AMENDMENTS.

       The table of contents is amended by striking the matter 
     relating to title IV and inserting the following:

``Sec. 315. Transition to sustainable fisheries.
``Sec. 316. Fisheries disaster relief.
``TITLE IV--FISHERY MONITORING AND RESEARCH
``Sec. 401. Registration.
``Sec. 402. Data collection.
``Sec. 403. Observers.
``Sec. 404. Fisheries research.
``Sec. 405. Incidental harvest research.''.
             TITLE III--FISHERIES STOCK RECOVERY FINANCING

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``Fisheries Stock Recovery 
     Financing Act''.

     SEC. 302. FISHERIES STOCK RECOVERY REFINANCING.

       Title XI of the Merchant Marine Act, 1936 (46 U.S.C. 1271 
     et seq.), is amended by adding at the end the following new 
     section:
       ``Sec. 1111. (a) Pursuant to the authority granted under 
     section 1103(a) of this title, the Secretary shall, under 
     such terms and conditions as the Secretary shall prescribe by 
     regulation, guarantee and make commitments to guarantee the 
     principal of, and interest on, obligations which aid in 
     refinancing, in a manner consistent with the reduced cash 
     flows available to obligors because of reduced harvesting 
     allocations during implementation of a fishery recovery 
     effort, existing obligations relating to fishing vessels or 
     fishery facilities. Guarantees under this section shall be 
     subject to all other provisions of this title not 
     inconsistent with the provisions of this section. The 
     provisions of this section shall, notwithstanding any other 
     provisions of this title, apply to guarantees under this 
     section.
       ``(b) Obligations eligible to be refinanced under this 
     section shall include all obligations which financed or 
     refinanced any expenditures associated with the ownership or 
     operation of fishing vessels or fishery facilities, including 
     but not limited to expenditures for reconstructing, 
     reconditioning, purchasing, equipping, maintaining, 
     repairing, supplying, or any other aspect whatsoever of 
     operating fishing vessels or fishery facilities, excluding 
     only such obligations--
       ``(1) which were not in existence prior to the time the 
     Secretary approved a fishery recovery effort eligible for 
     guarantees under this section and whose purpose, in whole or 
     in part, involved expenditures which resulted in increased 
     vessel harvesting capacity; and
       ``(2) as may be owed by an obligor either to any 
     stockholder, partner, guarantor, or 
     [[Page S247]] other principal of such obligor or to any 
     unrelated party if the purpose of such obligation had been to 
     pay an obligor's preexisting obligation to such stockholder, 
     partner, guarantor, or other principal of such obligor.
       ``(c) The Secretary shall refinance up to 100 percent of 
     the principal of, and interest on, such obligations, but, in 
     no event, shall the Secretary refinance an amount exceeding 
     75 percent of the unencumbered (after deducting the amount to 
     be refinanced by guaranteed obligations under this section) 
     market value, as determined by an independent marine 
     surveyor, of the fishing vessel or fishery facility to which 
     such obligations relate plus 75 percent of the unencumbered 
     (including but not limited to homestead exemptions) market 
     value, as determined by an independent marine surveyor, of 
     all other supplementary collateral. The Secretary shall do so 
     regardless of--
       ``(1) any fishing vessel or fishery facility's actual cost 
     or depreciated actual cost; and
       ``(2) any limitations elsewhere in this title on the amount 
     of obligations to be guaranteed or such amount's relationship 
     to actual cost or depreciated actual cost.
       ``(d) Obligations guaranteed under this section shall have 
     such maturity dates and other provisions as are consistent 
     with the intent and purpose of this section (including but 
     not limited to provisions for obligors to pay only the 
     interest accruing on the principal of such obligations during 
     the period in which fisheries stocks are recovering, with the 
     principal and interest accruing thereon being fully amortized 
     between the date stock recovery is projected to be completed 
     and the maturity date of such obligations).
       ``(e) No provision of section 1104A(d) of this title shall 
     apply to obligations guaranteed under this section.
       ``(f) The Secretary shall neither make commitments to 
     guarantee nor guarantee obligations under this section 
     unless--
       ``(1) the Secretary has first approved the fishery recovery 
     effort, for the fishery in which vessels eligible for the 
     guarantee of obligations under this section are participants; 
     and
       ``(2) the Secretary has considered such factors as--
       ``(A) the projected degree and duration of reduced 
     fisheries allocations;
       ``(B) the projected reduction in fishing vessel and fishery 
     facility cash flows;
       ``(C) the projected severity of the impact on fishing 
     vessels and fishery facilities;
       ``(D) the projected effect of the fishery recovery effort;
       ``(E) the provisions of any related fishery management plan 
     under the Magnuson Fishery Conservation and Management Act 
     (16 U.S.C. 1801 et seq.); and
       ``(F) the need for and advisability of guarantees under 
     this section;
       ``(3) the Secretary finds that the obligation to be 
     guaranteed will, considering the projected effect of the 
     fishery recovery effort involved and all other aspects of the 
     obligor, project, property, collateral, and any other aspects 
     whatsoever of the obligation involved, constitute, in the 
     Secretary's opinion, a reasonable prospect of full repayment; 
     and
       ``(4) the obligors agree to provide such security and meet 
     such other terms and conditions as the Secretary may, 
     pursuant to regulations prescribed under this section, 
     require to protect the interest of the United States and 
     carry out the purpose of this section.
       ``(g) All obligations guaranteed under this section shall 
     be accounted for separately, in a subaccount of the Federal 
     Ship Financing Fund to be known as the Fishery Recovery 
     Refinancing Account, from all other obligations guaranteed 
     under the other provisions of this title and the assets and 
     liabilities of the Federal Ship Financing Fund and the 
     Fishery Recovery Refinancing Account shall be segregated 
     accordingly.
       ``(h) For the purposes of this section, the term `fishery 
     recovery effort' means a fishery management plan, amendment, 
     or regulations required under section 305(b) of the Magnuson 
     Fishery Conservation and Management Act (16 U.S.C. 1854(b)) 
     to rebuild a fishery which the Secretary has determined to be 
     a commercial fishery failure under section 316 of such 
     Act.''.

     SEC. 303. FEDERAL FINANCING BANK RELATING TO FISHING VESSELS 
                   AND FISHERY FACILITIES.

       Section 1104A(b)(2) of the Merchant Marine Act, 1936 (46 
     U.S.C. 1274(b)(2)), is amended by striking ``Provided, 
     further, That in the case of a fishing vessel or fishery 
     facility, the obligation shall be in an aggregate principal 
     amount equal to 80 percent of the actual cost or depreciated 
     actual cost of the fishing vessel or fishery facility, except 
     that no debt may be placed under this proviso through the 
     Federal Financing Bank:'' and inserting the following: 
     ``Provided, further, That in the case of a fishing vessel or 
     fishery facility, the obligation shall be in an aggregate 
     principal amount not to exceed 80 percent of the actual cost 
     or depreciated actual cost of the fishing vessel or fishery 
     facility, and obligations related to fishing vessels and 
     fishery facilities under this title shall be placed through 
     the Federal Financing Bank unless placement through the 
     Federal Financing Bank is not reasonably available or 
     placement elsewhere is available at a lower annual effective 
     yield than placement through the Federal Financing Bank:''.

     SEC. 304. FEES FOR GUARANTEEING OBLIGATIONS.

       Section 1104A(e) of the Merchant Marine Act, 1936 (46 
     U.S.C. 1274(e)), is amended to read as follows:
       ``(e)(1) The Secretary is authorized to fix a fee for the 
     guarantee of obligations under this title. Obligors shall pay 
     all such fees to the Secretary when moneys are first advanced 
     under guaranteed obligations and at least 60 days prior to 
     each anniversary date thereafter. All such fees shall be 
     computed and shall be payable to the Secretary under such 
     regulations as the Secretary may prescribe.
       ``(2) For fishing vessels and fishery facilities, such fee 
     shall--
       ``(A) if the obligation will not be purchased by the 
     Federal Financing Bank, be in an amount equal to 1 percent 
     per year of the average principal amount of the obligation 
     outstanding (unless such obligation is issued under section 
     1111 of this title, in which case such fee shall be 1 and 
     one-half percent per year of such average principal amount; 
     and
       ``(B) if the obligation will be purchased by the Federal 
     Financing Bank, be in an amount equal to 2 percent per year 
     of the average principal amount of the obligation outstanding 
     (unless such obligation is issued under section 1111 of this 
     title, in which case such fee shall be 2 and one-half percent 
     per year of such average principal amount), less any fee the 
     Federal Financing Bank customarily charges for its services 
     with respect to federally guaranteed obligations purchased by 
     it and less the amount, if any, by which the interest rate on 
     such obligation (which shall be fixed at the time the Federal 
     Financing Bank commits to purchase such obligation) exceeds 
     the current new issue rate on outstanding marketable 
     obligations of the United States of comparable maturity.
       ``(3) For everything other than fishing vessels and fishery 
     facilities, such fee shall--
       ``(A) if the security for the guarantee of an obligation 
     under this title relates to a delivered vessel, not be less 
     than one-half of 1 percent per year nor more than 1 percent 
     per year of the average principal amount of such obligation 
     outstanding, excluding the average amount (except interest) 
     on deposit in an escrow fund created under section 1108 of 
     this title; and
       ``(B) if the security for the guarantee of an obligation 
     under this title relates to a vessel to be constructed, 
     reconstructed, or reconditioned, not be less than one-quarter 
     of 1 percent per year nor more than one-half of 1 percent per 
     year of the average principal amount of such obligation 
     outstanding, excluding the average amount (except interest) 
     on deposit in an escrow fund created under section 1108 of 
     this title. For the purposes of this subsection, if the 
     security for the guarantee of an obligation under this title 
     relates both to a delivered vessel or vessels and to a vessel 
     or vessels to be constructed, reconstructed, or 
     reconditioned, the principal amount of such obligation shall 
     be prorated in accordance with regulations prescribed by the 
     Secretary. The regulations to be prescribed by the Secretary 
     under this subsection shall provide a formula for determining 
     the creditworthiness of obligors under which the most 
     creditworthy obligors pay a fee computed on the lowest 
     allowable percentage and the least creditworthy obligors pay 
     a fee which may be computed on the highest allowable 
     percentage (the range of creditworthiness to be based on 
     obligors which have actually issued guaranteed 
     obligations).''.

     SEC. 305. SALE OF ACQUIRED COLLATERAL.

       Section 1104A(a)(3) of the Merchant Marine Act, 1936 (46 
     U.S.C. 1274(a)(3)), is amended by inserting after 
     ``financing'' the following: ``(without requiring subsidy 
     cost ceiling or other authorization under the Federal Credit 
     Reform Act of 1990)''.
  Mr. KERRY. Mr. President, on March 1, 1977, the Fishery Conservation 
and Management Act was signed into law in response to an urgent threat 
to the valuable living marine resources of our coastal waters. At that 
time, the threat to our domestic fisheries came in the form of an 
efficient and aggressive state-of-the-art foreign fishing fleet that 
was operating within sight of our shores and displacing our domestic 
fishermen and processors. In response, Congress, led by Senator Warren 
Magnuson, passed the Fishery Conservation and Management Act 
establishing a 200-mile fishery conservation zone and asserting United 
States management authority over fish within the conservation zone, as 
well as over anadromous species such as salmon throughout their 
migratory range. In honor of Senator Magnuson's leadership, in 1980, 
the act was officially retitled the Magnuson Fishery Conservation and 
Management Act.
  The Magnuson Act succeeded--it limited the operation of foreign 
fishing vessels and processors and encouraged the development of the 
U.S. domestic fishing fleet and processing industry. In 1993, U.S. 
commercial fishermen landed over 10 billion pounds of fish, producing 
$3.4 billion in dockside revenues. By weight of catch, the United 
States is now the world's sixth largest fishing nation. The United 
States is also the top seafood exporter, with exports valued at $3.1 
billion in 1993.
  [[Page S248]] However, we have succeeded too well in some ways, and 
today there is another threat to our coastal fisheries. The threat is 
not from abroad but from ourselves. Since the implementation of the 
Magnuson Act, the number of commercial groundfish vessels in New 
England has increased by 70 percent, and the number of fishermen has 
risen by 130 percent. Although fish and shellfish are renewable 
resources, they are not unlimited. In several U.S. fisheries, a pattern 
has been repeated: Fishermen, lured by the promise of large and 
lucrative harvests, enter a fishery when fish populations are abundant. 
As the fishery develops, larger boats often replace smaller boats, the 
number of boats increases, and new technologies are continually 
introduced to improve each vessel's fishing power and efficiency. In 
several U.S. fisheries, these trends have been bolstered by government 
policies, including tax incentives and Federal loan guarantees, 
designed to stimulate development of the domestic fishing industry. The 
result is that the harvesting capacity in many fisheries has out-paced 
the capacity of the fisheries to renew themselves. U.S. fisheries also 
have suffered from destruction of essential habitat, destructive 
fishing practices, and water pollution.
  The key to the success of the Magnuson Act is the ability of the 
eight regional fisheries management councils established under the act 
to work with the National Marine Fisheries Service to manage the 
fisheries on a regional level while meeting the national standards set 
forth in the act. The councils have made a substantial effort to manage 
the Nation's fisheries--as of September 1, 1993, 33 fishery management 
plans are in effect with several others in development. However, their 
success in managing the nation's fisheries has been mixed. Critics 
charge that since the enactment of the Magnuson Act, the councils have 
sometimes reacted to developments in fisheries rather than anticipating 
problems--even when looming problems are apparent. In addition, the 
complexity of the process has impeded the council response, often 
exacerbating the problem. In many instances, minor management actions 
could have been taken sooner to avoid the need for more dramatic 
measures later. In some regions, including parts of the Northwest, the 
council members are no longer perceived as stewards of the public 
resource, providing fair and balanced representation, but are seen as 
protectors of special economic interests. The Magnuson Act requires 
that council members be knowledgeable or experienced with regard to the 
conservation and management, or the recreational or commercial harvest, 
of the fishery resources within their respective geographic areas of 
responsibility. However, this requirement has created situations in 
which a council member may have personal or financial interests in a 
fishery he or she is responsible for managing.
  In fact, despite the work of the councils, problems continue to exist 
in varying degrees in many regions. These include: continued 
overfishing; lack of coordination between councils and the Federal 
Government; lack of accountability; inconsistency in State and Federal 
management measures; and adoption of unenforceable management measures.
  Perhaps the most visible example of the problems in fisheries 
management is one with which I unfortunately am too familiar--the 
collapse of the traditional New England groundfish stocks of cod, 
haddock, and yellowtail flounder. In 1990, the commercial fishing 
industry in Massachusetts was a $300 million industry. By 1993, 
revenues had dropped to almost $232 million, and their year revenues 
are certain to be much lower.
  In 1993, the decline of these valuable fish stocks necessitated a 
substantial amendment to the fisheries management plan for these stocks 
in an effort to eliminate overfishing by cutting in half fishing 
mortality over the next 5 to 7 years. The initiation of regulations 
necessary to rebuild the fishery has already had significant economic 
impact on the coastal communities throughout New England. However, even 
before those programs could be fully implemented, scientific 
information from the National Marine Fisheries Service indicated that 
the situation was worse than predicted, and as a result the New England 
Fisheries Management Council voted to recommend that the Secretary of 
Commerce take emergency action to address the crisis in New England
 while it develops a plan amendment under normal procedures. In 
December, the Secretary took emergency action to close portions of U.S. 
waters of the Georges Bank and southern New England to commercial 
fishing in an effort to save the traditional groundfish stocks from 
commercial extinction. These emergency measures are the latest blows to 
the New England fishing industry that is already staggering from the 
dire situation which they face. Further fishing restrictions are likely 
to have disastrous economic and social impacts on the historic fishing 
communities of the Northeast. These problems must be addressed and 
reversed for the sake of the fishermen and the fish in New England and 
throughout the Nation.

  Over the last 2 years, the Commerce Committee has conducted a series 
of hearings here in Washington and in fishing communities around the 
U.S. coast. We have reviewed comments from members of the fishing 
industry, the administration, conservation groups and other public 
interest groups. This has been a bipartisan effort. I have worked 
closely with the senior Senator from Alaska. We and our colleagues 
share the desire to ensure plentiful yields of fish for years to come. 
The bill that I am introducing today is an effort to address the 
existing problems of the fisheries management process.
  I recognize that this bill is ambitious in scope. However, the 
fisheries of the United States are at a crossroads and significant 
action is required to remedy our fisheries management problems and 
preserve the way of life of our fishing communities. Fish on the dinner 
table is something that many Americans may have taken for granted in 
the past; but unless we take steps to ensure that these vital resources 
are conserved, they will not be there for future generations. I hope my 
colleagues will join me in committing themselves to passing legislation 
as soon as possible to ensure that the fisheries of the United States 
once again will be bountiful and sustainable. I look forward to working 
with the new chairman of the Commerce Committee, Senator Pressler, and 
his staff and of course, the former chairman and new ranking Democratic 
member, Senator Hollings and his staff, toward this end. I want to 
thank Senator Hollings, Senator Stevens and his staff, and the staff of 
the majority and the minority, for their assistance in preparing this 
bipartisan bill for introduction today.
  I ask unanimous consent that a summary of the bill's principal 
provisions, and the bill itself, appear in the Record following my 
remarks.

     Summary of Major Provisions--Sustainable Fisheries Act of 1995

       The Sustainable Fisheries Act amends the Magnuson Fishery 
     Conservation and Management Act to extend the authorization 
     of appropriations through 1999, strengthen conservation 
     efforts and rebuild depleted fisheries. Major provisions 
     include the following:


                         FISHERIES CONSERVATION

       Preventing overfishing and rebuilding depleted fisheries. 
     The bill would require the Councils to define overfishing in 
     each fishery management plan. It also calls for an annual 
     report by the Secretary of Commerce (Secretary) on the status 
     of fisheries under each Council and identification of 
     fisheries that are overfished or approaching an overfished 
     condition. A Council would have one year to come up with a 
     plan to stop overfishing and rebuild the fishery, and the 
     Secretary would be required to step in if the Council fails 
     to act. While a plan is under development, interim measures 
     to reduce overfishing could be implemented as emergency 
     measures. To deal with the socioeconomic issues associated 
     with rebuilding the fishery, the Secretary would work with 
     the states and local communities to develop a sustainable 
     development strategy.
       Habitat protection. The Secretary would be required to 
     identify essential habitat for all fisheries under 
     management, based on information provided by the Councils. 
     The bill also would expand the existing authority of the 
     Councils and the Secretary to comment and make 
     recommendations to Federal agencies concerning actions that 
     would affect essential fish habitat. In addition, the 
     Secretary and the Councils would develop and publish a list 
     of fisheries and approved gear for each fishery. Ninety days 
     prior to using a new gear type or expanding into a new 
     fishery, a fisherman would be required to provide a Council 
     with notice and the opportunity to take emergency action to 
     restrict such gear or fishery.
       Bycatch and waste reduction. The bill defines categories of 
     bycatch and requires any 
     [[Page S249]] fishery management plan developed by a Council 
     or the Secretary to (1) assess the level of bycatch 
     concurring in each fishery, including the effect of a fishery 
     on other stocks of fish in the ecosystem; and (2) minimize, 
     to the extent practicable, mortality caused by waste and 
     discards of unusable fish. In addition, the bill would 
     encourage plans to provide incentives for fishing vessels 
     within each gear group to reduce bycatch. Finally, provisions 
     are included to establish specific timetables for reducing 
     waste and promoting full utilization in the North Pacific 
     fisheries.


                           MANAGEMENT PROCESS

       Streamlining the approval process for plans and 
     regulations. The bill simplifies and tightens the approval 
     process for fishery management plans and regulations.
       Council procedures and conflicts of interest. The bill 
     proposes a number of changes to increase Council 
     accountability, requiring that (1) a Council member be 
     recused from voting on a Council decision ``which would have 
     a significant and predictable effect'' on any financial 
     interest; (2) each Council keep detailed minutes of each 
     Council meeting, including a complete and accurate 
     description of discussions and conclusions; (3) each Council 
     record all roll call votes; and (4) with advance notice and 
     member concurrence, each Council consider additional agenda 
     items at meetings. The bill also establishes procedures for 
     appointing a treaty tribe representative to the Pacific 
     Council.
       Individual transferable quotas (ITQ). The bill prohibits 
     the Secretary from approving ITQ programs until guidelines 
     are established to deal with ITQ-related issues such as 
     initial allocation, eligibility for participation, 
     consolidation, and access by entry-level fishermen. To cover 
     management costs of an ITQ program, the Secretary would be 
     authorized to establish an annual fee of up to four percent 
     of the value of the fish harvested or processed, and an 
     additional one percent transfer fee. A 5-year fee exemption 
     is provided in the existing programs for the surf clam and 
     ocean quahog fishery and the wreckfish fishery. The bill also 
     clarifies that ITQs do not convey a property right and are 
     subject to termination at any time.
       Scientific basis for management. The bill includes several 
     provisions to improve monitoring and data collection for 
     fisheries management: (1) development (in cooperation with 
     the states and the Councils) of a federal plan for a 
     standardized vessel registration and data management system 
     to ensure the availability of basic fisheries data: (2) 
     establishment of an observer training and education program 
     and regulations for vessels that carry observers, including 
     protection from sexual harassment; and (3) an expanded 
     research program to provide better biological information and 
     to study the effects of fishing on the marine ecosystem.
       Enforcement. The bill would (1) establish voluntary 
     fishermen's networks to promote compliance with fishery 
     regulations; (2) require an annual report analyzing the 
     adequacy and effectiveness of enforcement efforts; (3) 
     encourage a reward of not less than 20 percent of any penalty 
     assessed for information leading to an enforcement action; 
     (4) require that fishery management plans identify needed 
     enforcement.


                  transition to sustainable fisheries

       Fisheries disaster relief. At the discretion of the 
     Secretary or at the request of an affected state or 
     community, the Secretary would (1) determine whether there is 
     a commercial fishery failure; and (2) make relief funds 
     available to the affected State or community, with the 
     Federal cost-share not to exceed 75 percent.
       Vessel or permit buy-out. As part of a sustainable 
     development strategy and to limit effort in an overfished 
     fishery, the Secretary would be authorized to develop and 
     implement a vessel or permit buy-out program requiring that 
     (1) a fishery management plan is in place that limits access 
     to the fishery and prevents replacement of fishing effort 
     that is bought out; (2) vessels or permits acquired under the 
     buy-out program cannot re-enter the fishery or contribute to 
     excess fishing effort in other fisheries; and (3) criteria 
     are established to determine types and numbers of vessels 
     which are eligible for participation. The bill specifies that 
     the Federal share of a buy-out program may not exceed 50 
     percent of the program costs. Working with the Council, the 
     Secretary would be authorized to establish a fee system to 
     collect the non-Federal share of funds for the program. 
     Annual fees could not exceed 5 percent of the value of fish 
     harvested in the fishery and would be deposited into a newly 
     established Ocean Conservation Trust fund.
       Vessel refinancing. The bill would amend Title XI of the 
     Merchant Marine Act of 1936 to provide for a fisheries stock 
     recovery refinancing program under the Fishing Vessel 
     Obligation Guarantee Program. For those fisheries in which a 
     fishery recovery effort is under way, the Secretary would be 
     authorized to refinance vessel mortgages, providing for an 
     extended repayment schedule (including interest-only 
     payments) that reflects reduced vessel income due to stock 
     rebuilding restrictions.
 Mr. MURKOWSKI. Mr. President. I am very pleased to join with my 
friends and colleagues Senator Stevens and Senator Kerry in the 
introduction of S. 39, a bill to reauthorize and revitalize the Fishery 
Conservation and Management Act, also known as the Magnuson Act.
  This bill is similar in almost all respects with the bill we 
introduced in the final days of the last Congress. As promised, that 
bill and this one both mark our intention that Magnuson Act discussions 
in this new Congress should focus on outstanding differences, rather 
than starting from scratch and covering old ground.
  A tremendous amount of work already has been done on this matter by 
fishing industry groups, the environmental community and others in 
Congress, so that this year's hearings will start with a solid, 
carefully laid platform.
  I have a great interest in seeing this bill move expeditiously 
through the legislative process to the President's desk. The Magnuson 
Act is the basis for all marine fisheries regulation in this country, 
and as such it is vital that it be reauthorized. As the regional 
fishery management councils created by this act struggle with new and 
evolving problems, we must take steps to allow the law to evolve.
  My own primary efforts are focused on an issue and I believe is about 
to explode into prominence throughout the world--the need to identify 
and reduce the levels of fishery bycatch and discard in America's 
fisheries. That's why I introduced the first bill to address bycatch 
back in November of last year. Today's bill follows the lead I 
established in October 1993, by requiring regional fishery management 
councils to adopt specific measures for bycatch reduction and 
assessment. This would become a mandatory part of every fishery 
management plan in the country, and would put us on the road to 
stopping the shameful waste that is currently occurring in many 
fisheries.
  Following up on this principle, Senator Stevens has authored a 
separate section of the bill for Alaska only, in which more specific 
targets are set for the North Pacific Fishery Management Council. 
Because the North Pacific Council is farther advanced in addressing 
this issue than many, I think it only appropriate that this 
reauthorization reflect that reality.
  Another amendment adopted from my 1993 bill is a change of only one 
word of one of the national standards established by Magnuson. However, 
that change, from `promote' to `consider,' is very important to 
ensuring a fair deal for Alaska's fishermen and shore-based processors. 
The national standards currently say that conservation and management 
plans should `promote' efficiency. This became a clear problem for 
Alaskan interests during the consideration of regulations to protect 
onshore interests from being preempted by offshore factory-trawlers, 
because it was seen as requiring the most economically efficient 
methods--rather than those that contributed to the overall welfare of 
fishing communities. The change will eliminate that threat, and allow 
all relevant issues to be fully considered.
  Among other provisions, this bill will improve fisheries conservation 
and utilization, on which so many individuals in our coastal 
communities depend. It will for the first time address the problem of 
overfishing by requiring corrective action to be taken when a fishery 
is or is in danger of becoming overfished. It will also strengthen the 
fisheries management process by improving the way that regional fishery 
councils function, improve the way fisheries research is conducted and 
make many other changes of great importance and urgent need.
  There are still many issues that need to be addressed and answers 
that need to be clarified. However, we will have an ample opportunity 
to address these areas and to hear from all those concerned during the 
deliberative process. I am assured that Senator Stevens and Senator 
Kerry wish to renew this effort as soon as possible this year, and I 
look forward to working with them both and with the interested members 
of the fisheries community.
                                 ______

      By Mr. FEINGOLD (for himself and Mr. Kohl):
  S. 40. A bill to direct the Secretary of the Army to transfer to the 
State of Wisconsin lands and improvements associated with the LaFarge 
Dam and Lake portion of the project for flood control and allied 
purposes, Kickapoo River, WI, and for other purposes; to the Committee 
on Environment and Public Works.

[[Page S250]]

                        LAFARGE DAM LEGISLATION

 Mr. FEINGOLD. Mr. President, I am pleased to join with my colleague 
from Wisconsin, Senator Kohl, in again introducing a bill to complete 
some unfinished business the Federal Government began in our State in 
1962, a public works project on the Kickapoo River that left a 
community expecting Federal flood control relief in a state of economic 
devastation. Identical legislation is being introduced today in the 
other Chamber by our colleagues from Wisconsin, Representatives 
Gunderson and Petri.
  Senator Kohl and I brought this measure before the Senate in the 103d 
Congress, and although it was passed by the other Chamber in the 
omnibus Water Resources Development Act [WRDA] we were not able to 
complete action on that measure in the Senate in the closing days of 
the 103d Congress. It is tenacity and enduring spirit of the people in 
this area, and their desire to turn away from the past, that brings us 
again to the floor on their behalf. It is also our responsibility, not 
only as members of the Wisconsin delegation, but also as Senators to 
seek to correct Federal actions when they adversely affect local areas. 
This legislation presents this body with such an opportunity.
  Mr. President, the story of the LaFarge Dam remains the same. More 
than 30 years ago, the U.S. Army Crops of Engineers planned to build a 
dam across the Kickapoo River, near the village of LaFarge, WI, which 
is located in southwest portion of my State. The dam was supposed to 
provide flood control in an often flooded valley. In addition, local 
residents were told of the economic benefits in tourism dollars that 
the planned lake and other improvements would bring to the area.
  Federal legislation authorizing the LaFarge Dam passed in 1962, and 
construction began in 1971. Despite the best of intentions, the project 
was never completed. Construction ended in 1975, leaving the proposed 
dam only 61 present complete, while 80 percent of the land needed to 
build the dam had been acquired by the Federal Government, including 
the private homes and farms of 140 families who were evicted in order 
to begin the project.
  The area, already struggling economically prior to the dam's 
development, was devastated. By 1990, it was estimated that annual 
losses resulting from the cessation of family farm operations and the 
unrealized tourism benefits that had been promised with the dam totaled 
more 300 jobs and $8 million for the local economy per year. In fact, 
the only remaining legacy of the project is a fragmented landscape. It 
is dotted with scattered remains of former farm homes, and a 103-foot 
tall, concrete shell of the dam that stands like an eerie sentinel, 
with the Kickapoo River flowing unimpeded through a 1000 foot gap. The 
most important benefit of the dam, its flood control protection, as 
never realized. The area continues to experience frequent floods today.
  The legislation we are introducing will being this chapter of the 
history of LaFarge to a close, but not by completing construction of 
the dam. Local residents who were once convinced that completion of the 
dam was the only ways out of their plight have now reached consensus 
the project should not continue.
  Instead, Mr. President, for the past 4 years, members of the local 
community, the Army Corps of Engineers, University of Wisconsin--
Extension, Wisconsin Department of Natural Resources, Wisconsin 
Department of Transportation, Wisconsin State Historic Society, the 
Governor's office, State legislators, Wisconsin environmental groups, 
and the members of the congressional delegation who join in introducing 
this legislation, have collaborated together to develop a plan to 
reclaim the dam area and manage it under a combination of State and 
local control.
  This legislation is the embodiment of that consensus. It contains 
several simple components.
  First, it deauthorizes the dam and accompanying 8,569 acres of 
federally-owned land and turns the land over to the State of Wisconsin. 
The Wisconsin State Legislature passed legislation last year to take 
over management of the Kickapoo Valley lands in preparation for Federal 
action. It provides that the deauthorized land will be managed as a 
reserve under the auspices of the newly created Kickapoo Valley 
Governing Board. The board is required, by Wisconsin State law, to 
preserve and enhance the unique environmental, scenic, and cultural 
features of the Kickapoo Valley, to provide facilities for the use and 
enjoyment of visitors to the area and to promote the area as a 
destination
 for vacationing and recreation.

  Strong environmental protection provisions are included in the State 
law including limits on development and an outright ban on any mining 
activities. In addition the board is required to consult with the State 
historical society and Wisconsin Indian tribes in managing the 
historical and cultural content of the lands.
  The Kickapoo Valley is truly a beautiful area of the State, filled 
with unique natural features such as sandstone cliffs, hearty forest 
lands, and scenic valleys. It is home to many rare plants and several 
State threatened and endangered animals, as well as more than 400 
archeological sites.
  It is these very attributes which contributed to the demise of dam 
plans, and which were long regarded to be standing in the way of 
progress. Now, the local community has embraced protection of these 
natural treasures as a means to revitalize the region.
  Second, Mr. President, the legislation that I am introducing 
maintains and slightly modifies authorization for improvement projects 
which were included in the original designs. These improvements include 
renovation of three roads, and construction of an education and 
interpretation complex that includes buildings, parking areas, 
recreational trails, and canoe facilities. The legislation also 
provides for environmental cleanup and site restoration of abandoned 
wells and farm sites in the area.
  These projects provide hope for the area and fulfillment of Federal 
promises made long ago. When the 140 families were forced to leave 
their homes in the 1960's, many of them left the region entirely. As I 
mentioned, many of those who stayed in the area lost income and the 
land they once owned was removed from the local tax base. Local 
businesses which once relied on these customers, suffered, and the 
school system lost property tax funding along with approximately one-
third of its students. Today, the median income is only slightly above 
half of the State average. And the heartfelt bitterness toward what is 
widely considered an irresponsible Federal boondoggle has been tempered 
only recently with plans for Federal deauthorization.
  Mr. President, that is why I am convinced the legislation we offer 
today is the best option. It is based on consensus, allows for 
responsible local and State control, and fulfills the Federal 
Government's responsibility to this area. It is not often that we are 
able to consider truly beneficial proposals that local communities want 
and need.
  As many in this Chamber know, I am concerned about the fiscal 
implications of all legislation that I bring before this body. The Army 
Corps of Engineers estimates that if the LaFarge Dam were to be 
completed today, the total cost would be $102 million of which only 
$18.6 million has already been expended. The legislation we offer 
completes the promised improvements to the area at a cost of $17 
million--a substantial savings of $66.4 million over costs for dam 
completion.
  In closing, Mr. President, I would like to extend my thanks to my 
colleagues who join me in introducing this legislation today. I also 
want to acknowledge the support and hard work of the people of the 
Kickapoo Valley in bringing this legislation to fruition.
  Mr. President, 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. 40

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

     SECTION 1. KICKAPOO RIVER, WISCONSIN.

       (a) Project Modification.--The project for flood control 
     and allied purposes, Kickapoo River, Wisconsin, authorized by 
     section 203 of the Flood Control Act of 1962 (76 Stat. 1190), 
     as modified by section 814 of the Water Resources Development 
     Act of 1986 (100 Stat. 4169), is further modified as provided 
     by this section.
     [[Page S251]]   (b) Transfer of Property.--
       (1) In general.--Subject to the requirements of this 
     subsection, the Secretary shall transfer to the State of 
     Wisconsin, without consideration, all right, title, and 
     interest of the United States in and to the lands described 
     in paragraph (2), including all works, structures, and other 
     improvements on the lands.
       (2) Land description.--The lands to be transferred pursuant 
     to paragraph (1) are the approximately 8,569 acres of land 
     associated with the LaFarge Dam and Lake portion of the 
     project referred to in subsection (a) in Vernon County, 
     Wisconsin, in the following sections:
       (A) Section 31, Township 14 North, Range 1 West of the 4th 
     Principal Meridian.
       (B) Sections 2 through 11, and 16, 17, 20, and 21, Township 
     13 North, Range 2 West of the 4th Principal Meridian.
       (C) Sections 15, 16, 21 through 24, 26, 27, 31, and 33 
     through 36, Township 14 North, Range 2 West of the 4th 
     Principal Meridian.
       (3) Terms and conditions.--The transfer under paragraph (1) 
     shall be made on the condition that the State of Wisconsin 
     enters into a written agreement with the Secretary to hold 
     the United States harmless from all claims arising from or 
     through the operation of the lands and improvements subject 
     to the transfer.
       (4) Deadlines.--Not later than July 1, 1995, the Secretary 
     shall transmit to the State of Wisconsin an offer to make the 
     transfer under this subsection. The offer shall provide for 
     the transfer to be made in the period beginning on November 
     1, 1995, and ending on December 31, 1995.
       (5) Deauthorization.--The LaFarge Dam and Lake portion of 
     the project referred to in subsection (a) is not authorized 
     after the date of the transfer under this subsection.
       (6) Interim management and maintenance.--The Secretary 
     shall continue to manage and maintain the LaFarge Dam and 
     Lake portion of project referred to in subsection (a) until 
     the date of the transfer under this subsection.
       (c) Completion of Project Features.--
       (1) Requirement.--The Secretary shall undertake the 
     completion of the following features of the project referred 
     to in subsection (a):
       (A) The continued relocation of State Highway Route 131 and 
     County Highway Routes P and F substantially in accordance 
     with plans contained in Design Memorandum No. 6, Relocation-
     LaFarge Reservoir, dated June 1970, except that the 
     relocation shall generally follow the road right-of-way 
     through the Kickapoo Valley in existence on the date of 
     enactment of this Act.
       (B) Construction of a visitor and education complex to 
     include buildings, parking areas, recreational trails, and 
     canoe facilities substantially in accordance with plans 
     contained in Design Memorandum No. 3, Preliminary Master Plan 
     for Resource Management, Kickapoo River, Wisconsin, dated May 
     1967, and Design Memorandum No. 7, Master Recreation Plan for 
     Resource Management, LaFarge Lake Kickapoo River, Wisconsin, 
     dated July 1974.
       (C) Environmental cleanup and site restoration of abandoned 
     wells, farm sites, and safety modifications to the water 
     control structures.
       (D) Cultural resource activities to meet the requirements 
     of Federal law.
       (2) Participation by state of wisconsin.--In undertaking 
     the completion of the features identified in paragraph (1), 
     the Secretary shall determine the requirements of the State 
     of Wisconsin on the location and design of each such feature.
       (d) Costs.--The cost of the project referred to in 
     subsection (a) is modified to authorize the Secretary to 
     carry out the project at a total cost of $17,000,000, with a 
     first Federal cost of $17,000,000.

     SEC. 2. SECRETARY DEFINED.

       As used in this Act, the term ``Secretary'' means the 
     Secretary of the Army, acting through the Chief of Engineers.

  Mr. KOHL. Mr. President, we in the Senate spend a great deal of time 
arguing about the appropriate role of the Federal Government. Certainly 
this past election has shown us that the American people are changing 
their opinions about the role that the Federal Government ought to play 
in our lives. That debate will continue long into the future.
  But one thing that we can probably all agree on is that one 
appropriate role of the Federal Government is to rectify its past 
mistakes, whenever possible. I know that my colleagues of all 
ideological stripes can list specific instances in which Federal 
intervention has caused undue pain and suffering to individuals or 
communities. Today I join with my colleague from Wisconsin, Senator 
Feingold in introducing a bill to address one of those mistakes that 
occurred some 30 years ago in the Kickapoo River Valley of Wisconsin. 
And I'm proud to say that the ``fix'' to this problem also saves the 
taxpayers millions of dollars.
  In the mid 1960s, Congress authorized the Corps of Engineers to build 
a flood control dam on the Kickapoo River at LaFarge in Vernon County, 
WI. In order to proceed with the project, the Corp of Engineers 
condemned 140 farms covering an area of about 8,500 acres. To LaFarge, 
a community of only 840 people, the loss of these farms dealt a 
significant blow to the local economy.
  With the loss of economic activity, the community eagerly awaited the 
completion of the dam, and the creation of a lake that promised to 
provide some economic benefits in the form of recreational and tourism 
activities. But because of budgetary and environmental concerns, the 
project never happened. And the people of LaFarge were left holding the 
bag.
  But I am proud to say that the reintroduction of this bill today 
represents a milestone in the cooperative effort of the citizens of the 
Kickapoo River Valley, the state of Wisconsin, and local environmental 
leaders to turn this bad situation into an outstanding success for the 
community, the State, and the Federal taxpayers.
  The LaFarge Dam legislation would modify the original LaFarge Dam 
authorization, returning the federally condemned property to the state 
of Wisconsin. Anticipating this action, the State Legislature and 
Governor Thompson acted last year to authorize the use of this 8,500 
property as a state recreational and environmental management area.
  The highway repairs envisioned by the original dam authorization 
would remain. Because the original authorization required an area to be 
flooded, the highway was targeted for relocation. The project has been 
in limbo all these years, the relocation never took place, nor have any 
improvements or needed maintenance been done on the highway. Now, over 
30 years later, the road has fallen into extreme disrepair, and this 
bill would authorize the necessary road improvements.
  The bill also reauthorizes the construction of a recreational 
facility to help interpret the surrounding environment for the 
visitors.
  While the original dam and flood control project, in today's dollars, 
would have cost the Federal Government $102 million, the modified 
project as authorized by the bill introduced today would only cost $17 
million.
  Late last year, both the House and Senate attempted to pass a Water 
Resources bill. A provision addressing the LaFarge dam project was 
included in the bill passed by the House, as well as the bill proposed 
for consideration in the Senate. Unfortunately, time grew short, and 
the bill was bogged down in the Senate Environment and Public Works 
Committee.
  Mr. President, it is my hope that the House and Senate will be able 
to work together early in the 104th Congress to pass a Water Resources 
bill, and that this legislation will be included in that bill.
                                 ______

      By Mr. BAUCUS (for himself and Mr. Burns):
  S. 41. A bill for the relief of Wade Bomar, and for other purposes; 
to the Committee on the Judiciary.


                         WADE BOMAR RELIEF ACT

 Mr. BAUCUS. Mr. President, today, along with Senator Burns, I am 
introducing a bill for the private relief of Wade Bomar. This bill 
would provide Mr. Bomar with relief in the amount he would qualify for 
under the Public Safety Officers' Benefit Act.
  Almost 5\1/2\ years ago, Wade volunteered to help the Bureau of 
Indian Affairs extinguish the Pryor Gap Fire, which was threatening the 
Crow Indian Reservation. While fighting the fire, a burning 50 foot 
pine crashed down on Wade. The accident left him paralyzed and unable 
to work again.
  As the fire raged in the Pryor Gap, the Senate was debating the 
Public Safety Officers' Benefit Act [PSOBA]. The bill passed and went 
into effect a few months later. Had Wade been injured a little while 
later he would have qualified for a payment of around $100,000 under 
this Act.
  Wade, the father of three young children, has dealt with his injury 
courageously. But beyond the physical and emotional pain, the accident 
left him and his family without medical insurance provided by his 
former job as a laborer to help pay for the huge medical bills. Because 
of these medical bills, he can't afford health or dental insurance for 
his children.
  Wade is a strong and courageous fighter, and I know he can make it on 
his own. But unable to work, the injury has left him with a hospital 
debt that 
[[Page S252]] he simply will not be able to pay. With the money 
provided by this bill, Wade will be able to bring himself out of debt 
once and for all. He will be able to give his family some security.
  This very bill passed the Senate unanimously last October. 
Unfortunately, time was short, and the House of Representatives failed 
to act. My hope is that Congress will act soon to give Wade the relief 
he has earned.
  I extend my appreciation to my colleagues in the Senate who supported 
this effort in the 103d Congress. And I ask for their support again to 
do what is right for a good man who was injured while helping others.
  I ask unanimous consent that the full text of this legislation be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 41

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

     SECTION 1. RELIEF OF WADE BOMAR.

       The Secretary of the Treasury shall pay, out of any money 
     in the Treasury not otherwise appropriated, $100,000 to Mr. 
     Wade Bomar in full settlement of a claim for injuries 
     sustained by Mr. Bomar in the line of duty on August 6, 1989, 
     while fighting the Pryor Gap fire, permanently depriving him 
     of the use of his limbs.
                                 ______

      By Mr. FEINGOLD:
  S. 42. A bill to terminate the Uniformed Services University of the 
Health Sciences; to the Committee on Armed Services.


             Terminating the University of Health Sciences

 Mr. FEINGOLD. Mr. President, I am today reintroducing legislation 
terminating the Uniformed Services University of the Health Sciences 
[USUHS]. This is a measure I introduced in the 103d Congress and is 
part of my 82-point plan to reduce the Federal deficit which I proposed 
when I ran for the U.S. Senate in 1992.
  USUHS is a medical school run by the Department of Defense [DOD]. 
Along with the Armed Forces Health Professionals Scholarship Program 
[AFHPSP] and other sources, including volunteers, it provides 
physicians for the military.
  Created in 1972, USUHS was intended to supply the bulk of the 
military's physician requirements. Today, USUHS only accounts for a 
fraction of the Department's needs--less than 9 percent in 1991 
according to the Congressional Budget Office [CBO].
  The other body has voted to terminate this program on several 
occasions, and last year, the Vice President's national performance 
review joined others, ranging from the Grace Commission to the CBO, in 
raising the question of whether this medical school, which graduated 
its first class in 1980, should be closed in light of the high cost of 
providing military physicians under this program in contrast to other, 
less costly sources.
  Last session, in assessing the 5-year budget impact of a plan to 
phase-down the school, the Office of Management and Budget [OMB] 
estimated $286.5 million in savings, including offsetting increases in 
the AFHPSP--a less costly mechanism for obtaining military physicians. 
After USUHS is fully closed, the annual savings would be in excess of 
$80 million.
  Mr. President, according to the Pentagon, USUHS is the single most 
expensive source of military physicians. It costs the Government more 
than four times as much to acquire a doctor from USUHS as it does to 
acquire one through the scholarship program.
  Even taking into account the longer service obligation of USUHS 
graduates, the CBO reports that accession costs are still three times 
those of AFHPSP physicians.
  As a practical matter, though, the military does not rely primarily 
on USUHS for its doctors. USUHS provides only about 1 of every 10 of 
the physicians for our military, while nearly three-fourths come from 
the scholarship program.
  Nor, evidently, has relying primarily on these other sources 
compromised the ability of military physicians to meet the needs of the 
Pentagon. According to OMB, of the approximately 2,000 physicians 
serving in Desert Storm, only 103, about 5 percent, were USUHS trained.
  Mr. President, though I am persuaded that there is sufficient reason 
to begin phasing out USUHS, there are a variety of questions that have 
arisen about the school that should be explored. Last session I 
authored an amendment to the fiscal year 1995 Defense authorization 
bill directing the General Accounting Office [GAO] to examine some of 
those issues. That amendment resulted from negotiations between myself 
and other Senators concerned with the future of USUHS, the senior 
Senator from Hawaii [Mr. Inouye] and the senior Senator from Maryland 
[Mr. Sarbanes], and was aimed at having GAO examine some critical 
issues relating to USUHS.
  Among those matters are whether USUHS is fulfilling its statutory 
mandate. A 1990 report of the DOD's inspector general noted that 
although there have been three studies on the cost effectiveness of 
USUHS, there had been no evaluation of how well USUHS meets DOD 
objectives, nor had there been an evaluation of the quality of the 
medical education.
  Mr. President, this lack of evaluation is particularly troubling as 
the inspector general's report noted that questions have been raised as 
to whether the style of education provided at USUHS--``. . . may be in 
danger of inhibiting the students from developing those critical 
abilities considered essential for innovation and/or ready adaptation 
to expected changes in biomedical technology anticipated during the 
military/civilian careers of the students.''
  Mr. President, another area of concern is how USUHS is meeting the 
needs of today's military structure. The proponents of USUHS frequently 
cite the higher retention rates of USUHS graduates over physicians 
obtained from other sources as a justification for continuation of this 
program. And there may be evidence that a greater percentage of USUHS 
trained physicians may remain in the military longer than those from 
other sources.
  But there does not appear to be a good understanding of what factors 
might contribute to longer retention rates. The body of students 
entering USUHS, for example, is disproportionately made up of members 
of the military, an aspect of USUHS grads that may have a large impact 
on their retention rates, and a feature that could be built into the 
military's alternative physician sources if needed.
  Nor is there any systematic analysis of how retention rates compare 
to the needs of the services for military physicians during a period of 
downsizing. This issue may be of particular relevance given the 
downsizing of our force levels.
  Testimony by the Department of Defense before the Subcommittee on 
Force Requirements and Personnel suggested that, based upon a 1989 
study, it needed to maintain a 10 percent of retention rate of 
physicians beyond 12 years, and that alternative sources like the 
AFHPSP may already be meeting the retention needs of the services.
  That prompted the chairman of the Armed Service Committee, the senior 
Senator from Georgia [Mr. Nunn], to question, during hearings held in 
the 103d Congress, whether these figures meant that we are retaining a 
more senior force than we need, a crucial consideration in determining 
the role of USUHS. This is a question GAO is addressing in its review.
  Mr. President, another question that can be raised is what other 
options are available to provide the unique contribution of USUHS. 
Suggestions have been made that civilian medical schools could provide 
the basic medical education with USUHS taking over a greater role in 
graduate and specialized military medical education.
  Since 90 percent of the military physicians come from sources other 
than USUHS, it is fair to ask whether all military physicians should 
receive some specialized training along the lines offered at this 
facility, rather than limiting it to a tiny percentage of military 
physicians. Perhaps the mission of USUHS should be refocused in this 
direction.
  Mr. President, these are all important matters that certainly merit 
examination, and I look forward to reviewing the work that the GAO will 
be doing in its study.
  I expect GAO to have much of its work done in time for consideration 
of the future of USUHS, and the legislation I am introducing today, 
during the 
[[Page S253]] 1995 deliberations on the Department of Defense 
authorization and appropriations bills.
  Mr. President, in conclusion, let me say that I fully recognize that 
USUHS has some dedicated supporters in the U.S. Senate, and I realize 
that there are legitimate arguments that those supporters have made in 
defense of this institution. The problem, however, is that the Federal 
Government can no longer afford to continue every program that provides 
some useful function.
  In the face of our staggering national debt and annual deficits, we 
must prioritize and eliminate programs that can no longer be sustained 
with limited Federal dollars, or where a more cost-effective means of 
fulfilling those functions can be substituted. The future of USUHS 
continues to be debated precisely because in these times of budget 
restraint it does not appear to pass the higher threshold tests which 
must be applied to all Federal spending programs.
  Mr. President, I ask unanimous consent that the text of the 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 42

       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 ``Uniformed Services 
     University of the Health Sciences Termination and Deficit 
     Reduction Act of 1995''.

     SEC. 2. TERMINATION OF THE UNIFORMED SERVICES UNIVERSITY OF 
                   THE HEALTH SCIENCES.

       (1) Termination.--(1) The Uniformed Services University of 
     the Health Sciences is terminated.
       (2)(A) Chapter 104 of title 10, United States Code, is 
     repealed.
       (B) The table of chapters at the beginning of subtitle A of 
     such title, and at the beginning of part III of such 
     subtitle, are each amended by striking out the item relating 
     to chapter 104.
       (b) Effective Date.--The termination referred to in 
     subsection (a), and the amendments made by such subsection, 
     shall take effect on the date of the graduation from the 
     Uniformed Services University of the Health Sciences of the 
     last class of students that enrolled in such university on or 
     before the date of the enactment of this Act.
                                 ______

      By Mr. FEINGOLD:
  S. 43. A bill to phase out Federal funding of the Tennessee Valley 
Authority; to the Committee on Environment and Public Works.


                 TENNESSEE VALLEY AUTHORITY LEGISLATION

 Mr. FEINGOLD. Mr. President, I am pleased to introduce S. 43, 
legislation that phases out funding for the Tennessee Valley Authority, 
and reduces the deficit by about $600 million over 5 years.
  The Tennessee Valley Authority [TVA], a federally owned and chartered 
corporation created in 1933, is one of the largest electric utilities 
in the country, supplying power to an 80,000 square mile, 125 county, 7 
State region.
  In addition to providing power, however, the TVA operates several 
other programs. Federal appropriations to the TVA support programs 
concerning nonpoint-source water pollution; economic development; a 
stewardship program that maintains a system of dams, reservoirs, and 
manages 300,000 acres of public land; recreational programs including 
the Land Between the Lakes region in the western part of Tennessee and 
Kentucky; a fertilizer research center, recently renamed the 
Environmental Research Center; and other programs.
  Mr. President, this legislation phases out Federal funding for TVA 
over 2 years. Funding for the fertilizer research center is eliminated 
beginning in fiscal year 1996 and funding for other activities is 
phased out by fiscal year 1997.
  The legislation directs the Office of Management and Budget to submit 
a plan to Congress by no later than January 1, 1996, outlining which 
programs the TVA will continue and how they will be funded, and which 
programs will be turned over to other entities.
  Mr. President, Federal law requires the TVA's electric power program 
to be financially self-supporting, and the Congressional Budget Office 
[CBO] has noted, in its March 1994, report ``Reducing the Deficit: 
Spending and Revenue Options,'' that ``because many of TVA's 
stewardship activities are necessary to maintain its power system, 
their costs would more appropriately be borne by users of the power,'' 
rather than the Federal taxpayer.
  In its 1992 study of energy subsidies, the Department of Energy 
reported that the TVA power operation benefits from a significant 
subsidy already, the ability to borrow capital at much lower interest 
rates than paid by investor-owned utilities, an advantage the 
Department said was worth $231 million in fiscal year 1990. Federal 
taxpayers should not be expected to pay the additional subsidy of 
supporting power-related stewardship activities.
  The CBO report also stated that other activities could be 
discontinued, or their costs could be recovered from State and local 
governments and others who more directly benefit from those activities, 
or through TVA's power rates.
  Mr. President, this makes sense, especially at a time of on-going 
Federal budget deficits when we have asked farmers, veterans, retirees, 
and small businesses to sacrifice in order to address those deficits.
  Similarly, the National Environmental Research Center, which costs 
Federal taxpayers $35 million annually, could be more appropriately 
funded by the private sector beneficiaries of its work, or by competing 
for research grants as other research institutions already do.
  In assessing the savings generated by their similar proposal, the CBO 
estimated that eliminating many of the activities supported by 
appropriations and increasing the funding from non-Federal sources 
could save $610 million over 5 years.
  Mr. President, in the middle of the Great Depression there may have 
been good reasons to create a Federal agency charged with broad powers 
over a diverse set of missions for a specific region. Today, with a 
national and regional economy in much better shape than it was 60 years 
ago, and with other Federal, State, and local agencies overseeing these 
same missions, the special reasons that may have justified creation of 
the TVA no longer exist.
  Indeed, some have criticized the structure of TVA, not
   because it duplicates many services that could be provided by other 
public and private entities, but because it is not accountable to local 
residents.

  Mr. President, for some, at least, the price of Federal funding has 
been the lack of local control.
  Beyond the savings that this measure can produce for deficit 
reduction, it can also restore local control for some of the activities 
now overseen by a Board of Directors that is appointed by the 
President.
  Let me add that this is certainly not a criticism of the dedicated 
individuals who have served in the TVA now or in past years. But a 
structure that relies on a distanced appointment process can not be as 
truly responsive to the needs and preferences of local residents as one 
which is more directly beholden to those residents.
  At the same time, given the singular nature of TVA and its special 
history, many residents and State and local governments may feel it is 
appropriate for TVA to continue some activities. And to the extent that 
Federal taxpayers are not asked to subsidize them, this legislation 
would not restrict the ability of TVA to continue operating those 
programs, consistent with the plan that the Office of Management and 
Budget will submit to Congress.
  Mr. President, the Tennessee Valley Authority was born in the New 
Deal and at that time it may well have been the appropriate model to 
address the many problems facing the region it serves.
  But we need to reassess that model, redistribute the burden of some 
activities to those who benefit from them, allocate other activities to 
private or public entities where appropriate, and help reduce the 
Federal deficit.
  Mr. President, I ask unanimous consent that the text of this measure 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 43

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
     [[Page S254]] SECTION 1. TENNESSEE VALLEY AUTHORITY.

       (a) Discontinuance of Appropriations.--Section 27 of the 
     Tennessee Valley Authority Act of 1933 (16 U.S.C. 831z) is 
     amended--
       (1) by inserting ``for fiscal years ending with (and 
     including) fiscal year 1996'' before the period; and
       (2) by adding at the end the following: ``No appropriations 
     may be made available for the National Fertilizer and 
     Environmental Research Center for fiscal year 1996.''.
       (b) Report.--Not later than January 1, 1996, the Director 
     of the Office of Management and Budget shall submit a plan to 
     Congress that--
       (1) describes the programs that should continue to be 
     operated by the Tennessee Valley Authority after fiscal year 
     1996 and describes how those programs should be funded;
       (2) describes the programs that the Tennessee Valley 
     Authority should discontinue or should transfer to other 
     entities after fiscal year 1996; and
       (3) recommends any legislation that may be necessary or 
     appropriate to carry out the purposes of this Act.
                                 ______

      By Mr. REID (for himself and Mr. Bryan):
  S. 44. A bill to amend title 4 of the United States Code of limit 
State taxation of certain pension income; to the Committee on Finance.


                         SOURCE TAX LEGISLATION

  Mr. REID. Mr. President, today I rise to reintroduce legislation that 
passed the House and Senate in the 103d Congress and passed this body 
twice in the 102d. It is legislation in which all Members of Congress 
have a stake.
  The bill which I introduce will eliminate a State's ability to tax a 
nonresidents pension income. As the situation exists today, retirees in 
every State may be forced to pay taxes to States where they do not 
reside. The retirees pay taxes on pensions drawn in the States where 
they spent their working years, despite the fact that they are no 
longer present to participate in medical assistance programs or senior 
centers, nor do they use the roads or public parks that these taxes are 
helping to fund. Most important of all, they don't even get to vote in 
their former State of residence--yet they still pay taxes to these 
States. It has been said many times, and I would agree, this is a clear 
case of taxation without representation.
  I would like to relate to my colleagues an example illustrating the 
inequity of the practice of source taxing pension incomes on 
nonresidents. The story I tell is what happened to a Nevada citizen, 
but it could be happening in any State.
  An older woman who lives in Fallon, NV has an annual income of 
between $12,000 and $13,000 a year. She is not rich, but she is 
surviving. One day the mail carrier delivers a notice from California 
that says she owes taxes on her pension income from California, plus 
the penalties and interest on those taxes. She cannot believe it but, 
being an honest person, she tells California that she has never paid 
these taxes in the past and asks why she is being assessed at this 
time. Mr. President, to make a long story short, the California 
Franchise Tax Board went back to 1978 and calculated her tax debt to be 
about $6,000. Mr. President, this woman's income is only $12,000 a 
year.
  Most citizens pay their taxes honestly and without too much 
complaining, but when they are taxed by a State where they do not 
reside, they begin to get upset with the system. I would like to pass 
on another case that illustrates the problem.
  In 1971 a Washington State resident went to work at a Federal 
penitentiary on McNeil Island, WA. In the late 1970's the Bureau of 
Prisons began closing the facility and reducing the staff. This man was 
left with two choices. He could resign and give up 9 years toward 
retirement or he could transfer to a Federal center in San Diego. He 
close the latter and went to work for the Bureau of Prisons.
  When this gentleman retires he plans on returning to the State of 
Washington where he still owns a home. He wants to be near his children 
and grandchildren, as they still reside in Washington.
  Although the State of Washington has no State income tax, this man 
learned that he will be subject to California's source tax on his 
pension income when he returns to Washington. This man was prodded by 
the system to move to California because the Federal Government closed 
down the prison where he worked. In order to maintain his income and 
continue building his pension he moved. Nevertheless he always intended 
to move back to Washington. Needless to say, he is justifiably angry. 
Let me read to you an excerpt from his letter to me. I quote:

       The so called source tax appears to be grossly illegal and 
     contrary to the rights guaranteed by our Constitution. That 
     being the case, I am amazed that our Congress does not take 
     immediate action to abolish such totally illegal state 
     levies. I am sure you understand that people employed by the 
     federal government could serve in numerous states throughout 
     their careers before retiring to their home states. It is 
     absolutely ridiculous, insidious and downright illegal for 
     those states to levy an income tax against a nonresident. It 
     is mind-boggling that a federal retiree, or any other retiree 
     living in a state that has no income tax could be paying 
     income tax to as many as 13 states.

  He continues his letter,

       Couple this tax with the ridiculously high cost of medical 
     care, hospitalization and other fast rising consumer costs, 
     and it should be quite evident that people will not be able 
     to survive on retirement incomes.

  Mr. President, this issue was brought to my attention several years 
ago by a Nevadan named Bill Hoffman. He told me about the cases I have 
related to you and many others. Bill informed me that retirees were 
being harassed by their former States because of this tax, commonly 
called a source tax. In fact, he had heard so many complaints that 
eventually he and his wife, Joanne, began organizing the people that 
were affected. Eventually they formed a group known as Retirees to 
Eliminate State Income Source Tax [RESIST].
  RESIST was founded in July of 1988 in Carson City, NV. In the less 
than 4 years since its beginning, RESIST membership has grown to tens 
of thousands of members. It includes members of every State of the 
Union. It is truly a nonprofit, grass roots organization. It operates 
entirely on the work of volunteers. No members are salaried.
  The credibility of this group has convinced other long-established 
organizations, such as the National Association of Retired Federal 
Employees [NARFE], the National Association for Uniformed Services, 
with 60,000 members, and the Fund for Assuring an Independent 
Retirement [FAIR] to make a commitment to the prohibition of the source 
tax on pension income.
  In the beginning, this issue affected mostly retired Government 
employees because of easy access to their records. However, as economic 
times become tougher, and State budgets are straining for additional 
revenues, the source tax is becoming an ever more popular revenue 
source. As an example, I have copies of letters from Ford and Rockwell 
that were sent to their retired employees telling them that they must 
report tax liabilities in those states that collect the source tax. 
Other companies have followed suit. As a result, the American Payroll 
Association has joined the coalition that wants to prohibit this tax.
  We are all aware of the increased mobility that Americans have come 
to know. Many people today plan to retire in places other than the area 
they work. The recent growth of Nevada is ample evidence of this. There 
are many reasons for it. People might want to live in a warmer climate. 
Or, possibly their families have moved and they want to join them. 
Whatever the reason, they spend their working years saving enough to be 
able to move to their chosen area. You can imagine the shock and then 
dismay when they receive a notification that back taxes, along with 
penalties and interest are owed to their old State of residence. The 
shock is from a tax for which they receive no services and no 
representation. The dismay comes from the often inability to pay a 
sometimes enormous tax debt when one lives on a fixed income.
  To prohibit this unethical practice, I am reintroducing this 
legislation which prohibits States from taxing pensions or retirement 
income of nonresidents, taking into consideration the way the State 
defines a resident.
  State budgets are experiencing economic hard times. It won't take 
long for States to realize that taxing someone from another State is an 
easy way to increase revenues without paying the political price. In 
other words, unless this legislation is passed, you can be sure that 
more and more States will begin to impose this unfair tax for which no 
one is accountable.
  In conclusion, there is no cost to the Federal Government to prohibit 
the practice of source taxing the pension 
[[Page S255]] income of nonresidents, and I urge my colleagues to 
cosponsor this bill.
                                 ______

      By Mr. FEINGOLD:
  S. 45. A bill to amend the Helium Act to require the Secretary of the 
Interior to sell Federal real and personal property held in connection 
with activities carried out under the Helium Act, and for other 
purposes; to the Committee on Energy and Natural Resources.


               termination of the federal helium program

 Mr. FEINGOLD. Mr. President, I am pleased to introduce S. 45, the 
Helium Reform and Deficit Reduction Act of 1995, legislation to phase 
out the Federal Helium Program. The measure is based on the excellent 
legislation introduced in the other body during the 103d Congress by 
Representatives Cox and Frank, and a similar bill introduced by 
Representatives Lehman, Vucanovich, and Miller.
  The legislation will produce real savings both in the near term, as 
operations are phased out, and over the long run, as the stockpile of 
helium is sold off.
  Analysis by the Congressional Budget Office [CBO] of similar 
legislation last year estimated that, under that bill, income to the 
Federal Treasury from the helium program would eventually double to $16 
million annually over the estimated CBO baseline of $8 million. These 
savings do not include revenues that will go to the Treasury from the 
sale of facilities and equipment of the helium program, nor do they 
include the value to the Treasury of the bulk of the helium stockpile 
that will remain well after the 5-year budget window--valued at a 
reported $1.6 billion at today's helium prices.
  Mr. President, the Helium Act of 1925 was initiated in large part 
because of the potential military importance of blimps. It authorized 
the Bureau of Mines to build and operate a helium extraction and 
purification plant, which went into operation in Amarillo, TX in 1929.
  According to the General Accounting Office, a nominal private helium 
industry existed in the United States before 1937, but between 1937 and 
1960, the Bureau of Mines was the only domestic helium producer, 
selling most of what it produced to other Federal agencies, but also 
supplying some to private firms.
  With the advent of space exploration and the growth of defense 
programs, the Federal Government's demand for helium was expected to 
grow dramatically, and in 1960, Congress amended the Helium Act to 
provide incentives for stripping natural gas of its helium, for 
purchase of the separated helium by the Government, and for its long-
term storage in the Cliffside Reservoir near Amarillo.
  Today, helium is used in large quantities in space, defense, an 
advanced energy systems. Its major uses include cryogenics in medical 
and superconductivity applications, cover gas in welding, and for 
pressurizing and purging fuel tanks and vessels in the space program. 
It is also used in breathing gas mixtures for deep sea diving, 
controlled atmospheres for growing crystals for transistors, heat 
transfer mediums for nuclear power generators, leak detection, 
chromatography, and as a lifting gas for blimps.
  As a result of the 1960 Act, four private natural gas producing 
companies built five helium extraction facilities and entered into 22-
year contracts with the Bureau of Mines.
  However, instead of appropriating funds for the helium program, the 
1960 act authorized the Secretary of the Interior to borrow from the 
Treasury up to $47.5 million per year, at compound interest, to 
purchase helium.
  The act stipulated that the Bureau of Mines set prices that would 
cover all of the program's costs, including debt and interest, and 
provided a period of 25 years to pay back the debt, subsequently 
extended to 1995. In addition, Federal agencies and contractors were 
required to buy helium from the Bureau of Mines.
  Mr. President, to a certain extent, the 1960 changes to program have 
succeeded, in so far as they helped create private helium operations. 
Prior to the 1960 act, the Federal Government owned the only helium 
extraction plants in the world. Today, 90 percent of the helium 
produced in this country comes from private operations.
  Unfortunately, the 1960 act also led to a growing Government-run 
operation. The borrowing done to pay for helium purchases has not been 
paid back, with the program now having accumulated a debt of 
approximately $1.4 billion to the treasury, and a stockpile of helium 
that some have suggested could supply the Government's needs for the 
next 80 to 100 years.
  Mr. President, the measure I have introduced directs the Secretary of 
the Interior to cease producing, refining, and marketing refined helium 
1 year after the effective date. It also directs the Secretary to 
dispose of all facilities and equipment used for the purpose of 
producing, refining, and marketing refined helium, consistent with 
Federal laws governing the disposal of surplus properties.
  The measure directs the Secretary to begin selling off the helium 
reserves owned by the Government. The sale of the helium reserves would 
be done over time to ensure that taxpayers will receive a fair price 
for the helium they have financed, and to minimize disruption of the 
private helium market.
  This legislation freezes the current debt owned by the helium program 
to the treasury, and dedicates the revenues from the sale of the 
facilities, equipment, and helium reserves to the repayment of that 
debt.
  Finally, the measure that annual financial statements be prepared 
describing the financial position of the helium operations, including a 
statement of what the interest payments on the outstanding repayable 
amounts would have been under the arrangements initiated in the 1960 
act.
  Mr. President, as I noted earlier, the CBO analyzed similar 
legislation last year, and estimated that under that measure income to 
the Federal treasury from the helium program would roughly double as 
the changes are phased in, with income exceeding expenses by about $16 
million annually in fiscal year 1999 under the legislation, compared 
with $8 million annually estimated for CBO baseline calculations.
  Though these are very real savings, there will be additional savings 
for the treasury as well under this legislation, including additional 
revenues that would accrue to the treasury from the sale of facilities 
and equipment, and the value to the treasury of the bulk of the helium 
stockpile that will remain well after the 5-year budget window.
  Though the helium stockpile is valued at $373 million in the Helium 
Fund Budget, the Congressional Research Service reports that the value 
of the crude helium in the Government's Cliffside Reservoir could be 
worth about $1 billion if it were sold at rates ranging from $25 to $35 
per thousand cubic feet, and a reported $1.6 billion if it were sold at 
today's prices.
  Mr. President, supporters of the helium program argue that the
   roughly $1.4 billion in debt it has accumulated should be 
disregarded. They maintain that since the debt is owed by one agency of 
the Government to another, it is only a bookkeeping dispute.

  That is not an acceptable description of the matter. First, though it 
is true that, in a sense, the Government owes the money to itself, 
those who would defend the helium program cannot selectively pick and 
choose those program costs to be included and those that are not to be 
included in assessing the program's efficiency. The growing debt was 
created because of borrowing by the program from the Federal treasury, 
borrowing that was used to fund the significant assets of the program, 
including the massive helium stockpile. It is deceptive to suggest that 
the overall productivity of the program should be measured without 
taking into account the borrowed capital which produced the giant 
stockpile of helium on which the program is drawing.
  Second, and just as important, the funding provided for this 
enterprise came at the cost of other governmental activities and an 
increased Federal deficit. The funds borrowed over the years could have 
been used for education, health care programs, national defense, small 
business programs, lower income taxes, or a lower Federal budget 
deficit. The debt that has been accumulating is a measure of the 
opportunity cost of that decision, and will be a measure of the 
opportunity cost to continue the helium operation should this 
legislation not pass.
  [[Page S256]] Mr. President, supporters of this program also argue 
that the program is as efficient as private sector helium producers and 
that the program produces helium at competitive rates. They maintain 
that their revenues exceed their cost of operation, if one excludes the 
debt payments they owe the Federal treasury.
  But, Mr. President, the facts do not bear this out. In part due to 
outdated plant and equipment, the Federal Helium Program is much less 
efficient than private sector helium refineries, producing one-third as 
much with more than four times the number of employees.
  Further, the Helium Advisory Council suggests that the Federal 
program understates the true costs of its helium production, in part 
because they do not include the cost of the crude helium purchased with 
the very funds borrowed from the taxpayers.
  The Council also notes that royalty payments to the Bureau of Mines 
for helium extracted by private companies from Federal land are used to 
subsidize the costs of the refining operation.
  Mr. President, though I dispute the contention that the Federal 
Helium Program is an efficient and competitive producer of helium, I 
want to stress that even if the Government was doing a competent job of 
producing helium, that is not a sufficient argument for the 
continuation of a program that is no longer needed.
  Though at one time there may have been an appropriate role for a 
Government-run helium program, there is now a sufficiently mature 
private helium industry to which the Government can turn for its helium 
needs.
  Mr. President, the time has come for the Federal Government to get 
out of the helium business. The Federal Helium Program is no longer 
needed, and we should begin to dismantle this operation as soon as 
possible in the most cost effective manner.
  This legislation does precisely that.
  Mr. President, I ask unanimous consent that a copy of the legislation 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 45

       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 ``Helium Reform and Deficit 
     Reduction Act of 1995''.

     SEC. 2. AMENDMENT OF HELIUM ACT.

       Except as otherwise expressly provided, whenever in this 
     Act an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Helium Act (50 U.S.C. 167 to 167n).

     SEC. 3. AUTHORITY OF SECRETARY.

       Sections 3, 4, and 5 are amended to read as follows:

     ``SEC. 3. AUTHORITY OF SECRETARY.

       ``(a) Extraction and Disposal of Helium on Federal Lands.--
       ``(1) In general.--The Secretary may enter into agreements 
     with private parties for the recovery and disposal of helium 
     on Federal lands upon such terms and conditions as he deems 
     fair, reasonable and necessary.
       ``(2) Leasehold rights.--The Secretary may grant leasehold 
     rights to any such helium.
       ``(3) Limitation.--The Secretary may not enter into any 
     agreement by which the Secretary sells such helium other than 
     to a private party with whom the Secretary has an agreement 
     for recovery and disposal of helium.
       ``(4) Regulations.--Agreements under paragraph (1) may be 
     subject to such regulations as may be prescribed by the 
     Secretary.
       ``(5) Existing rights.--An agreement under paragraph (1) 
     shall be subject to any rights of any affected Federal oil 
     and gas lessee that may be in existence prior to the date of 
     the agreement.
       ``(6) Terms and conditions.--An agreement under paragraph 
     (1) (and any extension or renewal of an agreement) shall 
     contain such terms and conditions as the Secretary may 
     consider appropriate.
       ``(7) Prior agreements.--This subsection shall not in any 
     manner affect or diminish the rights and obligations of the 
     Secretary and private parties under agreements to dispose of 
     helium produced from Federal lands in existence on the date 
     of enactment of the Helium Act of 1995 except to the extent 
     that such agreements are renewed or extended after that date.
       ``(b) Storage, Transportation and Sale.--The Secretary may 
     store, transport, and sell helium only in accordance with 
     this Act.
       ``(c) Monitoring and Reporting.--The Secretary may monitor 
     helium production and helium reserves in the United States 
     and periodically prepare reports regarding the amounts of 
     helium produced and the quantity of crude helium in storage 
     in the United States.

     ``SEC. 4. STORAGE AND TRANSPORTATION OF CRUDE HELIUM.

       ``(a) Storage and Transportation.--The Secretary may store 
     and transport crude helium and maintain and operate crude 
     helium storage facilities, in existence on the date of 
     enactment of the Helium Act of 1995 at the Bureau of Mines 
     Cliffside Field, and related helium transportation and 
     withdrawal facilities.
       ``(b) Cessation of Production, Refining, and Marketing.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of the Helium Act of 1995, the Secretary shall 
     cease producing, refining, and marketing refined helium and 
     shall cease carrying out all other activities relating to 
     helium which the Secretary was authorized to carry out under 
     this Act before the date of enactment of the Helium Act of 
     1995, except those activities described in subsection (a).
       ``(2) Amount owned by the united states.--The amount of 
     helium reserves owned by the United States and stored in the 
     Bureau of Mines Cliffside Field at the date of cessation of 
     activities, less 600,000,000 cubic feet, shall be the helium 
     reserves owned by the United States required to be sold 
     pursuant to section 8(b).
       ``(c) Disposal of Facilities.--
       ``(1) In general.--Subject to paragraph (5), not later than 
     1 year after the date of enactment of the Helium Act of 1995, 
     the Secretary shall dispose of all facilities, equipment, and 
     other real and personal property, and all interests therein, 
     held by the United States for the purpose of producing, 
     refining and marketing refined helium.
       ``(2) Applicable law.--The disposal of such property shall 
     be in accordance with the provisions of law governing the 
     disposal of excess or surplus properties of the United 
     States.
       ``(3) Proceeds.--All proceeds accruing to the United States 
     by reason of the sale or other disposal of such property 
     shall be treated as moneys received under this chapter for 
     purposes of section 6(f).
       ``(4) Costs.--All costs associated with such sale and 
     disposal (including costs associated with termination of 
     personnel) and with the cessation of activities under 
     subsection (b) shall be paid from amounts available in the 
     helium production fund established under section 6(f).
       ``(5) Exception.--Paragraph (1) shall not apply to any 
     facilities, equipment, or other real or personal property, or 
     any interest therein, necessary for the storage and 
     transportation of crude helium or any equipment needed to 
     maintain the purity, quality control, and quality assurance 
     of helium in the reserve.
       ``(d) Existing Contracts.--
       ``(1) In general.--All contracts that were entered into by 
     any person with the Secretary for the purchase by the person 
     from the Secretary of refined helium and that are in effect 
     on the date of the enactment of the Helium Act of 1995 shall 
     remain in force and effect until the date on which the 
     facilities described in subsection (c) are disposed of.
       ``(2) Costs.--Any costs associated with the termination of 
     contracts described in paragraph (1) shall be paid from the 
     helium production fund established under section 6(f).

     ``SEC. 5. FEES FOR STORAGE, TRANSPORTATION AND WITHDRAWAL.

       ``(a) In General.--Whenever the Secretary provides helium 
     storage, withdrawal, or transportation services to any 
     person, the Secretary shall impose a fee on the person to 
     reimburse the Secretary for the full costs of providing such 
     storage, transportation, and withdrawal.
       ``(b) Treatment.--All fees received by the Secretary under 
     subsection (a) shall be treated as moneys received under this 
     Act for purposes of section 6(f).''.

     SEC. 4. SALE OF CRUDE HELIUM.

       Section 6 is amended--
       (1) in subsection (a) by striking ``from the Secretary'' 
     and inserting ``from persons who have entered into 
     enforceable contracts to purchase an equivalent amount of 
     crude helium from the Secretary'';
       (2) in subsection (b)--
       (A) by inserting ``crude'' before ``helium''; and
       (B) by adding the following at the end: ``Except as may be 
     required by reason of subsection (a), the Secretary shall not 
     make sales of crude helium under this section in such amounts 
     as will disrupt the market price of crude helium.'';
       (3) in subsection (c)--
       (A) by inserting ``crude'' after ``Sales of''; and
       (B) by striking ``together with interest as provided in 
     this subsection'' and all that follows through the end of 
     such subsection and inserting ``all funds required to be 
     repaid to the United States as of October 1, 1994 under this 
     section (hereinafter referred to as `repayable amounts'). The 
     price at which crude helium is sold by the Secretary shall 
     not be less than the amount determined by the Secretary as 
     follows:
       ``(1) Divide the outstanding amount of such repayable 
     amounts by the volume (in mcf) of crude helium owned by the 
     United States and stored in the Bureau of Mines Cliffside 
     Field at the time of the sale concerned.
       ``(2) Adjust the amount determined under paragraph (1) by 
     the Consumer Price Index for years beginning after December 
     31, 1994.'';
       (4) by striking subsection (d) and inserting the following:
     [[Page S257]]   ``(d) Extraction of Helium From Deposits on 
     Federal Lands.--All moneys received by the Secretary from the 
     sale or disposition of helium on Federal lands shall be paid 
     to the Treasury and credited against the amounts required to 
     be repaid to the Treasury under subsection (c).'';
       (5) by striking subsection (e); and
       (6) in subsection (f)--
       (A) by inserting ``(1)'' after ``(f)''; and
       (B) by adding the following at the end:
       ``(2)(A) Within 7 days after the commencement of each 
     fiscal year after the disposal of the facilities referred to 
     in section 4(c), all amounts in such fund in excess of 
     $2,000,000 (or such lesser sum as the Secretary deems 
     necessary to carry out this Act during such fiscal year) 
     shall be paid to the Treasury and credited as provided in 
     paragraph (1).
       ``(B) Upon repayment of all amounts referred to in 
     subsection (c), the fund established under this section shall 
     be terminated and all moneys received under this Act shall be 
     deposited in the Treasury as General Revenues.''.

     SEC. 5. ELIMINATION OF STOCKPILE.

       Section 8 is amended to read as follows:

     ``SEC. 8. ELIMINATION OF STOCKPILE.
       ``(a) Review of Reserves.--The Secretary shall review 
     annually the known helium reserves in the United States and 
     make a determination as to the expected life of the domestic 
     helium reserves (other than federally owned helium stored at 
     the Cliffside Reservoir) at that time.
       ``(b) Stockpile Sales.--
       ``(1) Commencement.--Not later than January 1, 2005, the 
     Secretary shall commence offering for sale crude helium from 
     helium reserves owned by the United States in such minimum 
     annual amounts as would be necessary to dispose of all such 
     helium reserves in excess of 600,000,000 cubic feet on a 
     straight-line basis between that date and January 1, 2015.
       ``(2) Minimum price.--The minimum price for all sales under 
     paragraph (1), as determined by the Secretary in consultation 
     with the helium industry, shall be such price as will ensure 
     repayment of the amounts required to be repaid to the 
     Treasury under section 6(c).
       ``(3) Deferment.--The minimum annual sales requirement may 
     be deferred only to the extent that the Secretary is unable 
     to arrange sales at the minimum price.
       ``(4) Times of sale.--The sales shall be at such times 
     during each year and in such lots as the Secretary 
     determines, in consultation with the helium industry, are 
     necessary to carry out this subsection with minimum market 
     disruption.
       ``(c) Discovery of Additional Reserves.--The discovery of 
     additional helium reserves shall not affect the duty of the 
     Secretary to make sales of helium under subsection (b).''.

     SEC. 6. REPEAL OF AUTHORITY TO BORROW.

       Sections 12 and 15 are repealed.

     SEC. 7. REPORTS.

       Section 16 is amended--
       (1) by inserting ``(a) By the Secretary.--'' before ``The 
     Secretary''; and
       (2) by adding at the end the following:
       ``(b) By the Inspector General.--
       ``(1) Financial statements.--The Inspector General of the 
     Department of the Interior shall cause to be prepared, not 
     later than March 31 following each fiscal year commencing 
     with the date of enactment of the Helium Act of 1995, annual 
     financial statements for the helium operations of the Bureau 
     of Mines.
       ``(2) Cooperation.--The Director of the Bureau of Mines 
     shall cooperate with the Inspector General in carrying out 
     paragraph (1), and shall provide the Inspector General with 
     such personnel and accounting assistance as may be necessary 
     for that purpose.
       ``(3) Contents.--
       ``(A) In general.--The financial statements shall be 
     comprised of--
       ``(i) a balance sheet reflecting the overall financial 
     position of the helium operations, including assets and 
     liabilities thereof;
       ``(ii) a statement of operations reflecting the fiscal 
     period results of the helium operations;
       ``(iii) a statement of cash flows or changes in financial 
     position of the helium operations; and
       ``(iv) a reconciliation of budget reports of the helium 
     operations.
       ``(B) Statement of operations.--A statement of operations 
     shall include the revenues from, and costs of, sales of crude 
     helium, the storage and transportation of crude helium, the 
     production, refining and marketing of refined helium, and the 
     maintenance and operation of helium storage facilities at the 
     Bureau of Mines Cliffside Field.
       ``(C) Balance sheet.--
       ``(i) In general.--The balance sheet shall include--

       ``(I) on the asset side, the present discounted market 
     value of crude helium reserves; and
       ``(II) on the liability side, the accrued liability for 
     principal and interest on debt to the United States.

       ``(ii) For reporting purposes.--For financial reporting 
     purposes but not in connection with the determination of 
     sales prices in section 6(c), the balance sheet shall include 
     accrued but unpaid interest on outstanding repayable amounts 
     (as described in section 6(c)) through the date of the 
     report, calculated at the same rates as such interest was 
     calculated prior to the date of enactment of the Helium Act 
     of 1995.
       ``(D) Definitions.--In this paragraph:
       ``(i) Revenues.--The term `revenues' does not include--

       ``(I) royalties paid to the United States for production of 
     helium or other extraction of resources, except to the extent 
     that the helium operations incur direct costs in connection 
     therewith; or
       ``(II) proceeds from sales of assets other than inventory.

       ``(ii) Expenses.--The term `expenses' includes--

       ``(I) all labor costs of the Bureau of Mines helium 
     operations, and of the Department of the Interior in 
     connection therewith; and
       ``(II) for financial reporting purposes but not in 
     connection with the determination of sales prices under 
     section 6(c), all current-period interest on outstanding 
     repayable amounts (as described in section 6(c)) calculated 
     at the same rates as such interest was calculated prior to 
     the date of enactment of the Helium Act of 1995.

       ``(4) Audits.--
       ``(A) In general.--The financial statements shall be 
     audited annually by the Comptroller General of the United 
     States, who shall submit a report on such audits to the 
     Secretary of the Interior and Congress not later than June 30 
     following the end of the fiscal year for which they are 
     prepared.
       ``(B) Standards.--Each audit under subparagraph (A) shall 
     be prepared in accordance with generally accepted government 
     auditing standards.''.
                                 ______

      By Mr. FEINGOLD:
  S. 46. A bill to amend the Federal Election Campaign Act of 1971 to 
provide for a voluntary system of spending limits and partial public 
financing of Senate primary and general election campaigns, to limit 
contributions by multicandidate political committees, and for other 
purposes; to the Committee on Rules and Administration.


               campaign financing and spending reform act

  Mr. FEINGOLD. Mr. President, I rise today on this first day of the 
104th Congress to introduce legislation designed to fundamentally 
change the way we finance elections for the United States Senate. Over 
the last several years, there have been a host of campaign finance 
reform bills introduced in the Senate, different in scope, complexity 
and vision. Although most legislators agree that there is a dire need 
of campaign finance reform, we have been unable to reach agreement on 
the avenue that will best produce fair and competitive elections. This 
is regrettable. I fear that this lack of progress is in part due to the 
fact that many Members of Congress have lulled themselves into the 
belief that the public doesn't care about this issue. In fact, it seems 
possible that efforts to enact comprehensive campaign finance reform 
will be less of a priority in the 104th Congress, than it was in the 
103d Congress.
  Many Americans, however, are appalled and outraged at the big money 
or bought and sold images of our campaign financing system, whether it 
be a $44 million U.S. Senate campaign in California or the ugly 
spectacle of excessive contributions timed to coincide with key votes 
on major issues.
  Given the new political landscape in the U.S. Congress and the 
continuing failure to reform the system, this bill is a new attempt to 
forge a bipartisan consensus on the issue, in the hopes that real 
reform will be one of the great achievements of the 104th Congress. 
Failure to act in a bipartisan manner on this issue will surely deepen 
the disillusionment of the American people at the flaws in our current 
system, where big money plays such a dominate role in too many 
elections.
  Mr. President, perhaps the finest feature of our political system is 
that our form of government allows individuals from all walks of life 
to run for public office and represent their communities. Admittedly,
 it took our Nation some time to recognize the importance of expanding 
the ability of all individuals to participate fully in our democratic 
form of government. But over the years, a multitude of barriers 
including race and gender have been lifted and the result has been a 
system that can be fairly characterized as a representative democracy. 
I suspect few, if any, would argue that encouraging participation has 
been anything but tremendously beneficial to our political system.

  Unfortunately, at least one very ominous barrier remains, a barrier 
that has prevented too many qualified and competent individuals from 
seeking elected office and that barrier is the power of money. This is 
often true when a political challenger is discouraged by the financial 
advantage of an incumbent. Holding elected office has 
[[Page S258]] become an inherent financial advantage to incumbents for 
several reasons. It facilitates the ability to raise large amounts of 
money, be it from large contributors or political action committees, or 
from other such sources. Members of Congress also have other 
advantages, such as the ability to use the franking privilege to send 
free mass mailings to their constituents in the midst of a reelection 
campaign.
  Yet, this same type of advantage arises when an individual with large 
personal wealth enters a race for an open seat or a primary election. 
It is the ability to pour large sums of money into an election, whether 
it is the power of big money derived from the benefits of incumbency or 
the financial advantages of a wealthy candidate running for an open 
seat, that distorts our current electoral process. The unfortunate 
result is that we have a system that discourages individuals without 
access to large sums of money from running for elected office. I know 
this all too well because as I prepared to run for the United States 
Senate, I was constantly told that I was well qualified to be a 
candidate, but that I shouldn't run because I didn't have the financial 
resources to win such a race. Too few people have the ability to do 
what the current system requires of them to run an effective, 
competitive campaign--raise and spend millions of dollars. If you are a 
powerful member of the Senate Appropriations Committee as was my 
opponent in my 1992 election, and you have the ability to raise the 
nearly $6 million that he accumulated for that campaign, then the 
current system accommodates you. If you are independently wealthy and 
decide you would like to use your wealth to run for elected office, as 
the current trend seems to be, then the current system accommodates 
you. But if you are a schoolteacher, and serve part-time on your city 
council, or a State legislator and a bricklayer by trade, and decide 
that you would like to run for the United States Senate, then the 
current system tells you that based on your income level, employment 
status and other such factors, you are automatically a longshot to beat 
the incumbent Senator. Your positions on the issues? Not a factor. Your 
experience as a teacher or a bricklayer and your record on the city 
council or the State legislature? Irrelevant. Why? Because your 
inability to raise large amounts of money will in all likelihood 
inhibit you from getting your message to a state-wide electorate. This, 
Mr. President, must change.
  But there is more to this problem than simply the need to stop 
discouraging worthy candidates from running for Federal office. At 
times, I have believed that assisting challengers was the most 
compelling reason for reforming the campaign finance system. I assumed 
that incumbents were fairly content with the current system as it 
enabled incumbents to raise large amounts of money. But I have come to 
learn that there is another trait of our current campaign finance 
system that is antithetical to our political system, and that is the 
amount of time Members of Congress, that is, incumbents themselves, 
must spend raising funds for their reelection campaigns. If I have been 
struck by any single factor since become a Member of the Senate, it is 
the time and study that must go into work here, whether it is meeting 
with constituents, questioning witnesses or hearing testimony in our 
committees, or simply reviewing and examining the many proposals and 
bills that are considered in this chamber. And yet on top of all this 
work, Members of Congress are told by their advisers that they must 
raise money at a feverish pace for their reelection efforts, beginning 
the day after they are elected to a new 6-year term.
  It has been estimated that the average cost to run for reelection to 
the United States Senate is some 4 million dollars. That means that 
during a 6 year Senate term, one would have to raise, on average, over 
13,000 dollars a week or nearly 1,800 dollars a day to finance a 
reelection effort. The problem with this is, how can Members of 
Congress be expected to fulfill their legislative duties when so much 
time is required to raise this kind of money? We should be Senators 
first, and we should not have a system that forces a Member of Congress 
to forego certain legislative duties in favor of political fundraising. 
I have heard stories of Members missing late Friday night votes because 
of prior commitments to attend fundraisers. I do not believe that these 
votes would have been missed had our current system not placed such a 
heavy emphasis on the importance of raising money for reelection 
campaigns.
  There is another issue here that we should address. Many incumbent 
Members of Congress focus their fundraising efforts on large individual 
contributors or Political Action Committees, or PAC's, often from 
outside of their home states. This is, after all, where the big money 
is, and these sources are eager to contribute to Members who may 
protect or advance their interests. But we should ask ourselves if it 
is good for our political system to have legislators devoting so much 
of their time raising funds from large contributors and special 
interest groups from other States, rather than maintaining contact with 
their own constituents? Most of our constituents cannot afford to give 
$500 or $1,000 to a candidate, and few have the clout and influence 
possessed by those that control a PAC. By primarily focusing 
fundraising efforts on large contributors and special interests, 
Members of Congress are sending a message--hopefully a false message--
to the American people that these groups have special access to and 
influence with an elected representative. Such perceptions are the 
offspring of this dependence on special interest money and have fueled 
the public's growing disenchantment with our political system. It is 
little wonder under our current campaign financing system that the 
American people increasingly view Congress as an institution that is 
dominated and controlled by special interests.
  Another aspect that permeates the current system is the presumption 
that a campaign contribution entitles the giver to some form of 
repayment by the recipient. I remember one individual who gave a 
contribution, then hinted if I won the election and hired his nephew, 
there might be more contributions. Since my election, some individuals 
have called my office and indicated they could no longer support me 
financially if I could not get them tickets for a tour of the White 
House. One restaurant-owner questioned contributing to my campaign 
again because he claimed I did not patronize his restaurant enough, 
saying that ``I don't make a profit on you.'' We must recognize that it 
is our current campaign finance system that has fostered this you 
scratch my back mentality.
  The most comprehensive reform of our campaign system that will solve 
these problems is full public financing of campaigns, giving 
challengers a legitimate opportunity to run a competitive campaign and 
allowing incumbents to focus on their legislative obligations rather 
than criss-crossing the country to raise money. This kind of reform 
would help extinguish public perceptions that the legislative branch of 
Government is run by special interests.
  Mr. President, I recognize there has been much criticism directed at 
public financing in the past. Critics contend that it is an incumbent-
protection program and that the taxpayers would never stand for such a 
system. Yet, the only current public financing system we have for 
federal elections, the presidential system, has been a good model for 
reform. In the nearly 20 years of this system's existence, I have not 
heard it criticized for being unfair to challengers, unfair to either 
party, or dominated by special interests. In fact, there are Members of 
Congress, some who have heavily criticized the concept of public 
financing for congressional elections, who have accepted public funds 
in their campaigns for the presidency. Had it not been for the 
availability of those funds, I suspect many of these members would not
 have been able to attempt such an election bid. And that is exactly 
the dilemma faced by many qualified individuals who are interested in 
elected office. Public financing has been a success for presidential 
elections and there is no reason why it would not be equally successful 
for congressional elections.

  The task of mending our current campaign finance system is immense, 
but the bill I am introducing today will make significant progress 
towards addressing the flaws of our current system that I have just 
discussed. This bill will establish voluntary spending 
[[Page S259]] limits based on each state's individual voting age 
population. With the cooperation of the candidates, this will finally 
curtail the skyrocketing spending that has plagued political campaigns 
in recent years. Just as important, these spending limits will allow 
members of Congress to focus on their duties and responsibilities as 
elected officials rather than spending substantial amounts of time 
raising money. For those candidates that do abide by the spending 
limits, there will be matching funds in the primary election for 
contributions under $250, once a candidate has raised 10 percent of 
that State's spending limit in contributions of $250 or less, half of 
which must come from within the candidate's State. There will be a 100 
percent match for contributions under $100, and a 50 percent match for 
contributions between $101 and $250. These provisions, along with only 
providing matching funds for in-state contributions, will encourage 
candidates to focus on smaller contributions from their home states. I 
believe this focus upon raising money within our home States is 
critical--so critical that I have already pledged to do so for my own 
fundraising. The bill will also provide 90% public funding for general 
elections, again, once a threshold has been met. This funding will be 
in the form of direct payments, as well as discounted postage and 
discounted broadcast media rates.
  This bill will also ban contributions from political action 
committees, with a backup provision that will severely limit their 
influence if the Supreme Court rules such a ban unconstitutional. The 
bill will require greater disclosure of so-called ``soft money'', that 
is, the unregulated money that finds its way into campaigns which 
affect Federal elections. The bill will include several other 
provisions as well. It will prohibit an incumbent from sending out a 
franked mass mailing during the year of that Senator's election. It 
addresses lobbyists by prohibiting them from contributing to Senators 
that they lobby and from lobbying those they contribute to in the 12 
months before an election. The bill will codify a recent ruling by the 
Federal Election Commission that bars candidates from using campaign 
funds for personal purposes, such as mortgage payments, country club 
memberships and vacations.
  Mr. President, there are certainly other reforms that have been 
proposed by various individuals in recent years and I welcome 
additional suggestions and ideas. The elements addressed in this 
measure, however, are designed to focus upon the major problems that 
should be addressed in Senate campaigns. The bill does not include 
provisions relating primarily to House elections or changes in the 
presidential campaign system but certainly additional proposals in 
these areas would not be inconsistent with the measures emphasized in 
this legislation.
  Mr. President, obviously there are various ways to approach campaign 
finance reform, but I want to highlight the fact that my bill has a 
special focus on two essential elements of campaign finance reform--
voluntary spending limits and an emphasis upon raising a majority of 
funds within your home State rather than from special interests in 
Washington, D.C. I believe that these two reforms can provide the 
central core of a meaningful campaign finance reform bill that can be 
enacted in this Congress. In the past, many Democrats have pushed hard 
for spending limits while many Republicans have been at the forefront 
of efforts to restrict out-of-state contributions. I hope that a 
bipartisan consensus can emerge for legislation that contains these two 
core elements of reform because they focus on what are central problems 
that need to be addressed--the obscene amount of money being spent on
 political campaigns and the fact that so much of the money being 
raised to run these expensive campaigns comes not from the people who 
will be represented by the winner of the contest, but from wealthy 
individuals and special interests outside the State where the election 
is being conducted. During my 1992 campaign for the United States 
Senate, I pledged to raise a majority of my campaign funds from within 
the State of Wisconsin because I found it to be fundamentally wrong for 
candidates for public office to be focusing most of their campaign 
efforts on contributors from outside the districts they were seeking to 
represent. Some will argue that candidates should be allowed to raise 
funds from family, friends and supporters outside of their home States. 
My bill does not prevent this--it merely restricts access to public 
assistance only to those candidates who agree to raise the majority of 
funds from within their home State.
  As I have indicated, limiting out-of-state contributions is a broadly 
supported concept that has transcended party lines in the past. Such 
limits were not only included in campaign finance bills introduced in 
the last Congress by Democrats, but also in reform bills offered by 
Republicans. Senators Domenici and Packwood included out-of-state 
contribution limits in their respective bills, as did Senators Dole and 
McConnell in their bill which was cosponsored by 24 Republican 
Senators. Similar restrictions have been included in reforms proposed 
by the Republican leader in the House of Representatives in the 103d 
Congress, Bob Michel. The out-of-state fundraising limits included in 
this bill would be an important step towards making candidates for 
elected office more accountable to the voters in their home States.
  To fund the public benefits included in this bill, the legislation 
would create a new checkoff box on all income tax forms that will allow 
individuals to contribute an additional $5 on their tax bill, which 
will go to a Senate Election Campaign Fund that will be the source of 
public benefits. It may be argued that this funding mechanism is 
inadequate, that the American people will never voluntarily pay an 
additional $5 in taxes for a welfare program for Senators. But I 
disagree. I firmly believe that if we provide true leadership on this 
issue and inform the public of what that checkoff box would really 
mean, that we will have more than adequate funds to publicly finance 
Senate elections. That box would represent a contract with the American 
people. We are saying that if you want a campaign system that is fair 
to both parties, would allow elected officials to focus on their 
legislative responsibilities, and would free our political system from 
the grip that special interests have had for so many years, then it is 
worth it to you to give 5 dollars a year to this system. If such a 
system does not appeal to you, simply do not check the box. But I have 
faith in the American people, Mr. President, and I am convinced that if 
we offer them the true reforms that they have been demanding for so 
many years, they will support a system that merits such a modest 
donation.
  Mr. President, we have a system that is virtually out of control. 
During the 1994 elections, congressional candidates spent close to $600 
million--an 18 percent increase from the 1992 spending level and a 50 
percent increase from the 1990 level. Every campaign season, millions 
and millions of dollars are spent on political campaigns and the result 
has been an election system that is tailored almost exclusively for 
candidates that are well-financed or well-connected. The public 
benefits included in my bill will provide candidates who agree to limit 
their expenditures more than enough financing to adequately get their 
message out to the electorate. They will be able to purchase 
television, radio and print advertising. They will be able to send out 
mass mailings. We do not dictate to these candidates what they can say 
or how they say it--we only provide them with the means to inform 
voters of their ideas, their positions and their vision.
  But most importantly, this bill will return our campaign system to 
the people we represent. If individuals want to participate 
financially, they do not have to write a check for $100, $500 or 
$1,000. They can give 5 dollars when they pay their taxes and know that 
they are supporting a fair and equitable election process. If they want 
to run
 for office, they will have the financial opportunity if they can meet 
a threshold, thus proving that their ideas and viewpoints represent a 
broad base of support and deserve recognition. And if we reverse the 
perceptions of a Congress dominated by special interests and convince 
the American people that their voice means something, perhaps we can 
change the very troubling voter turnout figures that we have seen in 
recent elections.
  [[Page S260]] We should not have a campaign finance system that 
favors either challengers or incumbents, wealthy individuals or those 
from limited means, candidates who are rank and file workers or those 
from the side of management. We should have a system that provides all 
qualified candidates an equal and fair opportunity to run for public 
office. The bill I have introduced today represents the comprehensive 
reform that the American people have asked for. I am hopeful that the 
Members of this body understand how important this problem is to our 
constituents, and how fundamental it is to our political system. We 
need to enact campaign finance reform legislation this year, and I look 
forward to working with my colleagues in passing a bill that truly 
addresses the flaws and inadequacies of the current system. 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. 46

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

     SECTION 1. SHORT TITLE; AMENDMENT OF CAMPAIGN ACT; TABLE OF 
                   CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Senate 
     Campaign Financing and Spending Reform Act''.
       (b) Amendment of FECA.--When used in this Act, the term 
     ``FECA'' means the Federal Election Campaign Act of 1971 (2 
     U.S.C. 431 et seq.).
       (c) Table of Contents.--

Sec. 1. Short title; amendment of Campaign Act; table of contents.
Sec. 2. Findings and declarations of the Senate.

          TITLE I--CONTROL OF CONGRESSIONAL CAMPAIGN SPENDING

   Subtitle A--Senate Election Campaign Spending Limits and Benefits

Sec. 101. Senate spending limits and benefits.
Sec. 102. Ban on activities of political action committees in Federal 
              elections.
Sec. 103. Reporting requirements.
Sec. 104. Disclosure by noneligible candidates.

                     Subtitle B--General Provisions

Sec. 131. Broadcast rates and preemption.
Sec. 132. Extension of reduced third-class mailing rates to eligible 
              Senate candidates.
Sec. 133. Reporting requirements for certain independent expenditures.
Sec. 134. Campaign advertising amendments.
Sec. 135. Definitions.
Sec. 136. Provisions relating to franked mass mailings.

                   TITLE II--INDEPENDENT EXPENDITURES

Sec. 201. Clarification of definitions relating to independent 
              expenditures.

                        TITLE III--EXPENDITURES

                   Subtitle A--Personal Loans; Credit

Sec. 301. Personal contributions and loans.
Sec. 302. Extensions of credit.

   Subtitle B--Provisions Relating to Soft Money of Political Parties

Sec. 311. Reporting requirements.

                        TITLE IV--CONTRIBUTIONS

Sec. 401. Contributions through intermediaries and conduits; 
              prohibition on certain contributions by lobbyists.
Sec. 402. Contributions by dependents not of voting age.
Sec. 403. Contributions to candidates from State and local committees 
              of political parties to be aggregated.
Sec. 404. Limited exclusion of advances by campaign workers from the 
              definition of the term ``contribution''.

                    TITLE V--REPORTING REQUIREMENTS

Sec. 501. Change in certain reporting from a calendar year basis to an 
              election cycle basis.
Sec. 502. Personal and consulting services.
Sec. 503. Reduction in threshold for reporting of certain information 
              by persons other than political committees.
Sec. 504. Computerized indices of contributions.

                 TITLE VI--FEDERAL ELECTION COMMISSION

Sec. 601. Use of candidates' names.
Sec. 602. Reporting requirements.
Sec. 603. Provisions relating to the general counsel of the Commission.
Sec. 604. Enforcement.
Sec. 605. Penalties.
Sec. 606. Random audits.
Sec. 607. Prohibition of false representation to solicit contributions.
Sec. 608. Regulations relating to use of non-Federal money.

                        TITLE VII--MISCELLANEOUS

Sec. 701. Prohibition of leadership committees.
Sec. 702. Polling data contributed to candidates.
Sec. 703. Sense of the Senate that Congress should consider adoption of 
              a joint resolution proposing an amendment to the 
              Constitution that would empower Congress and the States 
              to set reasonable limits on campaign expenditures.
Sec. 704. Personal use of campaign funds.

              TITLE VIII--EFFECTIVE DATES; AUTHORIZATIONS

Sec. 801. Effective date.
Sec. 802. Severability.
Sec. 803. Expedited review of constitutional issues.
     SEC. 2. FINDINGS AND DECLARATIONS OF THE SENATE.

       (a) Necessity for Spending Limits.--The Senate finds and 
     declares that--
       (1) the current system of campaign finance has led to 
     public perceptions that political contributions and their 
     solicitation have unduly influenced the official conduct of 
     elected officials;
       (2) permitting candidates for Federal office to raise and 
     spend unlimited amounts of money constitutes a fundamental 
     flaw in the current system of campaign finance, and has 
     undermined public respect for the Senate as an institution;
       (3) the failure to limit campaign expenditures has caused 
     individuals elected to the Senate to spend an increasing 
     proportion of their time in office as elected officials 
     raising funds, interfering with the ability of the Senate to 
     carry out its constitutional responsibilities;
       (4) the failure to limit campaign expenditures has damaged 
     the Senate as an institution, due to the time lost to raising 
     funds for campaigns; and
       (5) to prevent the appearance of undue influence and to 
     restore public trust in the Senate as an institution, it is 
     necessary to limit campaign expenditures, through a system 
     which provides public benefits to candidates who agree to 
     limit campaign expenditures.
       (b) Necessity for Ban on Political Action Committees.--The 
     Senate finds and declares that--
       (1) contributions by political action committees to 
     individual candidates have created the perception that 
     candidates are beholden to special interests, and leave 
     candidates open to charges of undue influence;
       (2) contributions by political action committees to 
     individual candidates have undermined public confidence in 
     the Senate as an institution; and
       (3) to restore public trust in the Senate as an 
     institution, responsive to individuals residing within the 
     respective States, it is necessary to encourage candidates to 
     raise most of their campaign funds from individuals residing 
     within those States.
       (c) Necessity for Attributing Cooperative Expenditures to 
     Candidates.--The Senate finds and declares that--
       (1) public confidence and trust in the system of campaign 
     finance would be undermined should any candidate be able to 
     circumvent a system of caps on expenditures through 
     cooperative expenditures with outside individuals, groups, or 
     organizations;
       (2) cooperative expenditures by candidates with outside 
     individuals, groups, or organizations would severely 
     undermine the effectiveness of caps on campaign expenditures, 
     unless they are included within such caps; and
       (3) to maintain the integrity of the system of campaign 
     finance, expenditures by any individual, group, or 
     organization that have been made in cooperation with any 
     candidate, authorized committee, or agent of any candidate 
     must be attributed to that candidate's cap on campaign 
     expenditures.
          TITLE I--CONTROL OF CONGRESSIONAL CAMPAIGN SPENDING
   Subtitle A--Senate Election Campaign Spending Limits and Benefits

     SEC. 101. SENATE SPENDING LIMITS AND BENEFITS.

       (a) Amendment of FECA.--
       (1) In general.--FECA is amended by adding at the end the 
     following new title:
 ``TITLE V--SPENDING LIMITS AND BENEFITS FOR SENATE ELECTION CAMPAIGNS

     ``SEC. 501. CANDIDATES ELIGIBLE TO RECEIVE BENEFITS.

       ``(a) In General.--For purposes of this title, a candidate 
     is an eligible Senate candidate if the candidate--
       ``(1) meets the primary and general election filing 
     requirements of subsections (b) and (c);
       ``(2) meets the primary and runoff election expenditure 
     limits of subsection (d); and
       ``(3) meets the threshold contribution requirements of 
     subsection (e).
       ``(b) Primary Filing Requirements.--(1) The requirements of 
     this subsection are met if the candidate files with the 
     Secretary of the Senate a declaration that--
       ``(A) the candidate and the candidate's authorized 
     committees--
       ``(i)(I) will meet the primary and runoff election 
     expenditure limits of subsection (d); and
       ``(II) will only accept contributions for the primary and 
     runoff elections which do not exceed such limits;
       ``(ii)(I) will meet the primary and runoff election 
     multicandidate political committee contribution limits of 
     subsection (f); and
     [[Page S261]]   ``(II) will only accept contributions for the 
     primary and runoff elections from multicandidate political 
     committees which do not exceed such limits; and
       ``(iii) will limit acceptance of contributions during an 
     election cycle from individuals residing outside the 
     candidate's State and multicandidate political committees, 
     combined, to less than 50 percent of the aggregate amount of 
     contributions accepted from all contributors;
       ``(B) the candidate and the candidate's authorized 
     committees will meet the general election expenditure limit 
     under section 502(b); and
       ``(C) the candidate and the candidate's authorized 
     committees will meet the limitation on expenditures from 
     personal funds under section 502(a).
       ``(2) The declaration under paragraph (1) shall be filed 
     not later than the date the candidate files as a candidate 
     for the primary election.
       ``(c) General Election Filing Requirements.--(1) The 
     requirements of this subsection are met if the candidate 
     files a certification with the Secretary of the Senate under 
     penalty of perjury that--
       ``(A) the candidate and the candidate's authorized 
     committees--
       ``(i)(I) met the primary and runoff election expenditure 
     limits under subsection (d); and
       ``(II) did not accept contributions for the primary or 
     runoff election in excess of the primary or runoff 
     expenditure limit under subsection (d), whichever is 
     applicable, reduced by any amounts transferred to this 
     election cycle from a preceding election cycle; and
       ``(ii)(I) met the multicandidate political committee 
     contribution limits under subsection (f);
       ``(II) did not accept contributions for the primary or 
     runoff election in excess of the multicandidate political 
     committee contribution limits under subsection (f); and
       (iii) will limit acceptance of contributions during an 
     election cycle from individuals residing outside the 
     candidate's state and multicandidate political committees, 
     combined, to less than 50 percent of the aggregate amount of 
     contributions accepted from all contributors;
       ``(B) the candidate met the threshold contribution 
     requirement under subsection (e), and that only allowable 
     contributions were taken into account in meeting such 
     requirement;
       ``(C) at least one other candidate has qualified for the 
     same general election ballot under the law of the State 
     involved;
       ``(D) such candidate and the authorized committees of such 
     candidate--
       ``(i) except as otherwise provided by this title, will not 
     make expenditures which exceed the general election 
     expenditure limit under section 502(b);
       ``(ii) will not accept any contributions in violation of 
     section 315;
       ``(iii) except as otherwise provided by this title, will 
     not accept any contribution for the general election involved 
     to the extent that such contribution would cause the 
     aggregate amount of such contributions to exceed the sum of 
     the amount of the general election expenditure limit under 
     section 502(b) and the amount described in section 502(c), 
     reduced by any amounts transferred to the current election 
     cycle from a previous election cycle and not taken into 
     account under subparagraph (A)(ii);
       ``(iv) will deposit all payments received under this title 
     in an account insured by the Federal Deposit Insurance 
     Corporation from which funds may be withdrawn by check or 
     similar means of payment to third parties;
       ``(v) will furnish campaign records, evidence of 
     contributions, and other appropriate information to the 
     Commission; and
       ``(vi) will cooperate in the case of any audit and 
     examination by the Commission under section 506; and
       ``(E) the candidate intends to make use of the benefits 
     provided under section 503.
       ``(2) The declaration under paragraph (1) shall be filed 
     not later than 7 days after the earlier of--
       ``(A) the date the candidate qualifies for the general 
     election ballot under State law; or
       ``(B) if, under State law, a primary or runoff election to 
     qualify for the general election ballot occurs after 
     September 1, the date the candidate wins the primary or 
     runoff election.
       ``(d) Primary and Runoff Expenditure Limits.--(1) The 
     requirements of this subsection are met if:
       ``(A) The candidate or the candidate's authorized 
     committees did not make expenditures for the primary election 
     in excess of the lesser of--
       ``(i) 67 percent of the general election expenditure limit 
     under section 502(b); or
       ``(ii) $2,750,000.
       ``(B) The candidate and the candidate's authorized 
     committees did not make expenditures for any runoff election 
     in excess of 20 percent of the general election expenditure 
     limit under section 502(b).
       ``(2) The limitations under subparagraphs (A) and (B) of 
     paragraph (1) with respect to any candidate shall be 
     increased by the aggregate amount of independent expenditures 
     in opposition to, or on behalf of any opponent of, such 
     candidate during the primary or runoff election period, 
     whichever is applicable, which are required to be reported to 
     the Secretary of the Senate with respect to such period under 
     section 304(c).
       ``(3)(A) If the contributions received by the candidate or 
     the candidate's authorized committees for the primary 
     election or runoff election exceed the expenditures for 
     either such election, such excess contributions shall be 
     treated as contributions for the general election and 
     expenditures for the general election may be made from such 
     excess contributions.
       ``(B) Subparagraph (A) shall not apply to the extent that 
     such treatment of excess contributions--
       ``(i) would result in the violation of any limitation under 
     section 315; or
       ``(ii) would cause the aggregate contributions received for 
     the general election to exceed the limits under subsection 
     (c)(1)(D)(iii).
       ``(e) Threshold Contribution Requirements.--(1) The 
     requirements of this subsection are met if the candidate and 
     the candidate's authorized committees have received allowable 
     contributions during the applicable period in an amount at 
     least equal to the lesser of--
       ``(A) 10 percent of the general election expenditure limit 
     under section 502(b); or
       ``(B) $250,000.
       ``(2) For purposes of this section and section 503(b)--
       ``(A) The term `allowable contributions' means 
     contributions which are made as gifts of money by an 
     individual pursuant to a written instrument identifying such 
     individual as the contributor.
       ``(B) The term `allowable contributions' shall not 
     include--
       ``(i) contributions made directly or indirectly through an 
     intermediary or conduit which are treated as made by such 
     intermediary or conduit under section 315(a)(8)(B);
       ``(ii) contributions from any individual during the 
     applicable period to the extent such contributions exceed 
     $250; or
       ``(iii) contributions from individuals residing outside the 
     candidate's State to the extent such contributions exceed 50 
     percent of the aggregate allowable contributions (without 
     regard to this clause) received by the candidate during the 
     applicable period.

     Clauses (ii) and (iii) shall not apply for purposes of 
     section 503(b).
       ``(3) For purposes of this subsection and section 503(b), 
     the term `applicable period' means--
       ``(A) the period beginning on January 1 of the calendar 
     year preceding the calendar year of the general election 
     involved and ending on--
       ``(i) the date on which the certification under subsection 
     (c) is filed by the candidate; or
       ``(ii) for purposes of section 503(b), the date of such 
     general election; or
       ``(B) in the case of a special election for the office of 
     United States Senator, the period beginning on the date the 
     vacancy in such office occurs and ending on the date of the 
     general election involved.
       ``(f) Multicandidate Political Committee Contribution 
     Limits.--The requirements of this subsection are met if the 
     candidate and the candidate's authorized committees have 
     accepted from multicandidate political committees 
     contributions that do not exceed--
       ``(1) during any period in which the limitation under 
     section 323 is in effect, zero dollars; and
       ``(2) during any other period--
       ``(A) during the primary election period, an amount equal 
     to 20 percent of the primary election spending limit under 
     subsection (d)(1)(A); and
       ``(B) during the runoff election period, an amount equal to 
     20 percent of the runoff election spending limit under 
     subsection (d)(1)(B).
       ``(g) Indexing.--The $2,750,000 amount under subsection 
     (d)(1) shall be increased as of the beginning of each 
     calendar year beginning with calendar year 1998, based on the 
     increase in the price index determined under section 315(c), 
     except that, for purposes of subsection (d)(1), the base 
     period shall be calendar year 1992.

     ``SEC. 502. LIMITATIONS ON EXPENDITURES.

       ``(a) Limitation on Use of Personal Funds.--(1) The 
     aggregate amount of expenditures which may be made during an 
     election cycle by an eligible Senate candidate or such 
     candidate's authorized committees from the sources described 
     in paragraph (2) shall not exceed $25,000.
       ``(2) A source is described in this paragraph if it is--
       ``(A) personal funds of the candidate and members of the 
     candidate's immediate family; or
       ``(B) personal debt incurred by the candidate and members 
     of the candidate's immediate family.
       ``(b) General Election Expenditure Limit.--(1) Except as 
     otherwise provided in this title, the aggregate amount of 
     expenditures for a general election by an eligible Senate 
     candidate and the candidate's authorized committees shall not 
     exceed the lesser of--
       ``(A) $5,500,000; or
       ``(B) the greater of--
       ``(i) $950,000; or
       ``(ii) $400,000; plus
       ``(I) 30 cents multiplied by the voting age population not 
     in excess of 4,000,000; and
       ``(II) 25 cents multiplied by the voting age population in 
     excess of 4,000,000.
       ``(2) In the case of an eligible Senate candidate in a 
     State which has no more than 1 
     [[Page S262]] transmitter for a commercial Very High 
     Frequency (VHF) television station licensed to operate in 
     that State, paragraph (1)(B)(ii) shall be applied by 
     substituting--
       ``(A) `80 cents' for `30 cents' in subclause (I); and
       ``(B) `70 cents' for `25 cents' in subclause (II).
       ``(3) The amount otherwise determined under paragraph (1) 
     for any calendar year shall be increased by the same 
     percentage as the percentage increase for such calendar year 
     under section 501(f) (relating to indexing).
       ``(c) Payment of Taxes.--The limitation under subsection 
     (b) shall not apply to any expenditure for Federal, State, or 
     local taxes with respect to a candidate's authorized 
     committees.
       ``(d) Expenditures.--For purposes of this title, the term 
     `expenditure' has the meaning given such term by section 
     301(9), except that in determining any expenditures made by, 
     or on behalf of, a candidate or a candidate's authorized 
     committees, section 301(9)(B) shall be applied without regard 
     to clause (ii) or (vi) thereof.
     ``SEC. 503. BENEFITS ELIGIBLE CANDIDATE ENTITLED TO RECEIVE.

       ``(a) In General.--An eligible Senate candidate shall be 
     entitled to--
       ``(1) the broadcast media rates provided under section 
     315(b) of the Communications Act of 1934;
       ``(2) the mailing rates provided in section 3626(e) of 
     title 39, United States Code; and
       ``(3) payments in the amounts determined under subsection 
     (b).
       ``(b) Amount of Payments.--(1) For purposes of subsection 
     (a)(3), the amounts determined under this subsection are--
       ``(A) the public financing amount;
       ``(B) the independent expenditure amount; and
       ``(C) in the case of an eligible Senate candidate who has 
     an opponent in the general election who receives 
     contributions, or makes (or obligates to make) expenditures, 
     for such election in excess of the general election 
     expenditure limit under section 502(b), the excess 
     expenditure amount.
       ``(2) For purposes of paragraph (1), the public financing 
     amount is--
       ``(A) in the case of an eligible candidate who is a major 
     party candidate and who has met the threshold requirement of 
     section 501(e)--
       ``(i) during the primary election period, an amount equal 
     to 100 percent of the amount of contributions received during 
     that period from individuals residing in the candidate's 
     State in the aggregate amount of $100 or less plus an amount 
     equal to 50 percent of the amount of contributions received 
     during that period from individuals residing in the 
     candidate's State in the aggregate amount of more than $100 
     but less than $251, up to 50 percent of the primary election 
     spending limit under section 501(d)(1)(A), reduced by the 
     threshold requirement under section 501(e);
       ``(ii) during the runoff election period, an amount equal 
     to 100 percent of the amount of contributions received during 
     that period from individuals residing in the candidate's 
     State in the aggregate amount of $100 or less plus an amount 
     equal to 50 percent of the amount of contributions received 
     during that period from individuals residing in the 
     candidate's State in the aggregate amount of more than $100 
     but less than $251, up to 10 percent of the general election 
     spending limit under section 501(d)(1)(B); and
       ``(iii) during the general election period, an amount equal 
     to the general election expenditure limit applicable to the 
     candidate under section 502(b) (without regard to paragraph 
     (4) thereof); and
       ``(B) in the case of an eligible candidate who is not a 
     major party candidate and who has met the threshold 
     requirement of section 501(e)--
       ``(i) during the primary election period, an amount equal 
     to 100 percent of the amount of contributions received during 
     that period from individuals residing in the candidate's 
     State in the aggregate amount of $100 or less plus an amount 
     equal to 50 percent of the amount of contributions received 
     during that period from individuals residing in the 
     candidate's State in the aggregate amount of more than $100 
     but less than $251, up to 50 percent of the primary election 
     spending limit under section 501(d)(1)(A), reduced by the 
     threshold requirement under section 501(e);
       ``(ii) during the runoff election period, an amount equal 
     to 100 percent of the amount of contributions received during 
     that period from individuals residing in the candidate's 
     State in the aggregate amount of $100 or less plus an amount 
     equal to 50 percent of the amount of contributions received 
     during that period from individuals residing in the 
     candidate's State in the aggregate amount of more than $100 
     but less than $251, up to 10 percent of the general election 
     spending limit under section 501(d)(1)(B); and
       ``(iii) during the general election period, an amount equal 
     to 100 percent of the amount of contributions received during 
     that period from individuals residing in the candidate's 
     State in the aggregate amount of $100 or less plus an amount 
     equal to 50 percent of the amount of contributions received 
     during that period from individuals residing in the 
     candidate's State in the aggregate amount of more than $100 
     but less than $251, up to 50 percent of the general election 
     spending limit under section 502(b)
       ``(3) For purposes of paragraph (1), the independent 
     expenditure amount is the total amount of independent 
     expenditures made, or obligated to be made, during the 
     general election period by 1 or more persons in opposition 
     to, or on behalf of an opponent of, an eligible Senate 
     candidate which are required to be reported by such persons 
     under section 304(c) with respect to the general election 
     period and are certified by the Commission under section 
     304(c).
       ``(4) For purposes of paragraph (1), the excess expenditure 
     amount is the amount determined as follows:
       ``(A) In the case of a major party candidate, an amount 
     equal to the sum of--
       ``(i) if the excess described in paragraph (1)(C) is not 
     greater than 133\1/3\ percent of the general election 
     expenditure limit under section 502(b), an amount equal to 
     one-third of such limit applicable to the eligible Senate 
     candidate for the election; plus
       ``(ii) if such excess equals or exceeds 133\1/3\ percent 
     but is less than 166\2/3\ percent of such limit, an amount 
     equal to one-third of such limit; plus
       ``(iii) if such excess equals or exceeds 166\2/3\ percent 
     of such limit, an amount equal to one-third of such limit.
       ``(B) In the case of an eligible Senate candidate who is 
     not a major party candidate, an amount equal to the least of 
     the following:
       ``(i) The allowable contributions of the eligible Senate 
     candidate during the applicable period in excess of the 
     threshold contribution requirement under section 501(e).
       ``(ii) 50 percent of the general election expenditure limit 
     applicable to the eligible Senate candidate under section 
     502(b).
       ``(iii) The excess described in paragraph (1).
       ``(c) Waiver of Expenditure and Contribution Limits.--(1) 
     An eligible Senate candidate who receives payments under 
     subsection (a)(3) which are allocable to the independent 
     expenditure or excess expenditure amounts described in 
     paragraphs (3) and (4) of subsection (b) may make 
     expenditures from such payments to defray expenditures for 
     the general election without regard to the general election 
     expenditure limit under section 502(b).
       ``(2)(A) An eligible Senate candidate who receives benefits 
     under this section may make expenditures for the general 
     election without regard to clause (i) of section 501(c)(1)(D) 
     or subsection (a) or (b) of section 502 if any one of the 
     eligible Senate candidate's opponents who is not an eligible 
     Senate candidate either raises aggregate contributions, or 
     makes or becomes obligated to make aggregate expenditures, 
     for the general election that exceed 200 percent of the 
     general election expenditure limit applicable to the eligible 
     Senate candidate under section 502(b).
       ``(B) The amount of the expenditures which may be made by 
     reason of subparagraph (A) shall not exceed 100 percent of 
     the general election expenditure limit under section 502(b).
       ``(3)(A) A candidate who receives benefits under this 
     section may receive contributions for the general election 
     without regard to clause (iii) of section 501(c)(1)(D) if--
       ``(i) a major party candidate in the same general election 
     is not an eligible Senate candidate; or
       ``(ii) any other candidate in the same general election who 
     is not an eligible Senate candidate raises aggregate 
     contributions, or makes or becomes obligated to make 
     aggregate expenditures, for the general election that exceed 
     75 percent of the general election expenditure limit 
     applicable to such other candidate under section 502(b).
       ``(B) The amount of contributions which may be received by 
     reason of subparagraph (A) shall not exceed 100 percent of 
     the general election expenditure limit under section 502(b).
       ``(d) Use of Payments.--Payments received by a candidate 
     under subsection (a)(3) shall be used to defray expenditures 
     incurred with respect to the general election period for the 
     candidate. Such payments shall not be used--
       ``(1) except as provided in paragraph (4), to make any 
     payments, directly or indirectly, to such candidate or to any 
     member of the immediate family of such candidate;
       ``(2) to make any expenditure other than expenditures to 
     further the general election of such candidate;
       ``(3) to make any expenditures which constitute a violation 
     of any law of the United States or of the State in which the 
     expenditure is made; or
       ``(4) subject to the provisions of section 315(k), to repay 
     any loan to any person except to the extent the proceeds of 
     such loan were used to further the general election of such 
     candidate.
     ``SEC. 504. CERTIFICATION BY COMMISSION.

       ``(a) In General.--(1) The Commission shall certify to any 
     candidate meeting the requirements of section 501 that such 
     candidate is an eligible Senate candidate entitled to 
     benefits under this title. The Commission shall revoke such 
     certification if it determines a candidate fails to continue 
     to meet such requirements.
       ``(2) No later than 48 hours after an eligible Senate 
     candidate files a request with the Secretary of the Senate to 
     receive benefits under section 501, the Commission shall 
     issue a certification stating whether such candidate is 
     eligible for payments under this title and the amount of such 
     payments to which such candidate is entitled. The request 
     referred to in the preceding sentence shall contain--
     [[Page S263]]   ``(A) such information and be made in 
     accordance with such procedures as the Commission may provide 
     by regulation; and
       ``(B) a verification signed by the candidate and the 
     treasurer of the principal campaign committee of such 
     candidate stating that the information furnished in support 
     of the request, to the best of their knowledge, is correct 
     and fully satisfies the requirements of this title.
       ``(b) Determinations by Commission.--All determinations 
     (including certifications under subsection (a)) made by the 
     Commission under this title shall be final and conclusive, 
     except to the extent that they are subject to examination and 
     audit by the Commission under section 505 and judicial review 
     under section 506.

     ``SEC. 505. EXAMINATION AND AUDITS; REPAYMENTS; CIVIL 
                   PENALTIES.

       ``(a) Examination and Audits.--(1) After each general 
     election, the Commission shall conduct an examination and 
     audit of the campaign accounts of 10 percent of all 
     candidates for the office of United States Senator to 
     determine, among other things, whether such candidates have 
     complied with the expenditure limits and conditions of 
     eligibility of this title, and other requirements of this 
     Act. Such candidates shall be designated by the Commission 
     through the use of an appropriate statistical method of 
     random selection. If the Commission selects a candidate, the 
     Commission shall examine and audit the campaign accounts of 
     all other candidates in the general election for the office 
     the selected candidate is seeking.
       ``(2) The Commission may conduct an examination and audit 
     of the campaign accounts of any candidate in a general 
     election for the office of United States Senator if the 
     Commission determines that there exists reason to believe 
     that such candidate may have violated any provision of this 
     title.
       ``(b) Excess Payments; Revocation of Status.--(1) If the 
     Commission determines that payments were made to an eligible 
     Senate candidate under this title in excess of the aggregate 
     amounts to which such candidate was entitled, the Commission 
     shall so notify such candidate, and such candidate shall pay 
     an amount equal to the excess.
       ``(2) If the Commission revokes the certification of a 
     candidate as an eligible Senate candidate under section 
     504(a)(1), the Commission shall notify the candidate, and the 
     candidate shall pay an amount equal to the payments received 
     under this title.
       ``(c) Misuse of Benefits.--If the Commission determines 
     that any amount of any benefit made available to an eligible 
     Senate candidate under this title was not used as provided 
     for in this title, the Commission shall so notify such 
     candidate and such candidate shall pay the amount of such 
     benefit.
       ``(d) Excess Expenditures.--If the Commission determines 
     that any eligible Senate candidate who has received benefits 
     under this title has made expenditures which in the aggregate 
     exceed--
       ``(1) the primary or runoff expenditure limit under section 
     501(d); or
       ``(2) the general election expenditure limit under section 
     502(b),

     the Commission shall so notify such candidate and such 
     candidate shall pay an amount equal to the amount of the 
     excess expenditures.
       ``(e) Civil Penalties for Excess Expenditures and 
     Contributions.--(1) If the Commission determines that a 
     candidate has committed a violation described in subsection 
     (c), the Commission may assess a civil penalty against such 
     candidate in an amount not greater than 200 percent of the 
     amount involved.
       ``(2)(A) Low amount of excess expenditures.--Any eligible 
     Senate candidate who makes expenditures that exceed any 
     limitation described in paragraph (1) or (2) of subsection 
     (d) by 2.5 percent or less shall pay an amount equal to the 
     amount of the excess expenditures.
       ``(B) Medium amount of excess expenditures.--Any eligible 
     Senate candidate who makes expenditures that exceed any 
     limitation described in paragraph (1) or (2) of subsection 
     (d) by more than 2.5 percent and less than 5 percent shall 
     pay an amount equal to three times the amount of the excess 
     expenditures.
       ``(C) Large amount of excess expenditures.--Any eligible 
     Senate candidate who makes expenditures that exceed any 
     limitation described in paragraph (1) or (2) of subsection 
     (d) by 5 percent or more shall pay an amount equal to three 
     times the amount of the excess expenditures plus a civil 
     penalty in an amount determined by the Commission.
       ``(f) Unexpended Funds.--Any amount received by an eligible 
     Senate candidate under this title may be retained for a 
     period not exceeding 120 days after the date of the general 
     election for the liquidation of all obligations to pay 
     expenditures for the general election incurred during the 
     general election period. At the end of such 120-day period, 
     any unexpended funds received under this title shall be 
     promptly repaid.
       ``(g) Limit on Period for Notification.--No notification 
     shall be made by the Commission under this section with 
     respect to an election more than three years after the date 
     of such election.
       ``(h) Deposits.--The Secretary shall deposit all payments 
     received under this section into the Senate Election Campaign 
     Fund.

     ``SEC. 506. JUDICIAL REVIEW.

       ``(a) Judicial Review.--Any agency action by the Commission 
     made under the provisions of this title shall be subject to 
     review by the United States Court of Appeals for the District 
     of Columbia Circuit upon petition filed in such court within 
     thirty days after the agency action by the Commission for 
     which review is sought. It shall be the duty of the Court of 
     Appeals, ahead of all matters not filed under this title, to 
     advance on the docket and expeditiously take action on all 
     petitions filed pursuant to this title.
       ``(b) Application of Title 5.--The provisions of chapter 7 
     of title 5, United States Code, shall apply to judicial 
     review of any agency action by the Commission.
       ``(c) Agency Action.--For purposes of this section, the 
     term `agency action' has the meaning given such term by 
     section 551(13) of title 5, United States Code.

     ``SEC. 507. PARTICIPATION BY COMMISSION IN JUDICIAL 
                   PROCEEDINGS.

       ``(a) Appearances.--The Commission is authorized to appear 
     in and defend against any action instituted under this 
     section and under section 506 either by attorneys employed in 
     its office or by counsel whom it may appoint without regard 
     to the provisions of title 5, United States Code, governing 
     appointments in the competitive service, and whose 
     compensation it may fix without regard to the provisions of 
     chapter 51 and subchapter III of chapter 53 of such title.
       ``(b) Institution of Actions.--The Commission is 
     authorized, through attorneys and counsel described in 
     subsection (a), to institute actions in the district courts 
     of the United States to seek recovery of any amounts 
     determined under this title to be payable to the Secretary.
       ``(c) Injunctive Relief.--The Commission is authorized, 
     through attorneys and counsel described in subsection (a), to 
     petition the courts of the United States for such injunctive 
     relief as is appropriate in order to implement any provision 
     of this title.
       ``(d) Appeals.--The Commission is authorized on behalf of 
     the United States to appeal from, and to petition the Supreme 
     Court for certiorari to review, judgments or decrees entered 
     with respect to actions in which it appears pursuant to the 
     authority provided in this section.
     ``SEC. 508. REPORTS TO CONGRESS; REGULATIONS.

       ``(a) Reports.--The Commission shall, as soon as 
     practicable after each election, submit a full report to the 
     Senate setting forth--
       ``(1) the expenditures (shown in such detail as the 
     Commission determines appropriate) made by each eligible 
     Senate candidate and the authorized committees of such 
     candidate;
       ``(2) the amounts certified by the Commission under section 
     504 as benefits available to each eligible Senate candidate;
       ``(3) the amount of repayments, if any, required under 
     section 505 and the reasons for each repayment required; and
       ``(4) the balance in the Senate Election Campaign Fund, and 
     the balance in any account maintained by the Fund.

     Each report submitted pursuant to this section shall be 
     printed as a Senate document.
       ``(b) Rules and Regulations.--The Commission is authorized 
     to prescribe such rules and regulations, in accordance with 
     the provisions of subsection (c), to conduct such 
     examinations and investigations, and to require the keeping 
     and submission of such books, records, and information, as it 
     deems necessary to carry out the functions and duties imposed 
     on it by this title.
       ``(c) Statement to Senate.--Thirty days before prescribing 
     any rules or regulation under subsection (b), the Commission 
     shall transmit to the Senate a statement setting forth the 
     proposed rule or regulation and containing a detailed 
     explanation and justification of such rule or regulation.

     ``SEC. 509. PAYMENTS RELATING TO ELIGIBLE CANDIDATES.
       ``(a) Establishment of Campaign Fund.--(1) There is 
     established on the books of the Treasury of the United States 
     a special fund to be known as the `Senate Election Campaign 
     Fund'.
       ``(2)(A) There are appropriated to the Fund for each fiscal 
     year, out of amounts in the general fund of the Treasury not 
     otherwise appropriated, amounts equal to--
       ``(i) any contributions by persons which are specifically 
     designated as being made to the Fund;
       ``(ii) amounts collected under section 505(h); and
       ``(iii) any other amounts that may be appropriated to or 
     deposited into the Fund under this title.
       ``(B) The Secretary of the Treasury shall, from time to 
     time, transfer to the Fund an amount not in excess of the 
     amounts described in subparagraph (A).
       ``(C) Amounts in the Fund shall remain available without 
     fiscal year limitation.
       ``(3) Amounts in the Fund shall be available only for the 
     purposes of--
       ``(A) making payments required under this title; and
       ``(B) making expenditures in connection with the 
     administration of the Fund.
       ``(4) The Secretary shall maintain such accounts in the 
     Fund as may be required by this title or which the Secretary 
     determines to be necessary to carry out the provisions of 
     this title.
       ``(b) Payments Upon Certification.--Upon receipt of a 
     certification from the Commission under section 504, except 
     as provided in subsection (d), the Secretary shall promptly 
     pay the amount certified by the Commission to the candidate 
     out of the Senate Election Campaign Fund.
     [[Page S264]]   ``(c) Reductions in Payments if Funds 
     Insufficient.--(1) If, at the time of a certification by the 
     Commission under section 504 for payment to an eligible 
     candidate, the Secretary determines that the monies in the 
     Senate Election Campaign Fund are not, or may not be, 
     sufficient to satisfy the full entitlement of all eligible 
     candidates, the Secretary shall withhold from the amount of 
     such payment such amount as the Secretary determines to be 
     necessary to assure that each eligible candidate will receive 
     the same pro rata share of such candidate's full entitlement.
       ``(2) Amounts withheld under subparagraph (A) shall be paid 
     when the Secretary determines that there are sufficient 
     monies in the Fund to pay all, or a portion thereof, to all 
     eligible candidates from whom amounts have been withheld, 
     except that if only a portion is to be paid, it shall be paid 
     in such manner that each eligible candidate receives an equal 
     pro rata share of such portion.
       ``(3)(A) Not later than December 31 of any calendar year 
     preceding a calendar year in which there is a regularly 
     scheduled general election, the Secretary, after consultation 
     with the Commission, shall make an estimate of--
       ``(i) the amount of monies in the fund which will be 
     available to make payments required by this title in the 
     succeeding calendar year; and
       ``(ii) the amount of payments which will be required under 
     this title in such calendar year.
       ``(B) If the Secretary determines that there will be 
     insufficient monies in the fund to make the payments required 
     by this title for any calendar year, the Secretary shall 
     notify each candidate on January 1 of such calendar year (or, 
     if later, the date on which an individual becomes a 
     candidate) of the amount which the Secretary estimates will 
     be the pro rata reduction in each eligible candidate's 
     payments under this subsection. Such notice shall be by 
     registered mail.
       ``(C) The amount of the eligible candidate's contribution 
     limit under section 501(c)(1)(D)(iii) shall be increased by 
     the amount of the estimated pro rata reduction.
       ``(4) The Secretary shall notify the Commission and each 
     eligible candidate by registered mail of any actual reduction 
     in the amount of any payment by reason of this subsection. If 
     the amount of the reduction exceeds the amount estimated 
     under paragraph (3), the candidate's contribution limit under 
     section 501(c)(1)(D)(iii) shall be increased by the amount of 
     such excess.''.
       (2) Effective dates.--(A) Except as provided in this 
     paragraph, the amendment made by paragraph (1) shall apply to 
     elections occurring after December 31, 1995.
       (B) For purposes of any expenditure or contribution limit 
     imposed by the amendment made by paragraph (1)--
       (i) no expenditure made before January 1, 1996, shall be 
     taken into account, except that there shall be taken into 
     account any such expenditure for goods or services to be 
     provided after such date; and
       (ii) all cash, cash items, and Government securities on 
     hand as of January 1, 1996, shall be taken into account in 
     determining whether the contribution limit is met, except 
     that there shall not be taken into account amounts used 
     during the 60-day period beginning on January 1, 1996, to pay 
     for expenditures which were incurred (but unpaid) before such 
     date.
       (3) Effect of invalidity on other provisions of act.--If 
     section 501, 502, or 503 of title V of FECA (as added by this 
     section), or any part thereof, is held to be invalid, all 
     provisions of, and amendments made by, this Act shall be 
     treated as invalid.
       (b) Provisions To Facilitate Voluntary Contributions to 
     Senate Election Campaign Fund.--
       (1) General rule.--Part VIII of subchapter A of chapter 61 
     of the Internal Revenue Code of 1986 (relating to returns and 
     records) is amended by adding at the end the following:

   ``Subpart B--Designation of Additional Amounts to Senate Election 
                             Campaign Fund
``Sec. 6097. Designation of additional amounts.
     ``SEC. 6097. DESIGNATION OF ADDITIONAL AMOUNTS.

       ``(a) General Rule.--Every individual (other than a 
     nonresident alien) who files an income tax return for any 
     taxable year may designate an additional amount equal to $5 
     ($10 in the case of a joint return) to be paid over to the 
     Senate Election Campaign Fund.
       ``(b) Manner and Time of Designation.--A designation under 
     subsection (a) may be made for any taxable year only at the 
     time of filing the income tax return for the taxable year. 
     Such designation shall be made on the page bearing the 
     taxpayer's signature.
       ``(c) Treatment of Additional Amounts.--Any additional 
     amount designated under subsection (a) for any taxable year 
     shall, for all purposes of law, be treated as an additional 
     income tax imposed by chapter 1 for such taxable year.
       ``(d) Income Tax Return.--For purposes of this section, the 
     term `income tax return' means the return of the tax imposed 
     by chapter 1.''.
       (2) Conforming amendments.--(A) Part VIII of subchapter A 
     of chapter 61 of such Code is amended by striking the heading 
     and inserting:
     ``PART VIII--DESIGNATION OF AMOUNTS TO ELECTION CAMPAIGN FUNDS
``Subpart A. Presidential Election Campaign Fund.
``Subpart B. Designation of additional amounts to Senate Election 
              Campaign Fund.
          ``Subpart A--Presidential Election Campaign Fund''.

       (B) The table of parts for subchapter A of chapter 61 of 
     such Code is amended by striking the item relating to part 
     VIII and inserting:

``Part VIII. Designation of amounts to election campaign funds.''
       (3) Effective date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 102. BAN ON ACTIVITIES OF POLITICAL ACTION COMMITTEES IN 
                   FEDERAL ELECTIONS.

       (a) In General.--Title III of FECA (2 U.S.C. 431 et seq.), 
     is amended by adding at the end thereof the following new 
     section:


  ``BAN ON FEDERAL ELECTION ACTIVITIES BY POLITICAL ACTION COMMITTEES

       ``Sec. 323. (a) Notwithstanding any other provision of this 
     Act, no person other than an individual or a political 
     committee may make contributions, solicit or receive 
     contributions, or make expenditures for the purpose of 
     influencing an election for Federal office.
       ``(b) In the case of individuals who are executive or 
     administrative personnel of an employer--
       ``(1) no contributions may be made by such individuals--
       ``(A) to any political committees established and 
     maintained by any political party; or
       ``(B) to any candidate for nomination for election, or 
     election, to Federal office or the candidate's authorized 
     committees,

     unless such contributions are not being made at the direction 
     of, or otherwise controlled or influenced by, the employer; 
     and
       ``(2) the aggregate amount of such contributions by all 
     such individuals in any calendar year shall not exceed--
       ``(A) $20,000 in the case of such political committees; and
       ``(B) $5,000 in the case of any such candidate and the 
     candidate's authorized committees.''.
       (b) Definition of Political Committee.--(1) Paragraph (4) 
     of section 301 of FECA (2 U.S.C. 431(4)) is amended to read 
     as follows:
       ``(4) The term `political committee' means--
       ``(A) the principal campaign committee of a candidate;
       ``(B) any national, State, or district committee of a 
     political party, including any subordinate committee thereof; 
     and
       ``(C) any local committee of a political party which--
       ``(i) receives contributions aggregating in excess of 
     $5,000 during a calendar year;
       ``(ii) makes payments exempted from the definition of 
     contribution or expenditure under paragraph (8) or (9) 
     aggregating in excess of $5,000 during a calendar year;
       ``(iii) makes contributions or expenditures aggregating in 
     excess of $1,000 during a calendar year; or
       ``(D) any committee described in section 
     315(a)(8)(D)(i)(III).''.
       (2) Section 316(b)(2) of FECA (2 U.S.C. 441b(b)(2)) is 
     amended by striking subparagraph (C).
       (c) Candidate's Committees.--(1) Section 315(a) of FECA (2 
     U.S.C. 441a(a)) is amended by adding at the end thereof the 
     following new paragraph:
       ``(9) For the purposes of the limitations provided by 
     paragraphs (1) and (2), any political committee which is 
     established or financed or maintained or controlled by any 
     candidate or Federal officeholder shall be deemed to be an 
     authorized committee of such candidate or officeholder. 
     Nothing in this paragraph shall be construed to permit the 
     establishment, financing, maintenance, or control of any 
     committee which is prohibited by paragraph (3) or (6) of 
     section 302(e).''.
       (2) Section 302(e)(3) of FECA (2 U.S.C. 432) is amended to 
     read as follows:
       ``(3) No political committee that supports or has supported 
     more than one candidate may be designated as an authorized 
     committee, except that--
       ``(A) a candidate for the office of President nominated by 
     a political party may designate the national committee of 
     such political party as the candidate's principal campaign 
     committee, but only if that national committee maintains 
     separate books of account with respect to its functions as a 
     principal campaign committee; and
       ``(B) a candidate may designate a political committee 
     established solely for the purpose of joint fundraising by 
     such candidates as an authorized committee.''.
       (d) Rules Applicable When Ban Not in Effect.--For purposes 
     of the Federal Election Campaign Act of 1971, during any 
     period beginning after the effective date in which the 
     limitation under section 323 of such Act (as added by 
     subsection (a)) is not in effect--
       (1) the amendments made by subsections (a), (b), and (c) 
     shall not be in effect;
       (2) in the case of a candidate for election, or nomination 
     for election, to Federal office (and such candidate's 
     authorized committees), section 315(a)(2)(A) of FECA (2 
     U.S.C. 441a(a)(2)(A)) shall be applied by substituting 
     ``$1,000'' for ``$5,000'';
       (3) it shall be unlawful for a multicandidate political 
     committee to make a contribution to a candidate for election, 
     or 
     [[Page S265]] nomination for election, to Federal office (or 
     an authorized committee) to the extent that the making or 
     accepting of the contribution will cause the amount of 
     contributions received by the candidate and the candidate's 
     authorized committees from multicandidate political 
     committees to exceed the lesser of--
       (A) $825,000; or
       (B) 20 percent of the aggregate Federal election spending 
     limits applicable to the candidate for the election cycle.

     The $825,000 amount in paragraph (3) shall be increased as of 
     the beginning of each calendar year based on the increase in 
     the price index determined under section 315(c) of FECA, 
     except that for purposes of paragraph (3), the base period 
     shall be the calendar year 1996. A candidate or authorized 
     committee that receives a contribution from a multicandidate 
     political committee in excess of the amount allowed under 
     paragraph (3) shall return the amount of such excess 
     contribution to the contributor.
       (e) Rule Ensuring Prohibition on Direct Corporate and Labor 
     Spending.--If section 316(a) of the Federal Election Campaign 
     Act of 1971 is held to be invalid by reason of the amendments 
     made by this section, then the amendments made by subsections 
     (a), (b), and (c) of this section shall not apply to 
     contributions by any political committee that is directly or 
     indirectly established, administered, or supported by a 
     connected organization which is a bank, corporation, or other 
     organization described in such section 316(a).
       (f) Restrictions on Contributions to Political 
     Committees.--Paragraphs (1)(C) and (2)(C) of section 315(a) 
     of FECA (2 U.S.C. 441a(a) (1)(D) and (2)(D)) are each amended 
     by striking ``$5,000'' and inserting ``$1,000''.
       (g) Effective Dates.--(1) Except as provided in paragraph 
     (2), the amendments made by this section shall apply to 
     elections (and the election cycles relating thereto) 
     occurring after December 31, 1996.
       (2) In applying the amendments made by this section, there 
     shall not be taken into account--
       (A) contributions made or received before January 1, 1996; 
     or
       (B) contributions made to, or received by, a candidate on 
     or after January 1, 1996, to the extent such contributions 
     are not greater than the excess (if any) of--
       (i) such contributions received by any opponent of the 
     candidate before January 1, 1996, over
       (ii) such contributions received by the candidate before 
     January 1, 1996.

     SEC. 103. REPORTING REQUIREMENTS.

       Title III of FECA is amended by inserting after section 304 
     the following new section:


             ``REPORTING REQUIREMENTS FOR SENATE CANDIDATES

       ``Sec. 304A. (a) Candidate Other Than Eligible Senate 
     Candidate.--(1) Each candidate for the office of United 
     States Senator who does not file a certification with the 
     Secretary of the Senate under section 501(c) shall file with 
     the Secretary of the Senate a declaration as to whether such 
     candidate intends to make expenditures for the general 
     election in excess of the general election expenditure limit 
     applicable to an eligible Senate candidate under section 
     502(b). Such declaration shall be filed at the time provided 
     in section 501(c)(2).
       ``(2) Any candidate for the United States Senate who 
     qualifies for the ballot for a general election--
       ``(A) who is not an eligible Senate candidate under section 
     501; and
       ``(B) who either raises aggregate contributions, or makes 
     or obligates to make aggregate expenditures, for the general 
     election which exceed 75 percent of the general election 
     expenditure limit applicable to an eligible Senate candidate 
     under section 502(b),

     shall file a report with the Secretary of the Senate within 
     24 hours after such contributions have been raised or such 
     expenditures have been made or obligated to be made (or, if 
     later, within 24 hours after the date of qualification for 
     the general election ballot), setting forth the candidate's 
     total contributions and total expenditures for such election 
     as of such date. Thereafter, such candidate shall file 
     additional reports (until such contributions or expenditures 
     exceed 200 percent of such limit) with the Secretary of the 
     Senate within 24 hours after each time additional 
     contributions are raised, or expenditures are made or are 
     obligated to be made, which in the aggregate exceed an amount 
     equal to 10 percent of such limit and after the total 
     contributions or expenditures exceed 133\1/3\, 166\2/3\, and 
     200 percent of such limit.
       ``(3) The Commission--
       ``(A) shall, within 24 hours of receipt of a declaration or 
     report under paragraph (1) or (2), notify each eligible 
     Senate candidate in the election involved about such 
     declaration or report; and
       ``(B) if an opposing candidate has raised aggregate 
     contributions, or made or has obligated to make aggregate 
     expenditures, in excess of the applicable general election 
     expenditure limit under section 502(b), shall certify, 
     pursuant to the provisions of subsection (d), such 
     eligibility for payment of any amount to which such eligible 
     Senate candidate is entitled under section 503(a).
       ``(4) Notwithstanding the reporting requirements under this 
     subsection, the Commission may make its own determination 
     that a candidate in a general election who is not an eligible 
     Senate candidate has raised aggregate contributions, or made 
     or has obligated to make aggregate expenditures, in the 
     amounts which would require a report under paragraph (2). The 
     Commission shall, within 24 hours after making each such 
     determination, notify each eligible Senate candidate in the 
     general election involved about such determination, and 
     shall, when such contributions or expenditures exceed the 
     general election expenditure limit under section 502(b), 
     certify (pursuant to the provisions of subsection (d)) such 
     candidate's eligibility for payment of any amount under 
     section 503(a).
       ``(b) Reports on Personal Funds.--(1) Any candidate for the 
     United States Senate who during the election cycle expends 
     more than the limitation under section 502(a) during the 
     election cycle from his personal funds, the funds of his 
     immediate family, and personal loans incurred by the 
     candidate and the candidate's immediate family shall file a 
     report with the Secretary of the Senate within 24 hours after 
     such expenditures have been made or loans incurred.
       ``(2) The Commission within 24 hours after a report has 
     been filed under paragraph (1) shall notify each eligible 
     Senate candidate in the election involved about each such 
     report.
       ``(3) Notwithstanding the reporting requirements under this 
     subsection, the Commission may make its own determination 
     that a candidate for the United States Senate has made 
     expenditures in excess of the amount under paragraph (1). The 
     Commission within 24 hours after making such determination 
     shall notify each eligible Senate candidate in the general 
     election involved about each such determination.
       ``(c) Candidates for Other Offices.--(1) Each individual--
       ``(A) who becomes a candidate for the office of United 
     States Senator;
       ``(B) who, during the election cycle for such office, held 
     any other Federal, State, or local office or was a candidate 
     for such other office; and
       ``(C) who expended any amount during such election cycle 
     before becoming a candidate for the office of United States 
     Senator which would have been treated as an expenditure if 
     such individual had been such a candidate, including amounts 
     for activities to promote the image or name recognition of 
     such individual,

     shall, within 7 days of becoming a candidate for the office 
     of United States Senator, report to the Secretary of the 
     Senate the amount and nature of such expenditures.
       ``(2) Paragraph (1) shall not apply to any expenditures in 
     connection with a Federal, State, or local election which has 
     been held before the individual becomes a candidate for the 
     office of United States Senator.
       ``(3) The Commission shall, as soon as practicable, make a 
     determination as to whether the amounts included in the 
     report under paragraph (1) were made for purposes of 
     influencing the election of the individual to the office of 
     United States Senator.
       ``(d) Certifications.--Notwithstanding section 505(a), the 
     certification required by this section shall be made by the 
     Commission on the basis of reports filed in accordance with 
     the provisions of this Act, or on the basis of such 
     Commission's own investigation or determination.
       ``(e) Copies of Reports and Public Inspection.--The 
     Secretary of the Senate shall transmit a copy of any report 
     or filing received under this section or of title V (whenever 
     a 24-hour response is required of the Commission) as soon as 
     possible (but no later than 4 working hours of the 
     Commission) after receipt of such report or filing, and shall 
     make such report or filing available for public inspection 
     and copying in the same manner as the Commission under 
     section 311(a)(4), and shall preserve such reports and 
     filings in the same manner as the Commission under section 
     311(a)(5).
       ``(f) Definitions.--For purposes of this section, any term 
     used in this section which is used in title V shall have the 
     same meaning as when used in title V.''.

     SEC. 104. DISCLOSURE BY NONELIGIBLE CANDIDATES.

       Section 318 of FECA (2 U.S.C. 441d), as amended by section 
     133, is amended by adding at the end thereof the following:
       ``(e) If a broadcast, cablecast, or other communication is 
     paid for or authorized by a candidate in the general election 
     for the office of United States Senator who is not an 
     eligible Senate candidate, or the authorized committee of 
     such candidate, such communication shall contain the 
     following sentence: `This candidate has not agreed to 
     voluntary campaign spending limits.'.''.
                     Subtitle B--General Provisions

     SEC. 131. BROADCAST RATES AND PREEMPTION.

       (a) Broadcast Rates.--Section 315(b) of the Communications 
     Act of 1934 (47 U.S.C. 315(b)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``forty-five'' and inserting ``30'';
       (B) by striking ``sixty'' and inserting ``45''; and
       (C) by striking ``lowest unit charge of the station for the 
     same class and amount of time for the same period'' and 
     inserting ``lowest charge of the station for the same amount 
     of time for the same period on the same date''; and
       (2) by adding at the end the following new sentence:

     ``In the case of an eligible Senate candidate (as definedin 
     section 301(19) of the Federal Election Campaign Act of 
     1971), the charges during the general election period (as 
     defined 
     [[Page S266]] in section 301(21) of such Act) shall not 
     exceed 50 percent of the lowest charge described in paragraph 
     (1).''.
       (b) Preemption; Access.--Section 315 of the Communications 
     Act of 1934 (47 U.S.C. 315) is amended by redesignating 
     subsections (c) and (d) as subsections (e) and (f), 
     respectively, and by inserting immediately after subsection 
     (b) the following new subsection:
       ``(c)(1) Except as provided in paragraph (2), a licensee 
     shall not preempt the use, during any period specified in 
     subsection (b)(1), of a broadcasting station by a legally 
     qualified candidate for public office who has purchased and 
     paid for such use pursuant to the provisions of subsection 
     (b)(1).
       ``(2) If a program to be broadcast by a broadcasting 
     station is preempted because of circumstances beyond the 
     control of the broadcasting station, any candidate 
     advertising spot scheduled to be broadcast during that 
     program may also be preempted.
       ``(d) In the case of a legally qualified candidate for the 
     United States Senate, a licensee shall provide broadcast time 
     without regard to the rates charged for the time.''.

     SEC. 132. EXTENSION OF REDUCED THIRD-CLASS MAILING RATES TO 
                   ELIGIBLE SENATE CANDIDATES.

       Section 3626(e) of title 39, United States Code, is 
     amended--
       (1) in paragraph (2)(A)--
       (A) by striking ``and the National'' and inserting ``the 
     National''; and
       (B) by striking ``Committee;'' and inserting ``Committee, 
     and, subject to paragraph (3), the principal campaign 
     committee of an eligible House of Representatives or Senate 
     candidate;'';
       (2) in paragraph (2)(B), by striking ``and'' after the 
     semicolon;
       (3) in paragraph (2)(C), by striking the period and 
     inserting ``; and'';
       (4) by adding after paragraph (2)(C) the following new 
     subparagraph:
       ``(D) The terms `eligible Senate candidate' and `principal 
     campaign committee' have the meanings given those terms in 
     section 301 of the Federal Election Campaign Act of 1971.''; 
     and
       (5) by adding after paragraph (2) the following new 
     paragraph:
       ``(3) The rate made available under this subsection with 
     respect to an eligible Senate candidate shall apply only to--
       ``(A) the general election period (as defined in section 
     301 of the Federal Election Campaign Act of 1971); and
       ``(B) that number of pieces of mail equal to the number of 
     individuals in the voting age population (as certified under 
     section 315(e) of such Act) of the congressional district or 
     State, whichever is applicable.''.

     SEC. 133. REPORTING REQUIREMENTS FOR CERTAIN INDEPENDENT 
                   EXPENDITURES.

       Section 304(c) of FECA (2 U.S.C. 434(c)) is amended--
       (1) in paragraph (2), by striking out the undesignated 
     matter after subparagraph (C);
       (2) by redesignating paragraph (3) as paragraph (5); and
       (3) by inserting after paragraph (2), as amended by 
     paragraph (1), the following new paragraphs:
       ``(3)(A) Any independent expenditure (including those 
     described in subsection (b)(6)(B)(iii) of this section) 
     aggregating $1,000 or more made after the 20th day, but more 
     than 24 hours, before any election shall be reported within 
     24 hours after such independent expenditure is made.
       ``(B) Any independent expenditure aggregating $10,000 or 
     more made at any time up to and including the 20th day before 
     any election shall be reported within 48 hours after such 
     independent expenditure is made. An additional statement 
     shall be filed each time independent expenditures aggregating 
     $10,000 are made with respect to the same election as the 
     initial statement filed under this section.
       ``(C) Such statement shall be filed with the Secretary of 
     the Senate and the Secretary of State of the State involved 
     and shall contain the information required by subsection 
     (b)(6)(B)(iii) of this section, including whether the 
     independent expenditure is in support of, or in opposition 
     to, the candidate involved. The Secretary of the Senate shall 
     as soon as possible (but not later than 4 working hours of 
     the Commission) after receipt of a statement transmit it to 
     the Commission. Not later than 48 hours after the Commission 
     receives a report, the Commission shall transmit a copy of 
     the report to each candidate seeking nomination or election 
     to that office.
       ``(D) For purposes of this section, the term `made' 
     includes any action taken to incur an obligation for payment.
       ``(4)(A) If any person intends to make independent 
     expenditures totaling $5,000 during the 20 days before an 
     election, such person shall file a statement no later than 
     the 20th day before the election.
       ``(B) Such statement shall be filed with the Secretary of 
     the Senate and the Secretary of State of the State involved, 
     and shall identify each candidate whom the expenditure will 
     support or oppose. The Secretary of the Senate shall as soon 
     as possible (but not later than 4 working hours of the 
     Commission) after receipt of a statement transmit it to the 
     Commission. Not later than 48 hours after the Commission 
     receives a statement under this paragraph, the Commission 
     shall transmit a copy of the statement to each candidate 
     identified.
       ``(5) The Commission may make its own determination that a 
     person has made, or has incurred obligations to make, 
     independent expenditures with respect to any Federal election 
     which in the aggregate exceed the applicable amounts under 
     paragraph (3) or (4). The Commission shall notify each 
     candidate in such election of such determination within 24 
     hours of making it.
       ``(6) At the same time as a candidate is notified under 
     paragraph (3), (4), or (5) with respect to expenditures 
     during a general election period, the Commission shall 
     certify eligibility to receive benefits under section 504(a) 
     or section 604(b).
       ``(7) The Secretary of the Senate shall make any statement 
     received under this subsection available for public 
     inspection and copying in the same manner as the Commission 
     under section 311(a)(4), and shall preserve such statements 
     in the same manner as the Commission under section 
     311(a)(5).''

     SEC. 134. CAMPAIGN ADVERTISING AMENDMENTS.

       Section 318 of FECA (2 U.S.C. 441d) is amended--
       (1) in the matter before paragraph (1) of subsection (a), 
     by striking ``an expenditure'' and inserting ``a 
     disbursement'';
       (2) in the matter before paragraph (1) of subsection (a), 
     by striking ``direct'';
       (3) in paragraph (3) of subsection (a), by inserting after 
     ``name'' the following ``and permanent street address''; and
       (4) by adding at the end the following new subsections:
       ``(c) Any printed communication described in subsection (a) 
     shall be--
       ``(1) of sufficient type size to be clearly readable by the 
     recipient of the communication;
       ``(2) contained in a printed box set apart from the other 
     contents of the communication; and
       ``(3) consist of a reasonable degree of color contrast 
     between the background and the printed statement.
       ``(d)(1) Any broadcast or cablecast communication described 
     in subsection (a)(1) or subsection (a)(2) shall include, in 
     addition to the requirements of those subsections an audio 
     statement by the candidate that identifies the candidate and 
     states that the candidate has approved the communication.
       ``(2) If a broadcast or cablecast communication described 
     in paragraph (1) is broadcast or cablecast by means of 
     television, the statement required by paragraph (1) shall--
       ``(A) appear in a clearly readable manner with a reasonable 
     degree of color contrast between the background and the 
     printed statement, for a period of at least 4 seconds; and
       ``(B) be accompanied by a clearly identifiable photographic 
     or similar image of the candidate.
       ``(e) Any broadcast or cablecast communication described in 
     subsection (a)(3) shall include, in addition to the 
     requirements of those subsections, in a clearly spoken 
     manner, the following statement--
       `             is responsible for the content of this 
     advertisement.'

     with the blank to be filled in with the name of the political 
     committee or other person paying for the communication and 
     the name of any connected organization of the payor; and, if 
     broadcast or cablecast by means of television, shall also 
     appear in a clearly readable manner with a reasonable degree 
     of color contrast between the background and the printed 
     statement, for a period of at least 4 seconds.''.

     SEC. 135. DEFINITIONS.

       (a) In General.--Section 301 of FECA (2 U.S.C. 431) is 
     amended by striking paragraph (19) and inserting the 
     following new paragraphs:
       ``(19) The term `eligible Senate candidate' means a 
     candidate who is eligible under section 502 to receive 
     benefits under title V.
       ``(20) The term `general election' means any election which 
     will directly result in the election of a person to a Federal 
     office, but does not include an open primary election.
       ``(21) The term `general election period' means, with 
     respect to any candidate, the period beginning on the day 
     after the date of the primary or runoff election for the 
     specific office the candidate is seeking, whichever is later, 
     and ending on the earlier of--
       ``(A) the date of such general election; or
       ``(B) the date on which the candidate withdraws from the 
     campaign or otherwise ceases actively to seek election.
       ``(22) The term `immediate family' means--
       ``(A) a candidate's spouse;
       ``(B) a child, stepchild, parent, grandparent, brother, 
     half-brother, sister or half-sister of the candidate or the 
     candidate's spouse; and
       ``(C) the spouse of any person described in subparagraph 
     (B).
       ``(23) The term `major party' has the meaning given such 
     term in section 9002(6) of the Internal Revenue Code of 1986, 
     except that if a candidate qualified under State law for the 
     ballot in a general election in an open primary in which all 
     the candidates for the office participated and which resulted 
     in the candidate and at least one other candidate qualifying 
     for the ballot in the general election, such candidate shall 
     be treated as a candidate of a major party for purposes of 
     title V.
       ``(24) The term `primary election' means an election which 
     may result in the selection of a candidate for the ballot in 
     a general election for a Federal office.
       ``(25) The term `primary election period' means, with 
     respect to any candidate, the period beginning on the day 
     following the 
     [[Page S267]] date of the last election for the specific 
     office the candidate is seeking and ending on the earlier 
     of--
       ``(A) the date of the first primary election for that 
     office following the last general election for that office; 
     or
       ``(B) the date on which the candidate withdraws from the 
     election or otherwise ceases actively to seek election.
       ``(26) The term `runoff election' means an election held 
     after a primary election which is prescribed by applicable 
     State law as the means for deciding which candidate will be 
     on the ballot in the general election for a Federal office.
       ``(27) The term `runoff election period' means, with 
     respect to any candidate, the period beginning on the day 
     following the date of the last primary election for the 
     specific office such candidate is seeking and ending on the 
     date of the runoff election for such office.
       ``(28) The term `voting age population' means the resident 
     population, 18 years of age or older, as certified pursuant 
     to section 315(e).
       ``(29) The term `election cycle' means--
       ``(A) in the case of a candidate or the authorized 
     committees of a candidate, the term beginning on the day 
     after the date of the most recent general election for the 
     specific office or seat which such candidate seeks and ending 
     on the date of the next general election for such office or 
     seat; or
       ``(B) for all other persons, the term beginning on the 
     first day following the date of the last general election and 
     ending on the date of the next general election.
       ``(30) The terms `Senate Election Campaign Fund' and `Fund' 
     mean the Senate Election Campaign Fund established under 
     section 509.
       ``(31) The term `lobbyist' means--
       ``(A) a person required to register under section 308 of 
     the Federal Regulation of Lobbying Act (2 U.S.C. 267) or the 
     Foreign Agents Registration Act of 1938 (22 U.S.C. 611 et 
     seq.); and
       ``(B) a person who receives compensation in return for 
     having contact with Congress on any legislative matter.''.
       (b) Identification.--Section 301(13) of FECA (2 U.S.C. 
     431(13)) is amended by striking ``mailing address'' and 
     inserting ``permanent residence address''.
     SEC. 136. PROVISIONS RELATING TO FRANKED MASS MAILINGS.

       (a) Mass Mailings of Senators.--Section 3210(a)(6) of title 
     39, United States Code, is amended--
       (1) in subparagraph (A), by striking ``It is the intent of 
     Congress that a Member of, or a Member-elect to, Congress'' 
     and inserting ``A Member of, or Member-elect to, the House''; 
     and
       (2) in subparagraph (C)--
       (A) by striking ``if such mass mailing is postmarked fewer 
     than 60 days immediately before the date'' and inserting ``if 
     such mass mailing is postmarked during the calendar year''; 
     and
       (B) by inserting ``or reelection'' immediately before the 
     period.
       (b) Mass Mailings of House Members.--Section 3210 of title 
     39, United States Code, is amended--
       (1) in subsection (a)(7) by striking ``, except that--'' 
     and all that follows through the end of subparagraph (B) and 
     inserting a period; and
       (2) in subsection (d)(1) by striking ``delivery--'' and all 
     that follows through the end of subparagraph (B) and 
     inserting ``delivery within that area constituting the 
     congressional district or State from which the Member was 
     elected.''.
       (c) Prohibition on Use of Official Funds.--The Committee on 
     House Administration of the House of Representatives may not 
     approve any payment, nor may a Member of the House of 
     Representatives make any expenditure from, any allowance of 
     the House of Representatives or any other official funds if 
     any portion of the payment or expenditure is for any cost 
     related to a mass mailing by a Member of the House of 
     Representatives outside the congressional district of the 
     Member.
                   TITLE II--INDEPENDENT EXPENDITURES

     SEC. 201. CLARIFICATION OF DEFINITIONS RELATING TO 
                   INDEPENDENT EXPENDITURES.

       (a) Independent Expenditure Definition Amendment.--Section 
     301 of FECA (2 U.S.C. 431) is amended by striking paragraphs 
     (17) and (18) and inserting the following:
       ``(17)(A) The term `independent expenditure' means an 
     expenditure for an advertisement or other communication 
     that--
       ``(i) contains express advocacy; and
       ``(ii) is made without the participation or cooperation of 
     a candidate or a candidate's representative.
       ``(B) The following shall not be considered an independent 
     expenditure:
       ``(i) An expenditure made by a political committee of a 
     political party.
       ``(ii) An expenditure made by a person who, during the 
     election cycle, has communicated with or received information 
     from a candidate or a representative of that candidate 
     regarding activities that have the purpose of influencing 
     that candidate's election to Federal office, where the 
     expenditure is in support of that candidate or in opposition 
     to another candidate for that office.
       ``(iii) An expenditure if there is any arrangement, 
     coordination, or direction with respect to the expenditure 
     between the candidate or the candidate's agent and the person 
     making the expenditure.
       ``(iv) An expenditure if, in the same election cycle, the 
     person making the expenditure is or has been--
       ``(I) authorized to raise or expend funds on behalf of the 
     candidate or the candidate's authorized committees; or
       ``(II) serving as a member, employee, or agent of the 
     candidate's authorized committees in an executive or 
     policymaking position.
       ``(v) An expenditure if the person making the expenditure 
     has advised or counseled the candidate or the candidate's 
     agents at any time on the candidate's plans, projects, or 
     needs relating to the candidate's pursuit of nomination for 
     election, or election, to Federal office, in the same 
     election cycle, including any advice relating to the 
     candidate's decision to seek Federal office.
       ``(vi) An expenditure if the person making the expenditure 
     retains the professional services of any individual or other 
     person also providing those services in the same election 
     cycle to the candidate in connection with the candidate's 
     pursuit of nomination for election, or election, to Federal 
     office, including any services relating to the candidate's 
     decision to seek Federal office.
       ``(vii) An expenditure if the person making the expenditure 
     has consulted at any time during the same election cycle 
     about the candidate's plans, projects, or needs relating to 
     the candidate's pursuit of nomination for election, or 
     election, to Federal office, with--
       ``(I) any officer, director, employee or agent of a party 
     committee that has made or intends to make expenditures or 
     contributions, pursuant to subsections (a), (d), or (h) of 
     section 315 in connection with the candidate's campaign; or
       ``(II) any person whose professional services have been 
     retained by a political party committee that has made or 
     intends to make expenditures or contributions pursuant to 
     subsections (a), (d), or (h) of section 315 in connection 
     with the candidate's campaign.

     For purposes of this subparagraph, the person making the 
     expenditure shall include any officer, director, employee, or 
     agent of such person.
       ``(18) The term `express advocacy' means, when a 
     communication is taken as a whole, an expression of support 
     for or opposition to a specific candidate, to a specific 
     group of candidates, or to candidates of a particular 
     political party, or a suggestion to take action with respect 
     to an election, such as to vote for or against, make 
     contributions to, or participate in campaign activity.''.
       (b) Contribution Definition Amendment.--Section 301(8)(A) 
     of FECA (2 U.S.C. 431(8)(A)) is amended--
       (1) in clause (i), by striking ``or'' after the semicolon 
     at the end;
       (2) in clause (ii), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following new clause:
       ``(iii) any payment or other transaction referred to in 
     paragraph (17)(A)(i) that does not qualify as an independent 
     expenditure under paragraph (17)(A)(ii).''.
                        TITLE III--EXPENDITURES
                   Subtitle A--Personal Loans; Credit

     SEC. 301. PERSONAL CONTRIBUTIONS AND LOANS.

       Section 315 of FECA (2 U.S.C. 441a) is amended by adding at 
     the end the following new subsection:
       ``(i) Limitations on Payments to Candidates.--(1) If a 
     candidate or a member of the candidate's immediate family 
     made any loans to the candidate or to the candidate's 
     authorized committees during any election cycle, no 
     contributions after the date of the general election for such 
     election cycle may be used to repay such loans.
       ``(2) No contribution by a candidate or member of the 
     candidate's immediate family may be returned to the candidate 
     or member other than as part of a pro rata distribution of 
     excess contributions to all contributors.''.

     SEC. 302. EXTENSIONS OF CREDIT.

       Section 301(8)(A) of FECA (2 U.S.C. 431(8)(A)), as amended 
     by section 201(b), is amended--
       (1) by striking ``or'' at the end of clause (ii);
       (2) by striking the period at the end of clause (iii) and 
     inserting ``; or''; and
       (3) by inserting at the end the following new clause:
       ``(iv) with respect to a candidate and the candidate's 
     authorized committees, any extension of credit for goods or 
     services relating to advertising on broadcasting stations, in 
     newspapers or magazines, or by mailings, or relating to other 
     similar types of general public political advertising, if 
     such extension of credit is--
       ``(I) in an amount of more than $1,000; and
       ``(II) for a period greater than the period, not in excess 
     of 60 days, for which credit is generally extended in the 
     normal course of business after the date on which such goods 
     or services are furnished or the date of the mailing in the 
     case of advertising by a mailing.''.
   Subtitle B--Provisions Relating to Soft Money of Political Parties

     SEC. 311. REPORTING REQUIREMENTS.

       (a) Reporting Requirements.--Section 304 of FECA (2 U.S.C. 
     434), as amended by section 133(a), is amended by adding at 
     the end thereof the following new subsection:
       ``(e) Political Committees.--(1) The national committee of 
     a political party and any congressional campaign committee of 
     a 
     [[Page S268]] political party, and any subordinate committee 
     of either, shall report all receipts and disbursements during 
     the reporting period, whether or not in connection with an 
     election for Federal office.
       ``(2) Any political committee to which paragraph (1) does 
     not apply shall report any receipts or disbursements which 
     are used in connection with a Federal election.
       ``(3) If a political committee has receipts or 
     disbursements to which this subsection applies from any 
     person aggregating in excess of $200 for any calendar year, 
     the political committee shall separately itemize its 
     reporting for such person in the same manner as under 
     subsection (b) (3)(A), (5), or (6).
       ``(4) Reports required to be filed by this subsection shall 
     be filed for the same time periods required for political 
     committees under subsection (a).''.
       (b) Report of Exempt Contributions.--Section 301(8) of the 
     Federal Election Campaign Act of 1971 (2 U.S.C. 431(8)) is 
     amended by inserting at the end thereof the following:
       ``(C) The exclusion provided in clause (viii) of 
     subparagraph (B) shall not apply for purposes of any 
     requirement to report contributions under this Act, and all 
     such contributions aggregating in excess of $200 shall be 
     reported.''.
       (c) Reports by State Committees.--Section 304 of FECA (2 
     U.S.C. 434), as amended by subsection (a), is amended by 
     adding at the end thereof the following new subsection:
       ``(f) Filing of State Reports.--In lieu of any report 
     required to be filed by this Act, the Commission may allow a 
     State committee of a political party to file with the 
     Commission a report required to be filed under State law if 
     the Commission determines such reports contain substantially 
     the same information.''.
       (d) Other Reporting Requirements.--
       (1) Authorized committees.--Paragraph (4) of section 304(b) 
     of FECA (2 U.S.C. 434(b)(4)) is amended by striking ``and'' 
     at the end of subparagraph (H), by inserting ``and'' at the 
     end of subparagraph (I), and by adding at the end the 
     following new subparagraph:
       ``(J) in the case of an authorized committee, disbursements 
     for the primary election, the general election, and any other 
     election in which the candidate participates;''.
       (2) Names and addresses.--Subparagraph (A) of section 
     304(b)(5) of FECA (2 U.S.C. 434(b)(5)(A)) is amended--
       (A) by striking ``within the calendar year'', and
       (B) by inserting ``, and the election to which the 
     operating expenditure relates'' after ``operating 
     expenditure''.
                        TITLE IV--CONTRIBUTIONS

     SEC. 401. CONTRIBUTIONS THROUGH INTERMEDIARIES AND CONDUITS; 
                   PROHIBITION ON CERTAIN CONTRIBUTIONS BY 
                   LOBBYISTS.

       (a) Contributions Through Intermediaries and Conduits.--
     Section 315(a)(8) of FECA (2 U.S.C. 441a(a)(8)) is amended to 
     read as follows:
       ``(8) For the purposes of this subsection:
       ``(A) Contributions made by a person, either directly or 
     indirectly, to or on behalf of a particular candidate, 
     including contributions that are in any way earmarked or 
     otherwise directed through an intermediary or conduit to a 
     candidate, shall be treated as contributions from the person 
     to the candidate.
       ``(B) Contributions made directly or indirectly by a person 
     to or on behalf of a particular candidate through an 
     intermediary or conduit, including contributions made or 
     arranged to be made by an intermediary or conduit, shall be 
     treated as contributions from the intermediary or conduit to 
     the candidate if--
       ``(i) the contributions made through the intermediary or 
     conduit are in the form of a check or other negotiable 
     instrument made payable to the intermediary or conduit rather 
     than the intended recipient; or
       ``(ii) the intermediary or conduit is--
       ``(I) a political committee;
       ``(II) an officer, employee, or agent of such a political 
     committee;
       ``(III) a political party;
       ``(IV) a partnership or sole proprietorship;
       ``(V) a person who is required to register or to report its 
     lobbying activities, or a lobbyist whose activities are 
     required to be reported, under section 308 of the Federal 
     Regulation of Lobbying Act (2 U.S.C. 267), the Foreign Agents 
     Registration Act of 1938 (22 U.S.C. 611 et seq.), or any 
     successor Federal law requiring a person who is a lobbyist or 
     foreign agent to register or a person to report its lobbying 
     activities; or
       ``(VI) an organization prohibited from making contributions 
     under section 316, or an officer, employee, or agent of such 
     an organization acting on the organization's behalf.
       ``(C)(i) The term `intermediary or conduit' does not 
     include--
       ``(I) a candidate or representative of a candidate 
     receiving contributions to the candidate's principal campaign 
     committee or authorized committee;
       ``(II) a professional fundraiser compensated for 
     fundraising services at the usual and customary rate, but 
     only if the individual is not described in subparagraph 
     (B)(ii);
       ``(III) a volunteer hosting a fundraising event at the 
     volunteer's home, in accordance with section 301(8)(B), but 
     only if the individual is not described in subparagraph 
     (B)(ii); or
       ``(IV) an individual who transmits a contribution from the 
     individual's spouse.
       ``(ii) The term `representative' means an individual who is 
     expressly authorized by the candidate to engage in 
     fundraising, and who occupies a significant position within 
     the candidate's campaign organization, provided that the 
     individual is not described in subparagraph (B)(ii).
       ``(iii) The term `contributions made or arranged to be 
     made' includes--
       ``(I) contributions delivered to a particular candidate or 
     the candidate's authorized committee or agent; and
       ``(II) contributions directly or indirectly arranged to be 
     made to a particular candidate or the candidate's authorized 
     committee or agent, in a manner that identifies directly or 
     indirectly to the candidate or authorized committee or agent 
     the person who arranged the making of the contributions or 
     the person on whose behalf such person was acting.
     Such term does not include contributions made, or arranged to 
     be made, by reason of an oral or written communication by a 
     Federal candidate or officeholder expressly advocating the 
     nomination for election, or election, of any other Federal 
     candidate and encouraging the making of a contribution to 
     such other candidate. 
       ``(iv) The term `acting on the organization's behalf' 
     includes the following activities by an officer, employee or 
     agent of a person described in subparagraph (B)(ii)(VI):
       ``(I) Soliciting or directly or indirectly arranging the 
     making of a contribution to a particular candidate in the 
     name of, or by using the name of, such a person.
       ``(II) Soliciting or directly or indirectly arranging the 
     making of a contribution to a particular candidate using 
     other than incidental resources of such a person.
       ``(III) Soliciting contributions for a particular candidate 
     by substantially directing the solicitations to other 
     officers, employees, or agents of such a person.
       ``(D) Nothing in this paragraph shall prohibit--
       ``(i) bona fide joint fundraising efforts conducted solely 
     for the purpose of sponsorship of a fundraising reception, 
     dinner, or other similar event, in accordance with rules 
     prescribed by the Commission, by--
       ``(I) 2 or more candidates;
       ``(II) 2 or more national, State, or local committees of a 
     political party within the meaning of section 301(4) acting 
     on their own behalf; or
       ``(III) a special committee formed by 2 or more candidates, 
     or a candidate and a national, State, or local committee of a 
     political party acting on their own behalf; or
       ``(ii) fundraising efforts for the benefit of a candidate 
     that are conducted by another candidate.
     When a contribution is made to a candidate through an 
     intermediary or conduit, the intermediary or conduit shall 
     report the original source and the intended recipient of the 
     contribution to the Commission and to the intended 
     recipient.''.
       (b) Prohibition of Certain Contributions by Lobbyists.--
     Section 315 of FECA (2 U.S.C. 441a), as amended by section 
     301, is amended by adding at the end the following new 
     subsection:
       ``(j)(1) A lobbyist, or a political committee controlled by 
     a lobbyist, shall not make contributions to, or solicit 
     contributions for or on behalf of--
       ``(A) any member of Congress with whom the lobbyist has, 
     during the preceding 12 months, made a lobbying contact; or
       ``(B) any authorized committee of the President of the 
     United States if, during the preceding 12 months, the 
     lobbyist has made a lobbying contact with a covered executive 
     branch official.
       ``(2) A lobbyist who, or a lobbyist whose political 
     committee, has made any contribution to, or solicited 
     contributions for or on behalf of, any member of Congress or 
     candidate for Congress (or any authorized committee of the 
     President) shall not, during the 12 months following such 
     contribution or solicitation, make a lobbying contact with 
     such member or candidate who becomes a member of Congress (or 
     a covered executive branch official).
       ``(3) If a lobbyist advises or otherwise suggests to a 
     client of the lobbyist (including a client that is the 
     lobbyist's regular employer), or to a political committee 
     that is funded or administered by such a client, that the 
     client or political committee should make a contribution to 
     or solicit a contribution for or on behalf of--
       ``(A) a member of Congress or candidate for Congress, the 
     making or soliciting of such a contribution is prohibited if 
     the lobbyist has made a lobbying contact with the member of 
     Congress within the preceding 12 months; or
       ``(B) an authorized committee of the President, the making 
     or soliciting of such a contribution shall be unlawful if the 
     lobbyist has made a lobbying contact with a covered executive 
     branch official within the preceding 12 months.
       ``(4) For purposes of this subsection--
       ``(A) the term `covered executive branch official' means 
     the President, Vice-President, any officer or employee of the 
     executive office of the President other than a clerical or 
     secretarial employee, any officer or employee serving in an 
     Executive Level I, II, III, IV, or V position as designated 
     in statute or Executive order, any officer or employee 
     serving in a senior executive service position (as defined in 
     section 3232(a)(2) of title 5, United States Code), any 
     member of the uniformed services whose pay grade is at or in 
     excess of 0-7 under section 201 of title 37, United States 
     Code, and any officer or employee serving in a position of 
     confidential 
     [[Page S269]] or policy-determining character under schedule 
     C of the excepted service pursuant to regulations 
     implementing section 2103 of title 5, United States Code;
       ``(B) the term `lobbyist' means--
       ``(i) a person required to register under section 308 of 
     the Federal Regulation of Lobbying Act (2 U.S.C. 267) or the 
     Foreign Agents Registration Act of 1938 (22 U.S.C. 611 et 
     seq.) or any successor Federal law requiring a person who is 
     a lobbyist or foreign agent to register or a person to report 
     its lobbying activities; or
       ``(C) the term `lobbying contact'--
       ``(i) means an oral or written communication with or 
     appearance before a member of Congress or covered executive 
     branch official made by a lobbyist representing an interest 
     of another person with regard to--
       ``(I) the formulation, modification, or adoption of Federal 
     legislation (including a legislative proposal);
       ``(II) the formulation, modification, or adoption of a 
     Federal rule, regulation, Executive order, or any other 
     program, policy or position of the United States Government; 
     or
       ``(III) the administration or execution of a Federal 
     program or policy (including the negotiation, award, or 
     administration of a Federal contract, grant, loan, permit, or 
     license); but
       ``(ii) does not include a communication that is--
       ``(I) made by a public official acting in an official 
     capacity;
       ``(II) made by a representative of a media organization who 
     is primarily engaged in gathering and disseminating news and 
     information to the public;
       ``(III) made in a speech, article, publication, or other 
     material that is widely distributed to the public or through 
     the media;
       ``(IV) a request for an appointment, a request for the 
     status of a Federal action, or another similar ministerial 
     contact, if there is no attempt to influence a member of 
     Congress or covered executive branch official at the time of 
     the contact;
       ``(V) made in the course of participation in an advisory 
     committee subject to the Federal Advisory Committee Act (5 
     U.S.C. App.);
       ``(VI) testimony given before a committee, subcommittee, or 
     office of Congress a Federal agency, or submitted for 
     inclusion in the public record of a hearing conducted by the 
     committee, subcommittee, or office;
       ``(VII) information provided in writing in response to a 
     specific written request from a member of Congress or covered 
     executive branch official;
       ``(VIII) required by subpoena, civil investigative demand, 
     or otherwise compelled by statute, regulation, or other 
     action of Congress or a Federal agency;
       ``(IX) made to an agency official with regard to a judicial 
     proceeding, criminal or civil law enforcement inquiry, 
     investigation, or proceeding, or filing required by law;
       ``(X) made in compliance with written agency procedures 
     regarding an adjudication conducted by the agency under 
     section 554 of title 5, United States Code, or substantially 
     similar provisions;
       ``(XI) a written comment filed in a public docket and other 
     communication that is made on the record in a public 
     proceeding;
       ``(XII) a formal petition for agency action, made in 
     writing pursuant to established agency procedures; or
       ``(XIII) made on behalf of a person with regard to the 
     person's benefits, employment, other personal matters 
     involving only that person, or disclosures pursuant to a 
     whistleblower statute.''.
       ``(5) For purposes of this subsection, a lobbyist shall be 
     considered to make a lobbying contact or communication with a 
     member of Congress if the lobbyist makes a lobbying contact 
     or communication with--
       ``(i) the member of Congress;
       ``(ii) any person employed in the office of the member of 
     Congress; or
       ``(iii) any person employed by a committee, joint 
     committee, or leadership office who, to the knowledge of the 
     lobbyist, was employed at the request of or is employed at 
     the pleasure of, reports primarily to, represents, or acts as 
     the agent of the member of Congress.''.

     SEC. 402. CONTRIBUTIONS BY DEPENDENTS NOT OF VOTING AGE.

       Section 315 of FECA (2 U.S.C. 441a), as amended by section 
     401(b), is amended by adding at the end the following new 
     subsection:
       ``(k) For purposes of this section, any contribution by an 
     individual who--
       ``(1) is a dependent of another individual; and
       ``(2) has not, as of the time of such contribution, 
     attained the legal age for voting for elections to Federal 
     office in the State in which such individual resides,
     shall be treated as having been made by such other 
     individual. If such individual is the dependent of another 
     individual and such other individual's spouse, the 
     contribution shall be allocated among such individuals in the 
     manner determined by them.''.
     SEC. 403. CONTRIBUTIONS TO CANDIDATES FROM STATE AND LOCAL 
                   COMMITTEES OF POLITICAL PARTIES TO BE 
                   AGGREGATED.

       Section 315(a) of FECA (2 U.S.C. 441a(a)) is amended by 
     adding at the end the following new paragraph:
       ``(9) A candidate for Federal office may not accept, with 
     respect to an election, any contribution from a State or 
     local committee of a political party (including any 
     subordinate committee of such committee), if such 
     contribution, when added to the total of contributions 
     previously accepted from all such committees of that 
     political party, exceeds a limitation on contributions to a 
     candidate under this section.''.

     SEC. 404. LIMITED EXCLUSION OF ADVANCES BY CAMPAIGN WORKERS 
                   FROM THE DEFINITION OF THE TERM 
                   ``CONTRIBUTION''.

       Section 301(8)(B) of FECA (2 U.S.C. 431(8)(B)) is amended--
       (1) in clause (xiii), by striking ``and'' after the 
     semicolon at the end;
       (2) in clause (xiv), by striking the period at the end and 
     inserting: ``; and''; and
       (3) by adding at the end the following new clause:
       ``(xv) any advance voluntarily made on behalf of an 
     authorized committee of a candidate by an individual in the 
     normal course of such individual's responsibilities as a 
     volunteer for, or employee of, the committee, if the advance 
     is reimbursed by the committee within 10 days after the date 
     on which the advance is made, and the value of advances on 
     behalf of a committee does not exceed $500 with respect to an 
     election.''.
                    TITLE V--REPORTING REQUIREMENTS

     SEC. 501. CHANGE IN CERTAIN REPORTING FROM A CALENDAR YEAR 
                   BASIS TO AN ELECTION CYCLE BASIS.

       Paragraphs (2) through (7) of section 304(b) of FECA (2 
     U.S.C. 434(b)(2)-(7)) are amended by inserting after 
     ``calendar year'' each place it appears the following: 
     ``(election cycle, in the case of an authorized committee of 
     a candidate for Federal office)''.

     SEC. 502. PERSONAL AND CONSULTING SERVICES.

       Section 304(b)(5)(A) of FECA (2 U.S.C. 434(b)(5)(A)) is 
     amended by adding before the semicolon at the end the 
     following: ``, except that if a person to whom an expenditure 
     is made is merely providing personal or consulting services 
     and is in turn making expenditures to other persons (not 
     including employees) who provide goods or services to the 
     candidate or his or her authorized committees, the name and 
     address of such other person, together with the date, amount 
     and purpose of such expenditure shall also be disclosed''.
     SEC. 503. REDUCTION IN THRESHOLD FOR REPORTING OF CERTAIN 
                   INFORMATION BY PERSONS OTHER THAN POLITICAL 
                   COMMITTEES.

       Section 304(b)(3)(A) of FECA (2 U.S.C. 434(b)(3)(A)) is 
     amended by striking ``$200'' and inserting ``$50''.

     SEC. 504. COMPUTERIZED INDICES OF CONTRIBUTIONS.

       Section 311(a) of FECA (2 U.S.C. 438(a)) is amended--
       (1) by striking ``and'' at the end of paragraph (9);
       (2) by striking the period at the end of paragraph (10) and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(11) maintain computerized indices of contributions of 
     $50 or more.''.
                 TITLE VI--FEDERAL ELECTION COMMISSION

     SEC. 601. USE OF CANDIDATES' NAMES.

       Section 302(e)(4) of FECA (2 U.S.C. 432(e)(4)) is amended 
     to read as follows:
       ``(4)(A) The name of each authorized committee shall 
     include the name of the candidate who authorized the 
     committee under paragraph (1).
       ``(B) A political committee that is not an authorized 
     committee shall not include the name of any candidate in its 
     name or use the name of any candidate in any activity on 
     behalf of such committee in such a context as to suggest that 
     the committee is an authorized committee of the candidate or 
     that the use of the candidate's name has been authorized by 
     the candidate.''.

     SEC. 602. REPORTING REQUIREMENTS.

       (a) Option To File Monthly Reports--Section 304(a)(2) of 
     FECA (2 U.S.C. 434(a)(2)) is amended--
       (1) in subparagraph (A) by striking ``and'' at the end;
       (2) in subparagraph (B) by striking the period at the end 
     and inserting ``; and''; and
       (3) by inserting the following new subparagraph at the end:
       ``(C) in lieu of the reports required by subparagraphs (A) 
     and (B), the treasurer may file monthly reports in all 
     calendar years, which shall be filed no later than the 15th 
     day after the last day of the month and shall be complete as 
     of the last day of the month, except that, in lieu of filing 
     the reports otherwise due in November and December of any 
     year in which a regularly scheduled general election is held, 
     a pre-primary election report and a pre-general election 
     report shall be filed in accordance with subparagraph (A)(i), 
     a post-general election report shall be filed in accordance 
     with subparagraph (A)(ii), and a year end report shall be 
     filed no later than January 31 of the following calendar 
     year.''.
       (b) Filing Date.--Section 304(a)(4)(B) of FECA (2 U.S.C. 
     434(a)(4)(B)) is amended by striking ``20th'' and inserting 
     ``15th''.

     SEC. 603. PROVISIONS RELATING TO THE GENERAL COUNSEL OF THE 
                   COMMISSION.

       (a) Vacancy in the Office of General Counsel.--Section 
     306(f) of FECA (2 U.S.C. 437c(f)) is amended by adding at the 
     end the following new paragraph:
       ``(5) In the event of a vacancy in the office of general 
     counsel, the next highest ranking enforcement official in the 
     general counsel's office shall serve as acting general 
     counsel 
     [[Page S270]] with full powers of the general counsel until a 
     successor is appointed.''.
       (b) Pay of the General Counsel.--Section 306(f)(1) of FECA 
     (2 U.S.C. 437c(f)(1)) is amended--
       (1) by inserting ``and the general counsel'' after ``staff 
     director'' in the second sentence; and
       (2) by striking the third sentence.

     SEC. 604. ENFORCEMENT.

       (a) Basis for Enforcement Proceeding.--Section 309(a)(2) of 
     FECA (2 U.S.C. 437g(a)(2)) is amended by striking ``it has 
     reason to believe that a person has committed, or is about to 
     commit'' and inserting ``facts have been alleged or 
     ascertained that, if true, give reason to believe that a 
     person may have committed, or may be about to commit''.
       (b) Authority To Seek Injunction.--(1) Section 309(a) of 
     FECA (2 U.S.C. 437g(a)) is amended by adding at the end the 
     following new paragraph:
       ``(13)(A) If, at any time in a proceeding described in 
     paragraph (1), (2), (3), or (4), the Commission believes 
     that--
       ``(i) there is a substantial likelihood that a violation of 
     this Act or of chapter 95 or chapter 96 of the Internal 
     Revenue Code of 1986 is occurring or is about to occur;
       ``(ii) the failure to act expeditiously will result in 
     irreparable harm to a party affected by the potential 
     violation;
       ``(iii) expeditious action will not cause undue harm or 
     prejudice to the interests of others; and
       ``(iv) the public interest would be best served by the 
     issuance of an injunction,

     the Commission may initiate a civil action for a temporary 
     restraining order or a temporary injunction pending the 
     outcome of the proceedings described in paragraphs (1), (2), 
     (3), and (4).
       ``(B) An action under subparagraph (A) shall be brought in 
     the United States district court for the district in which 
     the defendant resides, transacts business, or may be 
     found.''.
       (2) Section 309(a) of FECA (2 U.S.C. 437g(a)) is amended--
       (A) in paragraph (7) by striking ``(5) or (6)'' and 
     inserting ``(5), (6), or (13)''; and
       (B) in paragraph (11) by striking ``(6)'' and inserting 
     ``(6) or (13)''.

     SEC. 605. PENALTIES.

       (a) Penalties Prescribed in Conciliation Agreements.--(1) 
     Section 309(a)(5)(A) of FECA (2 U.S.C. 437g(a)(5)(A)) is 
     amended by striking ``which does not exceed the greater of 
     $5,000 or an amount equal to any contribution or expenditure 
     involved in such violation'' and inserting ``which is--
       ``(i) not less than 50 percent of all contributions and 
     expenditures involved in the violation (or such lesser amount 
     as the Commission provides if necessary to ensure that the 
     penalty is not unjustly disproportionate to the violation); 
     and
       ``(ii) not greater than all contributions and expenditures 
     involved in the violation''.
       (2) Section 309(a)(5)(B) of FECA (2 U.S.C. 437g(a)(5)(B)) 
     is amended by striking ``which does not exceed the greater of 
     $10,000 or an amount equal to 200 percent of any contribution 
     or expenditure involved in such violation'' and inserting 
     ``which is--
       ``(i) not less than all contributions and expenditures 
     involved in the violation; and
       ``(ii) not greater than 150 percent of all contributions 
     and expenditures involved in the violation''.
       (b) Penalties When Violations Are Adjudicated in Court.--
     (1) Section 309(a)(6)(A) of FECA (2 U.S.C. 437g(a)(6)(A)) is 
     amended by striking all that follows ``appropriate order'' 
     and inserting ``, including an order for a civil penalty in 
     the amount determined under subparagraph (A) or (B) in the 
     district court of the United States for the district in which 
     the defendant resides, transacts business, or may be 
     found.''.
       (2) Section 309(a)(6)(B) of FECA (2 U.S.C. 437g(a)(6)(B)) 
     is amended by striking all that follows ``other order'' and 
     inserting ``, including an order for a civil penalty which 
     is--
       ``(i) not less than all contributions and expenditures 
     involved in the violation; and
       ``(ii) not greater than 200 percent of all contributions 
     and expenditures involved in the violation,
     upon a proper showing that the person involved has committed, 
     or is about to commit (if the relief sought is a permanent or 
     temporary injunction or a restraining order), a violation of 
     this Act or chapter 95 of chapter 96 of the Internal Revenue 
     Code of 1986.''.
       (3) Section 309(a)(6)(C) of FECA (29 U.S.C. 437g(6)(C)) is 
     amended by striking ``a civil penalty'' and all that follows 
     and inserting ``a civil penalty which is--
       ``(i) not less than 200 percent of all contributions and 
     expenditures involved in the violation; and
       ``(ii) not greater than 250 percent of all contributions 
     and expenditures involved in the violation.''.

     SEC. 606. RANDOM AUDITS.

       Section 311(b) of FECA (2 U.S.C. 438(b)) is amended--
       (1) by inserting ``(1)'' before ``The Commission''; and
       (2) by adding at the end the following new paragraph:
       ``(2) Notwithstanding paragraph (1), the Commission may 
     from time to time conduct random audits and investigations to 
     ensure voluntary compliance with this Act. The subjects of 
     such audits and investigations shall be selected on the basis 
     of criteria established by vote of at least 4 members of the 
     Commission to ensure impartiality in the selection process. 
     This paragraph does not apply to an authorized committee of 
     an eligible Senate candidate subject to audit under section 
     505(a) or an authorized committee of an eligible House of 
     Representatives candidate subject to audit under section 
     605(a).''.

     SEC. 607. PROHIBITION OF FALSE REPRESENTATION TO SOLICIT 
                   CONTRIBUTIONS.

       Section 322 of FECA (2 U.S.C. 441h) is amended--
       (1) by inserting after ``Sec. 322.'' the following: 
     ``(a)''; and
       (2) by adding at the end the following:
       ``(b) No person shall solicit contributions by falsely 
     representing himself as a candidate or as a representative of 
     a candidate, a political committee, or a political party.''.
     SEC. 608. REGULATIONS RELATING TO USE OF NON-FEDERAL MONEY.

       Section 306 of FECA (2 U.S.C. 437c) is amended by adding at 
     the end the following new subsection:
       ``(g) The Commission shall promulgate rules to prohibit 
     devices or arrangements which have the purpose or effect of 
     undermining or evading the provisions of this Act restricting 
     the use of non-Federal money to affect Federal elections.''.
                        TITLE VII--MISCELLANEOUS

     SEC. 701. PROHIBITION OF LEADERSHIP COMMITTEES.

       Section 302(e) of FECA (2 U.S.C. 432(e)) is amended--
       (1) by amending paragraph (3) to read as follows:
       ``(3) No political committee that supports or has supported 
     more than one candidate may be designated as an authorized 
     committee, except that--
       ``(A) a candidate for the office of President nominated by 
     a political party may designate the national committee of 
     such political party as the candidate's principal campaign 
     committee, but only if that national committee maintains 
     separate books of account with respect to its functions as a 
     principal campaign committee; and
       ``(B) a candidate may designate a political committee 
     established solely for the purpose of joint fundraising by 
     such candidates as an authorized committee.''; and
       (2) by adding at the end the following new paragraph:
       ``(6)(A) A candidate for Federal office or any individual 
     holding Federal office may not establish, maintain, or 
     control any political committee other than a principal 
     campaign committee of the candidate, authorized committee, 
     party committee, or other political committee designated in 
     accordance with paragraph (3). A candidate for more than one 
     Federal office may designate a separate principal campaign 
     committee for each Federal office.
       ``(B) For one year after the effective date of this 
     paragraph, any such political committee may continue to make 
     contributions. At the end of that period such political 
     committee shall disburse all funds by one or more of the 
     following means: making contributions to an entity qualified 
     under section 501(c)(3) of the Internal Revenue Code of 1986; 
     making a contribution to the treasury of the United States; 
     contributing to the national, State or local committees of a 
     political party; or making contributions not to exceed $1,000 
     to candidates for elective office.''.

     SEC. 702. POLLING DATA CONTRIBUTED TO CANDIDATES.

       Section 301(8) of FECA (2 U.S.C. 431(8)), as amended by 
     section 314(b), is amended by inserting at the end the 
     following new subparagraph:
       ``(D) A contribution of polling data to a candidate shall 
     be valued at the fair market value of the data on the date 
     the poll was completed, depreciated at a rate not more than 1 
     percent per day from such date to the date on which the 
     contribution was made.''.

     SEC. 703. SENSE OF THE SENATE THAT CONGRESS SHOULD CONSIDER 
                   ADOPTION OF A JOINT RESOLUTION PROPOSING AN 
                   AMENDMENT TO THE CONSTITUTION THAT WOULD 
                   EMPOWER CONGRESS AND THE STATES TO SET 
                   REASONABLE LIMITS ON CAMPAIGN EXPENDITURES.

       It is the sense of the Senate that Congress should consider 
     adoption of a joint resolution proposing an amendment to the 
     Constitution that would--
       (1) empower Congress to set reasonable limits on campaign 
     expenditures by, in support of, or in opposition to any 
     candidate in any primary, general, or other election for 
     Federal office; and
       (2) empower the States to set reasonable limits on campaign 
     expenditures by, in support of, or in opposition to any 
     candidate in any primary, general, or other election for 
     State or local office.

     SEC. 704. PERSONAL USE OF CAMPAIGN FUNDS.

       Section 313 of FECA (2 U.S.C. 439a) is amended--
       (1) by inserting ``(a)'' before ``Amounts''; and
       (2) by adding at the end the following new subsection:
       ``(b) For the purposes of this section, the term `personal 
     use' means the use of funds in a campaign account of a 
     present or former candidate to fulfill a commitment, 
     obligation, or expense of any person that would exist 
     irrespective of the candidate's campaign or duties as a 
     holder of Federal office.
              TITLE VIII--EFFECTIVE DATES; AUTHORIZATIONS

     SEC. 801. EFFECTIVE DATE.

       Except as otherwise provided in this Act, the amendments 
     made by, and the provisions 
     [[Page S271]] of, this Act shall take effect on the date of 
     the enactment of this Act but shall not apply with respect to 
     activities in connection with any election occurring before 
     January 1, 1996.

     SEC. 802. SEVERABILITY.

       Except as provided in sections 101(c) and 121(b), if any 
     provision of this Act (including any amendment made by this 
     Act), or the application of any such provision to any person 
     or circumstance, is held invalid, the validity of any other 
     provision of this Act, or the application of such provision 
     to other persons and circumstances, shall not be affected 
     thereby.

     SEC. 803. EXPEDITED REVIEW OF CONSTITUTIONAL ISSUES.

       (a) Direct Appeal to Supreme Court.--An appeal may be taken 
     directly to the Supreme Court of the United States from any 
     interlocutory order or final judgment, decree, or order 
     issued by any court ruling on the constitutionality of any 
     provision of this Act or amendment made by this Act.
       (b) Acceptance and Expedition.--The Supreme Court shall, if 
     it has not previously ruled on the question addressed in the 
     ruling below, accept jurisdiction over, advance on the 
     docket, and expedite the appeal to the greatest extent 
     possible.
                                 ______

      By Mr. SARBANES:
  S. 47. A bill to amend certain provisions of title 5, United States 
Code, in order to ensure equality between Federal firefighters and 
other employees in the civil service and other public sector 
firefighters, and for other purposes; to the Committee on Governmental 
Affairs.


                     Firefighters Pay Fairness Act

 Mr. SARBANES. Mr. President, as we begin the 104th Congress, I am 
reintroducing legislation to improve the pay system used for Federal 
firefighters.
  This important bill has three broad purposes: First, to improve pay 
equality with municipal and other public section firefighters; second, 
to enhance recruitment and retention of firefighters in order to 
maintain the highest quality Federal fire service; and third, to 
encourage Federal firefighters to pursue career advancement and 
training opportunities.
  Fire protection is clearly a major concern at Federal facilities and 
on Federal lands throughout the Nation. From fighting wildland fires in 
our National parks and forests to protecting military families from 
fires in their base housing, Federal firefighters play a vital role in 
preserving life and property. One only needs to recall the terrible 
tragedies in Colorado last summer to understand the incredible 
commitment of our Federal firefighters.
  The Department of Agriculture, the Coast Guard, the Department of 
Commerce, the Department of Defense, the General Services 
Administration, the Department of the Interior, and the Department of 
Veterans Affairs are among the Federal agencies that rely on Federal 
employees to protect their vast holdings of land and structures. Just 
like their municipal counterparts, these Federal firefighters are the 
first line of defense against threats to life and property.
  Mr. President, the current system used to pay our Federal 
firefighters is at best confusing and at worst unfair. These men and 
women work longer hours than other public sector firefighters yet are 
paid substantially less. The current pay system, which consists of 
three tiers, is overly complex and, more importantly, is hurting 
Federal efforts to attract and retain top-quality employees.
  Currently, most Federal firefighters work an average 72-hour week 
under exceptionally demanding conditions. The typical workweek consists 
of a one-day-on/one-day-off schedule which results in three 24-hour 
shifts per 72-hour week. Despite this unusual schedule, firefighters 
are paid under a modified version of the same General Schedule pay 
system used for full-time, 40-hour-per-week Federal workers.
  The result of the pay modification is that Federal firefighters make 
less per hour than any other Federal employees at the same grade level. 
For example: a firefighter who is a GS-5, Step 5 makes $7.21 per hour 
while other employees at the same grade and step earn $10.34 per hour. 
Some have tried to justify this by noting that part of a firefighter's 
day is downtime. However, I must note that all firefighters have 
substantial duties beyond those at the site of a fire. Adding to this 
discrepancy is the fact that the average municipal firefighter makes 
$12.87 per hour.
  Mr. President, this has caused the Federal fire service to become a 
training ground for young men and women who then leave for higher pay 
elsewhere in the public sector. Continually training new employees is, 
as my colleagues know, very expensive for any employer.
  The Office of Personnel Management is well aware of these problems. 
In fact, section 102 of the Federal Employees Pay Comparability Act of 
1990 [FEPCA], title V of Public Law 101-509, authorizes the 
establishment of special pay systems for certain Federal occupations. 
The origin of this provision was a recognition that the current pay 
classification system did not account for the unique and distinctive 
employment conditions of Federal protective occupations including the 
Federal fire service.
  In May of 1991, I wrote to OPM urging the establishment of a separate 
pay scale for firefighters under the authority provided for in FEPCA. 
Subsequently, OPM established an Advisory Committee on Law Enforcement 
and Protective Occupations consisting of agency personnel and 
representatives from Federal fire and law enforcement organizations. 
Beginning in August of 1991, representatives from the Federal fire 
community began working with OPM and other administration officials to 
identify and address the problems of paying Federal firefighters under 
the General Schedule. The committee completed its work in June of 1992 
and in December of that year issued a staff report setting forth 
recommendations to correct the most serious problems with the current 
pay system.
  Mr. President, I regret that since the release of the OPM 
recommendations, there has been no effort to implement any of the 
proposals of the advisory task force. In fact, OPM has communicated 
quite clearly that it has no plans to pursue any solution to the 
serious pay deficiencies that have been so widely identified and 
acknowledged.
  It would not be necessary to introduce this legislation today had OPM 
taken the corrective action that, in my view, is so
 clearly warranted. However, I have determined that legislation appears 
to be the only vehicle to achieve the necessary changes in the pay 
system for Federal firefighters.

  Mr. President, the Firefighter Pay Fairness Act would improve Federal 
firefighter pay in several important and straightforward ways. Perhaps 
most importantly, the bill draws from existing provisions in title V to 
calculate a true hourly rate for firefighters. This would alleviate the 
current problem of firefighters being paid considerably less than other 
General Schedule employees at the same GS level. It would also account 
for the varying length in the tour of duty for Federal firefighters 
stationed at different locations.
  In addition, the bill would use this hourly rate to ensure that 
firefighters receive true time and one-half overtime for hours worked 
over 106 in a biweekly pay period. This is designed to correct the 
problem, under the current system, where the overtime rate is 
calculated based on an hourly rate considerably less than base pay.
  The Firefighter pay Fairness Act would also extend these pay 
provisions to so-called wildland firefighters when they are engaged in 
firefighting duties. Currently, wildland firefighters are often not 
compensated for all the time spent responding to a fire event. Our bill 
would ensure that these protectors of our parks and forests would be 
paid fairly for ensuring the safety of these invaluable national 
resources.
  The bill also ensures that firefighters promoted to supervisory 
positions would be paid at a rate of pay at least equal to what they 
received before the promotion. This would address the situation, under 
the current pay system, which discourages employees from accepting 
promotions because of the significant loss of pay which often 
accompanies a move to a supervisory position.
  Similarly, the bill would encourage employees to get the necessary 
training in hazardous materials, emergency medicine, and other critical 
areas by ensuring they do not receive a pay cut while engaged in these 
training activities.
  Mr. President, this legislation is based upon a bill I authored in 
the 103d Congress. A bipartisan group of more than 50 Members 
cosponsored the measure in the Senate and the House 
[[Page S272]] last year. The legislation I am introducing today 
reflects several modifications that were suggested to the bill 
following substantial discussions with various Members. However, it is 
identical to the so-called compromise measure that was discussed with 
the authorizing as well as the appropriating committees last summer and 
received widespread support.
  To reduce initial costs and allow oversight of the effectiveness of 
the legislation, the bill I am introducing today would implement the 
new pay system and other provisions beginning October 1, 1995. However, 
the new rate of pay would be phased in over a four year period ending 
October 1, 1999.
  Mr. President, I consulted many of the affected groups in developing 
my legislation. I am very pleased that this bill has been endorsed by 
the American Federation of Government Employees, the International 
Association of Fire Chiefs, the International Association of Fire 
Fighters, the National Association of Government Employees, and the 
National Federation of Federal Employees.
  As I have said before, Mr. President, fairness is the key word. There 
is no reason why Federal firefighters should be paid dramatically less 
than their municipal counterparts. As a co-chairman of the 
Congressional Fire Services Caucus, I want to urge all members of the 
caucus and, indeed, all Members of the Senate to join in cosponsoring 
this important piece of legislation.
                                 ______

      By Mr. STEVENS (for himself and Mr. Murkowski):
  S. 49. To amend the Federal Water Pollution Control Act to modify the 
wetlands regulatory program corresponding to the low wetlands loss rate 
in Alaska and the significant wetlands conservation in Alaska, to 
protect Alaskan property owners, and to ease the burden on overly 
regulated Alaskan cities, boroughs, municipalities and villages; to the 
Committee on Environment and Public Works.


           The alaska wetlands regulatory reform act of 1995

  Mr. STEVENS. Mr. President, I send to the desk a bill to set a bold 
standard for the conservation of wetlands based upon the Alaska model. 
I am pleased that my colleague from Alaska, the chairman of the Energy 
Committee, has worked so closely with me on this bill. It is a combined 
effort and I thank him and his staff for their advice and assistance.
  This bill, S. 49, comes after years and years of working for 
regulatory and administrative solutions to the wetlands permitting 
problems experienced too frequently by Alaskans. I worked with the 
Small Business Committee for wetlands reform when I was a member of 
that committee and I testified before the Environment and Public Works 
Committee when it considered reform of the wetlands program. Senator 
Murkowswki and I, with our staffs, spent hours with the Environment 
Committee members on Alaskan wetlands reform during the 103d Congress. 
We sought improvements to the wetlands program, improvements that take 
into account the wetlands conditions in Alaska. However, the Clean 
Water Act was not reauthorized during the 103d Congress. The current 
administration even failed to propose meaningful
 reforms after again studying the Alaska wetlands problem to death.

  Today, Mr. President, we lay down our marker for Alaska wetlands 
regulatory program reform. We have exhausted other avenues. Our bill 
proposes the needed changes in the law and it is our reference point. 
Concepts in our bill will work because they change the regulatory 
program where they are inconsistent with Alaska's wetlands 
circumstances. Alaskans who encounter the wetlands program have helped 
us draft these proposals.
  Within Alaska are approximately 170 million acres of wetlands. We 
have many types of wetlands. Some, such as permafrost wetlands, are 
found in no other State. During the past 200 years virtually none of 
these wetlands have been lost. Estimates of Alaska wetlands loss over 
the past 200 years range from 80,000 to 200,000 acres. So in 200 years, 
Alaska lost less than one-tenth of 1 percent of its wetlands. The total 
Alaska wetlands impacted in over 200 years are less than loss rates for 
the south 48 annually.
  What's more, Mr. President, Alaska has vast acreage of wetlands that 
are conserved in national and State parks, wilderness systems, and 
refuges. Even our local governments designate expansive wetlands areas 
for conservation. The whole coastline along the city of Anchorage 
composes the Anchorage Coastal Wildlife Refuge; it is a wetlands 
conservation area established by Alaskans for Alaska.
  The point, Mr. President, is that within Alaska are vast wetlands. 
The bulk of the best wetlands are already conserved, most permanently 
protected.
  In contrast, the south 48 has lost over one-half of its wetlands 
during the past 200 years. South 48 loss occurred for a variety of 
reasons. Land was drained for agriculture. Swamps were filled for 
community growth and development. Much of the wetlands loss in the 
south 48 occurred well before the wetlands regulatory program began.
  Then, in the mid-1980's, came the idea of no net loss, a concept 
first proposed by President Bush. The President declared the goal of no 
net loss to reverse the trend of wetlands loss in the south 48. When he 
first mentioned the goal, President Bush referred to wetlands loss 
rates exceeding 50 percent, and he was clearly not talking about 
Alaska. If Alaska is factored in, the national loss rate would only be 
around 30 percent.
  After the President announced the new goal, the wetlands program was 
modified to implement no net loss. When the goal of no net loss was 
embraced by EPA and the Corps, it imprisoned Alaska.
  Therein lies the crux of the difficulties for Alaskans: the changes 
in the wetlands program designed to address the south 48 wetlands loss 
problem were imposed on a State containing the most wetlands, but 
without the loss problem of the south 48.
  Knowing this and considering the administrative and regulatory 
changes that the Alaska delegation has advocated for more than 5 years, 
Senator Murkowski and I are left with no choice but to introduce this 
bill. Make no mistake, this bill addresses squarely the problem of 
mitigation, the concept in the wetlands doctrine that penalizes 
Alaskans.
  In brief, our bill does the following:
  It introduces a balancing concept as a purpose of the Clean Water Act 
and requires wetlands conservation to be balanced with economic impacts 
on local and private economic interests.
  It establishes a new conservation standard. For States with 
substantial areas of conservation of wetlands, 15 acres in Federal, 
State, and local conservation designations for each acre filled, a 
modified permit standard applies. This approach will allow Alaskan 
permit applicants to receive permits without needless mitigation and 
without establishing that the project cannot be placed somewhere else. 
All projects must still minimize impact to wetlands.
  It establishes the concept of economic base lands for Native and 
State land grants by the Congress, lands that receive the same permit 
review as outlined for States with substantial conserved wetlands 
areas.
  Lastly, our bill provides for permit exemptions for certain 
activities such as water treatment facilities for mines, log transfer 
facilities, and airports.
  Alaskans have waited long enough for this reform, Mr. President. The 
time has come for meaningful reform that helps Alaskans. At current 
rates of development, it would take 250 years for Alaskans to impact 
just one percent of its wetlands. But Alaska has conserved its wetlands 
credit for this conservation must be given when it comes to utilizing 
our small private land base and our State and Native land grants. The 
time has come for wetlands reform, reform that is meaningful and 
effective for those who contribute to the economic well being of my 
State.
  Mr. MURKOWSKI. Mr. President, I join Senator Stevens today in 
introducing legislation, aptly numbered S. 49 for Alaska, the 49th 
State, to free our State to properly and sensitively develop land that 
is currently off-limits because a muscle-bound bureaucracy has refined 
the dispensing of redtape to an art form.
  Anyone who looks at the facts, and who is not already biased against 
any and all development in Alaska, cannot help but be persuaded that 
the very 
[[Page S273]] tough rules that apply to the development of wetlands in 
the lower 48 where 53 percent of the original wetlands have already 
been filed, drained or otherwise removed from wetland status do not 
make sense for Alaska where less than one tenth of 1 percent of 
original wetlands have been developed.
  Good public policy rewards behavior and penalizes bad behavior. 
Alaska has diligently protected its wetlands. One hundred fifty four 
million acres of wetlands, over 60 million acres are already out of 
reach of any sort of development, having been placed in Federal 
conservation units. By contrast in the lower 48 only 31 million acres 
are publicly owned. Alaska has developed at most only about 200,000 
acres of wetlands less than one tenth of 1 percent, compared to 
117,000,000 acres developed in the lower 48--53 percent. In other 
words, Alaska's wetlands are already better protected than any other 
State. We will never, never become another New Jersey. It is simply 
good public policy to tailor regulatory oversight of wetlands 
development in Alaska to Alaska, not to some other State that has badly 
managed its wetlands. That is what our bill attempts to do.
  Alaska is a young, strong State. The Federal Government has gone to 
great effort to provide for the orderly economic development of Alaska, 
first through the Statehood Act, in which 104 million acres were set 
aside for the State for purposes of economic development. Similarly, 
when the Congress passed the Alaska Natives Claim Settlement Act, 
approximately 43 million acres were granted to Native Alaskans through 
regional and village corporations for the purposes of economic 
development.
  The irony is that, because so much of Alaska is wetland, 98 percent 
of all Alaskan communities and 200 out of 209 remote villages are 
located in or next to wetlands. So, while the Federal Government on one 
hand provided the resources for planned, sensitive development by means 
of the Statehood Act and ANCSA, on the other hand the Federal 
bureaucrats have tied those same lands in a sticky ball of redtape that 
may make sense on the east coast, but makes no sense in Alaska. Can you 
imagine requiring compensatory mitigation, that is, creating new 
wetlands to replace any wetland used in a state in which 3 out of 4 
acres of non-mountainous land is already a wetland? Can you imagine 
requiring a wetlands permit to pile plowed snow on undeveloped land for 
the winter? Our bill is designed to address such absurdities.
  This legislation does not do away with regulatory oversight of 
wetlands in Alaska.
 But, in Alaska, wetlands regulation should no longer completely ignore 
the economic and social effect of the permitting process. Compensatory 
mitigation would be done away with in many circumstances such as when 
critical infrastructure for minimal rural water and sewer delivery are 
installed. In addition, Alaska would get credit for the wetlands we 
already protect. Other protections, such as avoidance and minimization, 
would remain.

  This will not satisfy those who are pleased with the status quo. They 
will not be comfortable with protecting Alaska for Alaskans. To them, 
preventing an Alaskan from building a garage, or a business on land 
designated wetland, even after avoidance and minimization requirements 
are met, is a small price to pay to preserve Alaska in its pristine 
primitiveness. In fact, in most cases it there is no price for them to 
pay because many of them live in New York, or Washington, DC or Los 
Angeles. For Alaskans, these regulations stop us dead in our tracks 
from pursuing the full promise of statehood.
  This legislation just deals with Alaska. It is our hope to work with 
other Senators and Members of Congress from other States in which the 
regulators are running amuck. It's a starting point and a signal that 
we are serious about bringing sense back to a process that seems to 
have been lobotomized. I look forward to beginning that process.
                                 ______

      By Mr. LOTT (for himself, Mr. Kyl, Mr. Mack, Mr. Shelby, and Mr. 
        Warner):
  S. 50. A bill to repeal the increase in tax on Social Security 
benefits; to the Committee on Finance.


                    senior citizens tax fairness act

  Mr. LOTT. Mr. President, I am here today to reintroduce the Senior 
Citizens Tax Fairness Act. I am introducing it today along with my 
distinguished new colleague from the State of Arizona, Senator Jon Kyl. 
Senator Kyl led the effort against the tax increase that this 
legislation would repeal when he was in the House of Representatives 
last year. So I am delighted now to have the opportunity to work with 
him on this legislation and on other issues here in the Senate.
  The Omnibus Budget Reconciliation Act of 1993 raised taxes on 
millions of Americans. For that reason, I opposed that legislation last 
year. In my opinion, the most unfair of all the new taxes included in 
OBRA 1993 was the increased tax on Social Security recipients. We 
raised taxes on the senior citizens, the group of Americans who have 
worked all their lives paying into the Social Security Trust Fund. They 
planned their retirements based on a certain level of income and return 
from their contributions, and then Congress, last year, in its infinite 
wisdom--I think mistakenly--changed the rules of the game on them. We 
broke our word to the elderly people of America. I think that was 
unconscionable, and it needs to be changed.
  As a member of the Budget Committee, I fought this tax last year from 
its inception. I offered amendments to knock it out in the Committee. I 
offered amendments on the floor of the Senate that were defeated by 
close votes, and that tax went on to become law. So I now do not intend 
to give up that fight, and I want to work this year to make sure that 
this new tax is repealed.
  The Senior Citizens Tax Fairness Act would do just that: It would 
completely repeal the tax increase imposed on the senior citizens of 
this country last year. Our bill would return the percentage of taxable 
benefits from the current 85 percent to the former 50 percent. For that 
reason, we have requested the bill number to be S. 50. This should make 
it easy for everyone to understand the purpose of the legislation.
  The tax increase should be repealed for many reasons. First, it 
directly hits those prudent and frugal Americans who have worked, 
sacrificed, and invested in America. This tax penalizes people who have 
saved for their retirements. It also penalizes those who are still 
working. This tax increase, combined with the perverse interplay of 
taxes on working seniors, will create marginal tax rates of more than 
100 percent for some beneficiaries. In addition to the taxes other 
Americans pay on their incomes, Social Security beneficiaries under 70 
who work forfeit $1 of Social Security benefits for every $3 they earn. 
This will cause some working seniors in the 28 percent bracket $1.04 
for every additional dollar they earn.
  This is fundamentally unfair. This retirement earnings test 
reduction, combined with other state and federal taxes, and the 
increased tax on benefits, creates a powerful work disincentive for
 older Americans, many of whom would like to continue to work and are 
needed in many instances. Why should we punish those who work with a 
tax rate higher than that of millionaires? Is that the American dream? 
I do not think so.

  As a study for the National Center for Policy Analysis points out, 
taxpayers are not taxed on their income unless they put away additional 
savings for their retirement or are working. Penalizing savings--and 
working--is harmful to our economy as a whole.
  What is even worse about this is that the revenues from the tax 
increase will not go to reduce the deficit. They will not go into the 
Social Security Trust Fund. The revenues will do nothing to help assure 
the fiscal integrity of the Social Security System. No, this tax 
increase and the revenue it produces, will go to fund other new 
government spending. To my knowledge, I believe I am correct in saying, 
this is the first time this has happened. I think that is the fact that 
most alarmed the seniors when they realized what was happening.
  The tax has repeatedly been referred to as a tax on the wealthy. But 
I remember when it was first proposed, it could apply to senior 
citizens with incomes as low as $19,000. Now the threshold has been 
raised somewhat, but surely, by most standards, somebody earning 
$34,000 is not wealthy.
  [[Page S274]] The Heritage Foundation analyzed distribution tables 
published by the House Ways and Means Committee and Census Bureau data. 
Based on that information, it is estimated that 57 percent of this tax 
will be paid by seniors earning less than $75,000. In my own State of 
Mississippi, it is estimated that the tax increase will cost senior 
citizens more than $20 million in 1994 alone.
  Additionally, the thresholds above which the additional tax must be 
paid are not indexed. Thus, because of inflation, more and more people 
will be subject to the tax each year.
  The question here is simple. Should Social Security recipients, 
retirees making as little as $34,000 a year, pay a higher marginal rate 
than any other American taxpayer just so the Federal Government can 
have more money to fund spending programs?
  I do not believe so. It is not fair to reduce the incomes of those 
who cannot change past work and savings decisions which were based on 
current law. Social Security represents a contract we made with the 
American people years ago. They have done their part by working hard 
and paying into the system all their lives. Congress must now uphold 
its end of the bargain, so I believe we need to repeal this inequitable 
tax this year. I will be looking for an opportunity to offer this bill 
on the floor, or to have it included in legislation that will be coming 
out of the Finance Committee, and perhaps even the Budget Committee. I 
believe that we are going to have a lot of support for it. I invite my 
colleagues to join Senator Kyl of Arizona and me as cosponsors.
 Mr. KYL. Mr. President, I rise as an original co-sponsor of S. 50, the 
``Senior Citizens Tax Fairness Act of 1995.'' As Senator Lott has 
explained, passage of S. 50 would repeal the Clinton Social Security 
Tax Increase contained in the Omnibus Budget Reconciliation Act of 1993 
(OBRA `93). I believe S. 50 represents an important ``first step'' in 
re-establishing the fundamental American principles of limited 
government, tax fairness, and self-reliance. I believe repeal of the 
Clinton Social Security Tax Increase is a simple matter of justice.
  During the 1992 presidential campaign, President Clinton promised to 
protect citizens ``who work hard and play by the rules.'' Surely, 
America's senior citizens are included in this category. Seniors have 
contributed to the Social Security system throughout their working 
lives. Many are dependent upon the government to discharge its 
obligations under the Social Security contract.
  Also during the campaign, the President said, ``we don't need to 
tamper with Social Security. It's solid. It's secure. It's sound. And 
I'm going to keep it that way. . . You can take that one to the bank.'' 
But, the President broke his promise. Included in the President's 1993 
tax legislation was a big penalty for many seniors.
  Under the Clinton Social Security Tax Increase, senior citizens with 
incomes over $34,000 and couples with incomes over $44,000 are now 
taxed on 85% of their Social Security benefits. This represents a 70 
percent increase in the marginal tax rate over prior law. For some 
beneficiaries, this has meant an annual tax hike of $2,700. When the 
Social Security Tax Increase is combined with the ``Social Security 
Earnings Limitation,'' a senior's marginal tax rate can reach 88%--
twice the rate paid by millionaires! This is not taxation. This is 
confiscation.
  The CBO estimates that, in 1994, 9.5 million beneficiaries were hit 
by the Clinton Social Security Tax Increase. This figure will rise to 
roughly 13.5 million by 1998 and will go higher each year thereafter 
because this tax is not indexed for inflation, thereby allowing 
``bracket creep.''
  To remedy the injustice imposed by the Clinton Social Security Tax 
Increase, Senator Trent Lott and I have introduced S. 50, the ``Senior 
Citizens Tax Fairness Act of 1995.'' S. 50 would repeal the punitive 
rate of taxation imposed upon millions of middle class senior citizens 
by the Clinton Social Security Tax Increase. S. 50 is identical to H.R. 
2959, which I introduced as a member of the House of Representatives on 
August 6, 1993, the day this tax increase was passed by the Congress.
  According to a Heritage Foundation analysis of figures provided by 
the Congressional Budget Office (CBO) and the U.S. Treasury Department, 
the Clinton Social Security Tax Increase will remove $380,675,441 from 
the pockets of Arizona's senior citizens between 1994 and 1998. 
Throughout America, $24.6 billion will be confiscated from seniors 
during the same period.
  The President and some members of Congress apparently forgot that 
Social Security is not an insurance policy intended to offset some 
unforeseen future occurrence. Rather it is a supplemental pension plan 
with a certain amount paid on a regular basis to retirees who made 
contributions to the fund on a regular basis throughout their working 
lives. Social Security is a planned savings program designed to provide 
income during an individual's retirement years.
  Mr. President, since the imposition of the Clinton Social Security 
Tax Increase, I have heard from thousands of senior citizens. Their 
message is clear and persuasive: While they are willing to do their 
fair share to reduce the size of the budget deficit, they do not 
understand why they must pay a new tax on their Social Security 
benefits in order to finance increased federal spending. America's 
seniors believe the government should cut spending first. And they are 
absolutely right. The history of federal taxation--including the 
Clinton Social Security Tax Increase--demonstrates compellingly that 
tax increases inevitably provide for increased federal spending rather 
than deficit reduction, as these measures are frequently advertised to 
provide.
  For instance, a study by the Joint Economic Committee found that, 
since 1947, every dollar of increased taxation resulted in $1.59 in 
increased Federal spending. This confirms a study by the Office of 
Management and Budget which concluded that, in the 1970s, tax revenues 
grew by $324.3 billion while spending rose by $395.3 billion. Thus, 
during this time period, for every dollar in higher taxes, spending 
rose by $1.22. In the 1980s, tax revenues increased by
 $514.6 billion. However, instead of using these additional revenues 
for deficit reduction, the Congress increased spending by $661.7 
billion, a spending increase of $1.29 for each dollar of revenue raised 
through new taxes. This trend has dramatically worsened since 1990. In 
fiscal years 1990-1993, federal spending has increased by $1.91 for 
each dollar of new revenue raised through taxation.

  The Congress imposed major tax increases in 1982, 1984, 1987, and 
1990. In each case lawmakers promised that the revenues raised would be 
used to reduce the deficit. However, in each instance, new tax revenues 
were used to fund new Federal spending. In fact, under OBRA '93, 
Federal spending is projected by the CBO to increase from $1.467 
trillion in 1994 to $1.758 trillion in 1998--an increase of $291 
billion. The same is true about revenues raised by the Clinton Social 
Security Tax Increase. These revenues have not been used to reduce the 
deficit. These revenues have been used to provide for additional 
Federal spending.
  The Clinton Social Security Tax Increase hinders economic growth by 
reducing incentives to save, work, and invest. For instance, a Social 
Security recipient in the middle tax bracket receiving $8,000 in annual 
benefits paid almost $800 in additional taxes this year. However, this 
individual pays the tax only because participation in the work force 
generates taxable income above the marginal rate. The incentive not to 
work is clear: The payment of additional taxes on benefits is required 
as a result of earnings received from productive economic activity. 
Taxation discourages this activity.
  It is also important to remember that Social Security is not the 
cause of the deficit. As we all know, the Social Security system now 
has an annual surplus of between $50 and $60 billion dollars. And, 
although CBO projects Social Security spending to rise by an average of 
4.96 percent annually over the next 5 years, it is not growing at an 
astronomical rate. We must remember that the driving force behind the 
growth in Federal spending is not Social Security; it is Medicare and 
Medicaid. Medicare is projected to rise by an average of 11.9 percent 
annually between 1993 and 1998. Medicaid is projected to grow at an 
annual average rate of 12.8 percent over the next 5 years. Mr. 
President, because Social 
[[Page S275]] Security is not the cause of the budget deficit, and 
because the revenues generated by the Clinton Social Security Tax 
Increase are not used to reduce that deficit. I believe justice 
requires that this tax be repealed.
  I believe America's primary problem is not that our citizens are 
taxed too little but that government spends too much. With regrettable 
consistency, the Clinton Social Security Tax Increase of 1993 continued 
the failed policies of past Congresses that seemed actually addicted to 
raising taxes and adverse cutting spending. Passage of S. 50 will 
represent an important reversal of this ``tax and spend'' tendency.
  The American people have given the 104th Congress an historic 
opportunity to reaffirm the fundamental principles of limited 
government, tax fairness, and self reliance. The Congress must not 
continue to impose higher taxes on Social Security to provide for 
additional Federal spending. Further, the Government simply must stop 
borrowing from the Social Security Trust Fund, and must begin the 
process of insuring the solvency of the system for all current and 
future retirees. But we cannot and should not begin this process until 
there is a significant national consensus and until all retires are 
adequately protected.
  I hope you will join Senator Lott and me in supporting passage of S. 
50, which will repeal the unjust Clinton Social Security Tax Increase. 
Thank you, Mr. President.
                                 ______

      By Mr. THURMOND:
  S. 51. A bill to amend title 28 of the United States Code to clarify 
the remedial jurisdiction of inferior Federal courts; to the Committee 
on the Judiciary.


                   JUDICIAL TAXATION PROHIBITION ACT

  Mr. THURMOND. Mr. President, I rise today to introduce legislation to 
prohibit Federal Judges from ordering new taxes or ordering increases 
in existing tax rates as a judicial remedy.
  In 1990, the Supreme Court decided in Missouri! v. Jenkins to allow 
Federal judges to order new taxes or tax increases as a judicial 
remedy. It is my firm belief that this narrow 5-4 decision permits 
Federal judges to exceed their proper boundaries of jurisdiction and 
authority under the Constitution.
  Mr. President, this ruling and Congressional response raises two 
constitutional issues which warrant discussion. One is whether Federal 
courts have authority under the Constitution to inject themselves into 
the legislative of taxation. The second constitutional issue arises in 
light of the Judicial Taxation Prohibition Act which I am now 
introducing to restrict the remedial jurisdiction of the Federal 
courts. This narrowly drafted legislation would prohibit Federal judges 
from ordering new taxes or ordering increases in existing tax rates. I 
believe it is clear under Article III that the Congress has the 
authority to restrict the remedial jurisdiction of the Federal Courts 
in this fashion.
  First, I want to speak on the issue of judicial taxation. Not since 
Great Britiain's ministry of George Grenville in 1765, have the 
American people faced the assault of taxation without
 representation as now authorized in the Jenkins decision.

  As part of his imperial reforms to tighten British control in the 
colonies, Grenville pushed the Stamp Act through the Parliament in 
1765. This act required excise duties to be paid by the colonists in 
the form of revenue stamps affixed to a variety of legal documents. 
This action came at a time when the colonies were in an uproar over the 
Sugar Act of 1764 which levied duties on certain imports such as sugar, 
indigo, coffee, linens, and other items.
  The ensuing firestorm of debate in America centered on the power of 
Britain to tax the colonies. James Otis, a young Boston attorney, 
echoed the opinion of most colonists stating that the Parliament did 
not have power to tax the colonies because Americans had no 
representation in that body. Mr. Otis had been attributed in 1761 with 
the statement that ``taxation without representation is tyranny.''
  In October, 1765, delegates from nine States were sent to New York as 
part of the Stamp Act Congress to protest the new law. It was during 
this time that John Adams wrote in opposition to the Stamp Act:

       We have always understood it to be a grand and fundamental 
     principle  * * * that no freeman shall be subject to any tax 
     to which he has not given his own consent, in person or by 
     proxy.

  A number of resolutions were adopted by the Stamp Act Congress 
protesting the acts of Parliament. One resolution stated:

       It is inseparably essential to the freedom of a people * * 
     * that no taxes be imposed on them, but with their own 
     consent,
      given personally or by their representatives.

  The resolutions concluded that the Stamp Act had a ``manifest 
tendency to subvert the rights and liberties of the colonists.''
  Opposition to the Stamp Act was vehemently continued through the 
colonies in pamphlet form. These pamphlets asserted that the basic 
premise of a free government included taxation of the people by 
themselves or through their representatives.
  Other Americans reacted to the Stamp Act by rioting, intimidating 
collectors, and boycotts directed against England. While Grenville's 
successor was determined to repeal the law, the social, economic and 
political climate in the colonies brought on the American Revolution. 
The principles expressed during the earlier crisis against taxation 
without representation became firmly imbedded in our Federal 
Constitution or 1787.
  Yet, the Supreme Court has overlooked this fundamental lesson in 
American history. The Jenkins decision extends the power of the 
judiciary into an area which has traditionally been reserved as a 
legislative function within the Federal, State, and local governments. 
In the ``Federalist No. 48,'' James Madison explained that in our 
democratic system, ``the legislative branch alone has access to the 
pockets of the people.''
  This idea has remained steadfast in America for over 200 years. 
Elected officials with authority to tax are directly accountable to the 
people who give their consent to taxation through the ballot box. The 
shield of accountability against
 unwarranted taxes has been removed now that the Supreme Court has 
sanctioned judicially imposed taxes. The American citizenry lacks 
adequate protection when they are subject to taxation by unelected, 
life tenured Federal judges.

  There are many programs and projects competing for a finite number of 
tax dollars. The public debate surrounding taxation is always intense. 
Sensitive discussions are held by elected officials and their 
constituents concerning increases and expenditures of scarce tax 
dollars. To allow Federal judges to impose taxes is to discount 
valuable public debate concerning priorities for expenditures of a 
limited public resource.
  Mr. President, the dispositive issue presented by the Jenkins 
decision is whether the American people want, as a matter of national 
policy, to be exposed to taxation without their consent by an 
independent and insulated judiciary. I most assuredly believe they do 
not.
  This brings us to the second constitutional issue which we must 
address in light of the Jenkins decision. That issue is congressional 
authority under the Constitution to limit the remedial jurisdiction of 
lower Federal courts established by the Congress. Article III, section 
1, of the Constitution provides jurisdiction to the lower Federal 
courts as the ``Congress may from time to time ordain and establish.'' 
There is no mandate in the Constitution to confer equity jurisdiction 
to the inferior Federal courts. Congress has the flexibility under 
article III to ``ordain and establish'' the lower Federal courts as it 
deems
 appropriate. This basic premise has been upheld by the Supreme Court 
in a number of cases including Lockerty v. Phillips, Lauf v. E.G. 
Skinner and Co., Kline v. Burke Construction Co., and Sheldon v. Sill.

  This legislation would preclude the lower Federal courts from issuing 
any order or decree requiring imposition of ``any new tax or to 
increase any existing tax or tax rate.'' I firmly believe that this 
language is wholly consistent with congressional authority under 
article III, section 1 of the Constitution.
  There is nothing in this legislation which would restrict the power 
of the Federal courts from hearing constitutional claims. It accords 
due respect to all provisions of the Constitution and 
[[Page S276]] merely limits the availability of a particular judicial 
remedy which has traditionally been a legislative function. The 
objective of this legislation is straightforward, to prohibit Federal 
courts from increasing taxes. The language in this bill applies to the 
lower Federal courts and does not deny claimants judicial access to 
seek redress of any Federal constitutional right.
  Mr. President, how long will it be before a Federal judge orders tax 
increases to build new highways or prisons? I do not believe the 
Founding Fathers had this type of activism in mind when they 
established the judicial branch of Government. The role of the 
judiciary is to interpret the law. The power to tax is an exclusive 
legislative right belonging to the Congress and governments at the 
State level. We are accountable to the citizens and must justify any 
new taxes. The American people deserve a timely response to the Jenkins 
decision and we must provide protection against the imposition of taxes 
by an independent judiciary.
  Mr. President, I ask unanimous consent that this proposal be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 51

       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 ``Judicial Taxation 
     Prohibition Act''.

     SEC. 2. FINDINGS.

       The Congress finds and declares that--
       (1) a variety of effective and appropriate judicial 
     remedies are available for the full redress of legal and 
     constitutional violations under existing law, and that the 
     imposition or increase of taxes by courts is neither 
     necessary nor appropriate for the full and effective exercise 
     of Federal court jurisdiction;
       (2) the imposition or increase of taxes by judicial order 
     constitutes an unauthorized and inappropriate exercise of the 
     judicial power under the Constitution of the United States 
     and is incompatible with traditional principles of American 
     law and government and the basic American principle that 
     taxation without representation is tyranny;
       (3) Federal courts exceed the proper boundaries of their 
     limited jurisdiction and authority under the Constitution of 
     the United States, and impermissibly intrude on the 
     legislative function in a democratic system of government, 
     when they issue orders requiring the imposition of new taxes 
     or the increase of existing taxes; and
       (4) the Congress retains the authority under article III, 
     sections 1 and 2 of the Constitution of the United States to 
     limit and regulate the jurisdiction of the inferior Federal 
     courts which it has seen fit to establish, and such authority 
     includes the power to limit the remedial authority of 
     inferior Federal courts.

     SEC. 3. AMENDMENT TO TITLE 28.

       (a) In General.--Chapter 85 of title 28, United States 
     Code, is amended by adding between sections 1341 and 1342, 
     the following new section:

     ``Sec. 1341A. Prohibition of judicial imposition or increase 
       of taxes

       ``(a) Notwithstanding any other provision of law, no 
     inferior court established by Congress shall have 
     jurisdiction to issue any remedy, order, injunction, writ, 
     judgment, or other judicial decree requiring the Federal 
     Government or any State or local government to impose any new 
     tax or to increase any existing tax or tax rate.
       ``(b) Nothing in this section shall prohibit inferior 
     Federal courts from ordering duly authorized remedies, 
     otherwise within their jurisdiction, which may require 
     expenditures by Federal, State, or local government where 
     such expenditures are necessary to effectuate such remedies.
       ``(c) For purposes of this section, the term `tax' 
     includes--
       ``(1) personal income taxes;
       ``(2) real and personal property taxes;
       ``(3) sales and transfer taxes;
       ``(4) estate and gift taxes;
       ``(5) excise taxes;
       ``(6) user taxes;
       ``(7) corporate and business income taxes; and
       ``(8) licensing fees or taxes.''.
       (b) Table of Sections.--The table of sections for chapter 
     85 is amended by inserting between the item relating to 
     section 1341 and the item relating to section 1342, the 
     following new item:

``1341A. Prohibition of judicial imposition or increase of taxes.''.
     SEC. 4. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect on the date of enactment.
      By Mr. THURMOND:
  S. 52. A bill to provide that a justice or judge convicted of a 
felony shall be suspended from office without pay; to the Committee on 
the Judiciary.


  LEGISLATION TO SUSPEND THE PAY OF JUSTICES OR JUDGES CONVICTED OF A 
                                 FELONY
  Mr. THURMOND. Mr. President, today I am introducing legislation which 
provides that a justice or judge convicted of a felony shall be 
suspended from office without pay pending the disposition of 
impeachment proceedings.
  I believe that the citizens of the United States will agree that 
those who have been convicted of felonies should not be allowed to 
continue to occupy positions of trust and responsibility in our 
Government. Nevertheless, under current constitutional law it is 
possible for judges to continue to receive a salary and to still sit on 
the bench and hear cases even after being convicted of a felony. If 
they are unwilling to resign, the only method which may be used to 
remove them from the Federal payroll is impeachment.
  Currently, the Congress has the power to impeach officers of the 
Government who have committed treason, bribery, or other high crimes 
and misdemeanors. Even when a court has already found an official 
guilty of a serious crime, Congress must then essentially retry the 
official before he or she can be removed from the Federal payroll. The 
impeachment process is typically very time consuming and can occupy a 
great deal of the resources of Congress.
  Mr. President, one way to solve this problem would be to amend the 
Constitution. Today, I am also introducing a Senate resolution 
proposing a constitutional amendment providing for forfeiture of office 
by Government officials and judges convicted of felonies. While I 
believe that a constitutional amendment may be the best solution to the 
problem, I am also introducing this statutory remedy to address the 
current situation.
  This legislation will provide that a judge convicted of a felony 
shall be suspended from office without pay pending the disposition of 
impeachment proceedings. The Framers of the Constitution could not have 
intended convicted felons to continue to serve on the bench and to 
receive compensation once they have violated the law and the trust of 
the people.
  Mr. President, I urge my colleagues to carefully consider this 
legislation and ask unanimous consent that it be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 52

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That 
     section 3 of title 28, United States Code, is amended by--
       (1) inserting ``(a)'' before ``Whenever the'';
       (2) adding at the end thereof the following:
       ``(b) Justices of the Supreme Court shall hold office 
     during good behavior.
       ``(c) For purposes of the tenure or appointment of a 
     justice, the term `good behavior' shall not include any 
     offense committed by a justice if the conviction of such 
     offense is punishable by death or imprisonment for a term 
     exceeding one year. Any justice convicted of such an offense 
     shall be suspended from office without pay pending the 
     disposition of impeachment proceedings.''.
       Sec. 2. Sections 44(b) and 134(a) of title 28, United 
     States Code, are each amended by adding at the end thereof 
     the following: ``For purposes of the tenure or appointment of 
     a judge, the term `good behavior' shall not include any 
     offense committed by a judge if the conviction of such 
     offense is punishable by death or imprisonment for a term 
     exceeding one year. Any judge convicted of such an offense 
     shall be suspended from office without pay pending the 
     disposition of impeachment proceedings.''.
                                 ______

      By Mr. THURMOND:
  S. 53. A bill to amend title 18, United States Code, to prohibit any 
person who is being compensated for lobbying the Federal Government 
from being paid on a contingency fee basis; to the Committee on the 
Judiciary.


      LEGISLATION BANNING CONTINGENCY FEES FOR LOBBYING ACTIVITIES

  Mr. THURMOND. Mr. President, today, I am introducing a bill which 
would prohibit any person who is being compensated for lobbying the 
Federal Government from being paid on a contingency fee basis. This 
bill is virtually identical to a bill I introduced in the 103d 
Congress. This legislation takes an important step towards ensuring 
integrity in the administration of the Federal Government.
   [[Page S277]] Congress has a great responsibility to ensure 
integrity in the administration of the Federal Government in all its 
departments. This has become even more important now that we have 
entered the era of the $1 trillion Federal budget. Vast sums of money 
are appropriated by Congress for various projects and studies. 
Contracts worth millions of dollars are regularly entered into by 
Federal agencies. The competition for these funds and contracts is 
intense.
  It is not realistic to assume that Congress can legislate integrity. 
However, we can, through legislation, make efforts to remove certain 
incentives to use undue influence to enter into contracts which are 
contrary to the fiscal and ethical interests of our Nation. 
Accordingly, I introduce this legislation which will prohibit payment 
for lobbying on a contingency fee basis.
  Mr. President, I have heard reports of certain lobbying activities 
which greatly disturb me. Specifically, I was informed that one 
lobbyist approached an institution and inquired as to how much Federal 
money was needed to fund a particular project. When the response was 
$12 million, the lobbyist responded that he would ask Congress for $14 
million. If successful, he would be paid $2 million. If he was 
unsuccessful, only a base fee would be charged. When our Nation is 
bridled with such a huge debt, we certainly cannot afford to borrow 
more money to provide such suspect incentive payments which work to 
further increase the deficit.
  Many lobbying firms do not operate on a contingency fee basis. Yet, 
other firms follow this practice. Hearings on these issues would be 
very helpful as this legislation moves through Congress. However, even 
if it is determined that such arrangements are rare--I take the view 
that even one is too much. Such arrangements are clearly wrong, and 
should not be tolerated.
  I firmly believe that lobbying on a contingency fee basis is wrong 
and should not be allowed. Congress should follow the lead of most 
States by enacting this legislation which would prohibit such 
arrangements.
  Mr. President, the question of the propriety of contingency fees in 
lobbying activities is not a new one. Common law has held such 
contracts unenforceable for decades. in fact, in 1916, the Supreme 
Court ruled on the character of such financial arrangements in the case 
of Crocker versus United States. The Court, quoting from a prior case, 
stated:

       All contracts . . . should be made with those . . . who 
     will execute them most faithfully, and at the least expense 
     to the Government. [Contingency fee arrangements] . . . tend 
     to introduce personal solicitation, and personal influence, 
     as elements in the procurement of contracts; and thus 
     directly lead to inefficiency in the public service, and to 
     unnecessary expenditures of the public funds.

  Mr. President, recognizing the improper incentives contingency fees 
for lobbyists have injected into Government, 35 States have laws on the 
books which prohibit payment for lobbying on a contingent fee basis. My 
home State of South Carolina has prohibited this type of lobbying since 
1935.
  At the Federal level, contingency fee arrangements are addressed to 
some extent in the executive branch. Two laws covering contracts 
awarded by the Executive Departments--41 U.S.C. 254 (a) and 10 U.S.C. 
2306 (b)--restrict the use of ``commission, percentage, brokerage or 
contingent fee'' arrangements to secure these contracts. However, the 
scope of these statutes is deficient in two respects. First, the 
violation of these provisions carries little penalty. the Government 
can only annul the contract secured by a contingency fee arrangement, 
or deduct from the contract the full amount of the contingency fee. 
They carry no criminal penalties. Second, these statutes only apply to 
the executive branch and not to activities involving Congress.
  Mr. President, the legislation I am introducing would make 
contingency fee arrangements to influence Government action a crime 
under Federal law. Any person who violates the provisions of this 
section shall be fined up to $100,000, or imprisoned not more than 5 
years, or both.
  Moreover, the Attorney General is empowered to bring a civil action 
to recover twice the proceeds obtained by that person due to such 
conduct. This act is prospective in nature and would only apply to 
contracts entered into after enactment.
  Lobbyists often provide expertise and helpful information not 
otherwise available. I want to be clear on this point. This is an 
important role for lobbyists, but I am opposed to contractual 
arrangements which impugn the integrity and efficiency of our system. 
Clearly, a person should be entitled to reasonable fees for legitimate 
services in presenting officials of the Government with information as 
may apprise them of the character and value of the project or service 
offered, and thus enable those officers to act for the best interest of 
the Nation. However, the law has long recognized that contingency fees 
are not appropriate in some areas while appropriate in others. For 
instance, contingency fees in tort actions provide the poor with access 
to the courts and are viewed favorably. In other areas, such as 
criminal and domestic law, such fees are inappropriate because they 
introduce improper incentives into the system. Similar principles 
should apply to contingency fees for lobbying.
  Mr. President, I urge my colleagues to support this legislation and I 
look forward to hearings on this important issue. The public deserves 
action on the part of Congress.
  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. 53

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
       That chapter 11 of title 18, United States Code, is amended 
     by--
       (1) inserting between sections 219 and 223, the following 
     new section:

     ``Sec. 220. Contingency fees in lobbying

       ``(a)(1) It shall be unlawful for any person to make, with 
     intent to influence, any oral or written communication on 
     behalf of any other person other than the United States to 
     any department, agency, court, House of Congress, or 
     commission of the United States, for compensation if such 
     compensation has knowingly been made dependent--
       ``(A) upon any action of Congress, including but not 
     limited to actions of either the house of Representatives or 
     the Senate, or any committee or member thereof, or the 
     passage or defeat of any proposed legislation;
       ``(B) upon the securing of an award, or upon the denial of 
     an award, of a contract or grant by establishment of the 
     Federal Government; or
       ``(C) upon the securing, or upon the denial, of any Federal 
     financial assistance or any other Federal contract or grant.
       ``(2) The provisions of paragraph (1) shall not apply in 
     any case involving the collection of any amount owed on a 
     debt or on a contract claim owed to a person by the Federal 
     Government.
       ``(b) Any person who violates the provisions of this 
     section shall be fined not more than $50,000 or imprisoned 
     not more than two years, or both.
       ``(c) The Attorney General may bring a civil action in any 
     United States district court, on behalf of the United States, 
     against any person who engages in conduct prohibited by this 
     section in lieu of or in addition to an action taken pursuant 
     to subsection (b), and upon proof of such conduct by a 
     preponderance of the evidence, may recover twice the amount 
     of any proceeds obtained by that person due to such conduct. 
     Such civil action shall be barred unless the action is 
     commenced within six years after the later of (1) the date on 
     which the prohibited conduct occurred, or (2) the date on 
     which the United States became or reasonably should have 
     become aware that the prohibited conduct had occurred.''; and
       (2) amending the table of sections by striking out the item 
     between the item relating to section 219 and the item 
     relating to section 224 and inserting in lieu thereof the 
     following:
``220. Contingency fees in lobbying.''.
       Sec. 2. This Act and the amendments made by this Act shall 
     become effective on the date of enactment of this Act and 
     shall apply to any contract entered into on or after such 
     date of enactment.
                                 ______

      By Mr. THURMOND:
  S. 54. A bill to amend title 18 to limit the application of the 
exclusionary rule; to the Committee on the Judiciary.


                    EXCLUSIONARY RULE LIMITATION ACT

  Mr. THURMOND. Mr. President, today, I rise to introduce a bill which 
would codify the good faith exception to the exclusionary rule that has 
been recognized by the Supreme Court.
  The legislation that I am offering today is similar to measures I 
have introduced in the last five Congresses and to a proposal which 
passed the Senate by the vote of 63-24 in 1984. Although the House of 
Representatives passed similar legislation during the 
[[Page S278]] last three out of four Congresses, the Senate failed to 
pass this proposal.
  The exclusionary rule is a judicially creased remedy for violations 
by law enforcement officers of the fourth amendment prohibition against 
illegal searches and seizures. More simply, if evidence is obtained by 
a law enforcement officer in violation of the fourth amendment then 
that evidence will be excluded in a criminal trail. The exclusionary 
rule is an important principle since it helps to ensure that law 
enforcement officers not be allowed to randomly enter our homes or 
private places and search without just cause.
  However, since the creation of the exclusionary rule remedy in 1914, 
in Weeks versus California, the Supreme Court has recognized exceptions 
when the exclusionary rule should not apply. This measure addresses one 
of those exceptions. This legislation codifies the Court's holding in 
United States versus Leon to provide that evidence obtained pursuant to 
a warrant which is later found to be defective will not be excluded it 
the law enforcement officer acted in objective good faith. Objective 
good faith would be established if the circumstances surrounding the 
search justify an objectively reasonable belief that it was in 
conformity with the fourth amendment. This bill also extends this 
exception to warrantless searches which has been recognized in two 
Federal circuits.
  Mr. President, the bill that I am introducing today neither 
authorizes nor encourages law enforcement officers to disregard the 
fourth amendment and randomly search a person's home. What it does is 
address the legal loophole that often allows a criminal to go free, 
irrespective of guilt or innocence, when evidence crucial to a criminal 
proceeding is suppressed. The goal of the exclusionary rule is to deter 
law enforcement conduct that violates the fourth amendment. Therefore, 
if a law enforcement officer's conduct in executing a search is in 
conformity with the fourth amendment, applying the exclusionary rule 
does not serve as a deterrent. It should be noted that the 
determination as to whether the officer conducted the search in 
objective good faith would be made by a court based on the 
circumstances surrounding the search. Of course, if the officer's 
conduct did not exhibit objective good faith, the evidence would not be 
allowed. This amendment is a reasonable extension of the exception 
currently recognized by the Supreme Court.
  We are well aware of the fact that the exclusion of evidence most 
often resulted in the release of the accused. This is a high price to 
pay for acts which do not violate the Constitution. Therefore, I think 
it wise to preclude the use of the exclusionary rule in these 
situations unless Congress so provides. This legislation will aid in 
the apprehension and prosecution of criminals without sacrificing the 
principles of the fourth amendment.
  In an effort to work towards a bi-partisan comprehensive crime bill 
last Congress, I agreed to not pursue passage of this measure. However, 
it is my belief that the Congress failed to produce a true, tough crime 
bill worthy of the American people. This Congress, I plan to strongly 
pursue this, and other, vital criminal law reform measures which will 
ensure that criminals are appropriately punished. I strongly urge my 
colleagues to support this vital measure and hope that we will act 
without delay.
  I ask unanimous consent that the full text of this bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 54

       That this Act may be cited as the ``Exclusionary Rule 
     Limitation Act of 1995''.
       Sec. 2. (a) Chapter 223 of title 18, United States Code, is 
     amended by adding the following two sections:

     ``Sec. 3508. Limitation of the fourth amendment exclusionary 
       rule

       `'Evidence which is obtained as a result of a search or 
     seizure shall not be excluded in a proceeding in a court of 
     the United States on the ground that the search or seizure 
     was in violation of the fourth amendment to the Constitution 
     of the United States, if the search or seizure was undertaken 
     in an objectively reasonable belief that it was in conformity 
     with the fourth amendment. A showing that evidence was 
     obtained pursuant to and within the scope of a warrant 
     constitutes prima facie evidence of such a reasonable belief, 
     unless that warrant was obtained through intentional and 
     material misrepresentation.

     ``Sec. 3509. General limitation of the exclusionary rule

       ``Except as specifically provided by statute or rule of 
     procedure evidence which is otherwise admissible shall not be 
     excluded in a proceeding in a court of the United States on 
     the ground that the evidence was obtained in violation of a 
     statute or rule of procedure, or of a regulation issued 
     pursuant thereto.''.
       (b) The table of sections of chapter 223 of title 18, 
     United States Code, is amended by adding at the end thereof:

``3508. Limitation of the fourth amendment exclusionary rule.
``3509. General limitation of the exclusionary rule.''.

                                 ______

      By Mr. INOUYE:
  S. 55. A bill to amend title 38, United States Code, to deem certain 
service in the organized military forces of the Government of the 
Commonwealth of the Philippines and the Philippine Scouts to have been 
active service for purposes of benefits under programs administered by 
the Secretary of Veterans Affairs; to the Committee on Veterans 
Affairs.


                      Filipino Veterans Equity Act

 Mr. INOUYE. Mr. President, today, I rise to introduce legislation 
which amends title 38, United States Code, to restore full veterans' 
benefits, by reason of service, to certain organized military forces of 
the Philippine Commonwealth Army and the Philippine Scouts.
  On July 26, 1941, President Roosevelt issued a military order that 
called members of the Philippine Commonwealth Army into the service of 
the United States Forces of the Far East. Under the Command of General 
Douglas MacArthur, our Filipino allies joined alongside American 
soldiers in fighting some of the most fierce battles of World War II.
  From the onset of the war through February 18, 1946, Filipinos who 
were called into service under President Roosevelt's order were 
entitled to full veterans' benefits by reason of their active service 
in our armed forces. Unfortunately, on February 18, 1946, the Congress 
enacted the Rescission Act of 1946 (now codified as Section 107, Title 
38, United States Code), which states that service performed by these 
Filipino veterans is not deemed as active service for purposes of any 
law of the United States conferring rights, privileges, or benefits. On 
May 27, 1946, the Congress extended the limitation on benefits to the 
new Filipino Scout units.
  Interestingly enough, Section 107 denied Filipino veterans access to 
health care, particularly for nonservice connected disability, and 
denied them other benefits such as pensions and home loan guarantees. 
Additionally, Section 107 limited the benefits received for service-
connected disabilities and death compensation to 50 percent of what was 
received by their American counterparts.
  As a result, Filipino veterans sued to obtain relief from this 
discriminatory treatment. The U.S. District Court for the District of 
Columbia, on May 12, 1989, in Quiban v. U.S. Veterans Administration, 
declared Section 107 unconstitutional. However, the U.S. Court of 
Appeals for the District of Columbia reversed that ruling and the 
veterans did not file a petition for certiorari to the U.S. Supreme 
Court. Thus, the Congress is responsible for rectifying this injustice.
  For many years, Filipino veterans of World War II have sought to 
correct this injustice by seeking equal treatment for their valiant 
military service in our Armed Forces. We must not ignore the 
recognition they duly deserve as U.S. veterans. Accordingly, I urge my 
colleagues to support this measure which would restore full veterans' 
benefits, by reason of service, to our Filipino allies of World War II.
  Mr. President, I ask unanimous consent that the text of my bill be 
placed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 55

       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 ``Filipino Veterans Equity Act 
     of 1995''.
     [[Page S279]] SEC. 2. CERTAIN SERVICE IN THE ORGANIZED 
                   MILITARY FORCES OF THE PHILIPPINES AND THE 
                   PHILIPPINE SCOUTS DEEMED TO BE ACTIVE SERVICE.

       (a) In General.--Section 107 of title 38, United States 
     Code, is amended--
       (1) in subsection (a)--
       (A) by striking out ``not'' after ``Army of the United 
     States, shall''; and
       (B) by striking out ``, except benefits under--'' and all 
     that follows and inserting in lieu thereof a period; and
       (2) in subsection (b)--
       (A) by striking out ``not'' after ``Armed Forces Voluntary 
     Recruitment Act of 1945 shall''; and
       (B) by striking out ``except--'' and all that follows and 
     inserting in lieu thereof a period.
       (b) Conforming Amendments.--(1) The heading of such section 
     is amended to read as follows:

     ``Sec. 107. Certain service deemed to be active service: 
       service in organized military forces of the Philippines and 
       in the Philippine Scouts''.

       (2) The item relating to such section in the table of 
     sections at the beginning of chapter 1 of such title is 
     amended to read as follows:

``107. Certain service deemed to be active service: service in 
              organized military forces of the Philippines and in the 
              Philippine Scouts.''.
     SEC. 3. EFFECTIVE DATE.

       (a) In General.--The amendments made by this Act shall take 
     effect on ____________.
       (b) Applicability.--No benefits shall accrue to any person 
     for any period before the effective date of this Act by 
     reason of the amendments made by this Act.
                                 ______

      By Mr. INOUYE:
  S. 57. A bill to amend the Immigration and Nationality Act to 
facilitate the immigration to the United States of certain aliens born 
in the Philippines or Japan who were fathered by United States 
citizens; to the Committee on the Judiciary.


                  amerasian immigration act amendments

 Mr. INOUYE. Mr. President, today, I rise to introduce legislation 
which amends Public Law 97-359, the Amerasian Immigration Act, to 
include Amerasian children from the Philippines and Japan as eligible 
applicants. This legislation also expands the eligibility period for 
the Philippines until the completion of the last United States military 
base closure and until the date of enactment of the proposed 
legislation for Japan.
  Under the current Amerasian immigration law, only children born in 
Korea, Laos, Kampuchea, Thailand, and Vietnam after December 31, 1950, 
and before October 22, 1982, who were fathered by United States 
citizens, are allowed to immigrate to the United States. When this 
legislation was first introduced in the 97th Congress, it included 
Amerasian children born in the Philippines and Japan with no time 
limits concerning their births. The final version of this bill, 
however, included only areas where the United States had engaged in 
active military combat from the Korean War onward, and hence, excluded 
both the Philippines and Japan.
  Although the Philippines and Japan were not considered a war zone 
from 1950 to 1982, the extent and nature of United States military 
involvement in both countries were quite similar to the involvement of 
the United States military in other Asian countries during the Korean 
and Vietnam wars. As a result, interracial marriages in both countries 
were common, thereby leading to a significant number of Amerasian 
children fathered by U.S. citizens. There are now over 50,000 Amerasian 
children in the Philippines and 6,000 Amerasian children in Japan born 
between 1987 and 1992.
  These children face similar problems to the Amerasian children 
provided for under Public Law 97-359. Due to the illegitimate or mixed 
ethnic make-up, they are often ostracized within their home countries. 
This stigmatization, in turn, leaves many without viable opportunities 
of employment, education, or family life. As a result, Amerasian 
children are subjected to conditions of severe poverty and prejudice, 
with very little hope of escaping their plight.
  Public Law 97-359 was passed in hopes of redressing the situation of 
Amerasian children in Korea, Laos, Kampuchea, Thailand, and Vietnam. 
Now is the time for the Senate to recognize our responsibilities to 
Amerasian children in the Philippines and Japan, and pass legislation 
that would lessen the severity of their impoverished lives.
  Mr. President, I ask unanimous consent that the text of my bill be 
placed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 57

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That 
     section 204(f)(2)(A) of the Immigration and Nationality Act 
     (8 U.S.C. 1154(f)(2)(A)) is amended--
       (1) by inserting ``(I)'' after ``born''; and
       (2) by inserting after ``subsection,'' the following: 
     ``(II) in the Philippines after 1950 and before November 24, 
     1992, or (III) in Japan after 1950 and before the date of 
     enactment of this subclause,''.
                                 ______

      By Mr. INOUYE:
  S. 58. A bill to increase the role of the Secretary of Transportation 
in administering section 901 of the Merchant Marine Act, 1936, and for 
other purposes; to the Committee on Commerce, Science, and 
Transportation.


        LEGISLATION RELATING TO THE MERCHANT MARINE ACT OF 1936

 Mr. Inouye. Mr. President, the legislation I am introducing today 
would centralize authority in the Secretary of Transportation for 
administering our cargo preference laws. The background of these laws, 
the need for them, and the problems which, in my view, necessitate the 
legislation are succinctly stated in a Journal of Commerce article 
dated November 18, 1988. While the first printing of this article was 
several years ago, the background it provides and the light it sheds on 
our present needs are still pertinent. I ask unanimous consent that the 
text of the bill and the article be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 58

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

     SECTION 1. TRANSPORTATION IN AMERICAN VESSELS OF GOVERNMENT 
                   PERSONNEL AND CERTAIN CARGOES.

       Section 901(b)(2) of the Merchant Marine Act, 1936 (46 
     U.S.C. App. 1241(b)(2)), is amended to read as follows:
       ``(2)(A) The Secretary of Transportation shall have the 
     sole responsibility for determining and designating the
      programs that are subject to the requirements of this 
     subsection. Each department or agency that has 
     responsibility for a program that is designated by the 
     Secretary of Transportation pursuant to the preceding 
     sentence shall, for the purposes of this subsection, 
     administer such program pursuant to regulations 
     promulgated by such Secretary.
       ``(B) The Secretary of Transportation shall--
       ``(i) review the administration of the programs referred to 
     in subparagraph (A); and
       ``(ii) on an annual basis, submit a report to Congress 
     concerning the administration of such programs.''.
                                                                    ____


                            Cargo Preference

               [From Journal of Commerce, Nov. 18, 1988]

       What it is: A series of statutes, going back to 1904, 
     intended to assure U.S.-flag ships a minimum share of cargoes 
     produced by U.S. government programs. It is the oldest U.S. 
     maritime promotional program and while subsidies and 
     financing aids have shrunk over the years, preference has 
     survived.
       Background: The preference laws began by tracking this 
     country's extension of its military and naval power, starting 
     with the Spanish-American War. More recently, they have come 
     to reflect the expansion of government programs extending 
     U.S. economic power and interest abroad.
       The Military Transportation Act of 1904 was the first of 
     the preference statutes and its requirement for U.S.-flag 
     vessel use, 100 percent, is the highest.
       In 1934 Congress adopted Public Resolution 17 to require 
     that half of the exports financed by the Reconstruction 
     Finance Corp. were to move in U.S.-flag vessels. Later that 
     resolution was made to apply to financing of the Export-
     Import Bank, established originally to facilitate trade with 
     the Soviet Union.
       In the early postwar period, Congress acted each year to 
     apply the resolution's 50 percent U.S.-flag share to foreign 
     aid shipments. It permanently inserted the requirement into 
     the 1954 Agricultural Trade Development and Assistance Act, 
     better known as Food for Peace and PL-480.
       Public Law 664 in 1961 made clear that preference should 
     benefit and protect all U.S.-flag vessels, not just liners, 
     and that all U.S. programs, including those where non-
     military agencies procured equipment, materials or 
     commodities for themselves or foreign governments, had to use 
     U.S. flags to the extent of 50 percent.
       Importance to Carriers: In the last year for which 
     statistics are available, calendar 1986, U.S.-flag carriers 
     hauled more than 33 million metric tons of preference cargo, 
     somewhat more than the 28.5 million tons of commercial 
     shipments carried that year. As an 
     [[Page S280]] industry, the revenue amounted to about $502 
     million.
       Necessity for Preference: Preference statutes are formally 
     predicated on the need for assured cargoes to encourage the 
     existence of a U.S.-flag merchant fleet to act as a military 
     auxiliary in times of national emergencies.
       Past efforts to apply preference to commercial cargoes have 
     failed, reflecting U.S. governmental sensitivity to 
     objections by this country's trading partners as well as 
     stern opposition from U.S. exporters, importers and 
     agricultural interests. The availability of preference 
     cargoes has unquestionably kept some U.S. carriers in 
     business but critics argue that preference has encouraged 
     keeping obsolete vessels in operation long after they should 
     have been scrapped.
       Extent of Program: The Defense Department, the Agriculture 
     Department and the Agency for International Development are 
     the agencies most heavily involved in utilizing shipping and 
     observing cargo preference. But there are at least 10 others 
     with the same cargo preference responsibilities although 
     smaller volumes. The Export-Import Bank in 1987 reported an 
     unusually high, 91 percent rate of U.S.-flag vessel use. It 
     brought participating carriers some $14.5 million in revenue.
       Problems: The Maritime Administration is responsible for 
     monitoring other government agencies to try to make sure they 
     live up to preference requirements. In fiscal year 1987, 
     those agencies met the cargo share minimums for the most 
     part. Among the exceptions were cases in which the cargo 
     origins and destinations were such that U.S.-flag vessels 
     were simply not available.
       Despite Reagan administration pledges to honor cargo 
     preference requirements, the Navy and the Agriculture 
     Department have had a number of preference fights with the 
     maritime industry.
       One produced an agreement by which the carriers agreed to 
     forgo preference claims on new Agriculture Department-
     supported export programs with commercial-like terms in 
     return for increasing to 75 percent their share of giveaway 
     relief food shipments.
       In another such dispute, the Navy and the U.S. State 
     Department were forced to negotiate a cargo-sharing agreement 
     with Iceland for military shipments there. Iceland threatened 
     the future of U.S. bases in that country if the United States 
     didn't agree to a departure from 100 percent U.S.-flag 
     carriage of defense shipments.
       There have been other, largely budget-driven attempts to 
     bypass preference, but carriers and their supporters in 
     Congress generally have managed to forestall them.
       Comment: Budgetary austerity and the Defense Department's 
     strict insistence of competitive procurement have combined to 
     make for increasing carrier dissatisfaction, especially with 
     the Navy's Military Sealift Command.
       Efforts already are under way to change the competitive 
     procurement system the command uses. Carriers hope generally, 
     to end the pressures they believe force rates downward to 
     depressed levels.
       The presidentially appointed commission on Merchant Marine 
     and Defense has recommended that all U.S.-flag preference 
     requirements programs be raised to 100 percent but the tight 
     budget and such interests as farmers and traders will work 
     against such a step. Agricultural interests have tried 
     unsuccessfully to have existing preference removed from 
     government programs in the belief that they inhibit U.S. farm 
     exports.
                                 ______

      By Mr. INOUYE:
  S. 59. A bill to amend the Public Health Service Act to provide 
health care practitioners in rural areas with training in preventive 
health care, including both physical and mental care, and for other 
purposes; to the Committee on


                        health care training act

 Mr. INOUYE. Mr. President, I introduce the Rural Preventive Health 
Care Training Act of 1995, a bill that responds to the dire situation 
our rural communities face in obtaining quality health care and disease 
prevention programs.
  Recently, the Institute of Medicine [IOM] released a report from 
their 2-year study entitled, ``Reducing Risks for Mental Disorders: 
Frontiers for Preventive Intervention Research.'' This study, mandated 
by the Senate Appropriations Subcommittee on Labor, Health and Human 
Services, and Education, of which I am a member and the distinguished 
Senator from Pennsylvania is Chair, highlights the benefits of 
preventive care for all health problems.
  Almost one fourth of Americans live in rural areas and thus 
frequently lack access to adequate physical and mental health care. For 
example, approximately 1,700 rural communities in virtually every State 
of the union suffer critical shortages of health care providers. As 
many as 21 million of the 34 million people living in underserved rural 
areas are without access to a primary care provider. In areas where 
providers exist, there are numerous limits to access, such as geography 
and distance, lack of transportation, and lack of knowledge about 
available resources. Additionally, due to the diversity of rural 
populations, ranging from native Americans to migrant farm workers, 
language and cultural obstacles are often a factor.
  Compound these problems with slim financial resources and many of 
America's rural communities go without vital health care, especially 
preventive care. Children fail to receive immunizations and routine 
checkups. Preventable illnesses and injuries occur needlessly and lead 
to expensive hospitalizations. Early symptoms of emotional problems and 
substance abuse go undetected and often develop into full blown 
disorders.
  Rural health care providers face a lack of training opportunities. 
Training in prevention is crucial in order to meet the demand for care 
in underserved areas. The Institute of Medicine Committee recommended 
that Congress and Federal agencies should immediately take steps to 
develop and support the training of additional researchers who can 
develop new preventive intervention research trials as well as evaluate 
the effectiveness of current service projects.
  Beyond the scope of simple prevention training, interdisciplinary 
preventive training in rural health is important because of a growing 
array of evidence that links mental disorders to physical ailments. For 
example, it has been estimated that from 50 to 70 percent of visits to 
physicians for medical symptoms are due in part or whole to 
psychosocial problems. By encouraging interdisciplinary training, rural 
communities can integrate the behavioral, biological, and psychological 
sciences to form the most effective preventive care possible.
  The problems with quality, access, and understanding of health care 
in rural areas all suggest that promoting interdisciplinary training of 
psychologists, nurses, and social workers is essential. The need 
becomes clearer when considering that many of the behavior-related 
problems afflicting rural communities are amenable to proven risk 
reduction strategies that are best provided by trained mental health 
care professionals.
  Interdisciplinary team prevention training will facilitate both 
health and mental health clinics sharing single service sites and 
routine consultation between groups. Social workers, psychologists, 
clinical psychiatric nurse specialists, and paraprofessionals play an 
important role in extending rural mental health services to those in 
need. Linkage of these services can provide better utilization of 
existing mental health care personnel, increase awareness and 
understanding of mental health services, and contribute to the overall 
health of rural communities.
  The Rural Preventive Health Care Training Act of 1995, targeted 
specifically toward rural communities, would implement the risk-
reduction model described in the IOM study. This model is based on the 
identification of risk factors for a certain disorder and the 
implementation of specific preventive strategies to target groups with 
those risk factors. The IOM Committee aptly demonstrates that methods 
of risk reduction have proven highly successful in many health-related 
areas, such as cardiovascular disease, smoking reduction, and the 
numerous childhood diseases and conditions that are preventable by 
early prenatal care for pregnant women.
  The cost of human suffering caused by poor health is immeasurable, 
but the huge financial burden placed on communities, families, and 
individuals is evident. By implementing preventive measures, the 
potential for savings in psychological and financial realms is 
enormous. This savings is the goal of the Rural Preventive Health Care 
Training Act of 1995.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 59

       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 ``Rural Preventive Health Care 
     Training Act of 1995''.
     [[Page S281]] SEC. 2. PREVENTIVE HEALTH CARE TRAINING.

       Section 778 of the Public Health Service Act (42 U.S.C. 
     294p) is amended--
       (1) by redesignating subsections (e) and (f) as subsections 
     (f) and (g), respectively;
       (2) by inserting after subsection (d), the following new 
     subsection:
       ``(e) Preventive Health Care Training.--
       ``(1) In general.--The Secretary may make grants to, and 
     enter into contracts with, any eligible applicant to enable 
     such applicant to provide preventive health care training to 
     health care practitioners practicing in rural areas in 
     accordance with paragraph (3). Such training should include 
     health care to prevent both physical and mental disorders 
     before the initial occurrence of such disorders. In carrying 
     out this paragraph, the Secretary shall encourage, but may 
     not require, the use of interdisciplinary training project 
     applications.
       ``(2) Limitation.--To be eligible to receive training using 
     assistance provided under paragraph (1), a health care 
     practitioner must be determined by the eligible applicant 
     involved to be practicing, or desiring to practice, in a 
     rural area.
       ``(3) Use of assistance.--Amounts received under a grant or 
     contract under this subsection shall be used--
       ``(A) to provide student stipends to individuals attending 
     rural community colleges or other institutions which service 
     predominantly rural communities for the purpose of receiving 
     preventive health care training;
       ``(B) to increase staff support at rural community colleges 
     or other institutions which service predominantly rural 
     communities to facilitate the provision of preventive health 
     care training;
       ``(C) to provide training in appropriate research and 
     program evaluation skills in rural communities;
       ``(D) to create and implement innovative programs and 
     curricula with a specific prevention component; and
       ``(E) for other purposes as the Secretary determines 
     appropriate.
       ``(4) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this subsection, 
     $5,000,000 for each of the fiscal years 1996 through 1998.''; 
     and
       (3) in subsection (g) (as so redesignated), by inserting 
     ``, except subsection (e),'' after ``section,''.
                                 ______

      By Mr. INOUYE:
  S. 60. A bill to amend title VII of the Public Health Service Act to 
revise and extend certain programs relating to the education of 
individuals as health professionals, and for other purposes; to the 
Committee on Labor and Human Resources.


       PHYSICAL AND OCCUPATIONAL THERAPY EDUCATION ASSISTANCE ACT

 Mr. INOUYE. Mr. President, today I am introducing the ``Physical and 
Occupational Therapy Education Assistance Act of 1995''. This 
legislation will assist in educating greater numbers of physical and 
occupational therapy practitioners to meet the current and future 
demand for the valuable services they provide our communities.
  In its most recent report, the Department of Labor's Bureau of Labor 
Statistics projected that the demand for services provided by physical 
and occupational therapy practitioners will increase dramatically over 
the next decade. According to the Bureau, between 1992 and 2005 the 
increase in demand will create a need for 79,400 additional physical 
therapists, an 88% increase over 1992 figures. Demand for physical 
therapist assistants is expected to grow at an even faster rate, 
experiencing a 93% increase over the same period. High demand is also 
expected for occupational therapists and occupational therapist 
assistants at 60% and 78%, respectively, by the year 2005.
  Current shortages exacerbate the problem and call for quick response. 
In a survey released in May 1994 regarding hospital employment (1992 
Survey of Human Resources), the American Hospital Association confirmed 
that physical therapy and occupational therapy maintain the highest 
average vacancy rates at 16.3% and 14%, respectively, of 26 health 
occupations. The legislation I introduce today would provide necessary 
assistance to physical therapy and occupational therapy programs 
throughout the country to address this current problem and assist in 
providing an adequate work force for the future. In awarding grants, 
preference would be given to those applicants that train practitioners 
in either rural or urban medically underserved communities.
  In addition, a shortage of physical and occupational therapy faculty 
threatens the ability of education programs to train an adequate supply 
of practitioners. The critical shortage of doctorally prepared physical 
and occupational therapists has resulted in an almost nonexistent pool 
of potential faculty. For the 1993 academic year, 65 faculty shortages 
were reported from the 131 accredited, professional-level physical 
therapy programs in the United States. Similarly, 50 faculty shortages 
were reported from the 85 accredited, professional-level occupational 
therapy programs. The legislation I introduce today would assist in the 
development of a pool of qualified faculty by giving preference to 
those grant applicants seeking to develop and expand post-professional 
programs for the advanced training of physical and occupational 
therapists.
  Passage of the ``Physical and Occupational Therapy Education 
Assistance Act of 1995'', as part of this year's reauthorization of 
Title VII of the Public Health Service Act, is essential to ensure 
adequate numbers of providers to meet the health needs of our nation. I 
look forward to working with my colleagues in the Congress and the 
Administration to enact this legislation.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 60

       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 ``Physical and Occupational 
     Therapy Education Assistance Act of 1995.''

     SEC. 2. PHYSICAL THERAPY AND OCCUPATIONAL THERAPY.

       Subpart II of part D of title VII of the Public Health 
     Service Act (42 U.S.C. 294d et seq.) is amended by adding at 
     the end thereof the following new section:

     ``SEC. 768. PHYSICAL THERAPY AND OCCUPATIONAL THERAPY.

       ``(a) In General.--The Secretary may make grants to, and 
     enter into contracts with, programs of physical therapy and 
     occupational therapy for the purpose of planning and 
     implementing projects for the recruitment, training and 
     retention of physical and occupational therapy practitioners 
     in approved programs that provide financial assistance in the 
     form of traineeships to students who participate in such 
     projects.
       ``(b) Preference in Making Grants.--In making grants under 
     subsection (a), the Secretary shall give preference to 
     qualified applicants that provide training in either physical 
     or occupational therapy programs in rural or urban medically 
     underserved communities, or that expand post-baccalaureate 
     programs for the advanced training of physical or 
     occupational therapy practitioners.
       ``(c) Peer Review.--Each peer review group established 
     under section 798(a) that reviews proposals for grants or 
     contracts under subsection (a) shall include no fewer than 2, 
     and no more than 3, physical or occupational therapists.
       ``(d) Report to Congress.--
       ``(1) In general.--The Secretary shall prepare a report 
     that--
       ``(A) summarizes the applications submitted to the 
     Secretary for grants or contracts under subsection (a);
       ``(B) specifies the identity of entities receiving the 
     grants or contracts; and
       ``(C) evaluates the effectiveness of the program based upon 
     the objectives established by the entities receiving the 
     grants or contracts.
       ``(2) Date certain for submission.--Not later than February 
     1, 1999, the Secretary shall complete the report required in 
     paragraph (1) and submit the report to the Committee on 
     Commerce of the House of Representatives, the Committee of 
     Appropriations of the House of Representatives, the Committee 
     of Labor and Human Resources of the Senate, and the Committee 
     of Appropriations of the Senate.
       ``(e) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there are authorized to be 
     appropriated $3,000,000 for each of the fiscal years 1996 
     through 1998.''.
                                 ______

      By Mr. INOUYE:
  S. 61. A bill to amend title XIX of the Social Security Act to 
provide for coverage of services provided by nursing school clinics 
under State Medicaid programs, and for other purposes; to the Committee 
on Finance.


                 the nursing school clinics act of 1995

  Mr. INOUYE. Mr. President, I rise today to introduce the Nursing 
School Clinics Act of 1995, a bill that has two main purposes. First, 
it builds on our concerted efforts to provide access to quality health 
care for all Americans by furnishing grants and incentives for nursing 
schools to establish primary care clinics in areas where additional 
medical services are most needed. Second, it provides the opportunity 
for nursing schools to enhance the scope of their students' training 
and education by giving them firsthand clinical experience in primary 
care facilities.
  [[Page S282]] Any good manager knows that when major problems are at 
hand and resources are tight, the most important act is the one that 
makes full use of all available resources. The American health care 
system is particularly deficient in this regard. We all know only too 
well that many individuals in the Nation have no or inadequate access 
to health care services, especially if they live in many of our rural 
towns and villages or inhabit our Indian communities. Many good people 
are trying to deliver services that are so vitally needed, but we need 
to do more. We must make full use of all health care practitioners, 
especially those who have been long waiting to give the nation the full 
measure of their professional abilities.
  Nursing is one of the noblest professions, with an enduring history 
of offering effective and sensitive care to those in need. Yet it is 
only in the last few years that we have begun to recognize the role 
that nurses can play as independent providers of care. Only recently, 
in 1990, Medicare was changed to authorize direct reimbursements to 
nurse practitioners. Medicaid is gradually being reformed to 
incorporate their services more effectively. The Nursing School Clinics 
Act continues the progress toward fully incorporating nurses in the 
delivery of health care services. Under the act, nursing schools will 
be able to establish clinics, supervised and staffed by nurse 
practitioners and nurse practitioner students, that provide primary 
care targeted to medically underserved rural and Native American 
populations.
  In the process of giving direct ambulatory care to their patients, 
these clinics will also furnish the forums in which both public and 
private schools of nursing can design and implement clinical training 
programs for their students. Simultaneous school-based education and 
clinical training have been a traditional part of physician 
development, but nurses have enjoyed fewer opportunities to combine 
classroom instruction with the practical experience of treating 
patients. This bill reinforces the principle for nurses of joining 
schooling with the actual practice of health care.
  To accomplish these objectives, title XIX of the Social Security Act 
is amended to designate that the services provided in these nursing 
school clinics are reimbursable under Medicaid. The combination of 
grants and the provision of Medicaid reimbursement furnishes the 
incentives and operational resources to start the clinics and to keep 
them going.
  To meet the increasing challenges of bringing cost-effective and 
quality health care to all Americans, we are going to have to think 
about and debate a variety of proposals, both large and small. Most 
important, however, we must approach the issue of health care with 
creativity and determination, ensuring that all reasonable avenues are 
pursued. Nurses have always been an integral part of health care 
delivery. The Nursing School Clinics Act of 1995 recognizes the central 
role they can perform as care givers to the medically underserved.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 61

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

     SECTION 1. MEDICAID COVERAGE OF SERVICES PROVIDED BY NURSING 
                   SCHOOL CLINICS.

       (a) In General.--Section 1905(a) of the Social Security Act 
     (42 U.S.C. 1396d(a)) is amended--
       (1) in paragraph (24), by striking ``and'' at the end;
       (2) by redesignating paragraph (25) as paragraph (26); and
       (3) by inserting after paragraph (24), the following new 
     paragraph:
       ``(25) nursing school clinic services (as defined in 
     subsection (t)) furnished by or under the supervision of a 
     nurse practitioner or a clinical nurse specialist (as defined 
     in section 1861(aa)(5)), whether or not the nurse 
     practitioner or clinical nurse specialist is under the 
     supervision of, or associated with, a physician or other 
     health care provider; and''.
       (b) Nursing School Clinic Services Defined.--Section 1905 
     of such Act (42 U.S.C. 1396d) is amended by adding at the end 
     the following new subsection:
       ``(t) The term `nursing school clinic services' means 
     services provided by a health care facility operated by an 
     accredited school of nursing which provides primary care, 
     long-term care, mental health counseling, home health 
     counseling, home health care, or other health care services 
     which are within the scope of practice of a registered 
     nurse.''.
       (c) Conforming Amendments.--Section 1902 of such Act (42 
     U.S.C. 1396a) is amended--
       (1) in subsection (a)(10)(C)(iv), by striking ``through 
     (24)'' and inserting ``through (25)''; and
       (2) in subsection (j), by striking ``through (25)'' and 
     inserting ``through (26)''.
       (d) Effective Date.--The amendments made by this Act shall 
     be effective with respect to payments under title XIX of the 
     Social Security Act for calendar quarters commencing with the 
     first calendar quarter beginning after the date of the 
     enactment of this Act.
                                 ______

      By Mr. INOUYE:
  S. 62. A bill to amend title XVIII of the Social Security Act to 
remove the restriction that a clinical psychologist or clinical social 
worker provide services in a comprehensive outpatient rehabilitation 
facility to a patient only under the care of a physician, and of other 
purposes; to the Committee on Finance.


  autonomous functioning of clinical psychologists and social workers 
                             under medicare

 Mr. INOUYE. Mr. President, today I am introducing legislation to 
authorize the autonomous functioning of clinical psychologists and 
clinical social workers within the Medicare comprehensive outpatient 
rehabilitation facility program.
  In my judgment, it is truly unfortunate that programs such as this 
currently require clinical supervision of the services provided by 
certain health professionals and do not allow each of the various 
health professions to truly function to the extent of their State 
practice acts. In my judgment, it is especially appropriate that those 
who need the services of outpatient rehabilitation facilities have 
access to a wide range of social and behavioral science expertise. 
Clinical psychologists and clinical social workers are recognized as 
independent providers of mental health care services through the 
Federal Employees Health Benefits Program, the Civilian Health and 
Medical Program of the Uniformed Services, the Medicare (Part B) 
Program, and numerous private insurance plans.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 62

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

     SECTION 1. REMOVAL OF RESTRICTION THAT A CLINICAL 
                   PSYCHOLOGIST OR CLINICAL SOCIAL WORKER PROVIDE 
                   SERVICES IN A COMPREHENSIVE OUTPATIENT 
                   REHABILITATION FACILITY TO A PATIENT ONLY UNDER 
                   THE CARE OF A PHYSICIAN.

       (a) In General.--Section 1861(cc)(2)(E) of the Social 
     Security Act (42 U.S.C. 1395x(cc)(2)(E)) is amended by 
     inserting before the semicolon ``(except with respect to 
     services provided by a clinical psychologist or a clinical 
     social worker)''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall become effective with respect to services provided on 
     or after January 1, 1996.
                                 ______

      By Mr. INOUYE:
  S. 63. A bill to amend title XVIII of the Social Security Act to 
provide improved reimbursement for clinical social worker services 
under the medicare program, and for other purposes; to the Committee on 
Finance.


            the clinical social worker services act of 1995
  Mr. INOUYE. Mr. President, today I am introducing legislation to 
amend Title XVIII of the Social Security Act to correct discrepancies 
in the reimbursement of clinical social workers covered through 
Medicare, Part B. The three proposed changes that are contained in this 
legislation are necessary to clarify the current payment process for 
clinical social workers and to establish a reimbursement methodology 
for the profession that is similar to other health care professionals 
reimbursed through the Medicare program.
  First, this legislation would set payment for clinical social worker 
services according to a fee schedule established by the Secretary. 
Currently, the methodology for reimbursing clinical social 
[[Page S283]] workers' services is set at a percentage of the fee for 
another non-physician provider group, creating a greater differential 
in charges than that which exists in the marketplace. I am aware of no 
other provision in the Medicare statute where one non-physician's 
reimbursement rate is tied to that of another non-physician provider. 
This is a precedent that clinical social workers understandably wish to 
change. I also wish to see that clinical social workers' services are 
valued on their own merit.
  Second, this legislation makes it clear that services and supplies 
furnished incident to a clinical social worker's services are a covered 
Medicare expense, just as these services are currently covered for 
other mental health professionals in Medicare. Third, the bill would 
allow a clinical social worker to be reimbursed for services provided 
to a client who is hospitalized.
  Clinical social workers are valued members of our health care 
provider team. They are legally regulated in every State of our Nation 
and are recognized as independent providers of mental health care 
throughout the health care system. Clinical social worker services were 
made available to Medicare beneficiaries through the Omnibus Budget 
Reconciliation Act of 1989. I believe that it is time now to correct 
the reimbursement problems that this profession has experienced through 
Medicare.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 63

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

     SECTION 1. IMPROVED REIMBURSEMENT FOR CLINICAL SOCIAL WORKER 
                   SERVICES UNDER MEDICARE.

       (a) In General.--Section 1833(a)(1)(F)(ii) of the Social 
     Security Act (42 U.S.C. 13951(a)(1)(F)(ii)) is amended to 
     read as follows: ``(ii) the amount determined by a fee 
     schedule established by the Secretary,''.
       (b) Definition of Clinical Social Worker Services 
     Expanded.--Section 1861(hh)(2) of such Act (42 U.S.C. 
     1395x(hh)(2)) is amended by striking ``services performed by 
     a clinical social worker (as defined in paragraph (1))'' and 
     inserting ``such services and such services and supplies 
     furnished as an incident to such services performed by a 
     clinical social worker (as defined in paragraph (1))''.
       (c) Clinical Social Worker Services Not To Be Included in 
     Inpatient Hospital Services.--Section 1861(b)(4) of such Act 
     (42 U.S.C. 1395x(b)(4)) is amended by striking ``and 
     services'' and inserting ``clinical social worker services, 
     and services''.
       (d) Treatment of Services Furnished in Inpatient Setting.--
     Section 1832(a)(2)(B)(iii) of such Act (42 U.S.C. 
     1395k(a)(2)(B)(iii)) is amended by striking ``and services'' 
     and inserting ``clinical social worker services, and 
     services''.
       (e) Effective Date.--The amendments made by this section 
     shall become effective with respect to payments made for 
     clinical social worker services furnished on or after January 
     1, 1996.
                                 ______

      By Mr. INOUYE:
  S. 64. A bill to amend title VII of the Public Health Service Act to 
make certain graduate programs in clinical psychology eligible to 
participate in various professions loan programs, and for other 
purposes; to the Committee on Labor and Human Resources.


        the u.s. public health service act amendment act of 1995

  Mr. INOUYE. Mr. President, I am introducing legislation today to 
modify title VII of the U.S. Public Health Service Act in order to 
provide students enrolled in graduate psychology programs with the 
opportunity to participate in various health professions loan programs.
  Providing students enrolled in graduate psychology programs with 
eligibility for financial assistance in the form of loans, loan 
guarantees, and scholarships will facilitate a much needed infusion of 
behavioral science expertise into our public health efforts. There is a 
growing recognition of the valuable contribution that is being made by 
our nation's psychologists toward solving some of our nation's most 
distressing problems such as domestic violence, addictions, 
occupational stress, child abuse, and depression.
  The participation of students of all kinds is vital to the success of 
health care training. The title VII programs play a significant role in 
providing financial support for the recruitment of minorities, women, 
and individuals from economically disadvantaged backgrounds. Minority 
therapists, for example, have an advantage in the provision of critical 
services to minority populations because they are more likely to 
understand or, perhaps, share the cultural background of their clients 
and are often able to communicate to them in their own language. Also 
significant is the fact that, when compared with non-minority 
graduates, ethnic minority graduates are less likely to work in private 
practice and more likely to work in community or non-profit settings, 
where ethnic minority and economically disadvantaged individuals are 
more likely to seek care.
  It is important that a continued emphasis be placed on the needy 
populations of our nation and that continued support be provided for 
the training of individuals who are most likely to provide services in 
underserved areas.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 64

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

     SECTION 1. PARTICIPATION IN VARIOUS HEALTH PROFESSIONS LOAN 
                   PROGRAMS.

       (a) Loan Agreements.--Section 721 of the Public Health 
     Service Act (42 U.S.C. 292q) is amended--
       (1) in subsection (a), by inserting ``, or any public or 
     nonprofit schools that offer graduate programs in clinical 
     psychology'' after ``veterinary medicine'';
       (2) in subsection (b)(4), by striking ``or doctor of 
     veterinary medicine or an equivalent degree'' and inserting 
     ``doctor of veterinary medicine or an equivalent degree, or a 
     graduate degree in clinical psychology''; and
       (3) in subsection (c)(1), by inserting ``, or schools that 
     offer graduate programs in clinical psychology'' after 
     ``veterinary medicine''.
       (b) Loan Provisions.--Section 722 of such Act (42 U.S.C. 
     292r) is amended--
       (1) in subsection (b)(1), by striking ``or doctor of 
     veterinary medicine or an equivalent degree'' and inserting 
     ``doctor of veterinary medicine or an equivalent degree, or a 
     graduate degree in clinical psychology''; and
       (2) in subsection (k)--
       (A) by striking ``or podiatry'' and inserting ``podiatry, 
     or clinical psychology'' in the matter preceding paragraph 
     (1); and
       (B) by striking ``or podiatric medicine'' in paragraph (4), 
     and inserting ``podiatric medicine, or clinical psychology''.
                                 ______

      By Mr. INOUYE:
  S. 65. A bill to amend title VII of the Public Health Service Act to 
establish a psychology post-doctoral fellowship program, and for other 
purposes; to the Committee on Labor and Human Resources.


          the public health service act amendment act of 1995

  Mr. INOUYE.
   Mr. President, I am introducing legislation today to amend Title VII 
of the Public Health Service Act to establish a psychology post-
doctoral program.

  Psychologists have made a unique contribution in serving the nation's 
medically underserved populations. Expertise in behavioral science is 
useful in addressing many of our most distressing concerns such as 
violence, addiction, mental illness, children's behavior disorders, and 
family disruption. Establishment of a psychology post-doctoral program 
could be most effective in finding solutions to these pressing societal 
issues.
  Similar programs supporting additional, specialized training in 
traditionally underserved settings or with specific underserved 
populations have been demonstrated to be successful in providing 
services to those same underserved populations during the years 
following the training experience. That is, mental health professionals 
who have participated in these specialized federally funded programs 
have tended not only to meet their payback obligations, but have 
continued to work in the public sector or with the underserved 
populations with whom they have been trained to work.
  While the doctorate in psychology provides broad-based knowledge and 
mastery in a wide variety of clinical skills, the specialized post-
doctoral fellowship programs provide particular diagnostic and 
treatment skills required to effectively respond to these underserved 
populations. For example, what 
[[Page S284]] looks like severe depression in an elderly person might 
be a withdrawal related to hearing loss, or what looks like poor 
academic motivation in a child recently relocated from Southeast Asia 
might be reflective of a cultural value of reserve rather than a 
disinterest in academic learning. Each of these situations requires 
very different interventions, of course, and specialized assessment 
skills.
  Domestic violence is not just a problem for the criminal justice 
system, it is a significant public health problem. A single aspect of 
the issue, domestic violence against women results in almost 100,000 
days of hospitalization, 30,000 emergency room visits, and 40,000 
visits to physicians each year. Rates of child and spouse abuse in 
rural areas are particularly high as are the rates of alcohol abuse and 
depression in adolescents. A post-doctoral fellowship program in the 
psychology of rural populations could be of special benefit in 
addressing these problems.
  Given the changing demographics of the nation--the increasing life 
span and numbers of the elderly, the rising percentage of minority 
populations within the country, as well as an increased recognition of 
the long-term sequelae of violence and abuse--and given the 
demonstrated success and effectiveness of these kinds of specialized 
training programs, it is incumbent upon us to encourage participation 
in post-doctoral fellowship programs that respond to the needs of the 
nation's underserved.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 65

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

     SECTION 1. GRANTS FOR FELLOWSHIPS IN PSYCHOLOGY.

       Part E of the Public Health Service Act is amended by 
     inserting after section 778 (42 U.S.C. 294p) the following 
     new section:

     ``SEC. 779. GRANTS FOR FELLOWSHIPS IN PSYCHOLOGY.

       ``(a) In General.--The Secretary shall establish a 
     psychology post-doctoral fellowship program to make grants to 
     and enter into contracts with eligible entities to encourage 
     the provision of psychological training and services in 
     underserved treatment areas.
       ``(b) Eligible Entities.--
       ``(1) Individuals.--In order to receive a grant under this 
     section an individual shall submit an application to the 
     Secretary at such time, in such form, and containing such 
     information as the Secretary shall require, including a 
     certification that such individual--
       ``(A) has received a doctoral degree through a graduate 
     program in psychology provided by an accredited institution 
     at the time such grant is awarded;
       ``(B) will provide services in a medically underserved 
     population during the period of such grant;
       ``(C) will comply with the provisions of subsection (c); 
     and
       ``(D) will provide any other information or assurances as 
     the Secretary determines appropriate.
       ``(2) Institutions.--In order to receive a grant or 
     contract under this section, an institution shall submit an 
     application to the Secretary at such time, in such form, and 
     containing such information as the Secretary shall require, 
     including a certification that such institution--
       ``(A) is an entity, approved by the State, that provides 
     psychological services in medically underserved areas or to 
     medically underserved populations (including entities that 
     care for the mentally retarded, mental health institutions, 
     and prisons);
       ``(B) will use amounts provided to such institution under 
     this section to provide financial assistance in the form of 
     fellowships to qualified individuals who meet the 
     requirements of subparagraphs (A) through (C) of paragraph 
     (2);
       ``(C) will not use in excess of 10 percent of amounts 
     provided under this section to pay for the administrative 
     costs of any fellowship programs established with such funds; 
     and
       ``(D) will provide any other information or assurance as 
     the Secretary determines appropriate.
       ``(c) Continued Provision of Services.--Any individual who 
     receives a grant or fellowship under this section shall 
     certify to the Secretary that such individual will continue 
     to provide the type of services for which such grant or 
     fellowship is awarded for at least 1 year after the term of 
     the grant or fellowship has expired.
       ``(d) Regulations.--Not later than 180 days after the date 
     of enactment of this section, the Secretary shall promulgate 
     regulations necessary to carry out this section, including 
     regulations necessary to carry out this section, including 
     regulations that define the terms `medically underserved 
     areas' or medically unserved populations'.
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $5,000,000 for each of the fiscal years 1996 through 1998.''.
                                 ______

      By Mr. INOUYE:
  S. 66. A bill to amend title VII of the Public Health Service Act to 
ensure that social work students or social work schools are eligible 
for support under the Health Careers Opportunity Program, the Minority 
Centers of Excellence Program, and programs of grants for training 
projects in geriatrics, to establish a social work training program, 
and for other purposes; to the Committee on Labor and Human Resources.


              support for social work schools and students

  Mr. INOUYE. Mr. President, on behalf of our Nation's clinical social 
workers, I am introducing legislation to amend the Public Health 
Service Act. This legislation will first, establish a new social work 
training program; second, ensure that social work students are eligible 
for support under the Health Careers Opportunity Program and that 
social work schools are eligible for support under the Minority Centers 
for Excellence programs; third, permit schools offering degrees in 
social work to obtain grants for training projects in geriatrics; and 
fourth, ensure that social work is recognized as a profession under the 
Public Health Maintenance Organization [HMO] Act.
  Despite the impressive range of services social workers provide to 
the people of this Nation, particularly our elderly, disadvantaged, and 
minority populations, few Federal programs exist to provide 
opportunities for social work training in health and mental health 
care. This legislation builds on the health professions education 
legislation enacted by the 102d Congress enabling schools of social 
work to apply for AIDS training funding and resources to establish 
collaborative relationships with rural health care providers and 
schools of medicine or osteopathic medicine. My bill provides funding 
for traineeships and fellowships for individuals who plan to specialize 
in, practice, or teach social work, or for operating approved social 
work training programs; it assists disadvantaged students to earn 
graduate degrees in social work with concentrations in health or mental 
health; it provides new resources and opportunities in social work 
training for minorities; and it encourages schools of social work to 
expand programs in geriatrics. Finally, the recognition of social work 
as a profession merely codifies current social work practice and 
reflects the modifications made by the Medicare HMO legislation.
  I believe it is important to ensure that the special expertise and 
skills social workers possess continue to be available to the citizens 
of this nation. This legislation, by providing financial assistance to 
schools of social work and social work students, recognizes the long 
history and critical importance of the services provided by social work 
professionals. In addition, since social workers have provided quality 
mental health services to our citizens for a long time and continue to 
be at the forefront of establishing innovative programs to serve our 
disadvantaged populations, I believe that it is time to provide them 
with the proper recognition of their profession that they have clearly 
earned and deserve.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 66

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

     SECTION 1. SOCIAL WORK STUDENTS.

       (a) Scholarships, Generally.--Section 737(a)(3) of the 
     Public Health Service Act (42 U.S.C. 293a(a)(3)) is amended 
     by striking ``offering graduate programs in clinical 
     psychology'' and inserting ``offering graduate programs in 
     clinical psychology, graduate programs in clinical social 
     work, or programs in social work''.
       (b) Faculty Positions.--Section 738(a)(3) of the Public 
     Health Service Act (42 U.S.C. 293b(a)(3)) is amended by 
     striking ``offering graduate programs in clinical 
     psychology'' and inserting ``offering graduate programs in 
     clinical psychology, graduate programs in clinical social 
     work, or programs in social work''.
     [[Page S285]]   (c) Health Professions School.--Section 
     739(h)(1)(A) of the Public Health Service Act (42 U.S.C. 
     293c(h)(1)(A)) is amended by striking ``or a school of 
     pharmacy'' and inserting ``a school of pharmacy, or a school 
     offering graduate programs in clinical social work, or 
     programs in social work''.
       (d) Health Careers Opportunities Program.--Section 
     740(a)(1) of the Public Health Service Act (42 U.S.C. 
     293d(a)(1)) striking ``offer graduate programs in clinical 
     psychology'' and inserting ``offering graduate programs in 
     clinical psychology or programs in social work''.

     SEC. 2. GERIATRICS TRAINING PROJECTS.

       Section 777(b)(1) of the Public Health Service Act (42 
     U.S.C. 294o(b)(1)) is amended by inserting ``schools offering 
     degrees in social work,'' after ``teaching hospitals,''.

     SEC. 3. SOCIAL WORK TRAINING PROGRAM.

       Part E of title VII of the Public Health Service Act (42 
     U.S.C. 294n et seq.) is amended by adding at the end thereof 
     the following new section:

     ``SEC. 779. SOCIAL WORK TRAINING PROGRAM.

       ``(a) Training Generally.--The Secretary may make grants 
     to, or enter into contracts with, any public or nonprofit 
     private hospital, school offering programs in social work, or 
     to or with a public or private nonprofit entity (which the 
     Secretary has determined is capable of carrying out such 
     grant or contract)--
       ``(1) to plan, develop, and operate, or participate in, an 
     approved social work training program (including an approved 
     residency or internship program) for students, interns, 
     residents, or practicing physicians;
       ``(2) to provide financial assistance (in the form of 
     traineeships and fellowships) to students, interns, 
     residents, practicing physicians, or other individuals, who 
     are in need thereof, who are participants in any such 
     program, and who plan to specialize or work in the practice 
     of social work;
       ``(3) to plan, develop, and operate a program for the 
     training of individuals who plan to teach in social work 
     training programs; and
       ``(4) to provide financial assistance (in the form of 
     traineeships and fellowships) to individuals who are 
     participants in any such program and who plan to teach in a 
     social work training program.
       ``(b) Academic Administrative Units.--
       ``(1) In general.--The Secretary may make grants to or 
     enter into contracts with schools offering programs in social 
     work to meet the costs of projects to establish, maintain, or 
     improve academic administrative units (which may be 
     departments, divisions, or other units) to provide clinical 
     instruction in social work.
       ``(2) Preference in making awards.--In making awards of 
     grants and contracts under paragraph (1), the Secretary shall 
     give preference to any qualified applicant for such an award 
     that agrees to expend the award for the purpose of--
       ``(A) establishing an academic administrative unit for 
     programs in social work; or
       ``(B) substantially expanding the programs of such a unit.
       ``(c) Duration of Award.--The period during which payments 
     are made to an entity from an award of a grant or contract 
     under subsection (a) may not exceed 5 years. The provision of 
     such payments shall be subject to annual approval by the 
     Secretary of the payments and subject to the availability of 
     appropriations for the fiscal year involved to make the 
     payments.
       ``(d) Funding.--
       ``(1) Authorization of appropriations.--For the purpose of 
     carrying out this section, there is authorized to be 
     appropriated $10,000,000 for each of the fiscal years 1996 
     through 1998.
       ``(2) Allocation.--Of the amounts appropriated under 
     paragraph (1) for a fiscal year, the Secretary shall make 
     available not less than 20 percent for awards of grants and 
     contracts under subsection (b).''.

     SEC. 4. CLINICAL SOCIAL WORKER SERVICES.

       Section 1302 of the Public Health Service Act (42 U.S.C. 
     300e-1) is amended--
       (1) in paragraphs (1) and (2), by inserting ``clinical 
     social worker,'' after ``psychologist,'' each place it 
     appears;
       (2) in paragraph (4)(A), by striking ``and psychologists'' 
     and inserting ``psychologists, and clinical social workers''; 
     and
       (3) in paragraph (5), by inserting ``clinical social 
     work,'' after ``psychology,''.
                                 ______

      By Mr. INOUYE:
  S. 67. A bill to amend title 10, United States Code, to authorize 
former members of the Armed Forces who are totally disabled as the 
result of a service-connected disability to travel on military aircraft 
in the same manner and to the same extent as retired members of the 
Armed Forces are entitled to travel on such aircraft; to the Committee 
on Armed Services.


                  THE PATRIOTIC AMERICANS ACT OF 1995

  Mr. INOUYE. Mr. President, today, I am reintroducing a bill which is 
of great importance to a group of patriotic Americans. This legislation 
is designed to extend space-available travel privileges on military 
aircraft to those who have been totally disabled in the service of our 
country.
  Currently, retired members of the Armed Forces are permitted to 
travel on space-available basis on non-scheduled military flights 
within the continental United States and on scheduled overseas flights 
operated by the Military Airlift Command. My bill would provide the 
same benefits for 100 percent, service-connected disabled veterans.
  Surely, we owe these heroic men and women, who have given so much to 
our country, a debt of gratitude. Of course, we can never repay them 
for the sacrifice they have made on behalf of all of us but we can 
surely try to make their lives more pleasant and fulfilling. One way in 
which we can help is to extend military travel privileges to these 
distinguished American veterans. I have received numerous letters from 
all over the country attesting to the importance attached to this issue 
by veterans. Therefore, I ask that my colleagues show their concern and 
join me in saying ``thank you'' by supporting this legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 67

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That 
     chapter 53 of title 10, United States Code, is amended by 
     inserting after section 1031 the following new section:

     Sec. 1032. Travel privileges on military aircraft for certain 
       former members of the armed forces

       ``A former member of the armed forces who is entitled to 
     compensation from the Veterans' Administration for a service-
     connected disability rated total in degree by the Veteran's 
     Administration is entitled, in the same manner and to the 
     same extent as retired members of the armed forces are 
     entitled to travel on a space-available basis on unscheduled 
     military flights within the continental United States and on 
     scheduled overseas flights operated by the Military Airlift 
     Command.''.
       Sec. 2. The table of sections, at the beginning of chapter 
     53 of title 10, United States Code, is amended by inserting 
     after the item relating to section 1031 the following new 
     item:

``Sec. 1032. Travel privileges on military aircraft for certain former 
              members of the armed forces.''.
                                 ______

      By Mr. INOUYE:
  S. 68. A bill to amend title 10, United States Code, to authorize the 
appointment of health care professionals to the positions of the 
Surgeon General of the Navy, and the Surgeon General of the Air Force; 
to the Committee on Armed Services.


                    THE SURGEON GENERALS ACT OF 1995

  Mr. INOUYE. Mr. President, I am introducing legislation today that 
would authorize the appointment of various health care professionals to 
policymaking positions in the Department of Defense. My legislation 
would allow the most qualified individuals from the full range of 
health professions, including but not limited to dentistry, medicine, 
nursing, osteopathy and psychology to fill the Army, Navy, and Air 
Force Surgeon General positions.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 68

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

     SECTION 1. SURGEON GENERAL OF THE ARMY.

       Section 3036 of title 10, United States Code, is amended--
       (1) in subsection (b), by inserting before the period at 
     the end of the third sentence the following. ``and shall be 
     appointed as prescribed in subsection (f)''; and
       (2) by adding at the end of the following new subsection 
     (f):
       ``(f) The President shall appoint the Surgeon General from 
     among commissioned officers in any corps of the Army Medical 
     Department who are educationally and professionally qualified 
     to furnish health care to other persons, including doctors of 
     medicine, dentistry, and osteopathy, nurses, and clinical 
     psychologists.''.

     SEC. 2. SURGEON GENERAL OF THE NAVY.

       Section 5137 of title 10, United States Code, is amended--
       (1) in the first sentence of subsection (a), by striking 
     out ``in the Medical Corps'' and inserting in lieu thereof 
     ``who are educationally and professionally qualified to 
     furnish health care to other persons, including doctors of 
     medicine, dentistry, and osteopathy, nurses, and clinical 
     psychologists''; and
       [[Page S286]] (2) in subsection (b), by striking out ``in 
     the Medical Corps'' and inserting in lieu thereof ``who is 
     qualified to be the Chief of the Bureau of Medicine and 
     Surgery''.

     SEC. 3. SURGEON GENERAL OF THE AIR FORCE.

       The first sentence of section 8036 of title 10, United 
     States Code, is amended by striking out ``designated as 
     medical officers under section 8067(a) of this title'' and 
     inserting in lieu thereof ``educationally and professionally 
     qualified to furnish health care to other persons, including 
     doctors of medicine, dentistry, and osteopathy, nurses, and 
     clinical psychologists''.
                                 ______

      By Mr. INOUYE:
  S. 69. A bill to amend section 1086 of title 10, United States Code, 
to provide for payment under CHAMPUS of certain health care expenses 
incurred by certain members and former members of the uniformed 
services and their dependents to the extent that such expenses are not 
payable under medicare, and for other purposes; to the Committee on 
Armed Services.


                   THE CHAMPUS AMENDMENT ACT OF 1995

  Mr. INOUYE. Mr. President, I feel that it is very important that our 
Nation continue its firm commitment to those individuals and their 
families who have served in the Armed Forces and made us the great 
Nation that we are today. As this population becomes older, they are 
unfortunately finding that they need a wider range of health services, 
some of which are simply not available under Medicare. These 
individuals made a commitment to their Nation, trusting that when they 
needed help the Nation would honor that commitment. The bill that I am 
recommending today would ensure the highest possible quality of care 
for these dedicated citizens and their families, who gave so much for 
us.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 69

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

     SECTION 1. EXPANSION OF MEDICARE EXCEPTION TO THE PROHIBITION 
                   OF CHAMPUS COVERAGE FOR CARE COVERED BY ANOTHER 
                   HEALTH CARE PLAN.

       (a) Amendment and Reorganization of Exceptions.--Subsection 
     (d) of section 1086 of title 10, United States Code, is 
     amended to read as follows:
       ``(d)(1) Section 1079(j) of this title shall apply to a 
     plan contracted for under this section except as follows:
       ``(A) Subject to paragraph (2), a benefit may be paid under 
     such plan in the case of a person referred to in subsection 
     (c) for items and services for which payment is made under 
     title XVIII of the Social Security Act.
       ``(B) No person eligible for health benefits under this 
     section may be denied benefits under this section with 
     respect to care or treatment for any service-connected 
     disability which is compensable under chapter 11 of title 38 
     solely on the basis that such person is entitled to care or 
     treatment for such disability in facilities of the Department 
     of Veterans Affairs.
       ``(2) If a person described in paragraph (1)(A) receives 
     medical or dental care for which payment may be made under 
     both title XVIII of the Social Security Act (42 U.S.C. 1395 
     et seq.) and a plan contracted for under subsection (a), the 
     amount payable for that care under the plan may not exceed 
     the difference between--
       ``(A) the sum of any deductibles, coinsurance, and balance 
     billing charges that would be imposed on the person if 
     payment for that care were made solely under that title; and
       ``(B) the sum of any deductibles, coinsurance, and balance 
     billing charges that would be imposed on the person if 
     payment for that care were made solely under the plan.
       ``(3) A plan contracted for under this section shall not be 
     considered a group health plan for the purposes of paragraph 
     (2) or (3) of section 1862(b) of the Social Security Act (42 
     U.S.C. 1395y(b)).
       ``(4) A person who, by reason of the application of 
     paragraph (1), receives a benefit for items or services under 
     a plan contracted for under this section shall provide the 
     Secretary of Defense with any information relating to amounts 
     charged and paid for the items and services that, after 
     consulting with the other administering Secretaries, the 
     Secretary requires. A certification of such person regarding 
     such amounts may be accepted for the purposes of determining 
     the benefit payable under this section.''.
       (b) Repeal of Superseded Provision.--Such section is 
     amended--
       (1) by striking out subsection (g); and
       (2) redesignating subsection (h) as subsection (g).

     SEC. 2. CONFORMING AMENDMENT.

       Section 1713(d) of title 38, United States Code, is amended 
     by striking out ``section 1086(d)(1) of title 10 or''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by this Act shall take effect with 
     respect to health care items or services provided on and 
     after the date of enactment of this Act.
                                 ______

      By Mr. DOLE (for Mr. Murkowski (for himself, Mr. Breaux, Mr. 
        Stevens, and Mr. Heflin)):
  S. 70. A bill to permit exports of certain domestically produced 
crude oil, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs


                         ALASKA OIL LEGISLATION

 Mr. MURKOWSKI. Mr. President, I rise to introduce legislation (S. 70) 
on behalf of myself and Senators Stevens and Breaux and Heflin that is 
critical to the economy of Alaska and the energy security of the United 
States. This legislation would lift the 22-year old prohibition on the 
export of Alaskan North Slope (ANS) crude oil, thereby allowing the 
state's most important and vital industry to sell its products in the 
global marketplace.
  Mr. President, the export ban is contrary to the free trade, non-
discrimination, and open market principles that have guided this 
Administration in the successful NAFTA and GATT negotiations. It 
represents the worst type of protectionism that costs workers jobs in 
Alaska and California, damages our nation's energy security, and 
contributes to our international trade deficit.
  The export ban is an unjustifiable and unprecedented discrimination 
against the State of Alaska and the citizens of my State. It costs the 
state hundreds of millions dollars a year in lost royalties and hinders 
the ability of the State to provide social services and infrastructure 
that would enable the State to diversify its economy. This artificial 
constraint on the development of Alaska's economy is fundamentally 
unfair, and in this Senator's view, impinges on the sovereignty of the 
State in a way that no other state has to endure.
  In 1973, when the ban was imposed, many people believed that our 
nation's energy security would be enhanced if ANS crude was committed 
solely for domestic consumption. Twenty-two years later, it is clear to 
nearly every economist who has studied this issue, that the export ban, 
rather than enhancing energy security, will ultimately make America 
more dependent on foreign oil.
  Today, most of the 1.8 million barrels of oil that is shipped from 
Alaska is delivered by tanker to the closest domestic markets on the 
West Coast, primarily California. The remainder is generally shipped to 
Panama, off-loaded into a pipeline and then re-loaded onto a tanker and 
transported to the Gulf Coast.
  The 1.3 million barrels of oil shipped into California each day glut 
the California market and drive the price of oil there far below the 
world price. These glut-induced prices have devastated the California 
oil and gas industry and exacerbated the prolonged California 
recession. Wells have been permanently shut in. Exploration and 
development activities have crawled to a near halt, and employment has 
been devastated.
  Mr. President, the single most effective way of reversing this trend 
and encouraging the renewed exploration and development of oil 
production in California is to lift the ban on the export of Alaska 
crude oil. The Department of Energy (DOE) reached this precise 
conclusion last year when it issued a report which concluded that 
California oil producers could be producing an additional 100 to 110 
thousand barrels a day if the ban is lifted. Moreover, the higher 
returns resulting from exports would stimulate exploration and 
development activities in major North Slope fields such as Point 
McIntyre or Endicott. As a result of this activity, DOE estimates that 
Alaskan oil reserves could increase by 200 million to 400 million 
barrels.
  Moreover, the DOE study found that ``exporting ANS crude oil would 
result in a substantial net increase in U.S. employment.'' According to 
DOE, if the ban is lifted this year, an additional 11,000, and possibly 
as many as 16,000 new jobs would be created over the next 12 months. 
And by the end of the decade, as many as 25,000 new jobs would be 
generated from ANS exports. Nearly all of those jobs would be created 
in two states that have yet to recover from the recession--California 
and Alaska.
  [[Page S287]] Another benefit that would result if the ban is lifted 
is that royalty revenue for the Federal government would increase, and 
tax and royalty revenues for Alaska and California would rise. DOE 
estimates that Federal receipts would increase from $99 million to $180 
million, while Alaska royalties and severance income would increase 
from $700 million to $1.6 billion. For California's state government, 
returns from royalties and state and local taxes would add $180 million 
to $230 to the state's coffers. And three-fourths of these financial 
benefits could accrue in the next two years.
  Mr. President, I am fully aware of concerns in the domestic maritime 
community that if the ban is lifted, the American-flag merchant marine 
will suffer severe employment declines because all of the oil currently 
shipped from Alaska to the lower 48 is shipped on American flag 
tankers. We are sympathetic to this concern and recognize the 
importance of maintaining a strong American-flag merchant marine. It is 
for that reason that our legislation requires exported Alaskan oil to 
be transported on American flag tankers. It is my expectation that 
these U.S. flag tankers will also be constructed in the United States, 
but I have not included a U.S.-build requirement in the legislation 
because of concerns expressed by the President.
  Mr. President, the Department of Energy has long supported lifting 
the export ban. The President has expressed his support for the concept 
of allowing ANS exports. It is my hope that this year, the President 
will work with members on both sides of the aisle to finally end this 
economically irrational export ban.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
                                 S. 70
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. EXPORTS OF ALASKAN NORTH SLOPE OIL.

       Section 28 of the Act entitled ``An Act to promote the 
     mining of coal phosphate, oil, oil shale, gas, and sodium on 
     the public domain'', approved February 25, 1920 (commonly 
     known as the ``Mineral Leasing Act'') (30 U.S.C. 185), is 
     amended--
       (1) by striking subsection (s) and inserting the following:


                  ``EXPORTS OF ALASKAN NORTH SLOPE OIL

       ``(s)(1) Subject to paragraphs (2) and (3), notwithstanding 
     any other provision of law (including any regulation), any 
     oil transported by pipeline over a right-of-way granted 
     pursuant to section 203 of the Trans-Alaska Pipeline 
     Authorization Act (43 U.S.C. 1652) may be exported.
       ``(2) Except in the case of oil exported to a country 
     pursuant to a bilateral international oil supply agreement 
     entered into by the United States with the country before 
     June 25, 1979, or to a county pursuant to the International 
     Emergency Oil Sharing Plan of the International Energy 
     Agency, the oil shall be transported by a vessel documented 
     under the laws of the United States and owned by a citizen of 
     the United States (as determined in accordance with section 2 
     of the Shipping Act, 1916 (46 U.S.C. App. 802)).
       ``(3) Nothing in this subsection shall restrict the 
     authority of the President under the Constitution, the 
     International Emergency Economic Powers Act (50 U.S.C. 1701 
     et seq.), or the National Emergencies Act (50 U.S.C. 1601 et 
     seq.) to prohibit exportation of the oil.''; and
       (2) by striking subsection (u).

     SECTION 2. EFFECTIVE DATE

       This Act and the amendments made by it shall take effect on 
     the date of enactment.

  Mr. STEVENS. Mr. President, I am pleased to join my colleague from 
Alaska and Senator Breaux and Heflin in introducing legislation to 
permit the export of Alaskan North Slope crude oil carried on U.S. flag 
vessels. This vital legislation will create jobs and increase oil 
production in Alaska and California. Moreover, it will ensure the 
continued survival of the independent tanker fleet manned by U.S. 
crews, and thus help enhance our national security while eliminating an 
injustice that for too long has discriminated exclusively against the 
citizens of Alaska. With the Administration's support, we intend to 
move this bill as quickly as possible to begin creating jobs, spurring 
energy production, and preserving our independent tanker fleet.
  For Senators who are less familiar with this issue, think it would be 
helpful to put the current export ban into perspective. The original 
ban was first enacted shortly after the commencement of the Arab-
Israeli war and the first oil boycott in 1973. It was tightened in 1979 
after the second oil shock. The original intent of the law was to 
enhance energy security, but today it actually discourages energy 
production and creates unnecessary hardships for the struggling 
domestic oil industry.
  Most North Slope crude oil is delivered to the West Coast, especially 
California, on U.S. flag vessels. The export ban drastically reduces 
the market value of the oil, and creates an artificial surplus on the 
West Coast. This depresses the production and development of both the 
North Slope crude and the heavy crude produced by small independent 
operations in California.
  In June of 1994, the Department of Energy released a comprehensive 
report which concluded that Alaskan oil exports would boost production 
in Alaska and California by at least 100,000 barrels per day by the end 
of the decade. That Department also concluded that permitting exports 
of this oil on U.S. flag ships would help create as many as 25,000 new 
jobs and hundreds of millions of dollars in new State and Federal 
revenues.
  Our proposed legislation would require the use of U.S. flag ships to 
carry the exports, meaning in general that the same ships which carry 
this oil today will continue to do so in the future. The majority of 
the oil, in fact, would never be exported and would still be sent to 
refineries in Washington, California, and Hawaii, preserving the 
shipping and refining industry jobs that are currently suffering from 
the artificial glut of oil on the West Coast. Further, although 
Administration concerns about certain international obligations led us 
to leave out provisions which would have required that these ships 
actually be build in the U.S., we expect that these ships will in fact 
continue to be built here and that the domestic shipping industry will 
benefit greatly from the increased activity which will result from 
lifting the ban.
  Mr. President, I emphasize that this legislation will increase jobs 
for Americans. It will help small businesses by permitting the oil 
market to function normally. It will help preserve the independent 
tanker fleet. It will help slow the decline in North Slope crude oil 
production and it will encourage additional production in California. 
Finally, it will help eliminate an injustice which for too long has 
unfairly discriminated against the citizens of Alaska. We urge the 
administration to join with us to help move this bipartisan legislation 
as quickly as possible.
                                 ______

      By Mr. INOUYE:
  S. 72. A bill to direct the Secretary of the Army to determine the 
validity of the claims of certain Filipinos that they performed 
military service on behalf of the United States during World War II; to 
the Committee on Armed Services.


                    the military claims act of 1995

  Mr. INOUYE. Mr. President, I am introducing legislation today that 
would direct the Secretary of the Army to determine whether certain 
nationals of the Philippine Islands performed military service on 
behalf of the United States during World War II.
  Mr. President, our Filipino veterans fought side by side and 
sacrificed their lives on behalf of the United States. This legislation 
would confirm the validity of their claims and further allow qualified 
individuals the opportunity to apply for military and veterans' 
benefits that, I believe, they are entitled to. As this population 
becomes older, it is important for our nation to extend its firm 
commitment to the Filipino veterans and their families who participated 
in making us the great nation today.
  I ask unanimous consent that the 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. 72

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

     SECTION 1. DETERMINATIONS BY THE SECRETARY OF THE ARMY.

       (a) In General.--Upon the written application of any person 
     who is a national of the Philippine Islands, the Secretary of 
     the Army shall determine whether such person performed any 
     military service in the Philippine Islands in aid of the 
     Armed Forces of the United States during World War II which 
     qualifies such person to receive any military, veterans', or 
     other benefits under the laws of the United States.

[[Page S288]]

       (b) Information To Be Considered.--In making a 
     determination for the purpose of subsection (a), the 
     Secretary shall consider all information and evidence 
     (relating to service referred to in subsection (a)) available 
     to the Secretary, including information and evidence 
     submitted by the applicant, if any.

     SEC. 2. CERTIFICATE OF SERVICE.

       (a) Issuance of Certificate of Service.--The Secretary 
     shall issue a certificate of service to each person 
     determined by the Secretary to have performed service 
     described in section 1(a).
       (b) Effect of Certificate of Service.--A certificate of 
     service issued to any person under subsection (a) shall, for 
     the purpose of any law of the United States, conclusively 
     establish the period, nature, and character of the military 
     service described in the certificate.

     SEC. 3. APPLICATIONS BY SURVIVORS.

       An application submitted by a surviving spouse, child, or 
     parent of a deceased person described in section 1(a) shall 
     be treated as an application submitted by such person.

     SEC. 4. LIMITATION PERIOD.

       The Secretary may not consider for the purpose of this Act 
     any application received by the Secretary more than two years 
     after the date of the enactment of this Act.

     SEC. 5. PROSPECTIVE APPLICATION OF DETERMINATIONS BY THE 
                   SECRETARY OF THE ARMY.

       No benefits shall accrue to any person for any period prior 
     to the date of the enactment of this Act as a result of the 
     enactment of this Act.

     SEC. 6. REGULATIONS.

       The Secretary shall issue regulations to carry out sections 
     1, 3, and 4.

     SEC. 7. RESPONSIBILITIES OF THE ADMINISTRATOR OF VETERANS' 
                   AFFAIRS.

       Any entitlement of a person to receive veterans' benefits 
     by reason of this Act shall be administered by the Veterans' 
     Administration pursuant to regulations issued by the 
     Administrator of Veterans' Affairs.

     SEC. 8. DEFINITIONS.

       As used in this Act--
       (1) the term ``World War II'' means the period beginning on 
     December 7, 1941, and ending on December 31, 1946; and
       (2) the term ``Secretary'' means the Secretary of the Army.
                                 ______

      By Mr. INOUYE:
  S. 73. A bill to amend title 10, United States Code, to authorize 
certain disabled former prisoners of war to use Department of Defense 
commissary stores and post and base exchanges; to the Committee on 
Armed Services.


                the former prisoners of war act of 1995

  Mr. INOUYE. Mr. President, today I am introducing legislation to 
enable those former Prisoners of War who have been separated honorably 
from their respective services and who have been rated to have a 30 
percent service-connected disability to have the use of both the 
military commissary and post exchange privileges. While I realize that 
it is impossible to adequately compensate one who has endured long 
periods of incarceration at the hands of our Nation's enemies, I do 
feel that this gesture is both meaningful and important to those 
concerned. It also serves as a reminder that our Nation has not 
forgotten their sacrifices.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 73

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That (a) 
     chapter 53 of title 10, United States Code, is amended by 
     adding at the end thereof the following new section:

     ``Sec. 1051. Use of commissary stores and post and base 
       exchanges by certain disabled former members of the armed 
       forces

       ``(a) In this section--
       ``(1) `former prisoner of war' has the same meaning as 
     provided in section 101(32) of title 38; and
       ``(2) `service-connected' has the same meaning as provided 
     in section 101(16) of such title.
       ``(b)(1) Under regulations prescribed as provided in 
     paragraph (2), a former prisoner of war who--
       ``(A) has been separated from active service in the Army, 
     the Navy, the Air Force, or the Marine Corps under honorable 
     conditions, and
       ``(B) has a service-connected disability rated by the 
     Secretary concerned or the Administrator of Veterans' Affairs 
     at 30 per centum or more,

     shall be permitted to use commissary stores and post and base 
     exchanges operating under the Department of Defense.
       ``(2)(A) The Secretary of Defense shall prescribe 
     regulations to carry out paragraph (1) in the case of 
     commissary stores.
       ``(B) The Secretary of the military department concerned 
     shall prescribe regulations to carry out paragraph (1) in the 
     case of post or base exchanges operating under the 
     jurisdiction of such military department.''.
       (b) The table of sections at the beginning of such chapter 
     is amended by adding at the end thereof the following new 
     item:
``1051. Use of commissary stores and post and base exchanges by certain 
              disabled former members of the armed forces.''.
                                 ______

      By Mr. INOUYE:
  S. 74. A bill to amend title 10, United States Code, to provide for 
jurisdiction, apprehension, and detention of members of the Armed 
Forces and certain civilians accompanying the Armed Forces outside the 
United States, and for other purposes; to the Committee on Armed 
Services.


       THE JURISDICTION, APPREHENSION, AND DETENTION ACT OF 1995

  Mr. INOUYE. Mr. President, the purpose of this bill is to fill 
certain jurisdictional voids involving offenses committed by U.S. 
nationals abroad. The Supreme Court has held that, at least in 
peacetime, civilians may not be tried by courts martial for offenses 
against military law that they may have committed abroad when they were 
members of the U.S. Armed Forces and when they were serving with, 
employed by, or accompanying the Armed Forces. Further, under existing 
statutes, acts committed by U.S. nationals abroad generally do not 
constitute offenses against any U.S. law even though they would 
constitute such offenses if they had been committed in this country. 
Thus, civilian nationals of the United States are generally not 
accountable to U.S. Courts for their conduct abroad.
  This bill would remedy this situation for conduct abroad by civilians 
who, at the time of the acts in question, were members of the Armed 
Forces or were serving with, employed by, or accompanying the Armed 
Forces. The bill would generally provide that such conduct would be 
subject to the same civilian criminal proscriptions that apply in areas 
under Federal jurisdiction.
  Mr. President, 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. 74

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

     SECTION 1. CRIMINAL OFFENSES COMMITTED OUTSIDE THE UNITED 
                   STATES

       (a) In General.--Subtitle A of title 10 of the United 
     States Code is amended by inserting after chapter 49 the 
     following new chapter:
  ``CHAPTER 50--CRIMINAL OFFENSES COMMITTED OUTSIDE THE UNITED STATES

``Sec.
``991. Definitions.
``992. Criminal offenses committed by a member of the armed forces or 
              by any person serving with, employed by, or accompanying 
              the armed forces outside of the United States.
``993. Delivery to authorities of foreign countries.
     ``Sec. 991. Definitions

       ``In this chapter:
       ``(1) The term `United States' includes the special 
     maritime and territorial jurisdiction of the United States.
       ``(2) The term `special maritime and territorial 
     jurisdiction of the United States' has the same meaning as is 
     provided in section 7 of title 18.
       ``(3) The term `criminal offense' means an offense 
     classified in section 1 of title 18 as a felony or a 
     misdemeanor (not including a petty offense).

     ``Sec. 992. Criminal offenses committed by a member of the 
       armed forces or by any person serving with, employed by, or 
       accompanying the armed forces outside of the United States

       ``(a) Except as otherwise provided in this section, any 
     person who, while serving as a member of the armed forces 
     outside the United States, or while serving with, employed 
     by, or accompanying the armed forces outside of the United 
     States, engages in conduct which would constitute a criminal 
     offense if the conduct were engaged in within the special 
     maritime and territorial jurisdiction of the United States 
     shall be guilty of a like offense against the United States 
     and shall be subject to the same punishment as is provided 
     under the provisions of title 18 for such like offense.
       ``(b) A member of the armed forces may not be tried 
     pursuant to an indictment or information charging an offense 
     described under subsection (a) while such member is subject 
     to trial by court-martial for the conduct charged in such 
     indictment or information.

[[Page S289]]

       ``(c) A person employed by the armed forces outside the 
     United States is not punishable under subsection (a) of this 
     section for conduct described in such subsection if such 
     person is not a national of the United States and was 
     appointed to his position of employment in the country in 
     which such person engaged in such conduct.
       ``(d)(1) Except in the case of a prosecution approved as 
     provided in paragraph (2), prosecution of a person may not be 
     commenced under this section for an offense described in 
     subsection (a) if a foreign government, in accordance with 
     jurisdiction recognized by the United States, has prosecuted 
     such person for the conduct constituting such offense.
       ``(2) The Attorney General of the United States, the Deputy 
     Attorney General of the United States, the Associate Attorney 
     General of the United States, or an Assistant
      Attorney General of the United States may approve a 
     prosecution which, except for this paragraph, is 
     prohibited under paragraph (1). An approval of prosecution 
     under this paragraph must be in writing. The authority to 
     approve a prosecution under this paragraph may not be 
     delegated below the level of Assistant Attorney General.
       ``(e)(1) The Secretary of Defense may designate and 
     authorize any member of the armed forces serving in a law 
     enforcement position in a criminal investigative agency of 
     the Department of Defense to apprehend and detain, outside 
     the United States, any person described in subsection (a) who 
     is reasonably believed to have engaged in conduct which 
     constitutes a criminal offense under such subsection.
       ``(2) A person apprehended and detained under paragraph (1) 
     shall be released to the custody of civilian law enforcement 
     authorities of the United States for removal to the United 
     States for judicial proceedings in relation in conduct 
     referred to in such paragraph unless (A) such person is 
     delivered to authorities of a foreign country under section 
     993 of this title, or (B) such person is pending court-
     martial under chapter 47 of this title for such conduct.

     ``Sec. 993. Delivery to authorities of foreign countries

       ``(a) Any member of the armed forces designated and 
     authorized under subsection (e) of section 992 of this title 
     may deliver any person described in subsection (a) of such 
     section to the appropriate authorities of a foreign country 
     in which such person is alleged to have engaged in conduct 
     described in such subsection (a) if--
       ``(1) the appropriate authorities of that country request 
     the delivery of the person to such country for trial for such 
     conduct as an offense under the laws of that country; and
       ``(2) the delivery of such person to that country is 
     authorized by a treaty or other international agreement to 
     which the United States is a party.
       ``(b) The Secretary of Defense may confine or otherwise 
     restrain a person whose delivery is requested under 
     subsection (a) until the completion of the trial of such 
     person by the foreign country making such request.
       ``(c) The Secretary of Defense shall determine what 
     officials of a foreign country constitute appropriate 
     authorities for the purposes of this section.''.
       (b) Technical Amendment.--The tables of chapters at the 
     beginning of such title and such subtitle are each amended by 
     inserting after the item relating to chapter 49 the 
     following:

  ``50. Criminal Offenses Outside the United States..............991''.
                                 ______

      By Mr. INOUYE:
  S. 75. A bill to allow the psychiatric or psychological examinations 
required under chapter 313 of title 18, United States Code, relating to 
offenders with mental disease or defect to be conducted by a clinical 
social worker; to the Committee on the Judiciary.


       THE PSYCHIATRIC AND PSYCHOLOGICAL EXAMINATIONS ACT OF 1995

  Mr. INOUYE. Mr. President, today I am introducing legislation to 
amend Title 18 of the United States Code to allow our Nation's clinical 
social workers to provide their mental health expertise to the Federal 
judiciary.
  I feel that the time has come to allow our Nation's judicial system 
to have access to a wide range of behavioral science and mental health 
expertise. I am confident that the enactment of this legislation would 
be very much in our Nation's best interest.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 75

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

     SECTION 1. EXAMINATIONS BY CLINICAL SOCIAL WORKERS.

       The first sentence of subsection (b) of section 4247 of 
     title 18, United States Code, is amended by--
       (1) striking out ``or'' after ``certified psychiatrist'' 
     and inserting a comma; and
       (2) inserting after ``psychologist,'' the following: ``or 
     clinical social worker,''.
                                 ______

      By Mr. INOUYE:
  S. 76. A bill to recognize the organization known as the National 
Academies of Practice, and for other purposes; to the Committee on the 
Judiciary.


       the national academies of practice recognition act of 1995

  Mr. INOUYE. Mr. President, today I am introducing legislation that 
would provide a federal charter for the National Academies of Practice. 
This organization represents outstanding practitioners who have made 
significant contributions to the practice of applied psychology, 
medicine, dentistry, nursing, optometry, podiatry, social work, and 
veterinary medicine. When fully established, each of the nine academies 
will possess 100 distinguished practitioners selected by their peers. 
This umbrella organization will be able to provide the Congress of the 
United States and the executive branch with considerable health policy 
expertise, especially from the perspective of those individuals who are 
in the forefront of actually providing health care.
  As we continue to grapple with the many complex issues surrounding 
the delivery of health care services, it is clearly in our best 
interest to ensure that the Congress have systematic access to the 
recommendations of an interdisciplinary body of health care 
practitioners.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
                                 S. 76

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

     SECTION 1. CHARTER.

       The National Academies of Practice organized and 
     incorporated under the laws of the District of Columbia, is 
     hereby recognized as such and is granted a Federal charter.

     SEC. 2. CORPORATE POWERS.

       The National Academies of Practice (hereafter referred to 
     in this Act as the ``corporation'') shall have only those 
     powers granted to it through its bylaws and articles of 
     incorporation filed in the State in which it is incorporated 
     and subject to the laws of such State.

     SEC. 3. PURPOSES OF CORPORATION.

       The purposes of the corporation shall be to honor persons 
     who have made significant contributions to the practice of 
     applied psychology, dentistry, medicine, nursing, optometry, 
     osteopathy, podiatry, social work, veterinary medicine, and 
     other health care professions, and to improve the practices 
     in such professions by disseminating information about new 
     techniques and procedures.

     SEC. 4. SERVICE OF PROCESS.

       With respect to service of process, the corporation shall 
     comply with the laws of the State in which it is incorporated 
     and those States in which it carries on its activities in 
     furtherance of its corporate purposes.

     SEC. 5. MEMBERSHIP.

       Eligibility for membership in the corporation and the 
     rights and privileges of members shall be as provided in the 
     bylaws of the corporation.

     SEC. 6. BOARD OF DIRECTORS; COMPOSITION; RESPONSIBILITIES.

       The composition and the responsibilities of the board of 
     directors of the corporation shall be as provided in the 
     articles of incorporation of the corporation and in 
     conformity with the laws of the State in which it is 
     incorporated.

     SEC. 7. OFFICERS OF THE CORPORATION.

       The officers of the corporation and the election of such 
     officers shall be as provided in the articles of 
     incorporation of the corporation and in conformity with the 
     laws of the State in which it is incorporated.

     SEC. 8. RESTRICTIONS.

       (a) Use of Income and Assets.--No part of the income or 
     assets of the corporation shall inure to any member, officer, 
     or director of the corporation or be distributed to any such 
     person during the life of this charter. Nothing in this 
     subsection shall be construed to prevent the payment of 
     reasonable compensation to the officers of the corporation or 
     reimbursement for actual necessary expenses in amounts 
     approved by the board of directors.
       (b) Loans.--The corporation shall not make any loan to any 
     officer, director, or employee of the corporation.
       (c) Political Activity.--The corporation, any officer, or 
     any director of the corporation, acting as such officer or 
     director, shall not contribute to, support, or otherwise 
     participate in any political activity or in any manner 
     attempt to influence legislation.
       (d) Issuance of Stock and Payment of Dividends.--The 
     corporation shall have no power to issue any shares of stock 
     nor to declare or pay any dividends.
       (e) Claims of Federal Approval.--The corporation shall not 
     claim congressional approval or Federal Government authority 
     for any of its activities.

     SEC. 9. LIABILITY.

       The corporation shall be liable for the acts of its 
     officers and agents when acting within the scope of their 
     authority.
     [[Page S290]] SEC. 10. MAINTENANCE AND INSPECTION OF BOOKS 
                   AND RECORDS.

       (a) Books and Records of Account.--The corporation shall 
     keep correct and complete books and records of account and 
     shall keep minutes of any proceeding of the corporation 
     involving any of its members, the board of directors, or any 
     committee having authority under the board of directors.
       (b) Names and Addresses of Members.--The corporation shall 
     keep at its principal office a record of the names and 
     addresses of all members having the right to vote in any 
     proceeding of the corporation.
       (c) Right To Inspect Books and Records.--All books and 
     records of the corporation may be inspected by any member 
     having the right to vote, or by any agent or attorney of such 
     member, for any proper purpose, at any reasonable time.
       (d) Application of State Law.--Nothing in this section 
     shall be construed to contravene any applicable State law.

     SEC. 11. AUDIT OF FINANCIAL TRANSACTIONS.

       The first section of the Act entitled ``An Act to provide 
     for audit of accounts of private corporations established 
     under Federal law'', approved August 30, 1964 (36 U.S.C. 
     1101), is amended--
       (1) by redesignating paragraph (72) as paragraph (71);
       (2) by designating the paragraph relating to the Non 
     Commissioned Officers Association of the United States of 
     America, Incorporated, as paragraph (72);
       (3) by redesignating paragraph (60), relating to the 
     National Mining Hall of Fame and Museum, as paragraph (73); 
     and
       (4) by adding at the end thereof the following new 
     paragraph:
       ``(75) National Academies of Practice.''.

     SEC. 12. ANNUAL REPORT.

       The corporation shall report annually to the Congress 
     concerning the activities of the corporation during the 
     preceding fiscal year. Such annual report shall be submitted 
     at the same time as is the report of the audit for such 
     fiscal year required by section 3 of the Act referred to in 
     section 11 of this Act. The report shall not be printed as a 
     public document.

     SEC. 13. RESERVATION OF RIGHT TO AMEND OR REPEAL CHARTER.

       The right to alter, amend, or repeal this Act is expressly 
     reserved to the Congress.

     SEC. 14. DEFINITION.

       For purposes of this Act, the term ``State'' includes the 
     District of Columbia, the Commonwealth of Puerto Rico, and 
     the territories and possessions of the United States.

     SEC. 15. TAX-EXEMPT STATUS.

       The corporation shall maintain its status as an 
     organization exempt from taxation as provided in the Internal 
     Revenue Code of 1986 or any corresponding similar provision.

     SEC. 16. TERMINATION.

       If the corporation fails to comply with any of the 
     restrictions or provisions of this Act the charter granted by 
     this Act shall terminate.
                                 ______

      By Mr. INOUYE:
  S. 77. A bill to restore the traditional observance of Memorial Day 
and Veterans Day; to the Committee on the Judiciary.


                 the traditional observance act of 1995

  Mr. INOUYE. Mr. President, in our effort to accommodate many 
Americans by making the last Monday in May, Memorial Day, we have lost 
sight of the significance of this day to our Nation. My bill would 
restore Memorial Day to May 30 and authorize our flag to fly at half 
mast on that day. In addition, this legislation would authorize the 
President to issue a proclamation making both Memorial Day and Veterans 
Day as days for prayers and ceremonies. This legislation would help 
restore the recognition our veterans deserve for the sacrifices they 
have made on behalf of our Nation.
  Mr. President, 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. 77

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That, (a) 
     effective one year following the date of enactment of this 
     Act--
       (1) section 6103(a) of title 5, United States Code, is 
     amended by striking out:
       ``Memorial Day, the last Monday in May.'' and inserting in 
     lieu thereof:
       ``Memorial Day, May 30.''; and
       (2) section 2(d) of the joint resolution entitled ``An Act 
     to codify and emphasize existing rules and customs pertaining 
     to the display and use of the flag of the United States of 
     America'', approved June 22, 1942 (36 U.S.C. 174(d)), is 
     amended by striking out:
       ``Memorial Day (half-staff until noon), the last Monday in 
     May;''
     and inserting in lieu thereof:
       ``Memorial Day (half-staff until noon), May 30;''.
       (b) The President is authorized and requested to issue a 
     proclamation calling upon the people of the United States to 
     observe Memorial Day and Veterans Day as days for prayer and 
     ceremonies showing respect for American veterans of wars and 
     other military conflicts.
                                 ______

      By Mr. INOUYE:
  S. 78. A bill to establish a temporary program under which parenteral 
diacetylmorphine will be make available through qualified pharmacies 
for the relief of intractable pain due to cancer; to the Committee on 
Labor and Human Resources.


                   THE COMPASSIONATE PAIN RELIEF ACT

  Mr. INOUYE. Mr. President, today I am introducing legislation that is 
directed to relieving the suffering of a small but significant number 
of our citizens--patients who are terminally ill with cancer and whose 
pain has not been effectively mitigated with currently available 
medications.
  For many years, the thought of cancer and its accompanying pain have 
sent chills of fear through all of us; likewise, the thought of heroin 
and its addictive qualities produces similar fears. In my judgment, we 
are in a position now where we can make a logical and thoughtful 
decision to legalize the therapeutic use of heroin for the terminally 
ill cancer patient suffering intractable pain while at the same time 
safeguarding against the diversion of the drug into illicit channels.
  The legislation I am introducing today is supported by thousands of 
Americans. Furthermore, it reflects the evolution and attitude of our 
Nation's health care system as evidenced by an editorial in the January 
14, 1982, issue of the prestigious New England Journal of Medicine, 
that urged more flexibility in the use of addictive drugs in the 
treatment of pain. This attitude is also present in an official 
statement made by the American Psychiatric Association that endorses 
the ``principle that the effectiveness of relief of pain in terminal 
cancer patients should take priority over a concern about `addiction' 
of the terminal cancer patient and should take priority over a concern 
about medication diversion to addicts''. A later article in the August 
23, 1984 issue of the New England Journal of Medicine by Dr. Allen 
Mondzac reviewed the unique characteristics of heroin and its valuable 
clinical role where it is available.
  The need for this legislation is dramatic. Although over the past two 
decades, a great deal of progress has been made in treating cancer, 
each year an estimated 800,000 Americans are diagnosed as having 
cancer, and over 400,000 die from the disease. Most of these 
individuals will have received competent and compassionate medical 
care, and many will receive adequate relief of pain. Unfortunately, the 
reality is also that a certain number of cancer patients do not obtain 
relief of pain from the current available analgesic medication--even 
the strongest narcotics. A panel from the National Institutes of Health 
[NIH] convened in May 1986 and heard testimony that 50 to 60 percent of 
patients with cancer pain lived the last part of their lives with 
unrelieved pain. A recent, 1992, survey by the Eastern Cooperative 
Oncology Group has found that as a general
 rule, patients underreport pain and physicians undertreat it. As a 
minimal figure, it has elsewhere been estimated that about 20 percent 
of terminal cancer patients suffer significant pain. Of this 20 
percent, it has been estimated that 10 percent do not obtain relief 
with presently prescribed medications. In human terms, these 
percentages mean that as many as 8,000 Americans will die in agony this 
year because of the intractable pain associated with terminal cancer. I 
have been assured by experts in the field that in many cases this pain 
can be alleviated with the therapeutic use of heroin, making the last 
months, weeks, or days of these patients more bearable. These dying 
patients are not now given the option of dying with dignity because of 
our Nation's continued and overriding fear of heroin. In my judgement, 
this fear alone has continued to prevent us, the lawmakers of our 
Nation, from making clear and rational decisions regarding the limited 
use of this long-proven and already available substance.

  Heroin has been proven effective with a number of patients in 
relieving pain. Research completed at Georgetown University's Vincent 
T. Lombardi Cancer Research Center has found heroin to be an effective 
analgesic for the control of cancer-related pain. In particular, it has 
been reported to be more potent than morphine in relieving cancer pain. 
Less than half a dose of heroin 
[[Page S291]]  produces the same pain relief as a dose of morphine. In 
the terminal phase of cancer, many patients cannot take medication by 
mouth, and might require injections. As the disease progresses, 
individuals might require higher doses at more frequent intervals to 
provide relief. This is when it would be desirable to have the option 
of using heroin in treating pain, since heroin is more potent and more 
soluble than morphine salts, and an effective dose can be administered 
in considerably smaller volumes. Thus, physicians have informed me that 
it is less painful to have such an injection--an important 
consideration in the emaciated, cachectic patient with little tissue 
mass remaining. In addition, its euphoric effects might be beneficial 
for people who know they are dying.
  Further, the onset of action of heroin is more rapid than morphine 
because of its solubility, giving relief of pain and a sense of well-
being sooner. It is most unfortunate that the use of heroin for these 
patients has not been allowed up to this date. This legislation will 
enable physicians to treat the dying cancer patient who suffers from 
intractable pain with a proven, effective medication.
  The time has now come to address the issue of why heroin should not 
be readily available as a therapeutic medication for our Nation's 
physicians in very specific situations when we have dying cancer 
patients who are suffering extreme pain. William F. Buckley, Jr., 
Editor-at-Large of National Review, has described our irrational 
maintenance of the prohibition against such uses of heroin in very real 
terms. As he pointed out:

       The irony is that anybody in a major city can acquire the 
     knowledge necessary to buy heroin from a dirty little drug 
     pimp, but licensed doctors may not administer the identical 
     drug to men and women--and children--literally dying from 
     excruciating pain.

  Our colleagues on the House Subcommittee on Health and the 
Environment held hearings on a similar bill as early as September 4, 
1980. At the time, a number of practicing physicians and others asked 
that the Federal controls on heroin be eased to permit the prescription 
of heroin for patients for whom more conventional pain killers were 
inadequate. It was further pointed out that in Great Britain, heroin 
has been used for years for these patients and that it has been shown 
to be particularly effective for those 10 percent of terminal cancer 
patients who require injected medication. British physicians consider 
heroin to be an indispensable potent narcotic analgesic in the 
treatment of advanced cancer. Use of heroin in specific situations is 
also permitted in Belgium, New Zealand, China, and many other civilized 
nations.
  Since this information was made public in the House hearings, the 
editorial writers of our country have taken up the issue, as reflected 
in supportive statements by, among a number of others, the New York 
Times, the Washington Post, the Washington Times, the Los Angles Times, 
the San Francisco Chronicle, the San Francisco Examiner, the Honolulu 
Star-Bulletin, the Honolulu Advertiser, the Chicago Sun-Times, the 
Cleveland Plain Dealer, the Rocky Mountain News, and the Richmond 
Times-Dispatch. Both the National Review and the New Republic have 
backed the proposal. The American Nurses' Association has strongly 
endorsed this merciful action. As a result of widespread support among 
physicians and the general public, heroin has become available in 
Canada for terminal cancer patients.
  The bill I am introducing today will give a very high priority to 
relief from intractable pain for terminal cancer patients. It 
authorizes the Secretary of the Department of Health and Human Services 
to establish demonstration programs that will permit the use of heroin 
by terminally ill cancer patients only, when suffering from pain that 
is not effectively treated with currently available analgesic 
medications.
  My bill has more than adequate safeguards to prevent the drug from 
being introduced to the general public. For example, a diagnosis must 
be made by the attending physician that his or her patient is ill with 
cancer and is suffering from pain that is not being effectively treated 
with other available analgesic medications. This diagnosis must be 
reviewed and approved by a medical review board of the hospital that 
will dispense the heroin. The heroin used in the program will be from 
that supply now confiscated under current laws. The Secretary of Health 
and Human Services is further authorized to establish additional 
regulations for the safe use and storage of heroin, to prevent its 
diversion into illicit channels. This program will be in force for a 5-
year period and periodic reporting is required of the Secretary on the 
activities under the bill.
  I strongly believe that the proposal will provide substantial 
benefits to those who are in intractable pain from terminal cancer and 
I am hopeful that my colleagues on the Senate Labor and Human Resources 
Committee will give this measure their prompt and most serious 
consideration.
  Mr. President, I request unanimous consent that the text of this bill 
be printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 78

       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 ``Compassionate Pain Relief 
     Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) cancer is a progressive, degenerative, and often 
     painful disease that afflicts one out of every four persons 
     in the United States and is the second leading cause of 
     death;
       (2) in the progression of terminal cancer, a significant 
     number of patients experience levels of intense and 
     intractable pain that cannot be effectively treated by 
     presently available medication;
       (3) the effect of such pain often leads to a severe 
     deterioration in the quality of life of the patient and 
     heartbreak for the family of the patient;
       (4) the therapeutic use of parenteral diacetylmorphine is 
     not permitted in the United States but extensive clinical 
     research has demonstrated that the drug is a potent, highly 
     soluble painkilling drug when properly formulated and 
     administered under the supervision of a physician;
       (5) it is in the public interest to make parenteral 
     diacetylmorphine available to patients through controlled 
     channels as a drug for the relief of intractable pain due to 
     terminal cancer;
       (6) diacetylmorphine is successfully used in Great Britain 
     and other countries for relief of pain due to cancer;
       (7) the availability of parenteral diacetylmorphine for the 
     limited purposes of controlling intractable pain due to 
     terminal cancer will not adversely affect the abuse of 
     illicit drugs or increase the incidence of pharmacy thefts;
       (8) the availability of parenteral diacetylmorphine will 
     enhance the ability of physicians to effectively treat and 
     control intractable pain due to terminal cancer; and
       (9) it is appropriate for the Federal Government to 
     establish a temporary program to permit the use of 
     pharmaceutical dosage forms of parenteral diacetylmorphine 
     for the control of intractable pain due to terminal cancer.

     SEC. 3. PARENTERAL DIACETYLMORPHINE PROGRAM.

       Title III of the Public Health Service Act (42 U.S.C. 241 
     et seq.) is amended by adding at the end the following new 
     part:

                  ``Part O--Compassionate Pain Relief

     ``SEC. 399G. PARENTERAL DIACETYLMORPHINE.

       ``(a) Regulations.--
       ``(1) In general.--Not later than three months after the 
     date of the enactment of this part, the Secretary shall issue 
     regulations establishing a program (referred to in this 
     section as the `program') under which parenteral 
     diacetylmorphine may be dispensed from pharmacies for the 
     relief of intractable pain due to terminal cancer.
       ``(2) Terminal cancer.--For purposes of this section, an 
     individual shall be considered to have terminal cancer if 
     there is histologic evidence of a malignancy in the 
     individual and the cancer of the individual is generally 
     recognized as a cancer with a high and predictable mortality.
       ``(b) Manufacturing.--Regulations established under this 
     section shall provide that manufacturers of parenteral 
     diacetylmorphine for dispensing under the program shall use 
     adequate methods of, and adequate facilities and controls 
     for, the manufacturing, processing, and packing of such drug 
     to preserve the identity, strength, quality, and purity of 
     the drug.
       ``(c) Availability to Pharmacies.--
       ``(1) Requirements.--Regulations established under this 
     section shall require that parenteral diacetylmorphine be 
     made available only to pharmacies that--
       ``(A) are hospital pharmacies or such other pharmacies as 
     the regulations specify;
       ``(B) are registered under section 302 of the Controlled 
     Substances Act (21 U.S.C. 822);
       ``(C) meet such qualifications as the regulations specify; 
     and
       ``(D) submit an application in accordance with paragraph 
     (2).
       ``(2) Application.--An application for parenteral 
     diacetylmorphine shall--
     [[Page S292]]   ``(A) be in such form and submitted in such 
     manner as the Secretary may prescribe; and
       ``(B) contain assurances satisfactory to the Secretary 
     that--
       ``(i) the applicant will comply with such special 
     requirements as the Secretary may prescribe respecting the 
     storage and dispensing of parenteral diacetylmorphine; and
       ``(ii) parenteral diacetylmorphine provided under the 
     application will be dispensed through the applicant upon the 
     written prescription of a physician registered under section 
     302 of the Controlled Substances Act (21 U.S.C. 822) to 
     dispense controlled substances in schedule II of such Act (21 
     U.S.C. 812(2)).
       ``(3) Intent of congress.--It is the intent of Congress 
     that--
       ``(A) the Secretary shall primarily utilize hospital 
     pharmacies for the dispensing of parenteral diacetylmorphine 
     under the program; and
       ``(B) the Secretary may distribute parenteral 
     diacetylmorphine through pharmacies other than hospital 
     pharmacies in cases in which humanitarian concerns 
     necessitate the provision of parenteral diacetylmorphine, a 
     significant need is shown for such provision, and adequate 
     protection is available against the diversion of parenteral 
     diacetylmorphine.
       ``(d) Illicit Diversion.--Regulations established by the 
     Secretary under this section shall be designed to protect 
     against the diversion into illicit channels of parenteral 
     diacetylmorphine distributed under the program.
       ``(e) Prescription by Physicians.--Regulations established 
     under this section shall--
       ``(1) require that parenteral diacetylmorphine be dispensed 
     only to an individual in accordance with the written 
     prescription of a physician;
       ``(2) provide that a physician registered under section 302 
     of the Controlled Substances Act (21 U.S.C. 822) may 
     prescribe parenteral diacetylmorphine for individuals for the 
     relief of intractable pain due to terminal cancer;
       ``(3) provide that any such prescription shall be in 
     writing; and
       ``(4) specify such other criteria for the prescription as 
     the Secretary may determine to be appropriate.
       ``(f) Federal Food, Drug, and Cosmetic Act.--The Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) and 
     titles II and III of the Comprehensive Drug Abuse Prevention 
     and Control Act of 1970 (21 U.S.C. 801 et seq. and 951 et 
     seq.) shall not apply with respect to--
       ``(1) the importing of opium;
       ``(2) the manufacture of parenteral diacetylmorphine; and
       ``(3) the distribution and dispensing of parenteral 
     diacetylmorphine,
     in accordance with the program.
       ``(g) Reports.--
       ``(1) By the secretary.--
       ``(A) Implementation and activities.--
       ``(i) Implementation.--Not later than 2 months after the 
     date of the enactment of this part and every third month 
     thereafter until the program is established under subsection 
     (a), the Secretary shall prepare and submit to the Committee 
     on Energy and Commerce of the House of Representatives and 
     the Committee on Labor and Human Resources of the Senate a 
     report containing information on the activities undertaken to 
     implement the program.
       ``(ii) Activities.--Not later than 1 year after the date 
     the program is established under subsection (a) and annually 
     thereafter until the program is terminated under subsection 
     (h), the Secretary shall prepare and submit to the committees 
     described in clause (i) a report containing information on 
     the activities under the program during the period for which 
     the report is submitted.
       ``(B) Pain management.--Not later than 6 months after the 
     date of the enactment of this part, the Secretary shall 
     prepare and submit to the Committee on Energy and Commerce of 
     the House of Representatives and the Committee on Labor and 
     Human Resources of the Senate a report that--
       ``(i) describes the extent of research activities on the 
     management of pain that have received funds through the 
     National Institutes of Health;
       ``(ii) describes the ways in which the Federal Government 
     supports the training of health personnel in pain management; 
     and
       ``(iii) contains recommendations for expanding and 
     improving the training of health personnel in pain 
     management.
       ``(2) By the comptroller general.--Not later than 56 months 
     after the date on which the program is established under 
     subsection (a), the Comptroller General of the United States 
     shall prepare and submit to the committees referred to in 
     paragraph (1)(A)(i) a report containing information on the 
     activities conducted under the program during such 56-month 
     period.
       ``(h) Termination and Modification.--
       ``(1) In general.--The Secretary may at any time later than 
     6 months after the date on which the program is established 
     under subsection (a), modify the regulations required by 
     subsection (a) or terminate the program if in the judgment of 
     the Secretary the program is no longer needed or if 
     modifications or termination are needed to prevent 
     substantial diversion of the diacetylmorphine.
       ``(2) Final termination.--The program shall terminate 60 
     months after the date the program is established under 
     subsection (a).''.
                                 ______

      By Mr. INOUYE:
  S. 79. A bill to require the Secretary of Agriculture to extend a 
nutrition assistance program to American Samoa, and for other purposes; 
to the Committee on Agriculture, Nutrition, and Forestry.


         THE NUTRITION ASSISTANCE PROGRAM EXTENSION ACT OF 1995

  Mr. INOUYE. Mr. President, I rise today to introduce a bill that will 
address an important need of the people of American Samoa.
  The American Samoa Nutrition Assistance Program [ASNAP], which serves 
the low-income elderly, blind and disabled in American Samoa, operates 
as a modified Food Stamp program coordinated by the Food and Nutrition 
Service [FNS] of the U.S. Department of Agriculture [USDA]. The ASNAP 
is currently supported through annual appropriations out of 
discretionary funds in the FNS account. Because of the small population 
of American Samoa--approximately 53,000 people--and the limited scope 
of the beneficiaries of this program, the cost of ASNAP only amounts to 
approximately $5.5 million annually. Yet, this is an important program 
to those individuals who look to it for sustenance. Unfortunately, the 
discretionary funding mechanism for the ASNAP makes annual funding 
unsure and makes it difficult for administrators to plan ahead.
  Similar programs for Puerto Rico and the Commonwealth of the Northern 
Mariana Islands are supported with mandatory funds through the Food 
Stamp Act of 1977. There is no reason that the ASNAP should be treated 
any differently. It should be funded through the identical mechanism. 
My bill will require the Secretary of Agriculture to extend the ASNAP 
to the low-income elderly, blind and disabled people of American Samoa 
under the Food Stamp Act. I urge my colleagues to join me in making 
this small, but worthwhile gesture for the benefit of those in need in 
American Samoa.
  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. 79

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

     SECTION 1. EXTENSION OF NUTRITION ASSISTANCE PROGRAM OF 
                   AMERICAN SAMOA.

       The First sentence of section 601(c) of Public Law 96-597 
     (48 U.S.C. 1469d(c)) is amended by inserting before the 
     period at the end the following: ``, and the Secretary of 
     Agriculture shall extend a nutrition assistance program 
     conducted under the Food Stamp Act of 1977 (7 U.S.C. 2011 et 
     seq.) to American Samoa''.
                                 ______

      By Mr. INOUYE:
  S. 80. A bill to amend the Perishable Agricultural Commodities Act, 
1930, to include marketing of fresh cut flowers and fresh cut foliage 
in the coverage of the Act, and for other purposes; to the Committee on 
Agriculture, Nutrition, and Forestry.


         THE PERISHABLE AGRICULTURAL COMMODITIES ACT AMENDMENTS

  Mr. INOUYE. Mr. President, I rise today to introduce a bill that will 
add a measure of fairness to the Perishable Agriculture Commodities Act 
of 1930 [PACA], which currently ignores an important segment of 
perishable agricultural items, namely, fresh cut flowers and fresh cut 
foliage.
  The PACA currently protects the interests of consumers and producers 
of fresh fruits and vegetables by requiring that the Secretary of 
Agriculture provide a licensing mechanism for brokers and dealers of 
these products. In addition, the PACA defines unfair and unlawful 
practices by such brokers and dealers, requires that such brokers and 
dealers hold commodities and proceeds of sales in trust for the benefit 
of unpaid growers, and outlines administrative and judicial causes of 
action for anyone injured by any violations of the PACA.
  The purpose of the PACA is to ensure that the public is assured of 
quality in the marketing of fresh products and that the producers' 
interests are protected when they entrust a shortlived commodity to a 
broker or dealer for transfer and sale.
  Consumers and producers of fresh cut flowers and fresh cut foliage 
experience many of the same risks as consumers 
[[Page S293]] and producers of fruits and vegetables; risks which the 
PACA seeks to alleviate. For this reason, consumers and producers of 
fresh cut flowers and fresh cut foliage should be afforded the same 
quality control and protections provided by the PACA with respect to 
fruits and vegetables. I urge my colleagues to join me in supporting my 
bill which will amend the PACA to include fresh cut flowers and fresh 
cut foliage in its coverage.
  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. 80

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

     SECTION 1. INCLUSION OF FRESH CUT FLOWERS AND FRESH CUT 
                   FOLIAGE IN PACA COVERAGE.

       Section 1(b)(4)(A) of the Perishable Agricultural 
     Commodities Act, 1930 (7 U.S.C. 499a(b)(4)(A)), is amended by 
     striking ``fruits and fresh vegetables'' and inserting 
     ``fruits, fresh vegetables, fresh cut flowers, and fresh cut 
     foliage''.
                                 ______

      By Mr. INOUYE:
  S. 81. A bill to amend the Internal Revenue Code of 1986 to provide a 
credit for the purchase of child restraint systems used in motor 
vehicles; to the Committee on Finance.


           THE CHILD RESTRAINT SYSTEMS AMENDMENT ACT OF 1995

  Mr. INOUYE. Mr. President, today I am introducing legislation to 
provide for a Federal income tax credit for those families who purchase 
a child restraint system for their automobiles.
  Accidents and injuries continue to cause almost half of the deaths of 
children between the ages of one and four, more than half of the deaths 
of children between five and fifteen, and continue to be the leading 
cause of death among children and young adults.
  It is my understanding that although the Department of Transportation 
has made injury prevention among children a top priority, a significant 
number of parents either do not have adequate child restraint systems 
or do not have them properly installed.
  It is imperative that we create this opportunity to provide America's 
parents with a financially accessible alternative to the insufficient 
level of child safety measures currently available for use in 
automobiles.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 81

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

     SECTION 1. CREDIT FOR PURCHASE OF CHILD RESTRAINT SYSTEMS.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     nonrefundable personal credits) is amended by adding at the 
     end the following new section:

     ``SEC. 25A. PURCHASE OF CHILD RESTRAINT SYSTEM.

       ``(a) General Rule.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     chapter for the taxable year an amount equal to the costs 
     incurred by the taxpayer during such taxable year in 
     purchasing a qualified child restraint system for any child 
     of the taxpayer.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Qualified child restraint system.--The term 
     `qualified child restraint system' means any child restraint 
     system which meets the requirements of section 571.213 of 
     title 49 of the Code of Federal Regulations.
       ``(2) Child.--The term `child' has the meaning given to 
     such term by section 151(c)(3).''
       (b) Conforming Amendment.--The table of sections for 
     subpart A of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by inserting after 
     the item relating to section 25 the following new item:

``Sec. 25A. Purchase of child restraint system.''

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1994.
                                 ______

      By Mr. INOUYE:
  S. 82. A bill to amend title 38, United States Code, to revise 
certain provisions relating to the appointment of clinical and 
counseling psychologists in the Veterans Health Administration, and for 
other purposes; to the Committee on Veterans' Affairs.


            the veterans' health administration act of 1995

  Mr. INOUYE. Mr. President, today I am introducing a bill to allow for 
the deferral of duty on merchandise admitted into a U.S. foreign trade 
zone, or subzone, for use within such a zone as production equipment, 
or parts thereof, until such merchandise is completely assembled, 
installed, tested, and used in the production for which it was 
admitted. This bill does not relieve any manufacturer operating in a 
U.S. foreign trade zone or subzone of its obligation to pay all 
applicable duty on such equipment, but rather it would allow these 
firms to defer the payment of duty until the equipment begins 
commercial operations in the zone or subzone, or enters the customs 
territory of the United States. The duty chargeable shall be at the 
same rate as would have been imposed on such production machinery and 
related equipment, and parts thereof--taking into account the 
privileged foreign or nonprivileged foreign zone status of 
merchandise--had duty been imposed at the time of entry into the 
customs territory of the United States.
  This legislation provides several practical advantages for U.S. 
manufacturers. Production equipment entering customs territory subject 
to duty often must be stored, assembled, tested, and/or reconfigured 
prior to beginning commercial operation for its intended purpose. Many 
times this equipment is found to be broken, flawed, lacking in 
components or materials and/or otherwise scrapped as useless. If duties 
have been filed, recovery of these funds through drawbacks can be 
burdensome and often full recovery of these financial resources is 
never realized. This can provide a tremendous financial strain on U.S. 
manufacturing firms by imposing an unnecessary economic burden.
  Under current law, production and capital equipment can be produced 
or assembled in one foreign trade zone, entered into the customs 
territory with payment of duties, and then transferred to another zone 
where it will be used. However, for many firms this is not always a 
realistic solution. Often production and capital equipment used in a 
foreign trade zone, once assembled, cannot be moved.
  Prior to 1988, the U.S. Customs Service allowed for the deferral of 
duty on foreign production equipment in U.S. foreign trade zones where 
it was to be used until such time as the equipment was placed in 
commercial operation. In 1988, however, Customs overturned its own 
ruling without any direction from the Congress.
  My legislation is consistent with the intent of the Foreign Trade 
Zones Act of 1934--19 U.S.C. 81(c)--which provides for the deferral of 
duty on merchandise in a foreign trade zone.
  Mr. President, I realize this bill will not eliminate the U.S. trade 
imbalance but it will remove an unnecessary economic burden on U.S. 
manufacturers and will further enhance our ability to compete in the 
global marketplace. Further, it will help preserve the American 
manufacturing base and preserve American jobs. For these reasons, I 
urge my colleagues to support the prompt passage of this important 
legislation.
  Mr. President, I ask unanimous consent that the text of my bill be 
placed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 82

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

     SECTION 1. REVISION OF AUTHORITY RELATING TO THE APPOINTMENT 
                   OF CLINICAL AND COUNSELING PSYCHOLOGISTS IN THE 
                   VETERANS HEALTH ADMINISTRATION.

       (a) In General.--Section 7401(3) of title 38, United States 
     Code, is amended by striking out ``who hold diplomas as 
     diplomates in psychology from an accrediting authority 
     approved by the Secretary''.
       (b) Certain Other Appointments.--Section 7405(a) of such 
     title is amended--
       (1) in paragraph (1)(B), by striking out ``Certified or'' 
     and inserting in lieu thereof ``Clinical or counseling 
     psychologists, certified or''; and
       (2) in paragraph (2)(B), by striking out ``Certified or'' 
     and inserting in lieu thereof ``Clinical or counseling 
     psychologists, certified or''.
       (c) Effective Date.--The amendments made by subsections (a) 
     and (b) shall take effect on the date of the enactment of 
     this Act. 
[[Page S294]] 
       (d) appointment Requirement.--Notwithstanding any other 
     provision of law, the Secretary of Veterans Affairs shall 
     begin to make appointments of clinical and counseling 
     psychologists in the Veterans Health Administration under 
     section 7401(3) of title 38, United States Code (as amended 
     by subsection (a)), not later than 1 year after the date of 
     the enactment of this Act.
                                 ______

      By Mr. INOUYE:
  S. 83. A bill to amend title 5, United States Code, to require the 
issuance of a prisoner-of-war medal to civilian employees of the 
Federal Government who are forcibly detained or interned by an enemy 
government or a hostile force under wartime conditions; to the 
Committee on Governmental Affairs.


            THE PRISONER-OF-WAR MEDAL AMENDMENT ACT OF 1995

  Mr. INOUYE. Mr. President, all to often we find that our Nation's 
Civilians who have been captured by a hostile government do not receive 
the recognition they deserve. My bill would correct this inequity and 
provide a prisoner-of-war medal for civilian employees of the Federal 
Government.
  Mr. President, 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. 83

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

     SECTION 1. PRISONER-OF-WAR MEDAL FOR CIVILIAN EMPLOYEES OF 
                   THE FEDERAL GOVERNMENT.

       (a) Authority To Issue Prisoner-of-War Medal.--Subpart A of 
     part III of title 5, United States
      Code, is amended by inserting after chapter 23 the following 
     new chapter:

                   ``CHAPTER 25--MISCELLANEOUS AWARDS
``2501. Prisoner-of-war medal: issue.
     ``Sec. 2501. Prisoner-of-war medal: issue

       ``(a) The President shall issue a prisoner-of-war medal to 
     any person who, while serving in any capacity as an officer 
     or employee of the Federal Government was forcibly detained 
     or interned, not as a result of such person's own willful 
     misconduct--
       ``(1) by an enemy government or its agents, or a hostile 
     force, during a period of war; or
       ``(2) by a foreign government or its agents, or a hostile 
     force, during a period other than a period of war in which 
     such person was held under circumstances which the President 
     finds to have been comparable to the circumstances under 
     which members of the armed forces have generally been 
     forcibly detained or interned by enemy governments during 
     periods of war.
       ``(b) The prisoner-of-war medal shall be of appropriate 
     design, with ribbons and appurtenances.
       ``(c) Not more than one prisoner-of-war medal may be issued 
     to a person under this section or section 1128 of title 10. 
     However, for each succeeding service that would otherwise 
     justify the issuance of such a medal, the President (in the 
     case of service referred to in subsection (a) of this 
     section) or the Secretary concerned (in the case of service 
     referred to in section 1128(a) of title 10) may issue a 
     suitable device to be worn as determined by the President or 
     such Secretary, as the case may be.
       ``(d) For a person to be eligible for issuance of a 
     prisoner-of-war medal, the person's conduct must have been 
     honorable for the period of captivity which serves as the 
     basis for the issuance.
       ``(e) If a person dies before the issuance of a prisoner-
     of-war medal to which he is entitled, the medal may be issued 
     to the person's representative, as designated by the 
     President.
       ``(f) Under regulations to be prescribed by the President, 
     a prisoner-of-war medal that is lost, destroyed, or rendered 
     unfit for use without fault or neglect on the part of the 
     person to whom it was issued may be replaced without charge.
       ``(g) In this section, the term `period of war' has the 
     meaning given such term in section 101(11) of title 38.''.
       (b) Technical Amendment.--The table of chapters at the 
     beginning of part III of such title is amended by inserting 
     after the item relating to chapter 23 the following new item:

  ``25. Miscellaneous Awards....................................2501''.
     SEC. 2. EFFECTIVE DATE.

       Section 2501 of title 5, United States Code, as added by 
     section 1, applies with respect to any person who, after 
     April 5, 1917, is forcibly detained or interned as described 
     in subsection (a) of such section.
                                 ______

      By Mr. INOUYE:
  S. 84. A bill to authorize the Secretary of Transportation to issue a 
certificate of documentation and coastwide trade endorsement for the 
vessel BAGGER, and for other purposes; to the Committee on Commerce, 
Science, and Transportation.


                     THE VESSEL BAGGER ACT OF 1995

  Mr. INOUYE. Mr. President, this private relief bill that I am 
introducing would authorize a certificate of documentation and 
coastwise trade endorsement for the vessel Bagger, a small boat to be 
used for charter fishing. 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. 84

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

     SECTION 1. CERTIFICATE OF DOCUMENTATION.

       Notwithstanding sections 12106 through 12108 of title 46, 
     United States Code, and section 27 of the Merchant Marine 
     Act, 1920 (46 U.S.C. App. 883), the Secretary of 
     Transportation may issue a certificate of documentation and 
     coastwise trade endorsement for the vessel BAGGER, hull 
     identification number 3121125, and State of Hawaii 
     registration number HA1809E.
                                 ______

      By Mr. FEINGOLD (for himself and Mr. Simon):
  S. 85. A bill to provide for home and community-based services for 
individuals with disabilities, and for other purposes; to the Committee 
on Finance.


      THE LONG-TERM CARE REFORM AND DEFICIT REDUCTION ACT OF 1995

  Mr. FEINGOLD.
   Mr. President, I am pleased to introduce S. 85, the Long-Term Care 
Reform and Deficit Reduction Act of 1995, legislation to reform 
fundamentally the way we provide long-term care in this country.

  Though Congress failed to pass comprehensive health care reform last 
year, we must not wait to renew our efforts. We should begin now, and 
universal coverage should again be our goal.
  The legislation I am introducing today does not attempt to reform our 
health care system in any comprehensive way, but it does serve to 
resume the debate, and can be a first step in the effort to pursue 
universal coverage.
  The bill establishes a system of consumer-oriented, consumer-directed 
home and community-based long-term care services for individuals with 
disabilities of any age.
  It is based on Wisconsin's home and community-based long-term care 
program, the Community Options Program [COP], which has been a national 
model of reform. COP was the keystone of Wisconsin's long-term care 
reforms that have saved Wisconsin taxpayers hundreds of millions of 
dollars.
  The legislation is also similar, in large part, to the excellent 
long-term care proposal included in President Clinton's health care 
reform bill last year, as well as to the provisions establishing home 
and community long-term care benefits in the versions of the 
President's bill that came out of the Senate Committee on Labor and 
Human Resources and the Senate Committee on Finance.
  Unlike so many other aspects of health care reform, the long-term 
care provisions that came out of the two Senate Committees, that were 
included in the Mitchell compromise measure, and that were part of the 
proposals produced by the standing committees in the other body, 
received bipartisan support. It is somewhat remarkable that when there 
was so much controversy over so many issues relating to health care 
reform that there was so much agreement over the need to include long-
term care reform.
  Mr. President, the measure also provides for a hospital-long-term 
care link program, identical to legislation I introduced, S.52, on the 
first day for introduction of bills in the 103d Congress.
  The hospital link program is based on our experiences in Wisconsin 
where such an initiative has helped direct individuals needing long-
term care services out of hospitals, and back to their own homes and 
communities. The hospital discharge is a critical point of embarkation 
into the long-term care system for many, and this program helps ensure 
that those who leave a hospital in need of long-term care can receive 
needed services where they prefer them--in their own homes.
  Mr. President, though I am convinced that long-term care reform can 
result in substantial savings to taxpayers--and this has been our 
experience in Wisconsin--this measure does not depend on hypothetical 
savings for funding. This measure includes funding provisions 
consisting of specific cuts within the health care system, scored by 
the Congressional Budget Office to reduce federal spending under 
Medicare.
  Included in these proposed spending cuts is a provision that reduces 
the 
[[Page S295]] subsidy we give to the wealthiest Medicare beneficiaries 
through the Part B premium. The provision would peg the Part B premium 
to income, reducing the taxpayer subsidy for individuals with income 
over $100,000 and couples with income over $125,000. The subsidy would 
be completely phased-out for individuals with income over $125,000, and 
couples with income over $150,000.
  Other savings are generated from a 10 percent home health copayment 
applied to individuals with incomes over 150 percent of poverty--still 
only half the copayment charged on other Medicare services; modifying 
the routine cost limits for home health services; correcting an anomaly 
in the formula for certain outpatient services; and, continuing the 
reduction in the inpatient hospital capital reimbursement formula.
  Based on the estimates of the provisions in this legislation 
generated by the CBO for 5 fiscal years, the measure actually generates 
savings in each of those years, and produces a total of $6.1 billion in 
deficit reduction over that time.
  This must be the approach we adopt, even for those proposals which 
experience shows will result in savings. By including funding 
provisions in this long-term care reform measure, we ensure that any 
additional savings produced by these reforms will only further reduce 
the budget deficit.
  Mr. President, though long-term care reform may serve to move us 
toward truly comprehensive health care reform, it is very much needed 
in its own right.
  While the population of those needing long-term care is growing much 
faster than those providing indirect support as taxpayers, informal 
care, which is largely provided by families, has been stretched to the 
limit by the economics of health care and the increasing age of the 
caregivers themselves.
  The default system of formal long-term care, currently funded through 
the Medicaid Program, requires that individuals impoverish themselves 
before they can receive needed care, and it largely limits care to 
expensive institutional settings.
  Failure to reform long-term care will inevitably lead to increased 
use of the Medicaid system--the most expensive long-term care 
alternative for taxpayers, and the least desirable for consumers.
  Mr. President, there are few statistical forecasts as accurate as 
those dealing with our population, and estimates show that the 
population needing long-term care will explode during the next few 
decades. The elderly are the fastest growing segment of our population, 
with those over age 85--individuals most in need of long-term care--the 
fastest growing segment of the elderly. The over 85 population will 
triple in size between 1980 and 2030, and will be nearly seven times 
larger in 2050 than in 1980.
  The growth in the population of elderly needing some assistance is 
expected to be equally dramatic. Activities of daily living, or ADL's, 
are a common measure of need for long-term care services. These 
activities include eating, transferring in and out of bed, toileting, 
dressing, and bathing. In 1988, approximately 6.9 million elderly could 
not perform all of these activities. By 2000, this population is 
expected to increase to 9 million, and by 2040 to 18 million.
  Mr. President, that we have been able to stave off a long-term care 
crisis to date is due in large part to the direct caregiving provided 
by millions of families for their elderly and disabled family members. 
But here, also, we see that the demographic changes of the next several 
decades will result in increased strain on the current system.
  While the number of people in need of care is increasing rapidly, the 
population supporting those individuals, either through direct 
caregiving, or indirectly through their taxes, is growing much more 
slowly, and thus is shrinking in comparison.
  In 1900, there were about 7 elderly individuals for every 100 people 
of working age. As of 1990, the ratio was about 20 elderly for every 
100, by 2020 the ratio will be 29 per 100, and after that it will rise 
to 38 per 100 by 2030.
  These population differences will be further aggravated by the 
changing nature of the family and the work force. As the Alzheimer's 
Association has noted smaller families, delayed childbearing, more 
women in the work force, higher divorce rates, and increased mobility 
all mean there will be fewer primary caregivers available, and far less 
informal support for those who do continue to provide care to family 
members in need of long-term care services.
  Mr. President, while some elderly are relatively well off, thanks in 
part to programs like Social Security and Medicare that have kept many 
out of poverty, it is also true that too many seniors still find 
themselves living near or below the poverty line. This is especially 
true for those needing long-term care, who, on average, are poorer than 
those who do not need long-term care. In 1990, about 27 percent of 
people needing help with some activity of daily living survived on 
incomes below the poverty level, compared with 17 percent of all older 
people. About half of impaired elderly have income under 150 percent of 
poverty, compared with 35 percent of all elderly, and, according to 
Families USA, while 20 percent of the population as a whole had annual 
family income under $15,685 in 1992, nearly half of the disabled 
population had income under that level.
  Further aggravating the problem is that informal family member 
caregivers are getting older. These caregivers are already an average 
of 57, with 36 percent of caregivers 65 or older. As the population 
ages, so will the average age of caregivers, and as the population of 
caregivers increases, their ability to provide adequate informal care 
diminishes.
  Mr. President, all in all our country faces a rapidly growing 
population needing long-term care services, a population which is 
disproportionately poor. At the same time, the group of family 
caregivers, that has kept most of the population needing long-term care 
out of government programs like Medicaid, is shrinking relative to 
those in need of services, and is becoming progressively older.
  The inescapable result of these trends is substantial pressure on 
government provided long-term care services--services that are 
inadequate in several fundamental ways.
  First, with some exceptions, the current system fails to build 
effectively on the informal care provided by families.
  Mr. President, most people with disabilities, even with severe 
disabilities, rely on care in their home from family and friends. The 
Alzheimer's Association estimates that families provide between 80 and 
90 percent of all care at home, willingly and without pay. The 
Association estimates that this informal off-budget care would cost $54 
billion to replace.
  This last figure can be only an estimate, not because it doesn't 
fairly represent the services currently being provided by family 
members, but because comparable services are largely unavailable from 
the long-term care system. The variety of home and community-based 
services provided by family members simply do not exist in many areas.
  Mr. President, the prevalence of family-provided caregiving affirms 
that, in reforming our long-term care system, it is vital that we build 
on top of the existing informal care that is being provided, not try to 
substitute for that care by imposing a new system. The goal of long-
term care reform is first to enable family caregivers to continue to 
provide the care they currently give and that their family members 
prefer.
  Mr. President, another weakness of the current long-term care system 
is the lack of a home and community service capacity. This is due in 
part to the inadequacies of the Medicaid Program. Enacted in 1965, 
Medicaid was primarily a response to the acute care needs of the poor. 
Though Congress did not envision Medicaid as a long-term care program, 
it quickly became the primary source of Government funds for long-term 
care services.
  For many years, those long-term services provided under Medicaid were 
almost exclusively institutionally based. Not until institutional 
services, such as nursing homes, had become well established were 
community and home-based services funded.
  The result of the head start given institutional long-term care 
services has been a continuing bias toward institutions in our long-
term care programs. The rate of nursing home use by the elderly since 
the advent of Medicare and 
[[Page S296]] Medicaid has doubled, while the community and home-based 
alternatives to institutional care are considered exceptions to 
institutional care. A State must get a waiver from the Federal 
Government in order to qualify for community and home-based nonmedical 
service alternatives under Medicaid, and in many cases, an individual 
must otherwise be headed to an institution in order to qualify for 
those Medicaid-funded community and home-based alternative programs.
  More significantly, there remains an absolute entitlement to
   institutional care that does not exist for the home and community-
based waiver alternatives.

  Mr. President, many families have been able to provide long-term care 
services themselves to their elderly and disabled family members, but 
the lack of even partial support services makes it increasingly 
difficult for families to choose to keep their family members at home.
  According to 1991 Alzheimer's Association study, the family 
caregiving alternative to Government-funded long-term care is likely to 
disappear not because of the increasing impairment of the long-term 
care consumer, but because of the physical, emotional, or financial 
exhaustion of the caregiver:

       Family caregivers suffer more stress-related illness, 
     resulting from exhaustion, lowered immune functions, and 
     injuries, than the general population . . . Depression among 
     caregivers of the frail elderly is as high as 43 to 46 
     percent, nearly three times the norm. . . . The likelihood of 
     health problems is heightened by the relatively high age of 
     caregivers: the average is 57. Thirty-six percent of 
     caregivers are 65 or older.

  Mr. President, the impact on the economy of the family caregiver is 
also significant. Beyond the obvious strain on the personal economy of 
those families with members needing long-term care services, there is 
also a significant effect on employers.
  One quarter of American workers over the age of 30 care for an 
elderly parent, and this percentage is expected to increase with 40 
percent of workers expected to be caring for aging parents in the next 
5 years.
  There are impressive statistics when one considers that caregivers 
report missing a week and a half of work each year in order to provide 
care, and nearly one-third of working caregivers have either quit their 
job or reduced their work hours because of their caregiving 
responsibilities.
  For those working 20 hours or fewer a week, over half have reduced 
their work hours because of caregiving responsibilities.
  Mr. President, long-term care is very much a women's issue. Women 
live longer than men, and make up a greater portion of the population 
needing care. And women are much more likely to be the family member 
that is providing care to a loved one who needs long-term care. One in 
five women have a parent living in their home, and nearly half of adult 
daughters who are caregivers are unemployed. Over a quarter of these 
women said they either quit their jobs or retired early just to provide 
care for an older person.
  In addition to the impact on caregivers as employees, workers, and 
family breadwinners, there is also a measurable impact on their 
personal health. As the Alzheimer's Association study noted, caregivers 
are more likely to be in poor health than the general population, and 
are three times more likely to suffer from depression, a condition that 
raises the risk of other ailments such as exhaustion, lowered immune 
function, stress-related illness, and injury related to their 
caregiving responsibilities.
  Compounding both the work-related and health-related problems, the 
burden of this kind of caregiving can increase over time. The 
Alzheimer's Association study noted that unlike caring for a child, 
which diminishes over time as the child matures and becomes more 
independent, caregiving responsibilities for an aging parent often 
increase as they become more dependent and require more care.
  Mr. President, failure to reform long-term care will also lead to 
cost-shifting and will undermine our efforts both to contain acute care 
costs and further reduce the deficit.
  Thanks in large part to the lack of universal coverage and the 
attendant shared responsibility, the health care system has become 
expert at shifting costs. Federal and State policymakers, in attempting 
to control costs, have often only created bigger incentives to shift 
costs as they try to clamp down in one area only to see utilization 
jump in another. All too often, no real savings are achieved in the 
end.
  This was seen, for example, when the Federal Government changed 
several aspects of Medicare reimbursements. Patients were discharged 
from hospitals quicker and sicker than they had been before with a 
resulting increase in utilization in other areas, including long-term 
care services such as skilled nursing facilities.
  This example is particularly appropriate. As efforts are made to 
limit costs in the acute care system, it is precisely this kind of 
shifting, from the acute care side to the long-term care side, that 
will occur unless long-term care reforms are pursued.
  A grandmother who is discharged from a hospital by an HMO seeking to 
lower its costs, may have little alternative but to enter a nursing 
home. Long-term care reform could provide her family with sufficient 
additional supports to be able to care for that grandmother in her own 
home, and at significantly lower cost to the family and the system as a 
whole.
  But, Mr. President, as important as it is to gain control of our 
health care costs, long-term care reform is needed first and foremost 
as a matter of humanity.
  In my own State of Wisconsin, long-term care has been the focus of 
significant reforms since the early 1980s.
  One long-term care administrator, Chuck McGlaughlin of Black River 
Falls, WI, testified before a field hearing of the Senate Aging 
Committee in the 103d Congress that prior to those reforms, he saw an 
almost complete absence of community or home-based long-term care 
services for people in need of support.
  This was especially visible for older disabled individuals. Except 
for those seniors with sufficient resources to create their own system 
of in-home supports, he saw many forced to enter nursing homes who 
would have liked to have remained in their own home or community.
  McLaughlin noted that though some eventually adjusted to leaving 
their home and entering the nursing home, others never did.

       I saw people who simply willed their own death because they 
     saw no reason to continue living. These were people who were 
     literally torn from familiar places and familiar people. 
     People who had lost the continuity of their lives and the 
     history that so richly made them into who they were now. 
     People who had nurtured and sustained their communities which 
     in turn provided them with positive status in that community. 
     These people were truly uprooted and adrift in an alien 
     environment lacking familiar sights, sounds, and smells. Many 
     of them simply chose not to live any longer. While the 
     medical care they received was excellent, they were more than 
     just their physical bodies. Modern medicine has no treatment 
     for a broken spirit.

  Mr. President, for many, the current long-term care system continues 
to be so inflexible as to be inhumane.
  Mr. President, there are many reasons for pursing long-term care 
reform--certainly more than are addressed here. But the one which may 
be the most meaningful for those actually needing long-term care is the 
ability to make their own choice about what kinds of services they will 
receive. In particular, this will mean the chance to remain as 
independent as possible, living at home or in the community or, if they 
choose, in an institution.
  Survey after survey reveal the overwhelming preference for home-based 
care, and these findings are consistent with the anecdotal evidence 
available from just about every family facing some kind of long-term 
care need.
  Ann Hauser, a 74-year-old woman who retired after 30 years as a ward 
clerk in a Milwaukee hospital, offered testimony at a May 9, 1994 field 
hearing of the Senate Special Committee on Aging that is typical of 
what many have said over the years.
  Now living at home with help from Wisconsin's home and community-
based long-term care program, the Community Options Program [COP], Ms. 
Hauser related a number of problems she had experienced while in 
different nursing homes.

       While at this nursing home and the others, I was to 
     continue on IV antibiotics and needed some, but not total 
     assistance for chair 
     [[Page S297]] transfers. Before much time had passed, I was 
     assisted in moving around so seldom that I lost muscle tone. 
     Within 5 months, I became bedridden. The Heuer lift became a 
     cop-out, and I learned that I was better to refuse it so that 
     I would keep the use of some of my muscles. The less active I 
     became, the more depressed I became. I was going downhill 
     fast.
       How could I be happy in places that allowed the aids to 
     switch the TV station on my television to their favorite soap 
     operas (when I don't even like shows like that)? Furthermore, 
     when I would remind them that I was at their mercy to finish 
     my bed bath as they stopped to watch ``just one more 
     minute,'' they would take away my remote control while I 
     shivered and waited.

  The particulars of Ms. Hauser's experience are less important than 
the overall loss of control and independence that she experienced, 
something that is common for many in nursing homes. As Ms. Hauser 
noted:

       How could I thrive in an environment that counted on my 
     remaining inactive when I had been so active until now?

  Dorothy Freund, a nursing home resident who also gave testimony at 
the May 9 field hearing. Ms. Freund, who received her BA from Ohio 
State University, majored in English, and later received an additional 
degree from Maclean College of Drama, Speech, and Voice in Chicago.
  After a brief stay in a hospital for treatment to her ankle, she came 
to a nursing home for further treatment. She gave up her apartment, 
because it was not designed for maneuvering in a wheelchair, and she 
has been on the COP waiting list for a year and a half.
  Ms. Freund testified that she enjoys helping people, and this was 
obvious to those at the hearing as she related her efforts to tutor a 
nursing assistant who had worked at the nursing home. The aid decided 
that she would like to become a nurse, to get her LPN, but needed to 
get her high school diploma. Ms. Freund helped her with English, 
geometry, government, and geography, and, thanks in large part to Ms. 
Freund's efforts, the nursing assistant did receive her high school 
diploma.
  Ms. Freund spoke about her experience and her thoughts on living in a 
nursing home:

       Then why not stay at the nursing home and help others in 
     the same way? It is not an atmosphere of peace and quiet for 
     any length of time. I'm not deprecating the nursing home and 
     its quality of care. They are always looking for ways to 
     improve situations and to solve problems that arise. Nor am I 
     downgrading those who are trying their best to give that 
     care. But when the shouting, moaning, screaming, and babbling 
     all go on at the same time it can be bedlam. It may erupt at 
     any moment. The frustrations of being stuffed in a nursing 
     home, the struggle to ride out the storms, and keep one's 
     head above the turbulent waters, can seem overwhelming when 
     there's not even a gleam at the end of the tunnel. But I just 
     can't resign myself to a life of Bingo and Roll-a-ball. 
     ``Don't give up; there must be a way.'' I keep telling 
     myself.

  Ms. Freund's testimony, again, is typical of the experiences of many 
needing long-term care. And it bears emphasizing that the desire to 
live in one's own home, and to be able to function as independently as 
possible, exists despite the high quality of care that is provided in 
most nursing homes.
  Mr. President, this should come as no surprise in a society that 
values independence so highly. We cannot expect an individual's value 
system to change the instant they require some long-term care, though 
this is precisely how our current long-term care system is structured.
  If for no other reason, we need to reform our long-term care system 
to reflect the values we cherish as a Nation, to live, as we wish, 
independently, in our own homes and communities.
  Mr. President, last year I issued a report reviewing the long-term 
care provisions in President Clinton's health care reform legislation 
and offering some modifications to those provisions based on our 
experience in Wisconsin. In that report, I noted that Chuck 
McLaughlin's eloquent comments on the importance of community were not 
only relevant, even central, to the discussion of long-term care, but 
that community must also be the focus of our efforts in many other 
areas of our lives as Americans and citizens of the world.
  More often than not, the critical problems we face stem from a 
failure of community or a lack of adequate community-based supports--
for example jobs and economic development, housing, crime, and 
education. These and other important issues are usually confronted by 
policymakers at a distance--from Washington, DC, or from state 
capitals--essentially from the top down.
  Too often we have tried to solve these challenges, including the 
challenge of long-term care, by imposing a superior vision from above. 
This approach has led to inflexible systems that cannot react to 
individual needs, but rather end up trying to fit the problem to their 
own structure.
  This fundamental weakness is often enough to undermine even the 
sometimes huge amounts of money that we send along to implement the 
problem solving. It also limits the kinds of creative approaches those 
who are on the ground may see as useful and necessary.
  Mr. President, just as we have a need to reinvent Government to 
respond more efficiently to our country's needs and our national 
deficit, we need also to reinvent community to allow flexible 
approaches to problems, and to allow those in the community to exercise 
their judgment as to how best solve problems.
  A great strength of the Wisconsin long-term care reforms, and 
especially the home and community-based benefit on which this 
legislation is based, is that it is focused on the needs of the 
individual. Eligibility is based on disability, not age, and services 
are centered around the particular needs of a individual rather than 
the perceived needs of a group.
  The approach this legislation takes is not only appropriate, but 
integral to the nature of long-term care.
  Mr. President, the population needing long-term care services is a 
diverse group with widely differing needs.
  Of the many misconceptions about long-term care, and about programs 
providing long-term care services, the most common may be that long-
term care is purely an elderly issue. Though it is true that the 
elderly make up the largest part of the population needing long-term 
cares services, long-term care is an issue facing millions of younger 
Americans. Approximately 1 million children have severe disabilities 
that require long-term care services.
  Beyond the wide difference in the ages of those needing long-term 
care services, there is a diversity of needs, including the needs of 
the caregiving family members who may need a variety of different long-
term care services.
  From individuals with cerebral palsy to families that have a loved 
one afflicted with Alzheimer's disease, however well intentioned, no 
one set of services will address the individual needs of long-term care 
consumers.
  Rather than trying to fit all of those needing long-term care 
services into one set of services, this legislation lets case managers, 
working with long-term care consumers and their families, determine 
just what services are needed and preferred.
  Mr. President, the failure to enact comprehensive reform will not
   interrupt my own efforts to advocate and push individual reforms 
that respond to the needs of people and that can help save our health 
care system money.

  In home and community-based long-term care reform, we can achieve 
both.
  For taxpayers in Wisconsin, COP has saved hundreds of millions of 
dollars that would otherwise have been spent on more expensive 
institutional care.
  During the 1980's, while the rest of the country was experiencing a 
24-percent increase in Medicaid nursing home bed use, in Wisconsin, 
thanks to COP and other long-term care reforms, Medicaid nursing home 
bed use actually dropped by 19 percent. In a recent talk, Gov. Tommy 
Thompson noted that COP saves Wisconsin taxpayers about $25 million 
every year.
  At the same time, COP has provided an alternative that allows the 
consumer to participate in determining the plan of care and in the 
execution of that plan.
  But, Mr. President, at the Federal level we are behind Wisconsin and 
other States in reforming long-term care. Despite the creation of 
community-based Medicaid waiver programs, consumers are, for the most 
part, faced with few alternatives.
  [[Page S298]] In describing the situation facing many elderly 
disabled prior to the establishment of COP in Wisconsin, Chuck 
McLaughlin testified before our field hearing that he recalled thinking 
that when he went to a grocery store there was incredible choice. He 
noted that there was an entire aisle for various types of pet food.

     But when elderly people encountered frailty and the loss of 
     independence, there were basically no choices for them. It 
     seemed a sad reality that society was doing a much better job 
     at providing meal diversity to cats and dogs than we were 
     doing at offering choices to humans facing frailty.

  Mr. President, that is the plight of many needing long-term care 
today. The disabled of all ages have few options. And those that they 
do have are expensive for them, for their families, and for taxpayers.
  This proposal will begin to provide the flexibility that State and 
local government needs to provide consumer-oriented and consumer-
directed services.
  Mr. President, I ask unanimous consent that a summary of the measure, 
followed by the complete text of the legislation, be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 85

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Long-Term 
     Care Reform and Deficit Reduction Act of 1995''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

    TITLE I--HOME AND COMMUNITY-BASED SERVICES FOR INDIVIDUALS WITH 
                              DISABILITIES

Sec. 101. State programs for home and community-based services for 
              individuals with disabilities.
Sec. 102. State plans.
Sec. 103. Individuals with disabilities defined.
Sec. 104. Home and community-based services covered under State plan.
Sec. 105. Cost sharing.
Sec. 106. Quality assurance and safeguards.
Sec. 107. Advisory groups.
Sec. 108. Payments to States.
Sec. 109. Appropriations; allotments to States.
Sec. 110. Federal evaluations.
Sec. 111. Information and technical assistance grants relating to 
              development of hospital linkage programs.

               TITLE II--PROVISIONS RELATING TO MEDICARE

Sec. 201. Recapture of certain health care subsidies received by high-
              income individuals.
Sec. 202. Imposition of 10 percent copayment on home health services 
              under medicare.
Sec. 203. Reduction in payments for capital-related costs for inpatient 
              hospital services.
Sec. 204. Elimination of formula-driven overpayments for certain 
              outpatient hospital services.
Sec. 205. Reduction in routine cost limits for home health services.
    TITLE I--HOME AND COMMUNITY-BASED SERVICES FOR INDIVIDUALS WITH 
                              DISABILITIES

     SEC. 101. STATE PROGRAMS FOR HOME AND COMMUNITY-BASED 
                   SERVICES FOR INDIVIDUALS WITH DISABILITIES.

       (a) In General.--Each State that has a plan for home and 
     community-based services for individuals with disabilities 
     submitted to and approved by the Secretary under section 
     102(b) may receive payment in accordance with section 108.
       (b) Entitlement to Services.--Nothing in this title shall 
     be construed to create a right to services for individuals or 
     a requirement that a State with an approved plan expend the 
     entire amount of funds to which it is entitled under this 
     title.
       (c) Designation of Agency.--Not later than 6 months after 
     the date of enactment of this Act, the Secretary shall 
     designate an agency responsible for program administration 
     under this title.

     SEC. 102. STATE PLANS.

       (a) Plan Requirements.--In order to be approved under 
     subsection (b), a State plan for home and community-based 
     services for individuals with disabilities must meet the 
     following requirements:
       (1) State maintenance of effort.--
       (A) In general.--A State plan under this title shall 
     provide that the State will, during any fiscal year that the 
     State is furnishing services under this title, make 
     expenditures of State funds in an amount equal to the State 
     maintenance of effort amount for the year determined under 
     subparagraph (B) for furnishing the services described in 
     subparagraph (C) under the State plan under this title or the 
     State plan under title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.).
       (B) State maintenance of effort amount.--
       (i) In general.--The maintenance of effort amount for a 
     State for a fiscal year is an amount equal to--

       (I) for fiscal year 1997, the base amount for the State (as 
     determined under clause (ii)) updated through the midpoint of 
     fiscal year 1997 by the estimated percentage change in the 
     index described in clause (iii) during the period beginning 
     on October 1, 1995, and ending at that midpoint; and
       (II) for succeeding fiscal years, an amount equal to the 
     amount determined under this clause for the previous fiscal 
     year updated through the midpoint of the year by the 
     estimated percentage change in the index described in clause 
     (iii) during the 12-month period ending at that midpoint, 
     with appropriate adjustments to reflect previous 
     underestimations or overestimations under this clause in the 
     projected percentage change in such index.

       (ii) State base amount.--The base amount for a State is an 
     amount equal to the total expenditures from State funds made 
     under the State plan under title XIX of the Social Security 
     Act (42 U.S.C. 1396 et seq.) during fiscal year 1995 with 
     respect to medical assistance consisting of the services 
     described in subparagraph (C).
       (iii) Index described.--For purposes of clause (i), the 
     Secretary shall develop an index that reflects the projected 
     increases in spending for services under subparagraph (C), 
     adjusted for differences among the States.
       (C) Medicaid services described.--The services described in 
     this subparagraph are the following:
       (i) Personal care services (as described in section 
     1905(a)(24) of the Social Security Act (42 U.S.C. 
     1396d(a)(24))).
       (ii) Home or community-based services furnished under a 
     waiver granted under subsection (c), (d), or (e) of section 
     1915 of such Act (42 U.S.C. 1396n).
       (iii) Home and community care furnished to functionally 
     disabled elderly individuals under section 1929 of such Act 
     (42 U.S.C. 1396t).
       (iv) Community supported living arrangements services under 
     section 1930 of such Act (42 U.S.C. 1396u).
       (v) Services furnished in a hospital, nursing facility, 
     intermediate care facility for the mentally retarded, or 
     other institutional setting specified by the Secretary.
       (2) Eligibility.--
       (A) In general.--Within the amounts provided by the State 
     and under section 108 for such plan, the plan shall provide 
     that services under the plan will be available to individuals 
     with disabilities (as defined in section 103(a)) in the 
     State.
       (B) Initial screening.--The plan shall provide a process 
     for the initial screening of an individual who appears to 
     have some reasonable likelihood of being an individual with 
     disabilities. Any such process shall require the provision of 
     assistance to individuals who wish to apply but whose 
     disability limits their ability to apply. The initial 
     screening and the determination of disability (as defined 
     under section 103(b)(1)) shall be conducted by a public 
     agency.
       (C) Restrictions.--
       (i) In general.--The plan may not limit the eligibility of 
     individuals with disabilities based on--

       (I) income;
       (II) age;
       (III) residential setting (other than with respect to an 
     institutional setting, in accordance with clause (ii)); or
       (IV) other grounds specified by the Secretary;

     except that through fiscal year 2005, the Secretary may 
     permit a State to limit eligibility based on level of 
     disability or geography (if the State ensures a balance 
     between urban and rural areas).
       (ii) Institutional setting.--The plan may limit the 
     eligibility of individuals with disabilities based on the 
     definition of the term ``institutional setting'', as 
     determined by the State.
       (D) Continuation of services.--The plan must provide 
     assurances that, in the case of an individual receiving 
     medical assistance for home and community-based services 
     under the State medicaid plan under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.) as of the date a 
     State's plan is approved under this title, the State will 
     continue to make available (either under this plan, under the 
     State medicaid plan, or otherwise) to such individual an 
     appropriate level of assistance for home and community-based 
     services, taking into account the level of assistance 
     provided as of such date and the individual's need for home 
     and community-based services.
       (3) Services.--
       (A) Needs assessment.--Not later than the end of the second 
     year of implementation, the plan or its amendments shall 
     include the results of a statewide assessment of the needs of 
     individuals with disabilities in a format required by the 
     Secretary. The needs assessment shall include demographic 
     data concerning the number of individuals within each 
     category of disability described in this title, and the 
     services available to meet the needs of such individuals.
       (B) Specification.--Consistent with section 104, the plan 
     shall specify--
       (i) the services made available under the plan;
       (ii) the extent and manner in which such services are 
     allocated and made available to individuals with 
     disabilities; and
     [[Page S299]]   (iii) the manner in which services under the 
     plan are coordinated with each other and with health and 
     long-term care services available outside the plan for 
     individuals with disabilities.
       (C) Taking into account informal care.--A State plan may 
     take into account, in determining the amount and array of 
     services made available to covered individuals with 
     disabilities, the availability of informal care. Any 
     individual plan of care developed under section 104(b)(1)(B) 
     that includes informal care shall be required to verify the 
     availability of such care.
       (D) Allocation.--The State plan--
       (i) shall specify how services under the plan will be 
     allocated among covered individuals with disabilities;
       (ii) shall attempt to meet the needs of individuals with a 
     variety of disabilities within the limits of available 
     funding;
       (iii) shall include services that assist all categories of 
     individuals with disabilities, regardless of their age or the 
     nature of their disabling conditions;
       (iv) shall demonstrate that services are allocated 
     equitably, in accordance with the needs assessment required 
     under subparagraph (A); and
       (v) shall ensure that--

       (I) the proportion of the population of low-income 
     individuals with disabilities in the State that represents 
     individuals with disabilities who are provided home and 
     community-based services either under the plan, under the 
     State medicaid plan, or under both, is not less than
       (II) the proportion of the population of the State that 
     represents individuals who are low-income individuals.
       (E) Limitation on licensure or certification.--The State 
     may not subject consumer-directed providers of personal 
     assistance services to licensure, certification, or other 
     requirements that the Secretary finds not to be necessary for 
     the health and safety of individuals with disabilities.
       (F) Consumer choice.--To the extent feasible, the State 
     shall follow the choice of an individual with disabilities 
     (or that individual's designated representative who may be a 
     family member) regarding which covered services to receive 
     and the providers who will provide such services.
       (4) Cost sharing.--The plan shall impose cost sharing with 
     respect to covered services in accordance with section 105.
       (5) Types of providers and requirements for 
     participation.--The plan shall specify--
       (A) the types of service providers eligible to participate 
     in the program under the plan, which shall include consumer-
     directed providers of personal assistance services, except 
     that the plan--
       (i) may not limit benefits to services provided by 
     registered nurses or licensed practical nurses; and
       (ii) may not limit benefits to services provided by 
     agencies or providers certified under title XVIII of the 
     Social Security Act (42 U.S.C. 1395 et seq.); and
       (B) any requirements for participation applicable to each 
     type of service provider.
       (6) Provider reimbursement.--
       (A) Payment methods.--The plan shall specify the payment 
     methods to be used to reimburse providers for services 
     furnished under the plan. Such methods may include 
     retrospective reimbursement on a fee-for-service basis, 
     prepayment on a capitation basis, payment by cash or vouchers 
     to individuals with disabilities, or any combination of these 
     methods. In the case of payment to consumer-directed 
     providers of personal assistance services, including payment 
     through the use of cash or vouchers, the plan shall specify 
     how the plan will assure compliance with applicable 
     employment tax and health care coverage provisions.
       (B) Payment rates.--The plan shall specify the methods and 
     criteria to be used to set payment rates for--
       (i) agency administered services furnished under the plan; 
     and
       (ii) consumer-directed personal assistance services 
     furnished under the plan, including cash payments or vouchers 
     to individuals with disabilities, except that such payments 
     shall be adequate to cover amounts required under applicable 
     employment tax and health care coverage provisions.
       (C) Plan payment as payment in full.--The plan shall 
     restrict payment under the plan for covered services to those 
     providers that agree to accept the payment under the plan (at 
     the rates established pursuant to subparagraph (B)) and any 
     cost sharing permitted or provided for under section 105 as 
     payment in full for services furnished under the plan.
       (7) Quality assurance and safeguards.--The State plan shall 
     provide for quality assurance and safeguards for applicants 
     and beneficiaries in accordance with section 106.
       (8) Advisory group.--The State plan shall--
       (A) assure the establishment and maintenance of an advisory 
     group under section 107(b); and
       (B) include the documentation prepared by the group under 
     section 107(b)(4).
       (9) Administration and access.--
       (A) State agency.--The plan shall designate a State agency 
     or agencies to administer (or to supervise the administration 
     of) the plan.
       (B) Coordination.--The plan shall specify how it will--
       (i) coordinate services provided under the plan, including 
     eligibility prescreening, service coordination, and referrals 
     for individuals with disabilities who are ineligible for 
     services under this title with the State medicaid plan under 
     title XIX of the Social Security Act (42 U.S.C. 1396 et 
     seq.), titles V and XX of such Act (42 U.S.C. 701 et seq. and 
     1397 et seq.), programs under the Older Americans Act of 1965 
     (42 U.S.C. 3001 et seq.), programs under the Developmental 
     Disabilities Assistance and Bill of Rights Act (42 U.S.C. 
     6000 et seq.), programs under the Individuals with 
     Disabilities Education Act (20 U.S.C. 1400 et seq.), and any 
     other Federal or State programs that provide services or 
     assistance targeted to individuals with disabilities; and
       (ii) coordinate with health plans.
       (C) Administrative expenditures.--Effective beginning with 
     fiscal year 2005, the plan shall contain assurances that not 
     more than 10 percent of expenditures under the plan for all 
     quarters in any fiscal year shall be for administrative 
     costs.
       (D) Information and assistance.--The plan shall provide for 
     a single point of access to apply for services under the 
     State program for individuals with disabilities. 
     Notwithstanding the preceding sentence, the plan may 
     designate separate points of access to the State program for 
     individuals under 22 years of age, for individuals 65 years 
     of age or older, or for other appropriate classes of 
     individuals.
       (10) Reports and information to secretary; audits.--The 
     plan shall provide that the State will furnish to the 
     Secretary--
       (A) such reports, and will cooperate with such audits, as 
     the Secretary determines are needed concerning the State's 
     administration of its plan under this title, including the 
     processing of claims under the plan; and
       (B) such data and information as the Secretary may require 
     in a uniform format as specified by the Secretary.
       (11) Use of state funds for matching.--The plan shall 
     provide assurances that Federal funds will not be used to 
     provide for the State share of expenditures under this title.
       (12) Health care worker redeployment.--The plan shall 
     provide for the following:
       (A) Before initiating the process of implementing the State 
     program under such plan, negotiations will be commenced with 
     labor unions representing the employees of the affected 
     hospitals or other facilities.
       (B) Negotiations under subparagraph (A) will address the 
     following:
       (i) The impact of the implementation of the program upon 
     the workforce.
       (ii) Methods to redeploy workers to positions in the 
     proposed system, in the case of workers affected by the 
     program.
       (C) The plan will provide evidence that there has been 
     compliance with subparagraphs (A) and (B), including a 
     description of the results of the negotiations.
       (13) Terminology.--The plan shall adhere to uniform 
     definitions of terms, as specified by the Secretary.
       (b) Approval of Plans.--The Secretary shall approve a plan 
     submitted by a State if the Secretary determines that the 
     plan--
       (1) was developed by the State after a public comment 
     period of not less than 30 days; and
       (2) meets the requirements of subsection (a).

     The approval of such a plan shall take effect as of the first 
     day of the first fiscal year beginning after the date of such 
     approval (except that any approval made before January 1, 
     1997, shall be effective as of January 1, 1997). In order to 
     budget funds allotted under this title, the Secretary shall 
     establish a deadline for the submission of such a plan before 
     the beginning of a fiscal year as a condition of its approval 
     effective with that fiscal year. Any significant changes to 
     the State plan shall be submitted to the Secretary in the 
     form of plan amendments and shall be subject to approval by 
     the Secretary.
       (c) Monitoring.--The Secretary shall annually monitor the 
     compliance of State plans with the requirements of this title 
     according to specified performance standards. In accordance 
     with section 108(e), States that fail to comply with such 
     requirements may be subject to a reduction in the Federal 
     matching rates available to the State under section 108(a) or 
     the withholding of Federal funds for services or 
     administration until such time as compliance is achieved.
       (d) Technical Assistance.--The Secretary shall ensure the 
     availability of ongoing technical assistance to States under 
     this section. Such assistance shall include serving as a 
     clearinghouse for information regarding successful practices 
     in providing long-term care services.
       (e) Regulations.--The Secretary shall issue such 
     regulations as may be appropriate to carry out this title on 
     a timely basis.

     SEC. 103. INDIVIDUALS WITH DISABILITIES DEFINED.

       (a) In General.--For purposes of this title, the term 
     ``individual with disabilities'' means any individual within 
     one or more of the following categories of individuals:
       (1) Individuals requiring help with activities of daily 
     living.--An individual of any age who--
       (A) requires hands-on or standby assistance, supervision, 
     or cueing (as defined in regulations) to perform three or 
     more activities of daily living (as defined in subsection 
     (d)); and
       (B) is expected to require such assistance, supervision, or 
     cueing over a period of at least 90 days.
       (2) Individuals with severe cognitive or mental 
     impairment.--An individual of any age--
     [[Page S300]]   (A) whose score, on a standard mental status 
     protocol (or protocols) appropriate for measuring the 
     individual's particular condition specified by the Secretary, 
     indicates either severe cognitive impairment or severe mental 
     impairment, or both;
       (B) who--
       (i) requires hands-on or standby assistance, supervision, 
     or cueing with one or more activities of daily living;
       (ii) requires hands-on or standby assistance, supervision, 
     or cueing with at least such instrumental activity (or 
     activities) of daily living related to cognitive or mental 
     impairment as the Secretary specifies; or
       (iii) displays symptoms of one or more serious behavioral 
     problems (that is on a list of such problems specified by the 
     Secretary) that create a need for supervision to prevent harm 
     to self or others; and
       (C) who is expected to meet the requirements of 
     subparagraphs (A) and (B) over a period of at least 90 days.

     Not later than 2 years after the date of enactment of this 
     Act, the Secretary shall make recommendations regarding the 
     most appropriate duration of disability under this paragraph.
       (3) Individuals with severe or profound mental 
     retardation.--An individual of any age who has severe or 
     profound mental retardation (as determined according to a 
     protocol specified by the Secretary).
       (4) Young children with severe disabilities.--An individual 
     under 6 years of age who--
       (A) has a severe disability or chronic medical condition 
     that limits functioning in a manner that is comparable in 
     severity to the standards established under paragraphs (1), 
     (2), or (3); and
       (B) is expected to have such a disability or condition and 
     require such services over a period of at least 90 days.
       (5) State option with respect to individuals with 
     comparable disabilities.--Not more than 2 percent of a 
     State's allotment for services under this title may be 
     expended for the provision of services to individuals with 
     severe disabilities that are comparable in severity to the 
     criteria described in paragraphs (1) through (4), but who 
     fail to meet the criteria in any single category under such 
     paragraphs.
       (b) Determination.--
       (1) In general.--In formulating eligibility criteria under 
     subsection (a), the Secretary shall establish criteria for 
     assessing the functional level of disability among all 
     categories of individuals with disabilities that are 
     comparable in severity, regardless of the age or the nature 
     of the disabling condition of the individual. The 
     determination of whether an individual is an individual with 
     disabilities shall be made by a public or nonprofit agency 
     that is specified under the State plan and that is not a 
     provider of home and community-based services under this 
     title and by using a uniform protocol consisting of an 
     initial screening and a determination of disability specified 
     by the Secretary. A State may not impose cost sharing with 
     respect to a determination of disability. A State may collect 
     additional information, at the time of obtaining information 
     to make such determination, in order to provide for the 
     assessment and plan described in section 104(b) or for other 
     purposes.
       (2) Periodic reassessment.--The determination that an 
     individual is an individual with disabilities shall be 
     considered to be effective under the State plan for a period 
     of not more than 6 months (or for such longer period in such 
     cases as a significant change in an individual's condition 
     that may affect such determination is unlikely). A 
     reassessment shall be made if there is a significant change 
     in an individual's condition that may affect such 
     determination.
       (c) Eligibility Criteria.--The Secretary shall reassess the 
     validity of the eligibility criteria described in subsection 
     (a) as new knowledge regarding the assessments of functional 
     disabilities becomes available. The Secretary shall report to 
     the Congress on its findings under the preceding sentence as 
     determined appropriate by the Secretary.
       (d) Activity of Daily Living Defined.--For purposes of this 
     title, the term ``activity of daily living'' means any of the 
     following: eating, toileting, dressing, bathing, and 
     transferring.

     SEC. 104. HOME AND COMMUNITY-BASED SERVICES COVERED UNDER 
                   STATE PLAN.

       (a) Specification.--
       (1) In general.--Subject to the succeeding provisions of 
     this section, the State plan under this title shall specify--
       (A) the home and community-based services available under 
     the plan to individuals with disabilities (or to such 
     categories of such individuals); and
       (B) any limits with respect to such services.
       (2) Flexibility in meeting individual needs.--Subject to 
     subsection (e)(2), such services may be delivered in an 
     individual's home, a range of community residential 
     arrangements, or outside the home.
       (b) Requirement for Needs Assessment and Plan of Care.--
       (1) In general.--The State plan shall provide for home and 
     community-based services to an individual with disabilities 
     only if the following requirements are met:
       (A) Comprehensive assessment.--
       (i) In general.--A comprehensive assessment of an 
     individual's need for home and community-based services 
     (regardless of whether all needed services are available 
     under the plan) shall be made in accordance with a uniform, 
     comprehensive assessment tool that shall be used by a State 
     under this paragraph with the approval of the Secretary. The 
     comprehensive assessment shall be made by a public or 
     nonprofit agency that is specified under the State plan and 
     that is not a provider of home and community-based services 
     under this title.
       (ii) Exception.--The State may elect to waive the 
     provisions of clause (i) if--

       (I) with respect to any area of the State, the State has 
     determined that there is an insufficient pool of entities 
     willing to perform comprehensive assessments in such area due 
     to a low population of individuals eligible for home and 
     community-based services under this title residing in the 
     area; and
       (II) the State plan specifies procedures that the State 
     will implement in order to avoid conflicts of interest.

       (B) Individualized plan of care.--
       (i) In general.--An individualized plan of care based on 
     the assessment made under subparagraph (A) shall be developed 
     by a public or nonprofit agency that is specified under the 
     State plan and that is not a provider of home and community-
     based services under this title, except that the State may 
     elect to waive the provisions of this sentence if, with 
     respect to any area of the State, the State has determined 
     there is an insufficient pool of entities willing to develop 
     individualized plans of care in such area due to a low 
     population of individuals eligible for home and community-
     based services under this title residing in the area, and the 
     State plan specifies procedures that the State will implement 
     in order to avoid conflicts of interest.
       (ii) Requirements with respect to plan of care.--A plan of 
     care under this subparagraph shall--

       (I) specify which services included under the individual 
     plan will be provided under the State plan under this title;
       (II) identify (to the extent possible) how the individual 
     will be provided any services specified under the plan of 
     care and not provided under the State plan;
       (III) specify how the provision of services to the 
     individual under the plan will be coordinated with the 
     provision of other health care services to the individual; 
     and
       (IV) be reviewed and updated every 6 months (or more 
     frequently if there is a change in the individual's 
     condition).

     The State shall make reasonable efforts to identify and 
     arrange for services described in subclause (II). Nothing in 
     this subsection shall be construed as requiring a State 
     (under the State plan or otherwise) to provide all the 
     services specified in such a plan.
       (C) Involvement of individuals.--The individualized plan of 
     care under subparagraph (B) for an individual with 
     disabilities shall--
       (i) be developed by qualified individuals (specified in 
     subparagraph (B));
       (ii) be developed and implemented in close consultation 
     with the individual (or the individual's designated 
     representative); and
       (iii) be approved by the individual (or the individual's 
     designated representative).
       (c) Requirement for Care Management.--
       (1) In general.--The State shall make available to each 
     category of individuals with disabilities care management 
     services that at a minimum include--
       (A) arrangements for the provision of such services; and
       (B) monitoring of the delivery of services.
       (2) Care management services.--
       (A) In general.--Except as provided in subparagraph (B), 
     the care management services described in paragraph (1) shall 
     be provided by a public or private entity that is not 
     providing home and community-based services under this title.
       (B) Exception.--A person who provides home and community-
     based services under this title may provide care management 
     services if--
       (i) the State determines that there is an insufficient pool 
     of entities willing to provide such services in an area due 
     to a low population of individuals eligible for home and 
     community-based services under this title residing in such 
     area; and
       (ii) the State plan specifies procedures that the State 
     will implement in order to avoid conflicts of interest.
       (d) Mandatory Coverage of Personal Assistance Services.--
     The State plan shall include, in the array of services made 
     available to each category of individuals with disabilities, 
     both agency-administered and consumer-directed personal 
     assistance services (as defined in subsection (h)).
       (e) Additional Services.--
       (1) Types of services.--Subject to subsection (f), services 
     available under a State plan under this title may include any 
     (or all) of the following:
       (A) Homemaker and chore assistance.
       (B) Home modifications.
       (C) Respite services.
       (D) Assistive technology devices, as defined in section 
     3(2) of the Technology-Related Assistance for Individuals 
     With Disabilities Act of 1988 (29 U.S.C. 2202(2)).
       (E) Adult day services.
       (F) Habilitation and rehabilitation.
       (G) Supported employment.
       (H) Home health services.
       (I) Transportation.
       (J) Any other care or assistive services specified by the 
     State and approved by the Secretary that will help 
     individuals with disabilities to remain in their homes and 
     communities.
     [[Page S301]]   (2) Criteria for selection of services.--The 
     State electing services under paragraph (1) shall specify in 
     the State plan--
       (A) the methods and standards used to select the types, and 
     the amount, duration, and scope, of services to be covered 
     under the plan and to be available to each category of 
     individuals with disabilities; and
       (B) how the types, and the amount, duration, and scope, of 
     services specified, within the limits of available funding, 
     provide substantial assistance in living independently to 
     individuals within each of the categories of individuals with 
     disabilities.
       (f) Exclusions and Limitations.--A State plan may not 
     provide for coverage of--
       (1) room and board;
       (2) services furnished in a hospital, nursing facility, 
     intermediate care facility for the mentally retarded, or 
     other institutional setting specified by the Secretary; or
       (3) items and services to the extent coverage is provided 
     for the individual under a health plan or the medicare 
     program.
       (g) Payment for Services.--In order to pay for covered 
     services, a State plan may provide for the use of--
       (1) vouchers;
       (2) cash payments directly to individuals with 
     disabilities;
       (3) capitation payments to health plans; and
       (4) payment to providers.
       (h) Personal Assistance Services.--
       (1) In general.--For purposes of this title, the term 
     ``personal assistance services'' means those services 
     specified under the State plan as personal assistance 
     services and shall include at least hands-on and standby 
     assistance, supervision, cueing with activities of daily 
     living, and such instrumental activities of daily living as 
     deemed necessary or appropriate, whether agency-administered 
     or consumer-directed (as defined in paragraph (2)). Such 
     services shall include services that are determined to be 
     necessary to help all categories of individuals with 
     disabilities, regardless of the age of such individuals or 
     the nature of the disabling conditions of such individuals.
       (2) Consumer-directed.--For purposes of this title:
       (A) In general.--The term ``consumer-directed'' means, with 
     reference to personal assistance services or the provider of 
     such services, services that are provided by an individual 
     who is selected and managed (and, at the option of the 
     service recipient, trained) by the individual receiving the 
     services.
       (B) State responsibilities.--A State plan shall ensure that 
     where services are provided in a consumer-directed manner, 
     the State shall create or contract with an entity, other than 
     the consumer or the individual provider, to--
       (i) inform both recipients and providers of rights and 
     responsibilities under all applicable Federal labor and tax 
     law; and
       (ii) assume responsibility for providing effective billing, 
     payments for services, tax withholding, unemployment 
     insurance, and workers' compensation coverage, and act as the 
     employer of the home care provider.
       (C) Right of consumers.--Notwithstanding the State 
     responsibilities described in subparagraph (B), service 
     recipients, and, where appropriate, their designated 
     representative, shall retain the right to independently 
     select, hire, terminate, and direct (including manage, train, 
     schedule, and verify services provided) the work of a home 
     care provider.
       (3) Agency administered.--For purposes of this title, the 
     term ``agency-administered'' means, with respect to such 
     services, services that are not consumer-directed.

     SEC. 105. COST SHARING.

       (a) No Cost Sharing for Poorest.--
       (1) In general.--The State plan may not impose any cost 
     sharing for individuals with income (as determined under 
     subsection (d)) less than 150 percent of the official poverty 
     level applicable to a family of the size involved (referred 
     to in paragraph (2)).
       (2) Official poverty level.--For purposes of paragraph (1), 
     the term ``official poverty level applicable to a family of 
     the size involved'' means, for a family for a year, the 
     official poverty line (as defined by the Office of Management 
     and Budget, and revised annually in accordance with section 
     673(2) of the Community Services Block Grant Act (42 U.S.C. 
     9902(2)) applicable to a family of the size involved.
       (b) Sliding Scale for Remainder.--
       (1) Required coinsurance.--The State plan shall impose cost 
     sharing in the form of coinsurance (based on the amount paid 
     under the State plan for a service)--
       (A) at a rate of 10 percent for individuals with 
     disabilities with income not less than 150 percent, and less 
     than 175 percent, of such official poverty line (as so 
     applied);
       (B) at a rate of 15 percent for such individuals with 
     income not less than 175 percent, and less than 225 percent, 
     of such official poverty line (as so applied);
       (C) at a rate of 25 percent for such individuals with 
     income not less than 225 percent, and less than 275 percent, 
     of such official poverty line (as so applied);
       (D) at a rate of 30 percent for such individuals with 
     income not less than 275 percent, and less than 325 percent, 
     of such official poverty line (as so applied);
       (E) at a rate of 35 percent for such individuals with 
     income not less than 325 percent, and less than 400 percent, 
     of such official poverty line (as so applied); and
       (F) at a rate of 40 percent for such individuals with 
     income equal to at least 400 percent of such official poverty 
     line (as so applied).
       (2) Required annual deductible.--The State plan shall 
     impose cost sharing in the form of an annual deductible--
       (A) of $100 for individuals with disabilities with income 
     not less than 150 percent, and less than 175 percent, of such 
     official poverty line (as so applied);
       (B) of $200 for such individuals with income not less than 
     175 percent, and less than 225 percent, of such official 
     poverty line (as so applied);
       (C) of $300 for such individuals with income not less than 
     225 percent, and less than 275 percent, of such official 
     poverty line (as so applied);
       (D) of $400 for such individuals with income not less than 
     275 percent, and less than 325 percent, of such official 
     poverty line (as so applied);
       (E) of $500 for such individuals with income not less than 
     325 percent, and less than 400 percent, of such official 
     poverty line (as so applied); and
       (F) of $600 for such individuals with income equal to at 
     least 400 percent of such official poverty line (as so 
     applied).
       (c) Recommendation of the Secretary.--The Secretary shall 
     make recommendations to the States as to how to reduce cost-
     sharing for individuals with extraordinary out-of-pocket 
     costs for whom the cost-sharing provisions of this section 
     could jeopardize their ability to take advantage of the 
     services offered under this title. The Secretary shall 
     establish a methodology for reducing the cost-sharing burden 
     for individuals with exceptionally high out-of-pocket costs 
     under this title.
       (d) Determination of Income for Purposes of Cost Sharing.--
     The State plan shall specify the process to be used to 
     determine the income of an individual with disabilities for 
     purposes of this section. Such standards shall include a 
     uniform Federal definition of income and any allowable 
     deductions from income.

     SEC. 106. QUALITY ASSURANCE AND SAFEGUARDS.

       (a) Quality Assurance.--
       (1) In general.--The State plan shall specify how the State 
     will ensure and monitor the quality of services, including--
       (A) safeguarding the health and safety of individuals with 
     disabilities;
       (B) setting the minimum standards for agency providers and 
     how such standards will be enforced;
       (C) setting the minimum competency requirements for agency 
     provider employees who provide direct services under this 
     title and how the competency of such employees will be 
     enforced;
       (D) obtaining meaningful consumer input, including consumer 
     surveys that measure the extent to which participants receive 
     the services described in the plan of care and participant 
     satisfaction with such services;
       (E) establishing a process to receive, investigate, and 
     resolve allegations of neglect or abuse;
       (F) establishing optional training programs for individuals 
     with disabilities in the use and direction of consumer 
     directed providers of personal assistance services;
       (G) establishing an appeals procedure for eligibility 
     denials and a grievance procedure for disagreements with the 
     terms of an individualized plan of care;
       (H) providing for participation in quality assurance 
     activities; and
       (I) specifying the role of the Long-Term Care Ombudsman 
     (under the Older Americans Act of 1965 (42 U.S.C. 3001 et 
     seq.)) and the protection and advocacy system (established 
     under section 142 of the the Developmental Disabilities 
     Assistance and Bill of Rights Act (42 U.S.C. 6042)) in 
     assuring quality of services and protecting the rights of 
     individuals with disabilities.
       (2) Issuance of regulations.--Not later than 1 year after 
     the date of enactment of this Act, the Secretary shall issue 
     regulations implementing the quality provisions of this 
     subsection.
       (b) Federal Standards.--The State plan shall adhere to 
     Federal quality standards in the following areas:
       (1) Case review of a specified sample of client records.
       (2) The mandatory reporting of abuse, neglect, or 
     exploitation.
       (3) The development of a registry of provider agencies or 
     home care workers and consumer directed providers of personal 
     assistance services against whom any complaints have been 
     sustained, which shall be available to the public.
       (4) Sanctions to be imposed on States or providers, 
     including disqualification from the program, if minimum 
     standards are not met.
       (5) Surveys of client satisfaction.
       (6) State optional training programs for informal 
     caregivers.
       (c) Client Advocacy.--
       (1) In general.--The State plan shall provide that the 
     State will expend the amount allocated under section 
     109(b)(2) for client advocacy activities. The State may use 
     such funds to augment the budgets of the Long-Term Care 
     Ombudsman (under the Older Americans Act of 1965 (42 U.S.C. 
     3001 et seq.) and the protection and advocacy system 
     (established under section 142 of the the Developmental 
     Disabilities Assistance and Bill of Rights Act (42 U.S.C. 
     6042)) or may establish a separate and independent client 
     advocacy office in accordance with paragraph (2) to 
     administer a new program designed to advocate for client 
     rights.
       (2) Client advocacy office.--
     [[Page S302]]   (A) In general.--A client advocacy office 
     established under this paragraph shall--
       (i) identify, investigate, and resolve complaints that--

       (I) are made by, or on behalf of, clients; and
       (II) relate to action, inaction, or decisions, that may 
     adversely affect the health, safety, welfare, or rights of 
     the clients (including the welfare and rights of the clients 
     with respect to the appointment and activities of guardians 
     and representative payees), of--

       (aa) providers, or representatives of providers, of long-
     term care services;
       (bb) public agencies; or
       (cc) health and social service agencies;
       (ii) provide services to assist the clients in protecting 
     the health, safety, welfare, and rights of the clients;
       (iii) inform the clients about means of obtaining services 
     provided by providers or agencies described in clause (i)(II) 
     or services described in clause (ii);
       (iv) ensure that the clients have regular and timely access 
     to the services provided through the office and that the 
     clients and complainants receive timely responses from 
     representatives of the office to complaints; and
       (v) represent the interests of the clients before 
     governmental agencies and seek administrative, legal, and 
     other remedies to protect the health, safety, welfare, and 
     rights of the clients with regard to the provisions of this 
     title.
       (B) Contracts and arrangements.--
       (i) In general.--Except as provided in clause (ii), the 
     State agency may establish and operate the office, and carry 
     out the program, directly, or by contract or other 
     arrangement with any public agency or nonprofit private 
     organization.
       (ii) Licensing and certification organizations; 
     associations.--The State agency may not enter into the 
     contract or other arrangement described in clause (i) with an 
     agency or organization that is responsible for licensing, 
     certifying, or providing long-term care services in the 
     State.
       (d) Safeguards.--
       (1) Confidentiality.--The State plan shall provide 
     safeguards that restrict the use or disclosure of information 
     concerning applicants and beneficiaries to purposes directly 
     connected with the administration of the plan.
       (2) Safeguards against abuse.--The State plans shall 
     provide safeguards against physical, emotional, or financial 
     abuse or exploitation (specifically including appropriate 
     safeguards in cases where payment for program benefits is 
     made by cash payments or vouchers given directly to 
     individuals with disabilities). All providers of services 
     shall be required to register with the State agency.
       (3) Regulations.--Not later than January 1, 1997, the 
     Secretary shall promulgate regulations with respect to the 
     requirements on States under this subsection.
       (e) Specified Rights.--The State plan shall provide that in 
     furnishing home and community-based services under the plan 
     the following individual rights are protected:
       (1) The right to be fully informed in advance, orally and 
     in writing, of the care to be provided, to be fully informed 
     in advance of any changes in care to be provided, and (except 
     with respect to an individual determined incompetent) to 
     participate in planning care or changes in care.
       (2) The right to--
       (A) voice grievances with respect to services that are (or 
     fail to be) furnished without discrimination or reprisal for 
     voicing grievances;
       (B) be told how to complain to State and local authorities; 
     and
       (C) prompt resolution of any grievances or complaints.
       (3) The right to confidentiality of personal and clinical 
     records and the right to have access to such records.
       (4) The right to privacy and to have one's property treated 
     with respect.
       (5) The right to refuse all or part of any care and to be 
     informed of the likely consequences of such refusal.
       (6) The right to education or training for oneself and for 
     members of one's family or household on the management of 
     care.
       (7) The right to be free from physical or mental abuse, 
     corporal punishment, and any physical or chemical restraints 
     imposed for purposes of discipline or convenience and not 
     included in an individual's plan of care.
       (8) The right to be fully informed orally and in writing of 
     the individual's rights.
       (9) The right to a free choice of providers.
       (10) The right to direct provider activities when an 
     individual is competent and willing to direct such 
     activities.

     SEC. 107. ADVISORY GROUPS.

       (a) Federal Advisory Group.--
       (1) Establishment.--The Secretary shall establish an 
     advisory group, to advise the Secretary and States on all 
     aspects of the program under this title.
       (2) Composition.--The group shall be composed of 
     individuals with disabilities and their representatives, 
     providers, Federal and State officials, and local community 
     implementing agencies. A majority of its members shall be 
     individuals with disabilities and their representatives.
       (b) State Advisory Groups.--
       (1) In general.--Each State plan shall provide for the 
     establishment and maintenance of an advisory group to advise 
     the State on all aspects of the State plan under this title.
       (2) Composition.--Members of each advisory group shall be 
     appointed by the Governor (or other chief executive officer 
     of the State) and shall include individuals with disabilities 
     and their representatives, providers, State officials, and 
     local community implementing agencies. A majority of its 
     members shall be individuals with disabilities and their 
     representatives. The members of the advisory group shall be 
     selected from those nominated as described in paragraph (3).
       (3) Selection of members.--Each State shall establish a 
     process whereby all residents of the State, including 
     individuals with disabilities and their representatives, 
     shall be given the opportunity to nominate members to the 
     advisory group.
       (4) Particular concerns.--Each advisory group shall--
       (A) before the State plan is developed, advise the State on 
     guiding principles and values, policy directions, and 
     specific components of the plan;
       (B) meet regularly with State officials involved in 
     developing the plan, during the development phase, to review 
     and comment on all aspects of the plan;
       (C) participate in the public hearings to help assure that 
     public comments are addressed to the extent practicable;
       (D) report to the Governor and make available to the public 
     any differences between the group's recommendations and the 
     plan;
       (E) report to the Governor and make available to the public 
     specifically the degree to which the plan is consumer-
     directed; and
       (F) meet regularly with officials of the designated State 
     agency (or agencies) to provide advice on all aspects of 
     implementation and evaluation of the plan.

     SEC. 108. PAYMENTS TO STATES.

       (a) In General.--Subject to section 102(a)(9)(C) (relating 
     to limitation on payment for administrative costs), the 
     Secretary, in accordance with the Cash Management Improvement 
     Act, shall authorize payment to each State with a plan 
     approved under this title, for each quarter (beginning on or 
     after January 1, 1997), from its allotment under section 
     109(b), an amount equal to--
       (1)(A) with respect to the amount demonstrated by State 
     claims to have been expended during the year for home and 
     community-based services under the plan for individuals with 
     disabilities that does not exceed 20 percent of the amount 
     allotted to the State under section 109(b), 100 percent of 
     such amount; and
       (B) with respect to the amount demonstrated by State claims 
     to have been expended during the year for home and community-
     based services under the plan for individuals with 
     disabilities that exceeds 20 percent of the amount allotted 
     to the State under section 109(b), the Federal home and 
     community-based services matching percentage (as defined in 
     subsection (b)) of such amount; plus
       (2) an amount equal to 90 percent of the amount 
     demonstrated by the State to have been expended during the 
     quarter for quality assurance activities under the plan; plus
       (3) an amount equal to 90 percent of amount expended during 
     the quarter under the plan for activities (including 
     preliminary screening) relating to determination of 
     eligibility and performance of needs assessment; plus
       (4) an amount equal to 90 percent (or, beginning with 
     quarters in fiscal year 2005, 75 percent) of the amount 
     expended during the quarter for the design, development, and 
     installation of mechanical claims processing systems and for 
     information retrieval; plus
       (5) an amount equal to 50 percent of the remainder of the 
     amounts expended during the quarter as found necessary by the 
     Secretary for the proper and efficient administration of the 
     State plan.
       (b) Federal Home and Community-Based Services Matching 
     Percentage.--In subsection (a), the term ``Federal home and 
     community-based services matching percentage'' means, with 
     respect to a State, the State's Federal medical assistance 
     percentage (as defined in section 1905(b) of the Social 
     Security Act (42 U.S.C. 1396d(b))) increased by 15 percentage 
     points, except that the Federal home and community-based 
     services matching percentage shall in no case be more than 95 
     percent.
       (c) Payments on Estimates with Retrospective Adjustments.--
     The method of computing and making payments under this 
     section shall be as follows:
       (1) The Secretary shall, prior to the beginning of each 
     quarter, estimate the amount to be paid to the State under 
     subsection (a) for such quarter, based on a report filed by 
     the State containing its estimate of the total sum to be 
     expended in such quarter, and such other information as the 
     Secretary may find necessary.
       (2) From the allotment available therefore, the Secretary 
     shall provide for payment of the amount so estimated, reduced 
     or increased, as the case may be, by any sum (not previously 
     adjusted under this section) by which the Secretary finds 
     that the estimate of the amount to be paid the State for any 
     prior period under this section was greater or less than the 
     amount that should have been paid.
       (d) Application of Rules Regarding Limitations on Provider-
     Related Donations and Health Care Related Taxes.--The 
     provisions of section 1903(w) of the Social Security Act (42 
     U.S.C. 1396b(w)) shall apply to payments to States under this 
     section in the same manner as they apply to payments to 
     States under section 1903(a) of such Act (42 U.S.C. 
     1396b(a)).
     [[Page S303]]   (e) Failure to Comply With State Plan.--If a 
     State furnishing home and community-based services under this 
     title fails to comply with the State plan approved under this 
     title, the Secretary may either reduce the Federal matching 
     rates available to the State under subsection (a) or withhold 
     an amount of funds determined appropriate by the Secretary 
     from any payment to the State under this section.

     SEC. 109. APPROPRIATIONS; ALLOTMENTS TO STATES.

       (a) Appropriations.--
       (1) Fiscal years 1997 through 2005.--Subject to paragraph 
     (5)(C), for purposes of this title, the appropriation 
     authorized under this title for each of fiscal years 1997 
     through 2005 is the following:
       (A) For fiscal year 1997, $1,800,000,000.
       (B) For fiscal year 1998, $3,500,000,000.
       (C) For fiscal year 1999, $5,800,000,000.
       (D) For fiscal year 2000, $7,300,000,000.
       (E) For fiscal year 2001, $10,000,000,000.
       (F) For fiscal year 2002, $15,700,000,000.
       (G) For fiscal year 2003, $22,800,000,000.
       (H) For fiscal year 2004, $30,700,000,000.
       (I) For fiscal year 2005, $34,600,000,000.
       (2) Subsequent fiscal years.--For purposes of this title, 
     the appropriation authorized for State plans under this title 
     for each fiscal year after fiscal year 2005 is the 
     appropriation authorized under this subsection for the 
     preceding fiscal year multiplied by--
       (A) a factor (described in paragraph (3)) reflecting the 
     change in the consumer price index for the fiscal year; and
       (B) a factor (described in paragraph (4)) reflecting the 
     change in the number of individuals with disabilities for the 
     fiscal year.
       (3) CPI increase factor.--For purposes of paragraph (2)(A), 
     the factor described in this paragraph for a fiscal year is 
     the ratio of--
       (A) the annual average index of the consumer price index 
     for the preceding fiscal year, to--
       (B) such index, as so measured, for the second preceding 
     fiscal year.
       (4) Disabled population factor.--For purposes of paragraph 
     (2)(B), the factor described in this paragraph for a fiscal 
     year is 100 percent plus (or minus) the percentage increase 
     (or decrease) change in the disabled population of the United 
     States (as determined for purposes of the most recent update 
     under subsection (b)(3)(D)).
       (5) Additional funds due to medicaid offsets.--
       (A) In general.--Each participating State must provide the 
     Secretary with information concerning offsets and reductions 
     in the medicaid program resulting from home and community-
     based services provided disabled individuals under this 
     title, that would have been paid for such individuals under 
     the State medicaid plan. At the time a State first submits 
     its plan under this title and before each subsequent fiscal 
     year (through fiscal year 2005), the State also must provide 
     the Secretary with such budgetary information (for each 
     fiscal year through fiscal year 2005), as the Secretary 
     determines to be necessary to carry out this paragraph.
       (B) Reports.--Each State with a program under this title 
     shall submit such reports to the Secretary as the Secretary 
     may require in order to monitor compliance with subparagraph 
     (A). The Secretary shall specify the format of such reports 
     and establish uniform data reporting elements.
       (C) Adjustments to appropriation.--
       (i) In general.--For each fiscal year (beginning with 
     fiscal year 1997 and ending with fiscal year 2005) and based 
     on a review of information submitted under subparagraph (A), 
     the Secretary shall determine the amount by which the 
     appropriation authorized under subsection (a) will increase. 
     The amount of such increase for a fiscal year shall be 
     limited to the reduction in Federal expenditures of medical 
     assistance (as determined by Secretary) that would have been 
     made under title XIX of the Social Security Act (42 U.S.C. 
     1396 et seq.) but for the provision of home and community 
     based services under the program under this title.
       (ii) Annual publication.--The Secretary shall publish 
     before the beginning of such fiscal year, the revised 
     appropriation authorized under this subsection for such 
     fiscal year.
       (D) Construction.--Nothing in this subsection shall be 
     construed as requiring States to determine eligibility for 
     medical assistance under the State medicaid plan on behalf of 
     individuals receiving assistance under this title.
       (b) Allotments to States.--
       (1) In general.--The Secretary shall allot the amounts 
     available under the appropriation authorized for the fiscal 
     year under paragraph (1) of subsection (a) (without regard to 
     any adjustment to such amount under paragraph (5) of such 
     subsection), to the States with plans approved under this 
     title in accordance with an allocation formula developed by 
     the Secretary that takes into account--
       (A) the percentage of the total number of individuals with 
     disabilities in all States that reside in a particular State;
       (B) the per capita costs of furnishing home and community-
     based services to individuals with disabilities in the State; 
     and
       (C) the percentage of all individuals with incomes at or 
     below 150 percent of the official poverty line (as described 
     in section 105(a)(2)) in all States that reside in a 
     particular State.
       (2) Allocation for client advocacy activities.--Each State 
     with a plan approved under this title shall allocate one-half 
     of one percent of the State's total allotment under paragraph 
     (1) for client advocacy activities as described in section 
     106(c).
       (3) No duplicate payment.--No payment may be made to a 
     State under this section for any services provided to an 
     individual to the extent that the State received payment for 
     such services under section 1903(a) of the Social Security 
     Act (42 U.S.C. 1396b(a)).
       (4) Reallocations.--Any amounts allotted to States under 
     this subsection for a year that are not expended in such year 
     shall remain available for State programs under this title 
     and may be reallocated to States as the Secretary determines 
     appropriate.
       (5) Savings due to medicaid offsets.--
       (A) In general.--Except as provided in subparagraph (B), 
     from the total amount of the increase in the amount available 
     for a fiscal year under paragraph (1) of subsection (a) 
     resulting from the application of paragraph (5) of such 
     subsection, the Secretary shall allot to each State with a 
     plan approved under this title, an amount equal to the 
     Federal offsets and reductions in the State's medicaid plan 
     for such fiscal year that was reported to the Secretary under 
     subsection (a)(5), reduced or increased, as the case may be, 
     by any amount by which the Secretary determines that any 
     estimated Federal offsets and reductions in such State's 
     medicaid plan reported to the Secretary under subsection 
     (a)(5) for the previous fiscal year were greater or less than 
     the actual Federal offsets and reductions in such State's 
     medicaid plan.
       (B) Cap on state savings allotment.--In no case shall the 
     allotment made under this paragraph to any State for a fiscal 
     year exceed the product of--
       (i) the Federal medical assistance percentage for such 
     State (as defined under section 1905(b) of the Social 
     Security Act (42 U.S.C. 1396d(b))); multiplied by
       (ii)(I) for fiscal year 1997, the base medical assistance 
     amount for the State (as determined under subparagraph (C)) 
     updated through the midpoint of fiscal year 1997 by the 
     estimated percentage change in the index described in section 
     102(a)(1)(B)(iii) during the period beginning on October 1, 
     1995, and ending at that midpoint; and
       (II) for succeeding fiscal years, an amount equal to the 
     amount determined under this clause for the previous fiscal 
     year updated through the midpoint of the year by the 
     estimated percentage change in such index during the 12-month 
     period ending at that midpoint, with appropriate adjustments 
     to reflect previous underestimations or overestimations under 
     this clause in the projected percentage change in such index.
       (C) Base medical assistance amount.--The base medical 
     assistance amount for a State is an amount equal to the total 
     expenditures from Federal and State funds made under the 
     State plan under title XIX of the Social Security Act (42 
     U.S.C 1396 et seq.) during fiscal year 1995 with respect to 
     medical assistance consisting of the services described in 
     section 102(a)(1)(C).
       (c) State Entitlement.--This title constitutes budget 
     authority in advance of appropriations Acts, and represents 
     the obligation of the Federal Government to provide for the 
     payment to States of amounts described in subsection (a).

     SEC. 110. FEDERAL EVALUATIONS.

       (a) In General.--Not later than December 31, 2002, December 
     31, 2005, and each December 31 thereafter, the Secretary 
     shall provide to Congress analytical reports that evaluate--
       (1) the extent to which individuals with low incomes and 
     disabilities are equitably served;
       (2) the adequacy and equity of service plans to individuals 
     with similar levels of disability across States;
       (3) the comparability of program participation across 
     States, described by level and type of disability; and
       (4) the ability of service providers to sufficiently meet 
     the demand for services.
       (b) Geriatric Assessments.--Not later than 18 months after 
     the date of enactment of this Act, the Secretary shall report 
     to Congress concerning the feasibility of providing 
     reimbursement under health plans and other payers of health 
     services for full geriatric assessment, when recommended by a 
     physician.

     SEC. 111. INFORMATION AND TECHNICAL ASSISTANCE GRANTS 
                   RELATING TO DEVELOPMENT OF HOSPITAL LINKAGE 
                   PROGRAMS.

       (a) Findings.--Congress finds that--
       (1) demonstration programs and projects have been developed 
     to offer care management to hospitalized individuals awaiting 
     discharge who are in need of long-term health care services 
     that meet individual needs and preferences in home and 
     community-based settings as an alternative to long-term 
     nursing home care or institutional placement; and
       (2) there is a need to disseminate information and 
     technical assistance to hospitals and State and local 
     community organizations regarding such programs and projects 
     and to provide incentive grants to State and local public and 
     private agencies, including area agencies on aging, to 
     establish and expand programs that offer care management to 
     individuals awaiting discharge from acute care hospitals who 
     are in need of long-term care so that services to meet 
     individual needs and preferences can be arranged in home and 
     community-based settings as an alternative to long-term 
     placement in nursing homes or other institutional settings.
     [[Page S304]]   (b) Dissemination of Information, Technical 
     Assistance, and Incentive Grants to Assist in the Development 
     of Hospital Linkage Programs.--Part C of title III of the 
     Public Health Service Act (42 U.S.C. 248 et seq.) is amended 
     by adding at the end thereof the following new section:

     ``SEC. 327B. DISSEMINATION OF INFORMATION, TECHNICAL 
                   ASSISTANCE AND INCENTIVE GRANTS TO ASSIST IN 
                   THE DEVELOPMENT OF HOSPITAL LINKAGE PROGRAMS.

       ``(a) Dissemination of Information.--The Secretary shall 
     compile, evaluate, publish and disseminate to appropriate 
     State and local officials and to private organizations and 
     agencies that provide services to individuals in need of 
     long-term health care services, such information and 
     materials as may assist such entities in replicating 
     successful programs that are aimed at offering care 
     management to hospitalized individuals who are in need of 
     long-term care so that services to meet individual needs and 
     preferences can be arranged in home and community-based 
     settings as an alternative to long-term nursing home 
     placement. The Secretary may provide technical assistance to 
     entities seeking to replicate such programs.
       ``(b) Incentive Grants To Assist in the Development of 
     Hospital Linkage Programs.--The Secretary shall establish a 
     program under which incentive grants may be awarded to assist 
     private and public agencies, including area agencies on 
     aging, and organizations in developing and expanding programs 
     and projects that facilitate the discharge of individuals in 
     hospitals or other acute care facilities who are in need of 
     long-term care services and placement of such individuals 
     into home and community-based settings.
       ``(c) Administrative Provisions.--
       ``(1) Eligible entities.--To be eligible to receive a grant 
     under subsection (b) an entity shall be--
       ``(A)(i) a State agency as defined in section 102(43) of 
     the Older Americans Act of 1965 (42 U.S.C. 3002(43)); or
       ``(ii) a State agency responsible for administering home 
     and community care programs under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.); or
       ``(B) if no State agency described in subparagraph (A) 
     applies with respect to a particular State, a public or 
     nonprofit private entity.
       ``(2) Applications.--To be eligible to receive an incentive 
     grant under subsection (b), an entity shall prepare and 
     submit to the Secretary an application at such time, in such 
     manner and containing such information as the Secretary may 
     require, including--
       ``(A) an assessment of the need within the community to be 
     served for the establishment or expansion of a program to 
     facilitate the discharge of individuals in need of long-term 
     care who are in hospitals or other acute care facilities into 
     home and community-care programs that provide individually 
     planned, flexible services that reflect individual choice or 
     preference rather than nursing home or institutional 
     settings;
       ``(B) a plan for establishing or expanding a program for 
     identifying individuals in hospital or acute care facilities 
     who are in need of individualized long-term care provided in 
     home and community-based settings rather than nursing homes 
     or other institutional settings and undertaking the planning 
     and management of individualized care plans to facilitate 
     discharge into such settings;
       ``(C) assurances that nongovernmental case management 
     agencies funded under grants awarded under this section are 
     not direct providers of home and community-based services;
       ``(D) satisfactory assurances that adequate home and 
     community-based long term care services are available, or 
     will be made available, within the community to be served so 
     that individuals being discharged from hospitals or acute 
     care facilities under the proposed program can be served in 
     such home and community-based settings, with flexible, 
     individualized care that reflects individual choice and 
     preference;
       ``(E) a description of the manner in which the program to 
     be administered with amounts received under the grant will be 
     continued after the termination of the grant for which such 
     application is submitted; and
       ``(F) a description of any waivers or approvals necessary 
     to expand the number of individuals served in federally 
     funded home and community-based long term care programs in 
     order to provide satisfactory assurances that adequate home 
     and community-based long term care services are available in 
     the community to be served.
       ``(3) Awarding of grants.--
       ``(A) Preferences.--In awarding grants under subsection 
     (b), the Secretary shall give preference to entities 
     submitting applications that--
       ``(i) demonstrate an ability to coordinate activities 
     funded using amounts received under the grant with programs 
     providing individualized home and community-based case 
     management and services to individuals in need of long term 
     care with hospital discharge planning programs; and
       ``(ii) demonstrate that adequate home and community-based 
     long term care management and services are available, or will 
     be made available to individuals being served under the 
     program funded with amounts received under subsection (b).
       ``(B) Distribution.--In awarding grants under subsection 
     (b), the Secretary shall ensure that such grants--
       ``(i) are equitably distributed on a geographic basis;
       ``(ii) include projects operating in urban areas and 
     projects operating in rural areas; and
       ``(iii) are awarded for the expansion of existing hospital 
     linkage programs as well as the establishment of new 
     programs.
       ``(C) Expedited consideration.--The Secretary shall provide 
     for the expedited consideration of any waiver application 
     that is necessary under title XIX of the Social Security Act 
     (42 U.S.C. 1396 et seq.) to enable an applicant for a grant 
     under subsection (b) to satisfy the assurance required under 
     paragraph (1)(D).
       ``(4) Use of grants.--An entity that receives amounts under 
     a grant under subsection (b) may use such amounts for 
     planning, development and evaluation services and to provide 
     reimbursements for the costs of one or more case mangers to 
     be located in or assigned to selected hospitals who would--
       ``(A) identify patients in need of individualized care in 
     home and community-based long-term care;
       ``(B) assess and develop care plans in cooperation with the 
     hospital discharge planning staff; and
       ``(C) arrange for the provision of community care either 
     immediately upon discharge from the hospital or after any 
     short term nursing-home stay that is needed for recuperation 
     or rehabilitation;
       ``(5) Direct services subject to reimbursements.--None of 
     the amounts provided under a grant under this section may be 
     used to provide direct services, other than case management, 
     for which reimbursements are otherwise available under title 
     XVIII or XIX of the Social Security Act (42 U.S.C. 1395 et 
     seq. and 1396 et seq.).
       ``(6) Limitations.--
       ``(A) Term.--Grants awarded under this section shall be for 
     terms of less than 3 years.
       ``(B) Amount.--Grants awarded to an entity under this 
     section shall not exceed $300,000 per year. The Secretary may 
     waive the limitation under this subparagraph where an 
     applicant demonstrates that the number of hospitals or 
     individuals to be served under the grant justifies such 
     increased amounts.
       ``(C) Supplanting of funds.--Amounts awarded under a grant 
     under this section may not be used to supplant existing State 
     funds that are provided to support hospital link programs.
       ``(d) Evaluation and Reports.--
       ``(1) By grantees.--An entity that receives a grant under 
     this section shall evaluate the effectiveness of the services 
     provided under the grant in facilitating the placement of 
     individuals being discharged from hospitals or acute care 
     facilities into home and community-based long term care 
     settings rather than nursing homes. Such entity shall prepare 
     and submit to the Secretary a report containing such 
     information and data concerning the activities funded under 
     the grant as the Secretary determines appropriate.
       ``(2) By secretary.--Not later than the end of the third 
     fiscal year for which funds are appropriated under subsection 
     (e), the Secretary shall prepare and submit to the 
     appropriate committees of Congress, a report concerning the 
     results of the evaluations and reports conducted and prepared 
     under paragraph (1).
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $5,000,000 for each of the fiscal years 1996 through 1998.''.
               TITLE II--PROVISIONS RELATING TO MEDICARE

     SEC. 201. RECAPTURE OF CERTAIN HEALTH CARE SUBSIDIES RECEIVED 
                   BY HIGH-INCOME INDIVIDUALS.

       (a) In General.--Subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new part:

  ``PART VIII--CERTAIN HEALTH CARE SUBSIDIES RECEIVED BY HIGH-INCOME 
                              INDIVIDUALS
``Sec. 59B. Recapture of certain health care subsidies.
     ``SEC. 59B. RECAPTURE OF CERTAIN HEALTH CARE SUBSIDIES.

       ``(a) Imposition of Recapture Amount.--In the case of an 
     individual, if the modified adjusted gross income of the 
     taxpayer for the taxable year exceeds the threshold amount, 
     such taxpayer shall pay (in addition to any other amount 
     imposed by this subtitle) a recapture amount for such taxable 
     year equal to the aggregate of the Medicare part B recapture 
     amounts (if any) for months during such year that a premium 
     is paid under part B of title XVIII of the Social Security 
     Act for the coverage of the individual under such part.
       ``(b) Medicare Part B Premium Recapture Amount for Month.--
     For purposes of this section, the Medicare part B premium 
     recapture amount for any month is the amount equal to the 
     excess of--
       ``(1) 200 percent of the monthly actuarial rate for 
     enrollees age 65 and over determined for that calendar year 
     under section 1839(a)(1) of the Social Security Act, over
       ``(2) the total monthly premium under section 1839 of the 
     Social Security Act (determined without regard to subsections 
     (b) and (f) of section 1839 of such Act).
       ``(c) Phase-in of Recapture Amount.--
       ``(1) In general.--If the modified adjusted gross income of 
     the taxpayer for any taxable year exceeds the threshold 
     amount by less 
     [[Page S305]] than $25,000, the recapture amount imposed by 
     this section for such taxable year shall be an amount that 
     bears the same ratio to the recapture amount that would (but 
     for this subsection) be imposed by this section for such 
     taxable year as such excess bears to $25,000.
       ``(2) Joint returns.--If a recapture amount is determined 
     separately for each spouse filing a joint return, paragraph 
     (1) shall be applied by substituting `$50,000' for `$25,000' 
     each place it appears.
       ``(d) Other Definitions and Special Rules.--For purposes of 
     this section:
       ``(1) Threshold amount.--The term `threshold amount' 
     means--
       ``(A) except as otherwise provided in this paragraph, 
     $100,000;
       ``(B) $125,000 in the case of a joint return; and
       ``(C) zero in the case of a taxpayer who--
       ``(i) is married (as determined under section 7703) but 
     does not file a joint return for such year; and
       ``(ii) does not live apart from his spouse at all times 
     during the taxable year.
       ``(2) Modified adjusted gross income.--The term `modified 
     adjusted gross income' means adjusted gross income--
       ``(A) determined without regard to sections 135, 911, 931, 
     and 933; and
       ``(B) increased by the amount of interest received or 
     accrued by the taxpayer during the taxable year that is 
     exempt from tax.
       ``(3) Joint returns.--In the case of a joint return--
       ``(A) the recapture amount under subsection (a) shall be 
     the sum of the recapture amounts determined separately for 
     each spouse; and
       ``(B) subsections (a) and (c) shall be applied by taking 
     into account the combined modified adjusted gross income of 
     the spouses.
       ``(4) Coordination with other provisions.--
       ``(A) Treated as tax for subtitle f.--For purposes of 
     subtitle F, the recapture amount imposed by this section 
     shall be treated as if it were a tax imposed by section 1.
       ``(B) Not treated as tax for certain purposes.--The 
     recapture amount imposed by this section shall not be treated 
     as a tax imposed by this chapter for purposes of 
     determining--
       ``(i) the amount of any credit allowable under this 
     chapter; or
       ``(ii) the amount of the minimum tax under section 55.
       ``(C) Treated as payment for medical insurance.--The 
     recapture amount imposed by this section shall be treated as 
     an amount paid for insurance covering medical care, within 
     the meaning of section 213(d).''.
       (b) Transfers to Federal Supplementary Medical Insurance 
     Trust Fund.--
       (1) In general.--There are hereby appropriated to the 
     Federal Supplementary Medical Insurance Trust Fund amounts 
     equivalent to the aggregate increase in liabilities under 
     chapter 1 of the Internal Revenue Code of 1986 that is 
     attributable to the application of section 59B(a) of such 
     Code, as added by this section.
       (2) Transfers.--The amounts appropriated by paragraph (1) 
     to the Federal Supplementary Medical Insurance Trust Fund 
     shall be transferred from time to time (but not less 
     frequently than quarterly) from the general fund of the 
     Treasury on the basis of estimates made by the Secretary of 
     the Treasury of the amounts referred to in paragraph (1). Any 
     quarterly payment shall be made on the first day of such 
     quarter and shall take into account the recapture amounts 
     referred to in such section 59B(a) for such quarter. Proper 
     adjustments shall be made in the amounts subsequently 
     transferred to the extent prior estimates were in excess of 
     or less than the amounts required to be transferred.
       (c) Reporting Requirements.--
       (1) Paragraph (1) of section 6050F(a) of the Internal 
     Revenue Code of 1986 (relating to returns relating to social 
     security benefits) is amended by striking ``and'' at the end 
     of subparagraph (B) and by inserting after subparagraph (C) 
     the following new subparagraph:
       ``(D) the number of months during the calendar year for 
     which a premium was paid under part B of title XVIII of the 
     Social Security Act for the coverage of such individual under 
     such part, and''.
       (2) Paragraph (2) of section 6050F(b) of such Code is 
     amended to read as follows:
       ``(2) the information required to be shown on such return 
     with respect to such individual.''.
       (3) Subparagraph (A) of section 6050F(c)(1) of such Code is 
     amended by inserting before the comma ``and in the case of 
     the information specified in subsection (a)(1)(D)''.
       (4) The heading for section 6050F of such Code is amended 
     by inserting ``AND MEDICARE PART B COVERAGE'' before the 
     period.
       (5) The item relating to section 6050F in the table of 
     sections for subpart B of part III of subchapter A of chapter 
     61 of such Code is amended by inserting ``and Medicare part B 
     coverage'' before the period.
       (d) Waiver of Certain Estimated Tax Penalties.--No addition 
     to tax shall be imposed under section 6654 of the Internal 
     Revenue Code of 1986 (relating to failure to pay estimated 
     income tax) for any period before April 16, 1998, with 
     respect to any underpayment to the extent that such 
     underpayment resulted from section 59B(a) of the Internal 
     Revenue Code of 1986, as added by this section.
       (e) Clerical Amendment.--The table of parts for subchapter 
     A of chapter 1 of the Internal Revenue Code of 1986 is 
     amended by adding at the end thereof the following new item:

``Part VIII. Certain health care subsidies received by high-income 
              individuals.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 202. IMPOSITION OF 10 PERCENT COPAYMENT ON HOME HEALTH 
                   SERVICES UNDER MEDICARE.

       (a) In General.--
       (1) Part a.--Section 1813(a) of the Social Security Act (42 
     U.S.C. 1395e(a)) is amended by adding at the end the 
     following new paragraph:
       ``(5)(A) The amount payable for a home health service 
     furnished to an individual under this part shall be reduced 
     by a copayment amount equal to 10 percent of the average 
     nationwide per visit cost for such a service furnished under 
     this title (as determined by the Secretary on a prospective 
     basis for services furnished during a calendar year).
       ``(B) Subparagraph (A) shall not apply to individuals whose 
     family income does not exceed 150 percent of the official 
     poverty line (referred to in section 1905(p)(2)) for a family 
     of the size involved.''.
       (2) Part b.--
       (A) In general.--Section 1833(b) of the Social Security Act 
     (42 U.S.C. 1395l(b)) is amended by adding at the end the 
     following new sentence: ``If the total amount of the expenses 
     incurred by an individual as determined under the preceding 
     provisions of this subsection include expenses for a home 
     health service, such expenses shall be further reduced by a 
     copayment amount equal to 10 percent of the average 
     nationwide per visit cost for such a service furnished under 
     this title (as determined by the Secretary on a prospective 
     basis for services furnished during a calendar year). The 
     preceding sentence shall not apply to individuals whose 
     family income does not exceed 150 percent of the official 
     poverty line (referred to in section 1905(p)(2)) for a family 
     of the size involved.''.
       (B) Conforming amendment.--Section 1833(a)(2) of the Social 
     Security Act (42 U.S.C. 1395l(a)(2)), as amended by sections 
     147(f)(6)(C) and 156(a)(2)(B)(iii) of the Social Security Act 
     Amendments of 1994 (Public Law 103-432; 108 Stat. 4432, 
     4440), is further amended--
       (i) in subparagraph (A), by striking ``to home health 
     services (other than a covered osteoporosis drug (as defined 
     in section 1861(kk))) and'';
       (ii) in subparagraph (E), by striking ``and'' at the end;
       (iii) in subparagraph (F), by striking the semicolon at the 
     end and inserting ``; and''; and
       (iv) by adding at the end the following new subparagraph:
       ``(G) with respect to any home health service (other than a 
     covered osteoporosis drug (as defined in section 1861(kk)))--
       ``(i) the lesser of --

       ``(I) the reasonable cost of such service, as determined 
     under section 1861(v); or
       ``(II) the customary charges with respect to such service;

     less the amount a provider may charge as described in clause 
     (ii) of section 1866(a)(2)(A); or
       ``(ii) if such service is furnished by a public provider of 
     services, or by another provider that demonstrates to the 
     satisfaction of the Secretary that a significant portion of 
     its patients are low-income (and requests that payment be 
     made under this clause), free of charge or at nominal charges 
     to the public, the amount determined in accordance with 
     section 1814(b)(2).''.
       (3) Provider charges.--Section 1866(a)(2)(A)(i) of the 
     Social Security Act (42 U.S.C. 1395cc(a)(2)(A)(i)) is 
     amended--
       (A) by striking ``deduction or coinsurance'' and inserting 
     ``deduction, coinsurance, or copayment''; and
       (B) by striking ``or (a)(4)'' and inserting ``(a)(4), or 
     (a)(5)''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to home health services furnished on or after 
     January 1, 1996.

     SEC. 203. REDUCTION IN PAYMENTS FOR CAPITAL-RELATED COSTS FOR 
                   INPATIENT HOSPITAL SERVICES.

       (a) PPS Hospitals.--
       (1) Reduction in base payment rates for pps hospitals.--
     Section 1886(g)(1)(A) of the Social Security Act (42 U.S.C. 
     1395ww(g)(1)(A)) is amended by adding at the end the 
     following new sentence: ``In addition to the reduction 
     described in the preceding sentence, for discharges occurring 
     after September 30, 1995, the Secretary shall reduce by 7.31 
     percent the unadjusted standard Federal capital payment rate 
     (as described in section 412.308(c) of title 42, Code of 
     Federal Regulations, as in effect on the date of enactment of 
     the Long-Term Care Reform and Deficit Reduction Act of 1995) 
     and shall reduce by 10.41 percent the unadjusted hospital-
     specific rate (as described in section 412.328(e)(1) of title 
     42, Code of Federal Regulations, as in effect on the date of 
     enactment of the Long-Term Care Reform and Deficit Reduction 
     Act of 1995).''.
       (2) Reduction in update.--Section 1886(g)(1) of the Social 
     Security Act (42 U.S.C. 1395ww(g)(1)) is amended--
       (A) in subparagraph (B)(i)--
       (i) by striking ``and (II)'' and inserting ``(II)''; and
     [[Page S306]]   (ii) by striking the semicolon at the end and 
     inserting the following: ``, and (III) an annual update 
     factor established for the prospective payment rates 
     applicable to discharges in a fiscal year that (subject to 
     reduction under subparagraph (C)) will be based upon such 
     factor as the Secretary determines appropriate to take into 
     account amounts necessary for the efficient and effective 
     delivery of medically appropriate and necessary care of high 
     quality;'';
       (B) by redesignating subparagraph (C) as subparagraph (D); 
     and
       (C) by inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C)(i) With respect to payments attributable to portions 
     of cost reporting periods or discharges occurring during each 
     of the fiscal years 1996 through 2003, the Secretary shall 
     include a reduction in the annual update factor established 
     under subparagraph (B)(i)(III) for discharges in the year 
     equal to the applicable update reduction described in clause 
     (ii) to adjust for excessive increases in capital costs per 
     discharge for fiscal years prior to fiscal year 1992 (but in 
     no event may such reduction result in an annual update factor 
     less than zero).
       ``(ii) In clause (i), the term `applicable update 
     reduction' means, with respect to the update factor for a 
     fiscal year--
       ``(I) 4.9 percentage points; or
       ``(II) if the annual update factor for the previous fiscal 
     year was less than the applicable update reduction for the 
     previous year, the sum of 4.9 percentage points and the 
     difference between the annual update factor for the previous 
     year and the applicable update reduction for the previous 
     year.''.
       (b) PPS-Exempt Hospitals.--Section 1861(v)(1) of the Social 
     Security Act (42 U.S.C. 1395x(v)(1)) is further amended by 
     adding at the end the following new subparagraph:
       ``(T) Such regulations shall provide that, in determining 
     the amount of the payments that may be made under this title 
     with respect to the capital-related costs of inpatient 
     hospital services furnished by a hospital that is not a 
     subsection (d) hospital (as defined in section 1886(d)(1)(B)) 
     or a subsection (d) Puerto Rico hospital (as defined in 
     section 1886(d)(9)(A)), the Secretary shall reduce the 
     amounts of such payments otherwise established under this 
     title by 15 percent for payments attributable to portions of 
     cost reporting periods occurring during each of the fiscal 
     years 1996 through 2003.''.

     SEC. 204. ELIMINATION OF FORMULA-DRIVEN OVERPAYMENTS FOR 
                   CERTAIN OUTPATIENT HOSPITAL SERVICES.

       (a) Ambulatory Surgical Center Procedures.--Section 
     1833(i)(3)(B)(i)(II) of the Social Security Act (42 U.S.C. 
     1395l(i)(3)(B)(i)(II)) is amended--
       (1) by striking ``of 80 percent''; and
       (2) by striking the period at the end and inserting the 
     following: ``, less the amount a provider may charge as 
     described in clause (ii) of section 1866(a)(2)(A).''.
       (b) Radiology Services and Diagnostic Procedures.--Section 
     1833(n)(1)(B)(i)(II) of the Social Security Act (42 U.S.C. 
     1395l(n)(1)(B)(i)(II)) is amended--
       (1) by striking ``of 80 percent''; and
       (2) by striking the period at the end and inserting the 
     following: ``, less the amount a provider may charge as 
     described in clause (ii) of section 1866(a)(2)(A).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to services furnished during portions of cost 
     reporting periods occurring on or after July 1, 1995.

     SEC. 205. REDUCTION IN ROUTINE COST LIMITS FOR HOME HEALTH 
                   SERVICES.

       (a) Reduction in Update To Maintain Freeze in 1996.--
       (1) In general.--Section 1861(v)(1)(L)(i) of the Social 
     Security Act (42 U.S.C. 1395x(v)(1)(L)(i)) is amended--
       (A) in subclause (II), by striking ``or'' at the end;
       (B) in subclause (III), by striking ``112 percent,'' and 
     inserting ``and before July 1, 1996, 112 percent, or''; and
       (C) by inserting after subclause (III) the following new 
     subclause:
       ``(IV) July 1, 1996, 100 percent (adjusted by such amount 
     as the Secretary determines to be necessary to preserve the 
     savings resulting from the enactment of section 13564(a)(1) 
     of the Omnibus Budget Reconciliation Act of 1993),''.
       (2) Adjustment to limits.--Section 1861(v)(1)(L)(ii) of the 
     Social Security Act (42 U.S.C. 1395x(v)(1)(L)(ii)) is amended 
     by adding at the end the following new sentence: ``The effect 
     of the amendments made by section 205(a)(1) of the Long-Term 
     Care Reform and Deficit Reduction Act of 1995 shall not be 
     considered by the Secretary in making adjustments pursuant to 
     this clause.''.
       (b) Basing Limits in Subsequent Years on Median of Costs.--
       (1) In general.--Section 1861(v)(1)(L)(i) of the Social 
     Security Act (42 U.S.C. 1395x(v)(1)(L)(i)), as amended by 
     subsection (a), is amended in the matter following subclause 
     (IV) by striking ``the mean'' and inserting ``the median''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to cost reporting periods beginning on or after 
     July 1, 1997.
                                                                    ____

              Summary of Long-Term Care Reform Legislation


                                Overall

       The measures establishes a new home and community-based 
     long-term care program to persons of all ages. The program 
     would provide funds to States in the form of a block grant, 
     matched by State funds, on a voluntary basis. Federal and 
     State financial participation is capped, and the program 
     would not constitute an entitlement to individuals. In 
     particular, neither States nor the Federal government would 
     be required to spend anymore than set forth by this measure.


                              ELIGIBILITY

       Those meeting any of the following criteria would be 
     eligible for the program:
       (1) Individuals requiring assistance with three or more 
     activities of daily living.
       (2) Individuals with severe mental retardation.
       (3) Individuals with severe cognitive or mental impairment.
       (4) Children, under 6, with severe disabilities.
       In addition, States could set aside up to 2% of their 
     program funding for individuals who may not meet any one of 
     the above criteria, but who have a disability of comparable 
     level of severity.


                                SERVICES

       States participating in the program would be required to 
     provide assessment, plan of care, personal assistance, and 
     case management services. In addition, states may also offer 
     homemaker services, home modifications, respite, assistive 
     devices, adult day care, habilitation/rehabilitation, 
     supported employment home health care, and any other service 
     at State discretion.


                      FEDERAL ALLOTMENT TO STATES

       The total Federal allotment to States under this program 
     would be:
       (A) For fiscal year 1997, $1,800,000,000
       (B) For fiscal year 1998, $3,500,000,000
       (C) For fiscal year 1999, $5,800,000,000
       (D) For fiscal year 2000, $7,300,000,000
       (E) For fiscal year 2001, $10,000,000,000
       (F) For fiscal year 2002, $15,700,000,000
       (G) For fiscal year 2003, $22,800,000,000
       (H) For fiscal year 2004, $30,700,000,000
       (I) For fiscal year 2005, $34,600,000,000.
       Thereafter, the total Federal allotment would be increased 
     by factors relating to inflation, and the change in the 
     number of disabled.
       In addition, States would be allowed to capture any 
     Medicaid savings generated by the new benefit, and apply that 
     savings to their program.


                       Copayments and Deductibles

       The program includes a sliding scale payment schedule for 
     eligible individuals based on income. Individuals with 
     incomes below 150% of poverty would have no copayment or 
     deductible. Above 150% of poverty, copayments and deductibles 
     would range from 10% and $100 respectively for those with 
     incomes between 150% and 175% of poverty, up to 40% and $600 
     respectively for those with incomes above 400% of poverty.


                   Hospital/Home & Community Linkage

       The program includes a hospital/home and community-based 
     long-term care linkage program, to establish and expand State 
     run programs designed to help facilitate the placement of 
     individuals in need of long-term health care services into 
     home- and community-based settings rather than institutional 
     settings. This provision authorizes up to $5 million per year 
     for three years.


                           Funding Provisions

       The measure includes the following modifications to 
     Medicare:
       Applies an income test to Medicare Part B premiums for 
     individuals with incomes over $100,000 and couples with 
     incomes over $125,000, increasing to 100% of Medicare costs 
     for individuals with incomes over $125,000 and couples with 
     incomes over $150,000.
       Applies a 10% copayment to home health services for 
     individuals with incomes over 150% of poverty.
       Modifies aggregate cost limits for home health agencies.
       Eliminates formula-driven overpayments to hospitals for 
     certain outpatient services.
       Modifies reimbursement for inpatient-related capital costs.
                                 ______

      By Mr. FEINGOLD:
  S. 86. A bill to modify the estate recovery provisions of the 
medicaid program to give States the option to recover the costs of home 
and community-based services for individuals over age 55, and for other 
purposes; to the Committee on Finance.


                THE MEDICAID ESTATE RECOVERY ACT OF 1995
  Mr. FEINGOLD. Mr. President, I am pleased to reintroduce legislation 
today to eliminate the current mandate on States to place liens on the 
homes and estates of older medicaid beneficiaries receiving home and 
community-based long-term care services, and to provide more than 
adequate funding for that change by establishing a certificate of need 
process to regulate the growth of federally funded nursing home beds.
  This legislation was made necessary by an interpretation being made 
by the Health Care Financing Administration [HCFA] of language included 
in the Omnibus Budget Reconciliation Act of 1993 [OBRA 93]. 
Specifically, language 
[[Page S307]] was included relating to States' recovering Medicaid 
payments from the estates of beneficiaries, for certain services to 
people over age 55. HCFA has interpreted OBRA 93 to mandate the 
recovery of, among other things, home and community-based long-term 
care services.
  Unless changed, States will have to implement the mandate.
  This legislation modifies the estate recovery provisions of OBRA 93 
to clarify that States may pursue recovery of the cost of Medicaid home 
and community-based long-term care services from the estates of 
beneficiaries, but that States are not required to do so.
  Mr. President, in the past, States have had the option of recovering 
payments for those services from the estates of beneficiaries, but in 
some cases, at least, have chosen not to do so.
  In Wisconsin, estate recovery for home and community-based long-term 
care services was implemented briefly in 1991, but was terminated 
because of the significant problems experienced with the home and 
community-based Medicaid waiver programs.
  Many cases were documented where individuals needing long-term care 
refused community-based care because of their fear of estate recovery 
or the placement of a lien on their homes.
  One case in southwestern Wisconsin involved an older woman who was 
suffering from Congestive Heart Failure, phlebitis, severe arthritis, 
and who had difficulty just being able to move. She was being screened 
for the Medicaid version of Wisconsin's model home and community-based 
long-term care program, the Community Options Program, when the 
caseworker told her of the new law, and
 that a lien would be put on the estate of the program's clients. The 
caseworker reported that the older woman began to sob, and told the 
caseworker that she had worked hard all her life and paid taxes and 
could not understand why the things she had worked for so hard would be 
taken from her family after her death.

  When asked if she would like to receive services, the client refused. 
As frail as this client was, the social worker noted that she preferred 
to chance being on her own rather than endanger her meager estate by 
using Medicaid funded services.
  In northeastern Wisconsin, a 96 year old woman was being cared for by 
her 73 year old widowed daughter in their home. The family was 
receiving some Medicaid long-term care services, including respite 
services for the elderly caregiver daughter, but the family 
discontinued all services when they heard of the new law because the 
older daughter needed to count on the home for security in her own old 
age.
  A 72 year old man, who had 4 by-pass surgeries and was paralyzed on 
one side, and his 66 year old wife, who had 3 by-pass surgeries and 
rheumatoid arthritis, both needed some assistance to be able to live 
together at home. But when Medicaid was suggested, they refused because 
of the new law.
  Mr. President, these examples are not unusual.
  Nor were many of the individuals and families who refused help 
protecting vast estates. For many, the estates being put at risk were 
modest at best.
  A couple in the Green Bay area of Wisconsin who lived in a mobile 
home and had less than $20,000 in life savings told the local Benefit 
Specialist that they would refuse Medicaid funded services rather than 
risk not leaving their small estate to their family members.
  Leaving even a small bequest to a loved-one is a fundamental and 
deeply felt need of many seniors. Even the most modest home can 
represent a lifetime's work, and many are willing to forego medical 
care they know they need to be able to leave a small legacy.
  The prospect of estate recovery requirements is not a happy one for 
program administrators either. State, counties, and non-profit 
agencies, administrators of Medicaid services, are ill-equipped to be 
real estate agents.
  Divestment concerns in the Medicaid program, already a problem, could 
continue to grow as pressure to utilize existing loopholes increases 
with estate recovery mandated in this way. Worse, as the Coalition of 
Wisconsin Aging Groups has pointed out, children who feel ``entitled to 
inheritance'' might force transfers, constituting elder abuse in some 
cases.
  Too, Mr. President, there is a very real question of age 
discrimination with the estate recovery provisions of OBRA 93. Only 
individuals over age 55 are subject to estate recovery. Such age-based 
distinctions border on age discrimination and ought to be minimized.
  Mr. President, I strongly believe we must be prudent in estimating 
the costs of legislative proposals, and to that end it is vital that we 
accept the cost estimates from the Congressional Budget Office [CBO] 
for purposes of assessing the budgetary impact of legislation and how 
those impacts are to be offset. For those reasons, I have included 
provisions in this measure that are scored by CBO to more than offset 
the officially estimated loss in savings from the estate recovery 
mandate.
  But, Mr. President, I also believe that the expected savings from 
this mandate are questionable.
  Prior to enacting estate recovery in Wisconsin, officials estimated 
$13.4 million a year could be recovered by the liens. Real collections 
fell far short. For fiscal year 1992, the State only realized a 
reported $1 million in collections. And for the period of January to 
July of 1993, even after officials lowered their estimates, only $2.2 
million was realized of an expected $3.8 million in collections.
  In addition to lower than expected collections, the refusal to accept 
home and community-based long-term care because of the prospect of a 
lien on the estate could lead to the earlier and more costly need for 
institutional care. Such a result would not only undercut the 
questionable savings from the program, but would be directly contrary 
to the Medicaid home and community-based waiver program, which is 
intended precisely to keep people out of institutions and in their own 
homes and communities.
  The brief experience we had in Wisconsin led the State to limit 
estate recovery to nursing home care and related services, where, as a 
practical matter, the potential for estate recovery and liens on homes 
are much less of a barrier to services.
  Indeed, just as we should provide financial incentives to individuals 
to use more cost-effective care, so too should we consider financial 
disincentives for more costly alternatives. A recent study in Wisconsin 
showed that two Medicaid waiver programs saved $17.6 million in 1992 by 
providing home and community-based alternatives to institutional care.
  In that context, including the more expensive institutional care 
alternatives in the estate recovery mandate makes good sense, and my 
legislation would not change that portion of the law.
  But it does not make sense to jeopardize a program that has produced 
many more times the savings in lowered institutional costs than even 
the overly optimistic estimates suggest could be recovered from the 
estates of those receiving home and community-based long-term care.
  All in all, the estate recovery provisions of OBRA 93, as interpreted 
by HCFA, will generate little additional revenue, are likely to produce 
more expensive utilization of Medicaid services, may cause an 
administrative nightmare for state and local government, could 
aggravate the divestment problem, may result in increased elder abuse, 
and could well constitute age discrimination.
  Though many long-term care experts maintain that mandating estate 
recovery for home and community-based long-term care services will only 
lead to increased utilization of more expensive institutional 
alternatives, and thus increased cost to Federal taxpayers, the CBO 
estimated a revenue loss of $20 million in the first year and $260 
million over five years for this proposal.
  As I noted above, it is important to act responsibly to fund that 
formal cost estimate with offsetting spending cuts. The additional 
savings I firmly believe will be generated beyond the scored amounts 
would then help reduce our Federal budget deficit.
  This measure includes a provision that more than offsets the official 
scored revenue loss from eliminating the estate recovery mandate. That 
provision regulates the growth in the number of nursing home beds 
eligible for Federal funding through Medicaid, Medicare, or other 
Federal programs 
[[Page S308]] by requiring providers to obtain a certificate of need 
[CON] to operate additional beds.
  For any specified area, States would issue a CON only if the ratio of 
the number of nursing home beds to the population that is likely to 
need them falls below guidelines set by the State
 and subject to Federal approval.

  This approach allows new nursing home beds to operate where there is 
a demonstrated need, while limiting the potential burden on the 
taxpayer where no such need has been established.
  Slowing the growth of nursing home beds is critical to reforming the 
current long-term care system. In Wisconsin, limiting nursing home bed 
growth has been part of the success of the long-term care reforms 
initiated in the early 1980s. While the rest of the country experienced 
a 24 percent increase in Medicaid nursing home bed use during the 
1980s, Wisconsin saw Medicaid nursing home bed use decline by 19 
percent.
  The certificate of need provision is far more modest than the 
absolute cap on nursing home beds adopted in Wisconsin, and recognizes 
that there needs to be some flexibility to recognize the differences of 
long-term care services among States.
  It is also consistent with the kind of long-term care reform I will 
be proposing as separate legislation, as well as the reforms included 
in several of the major health care reform proposals of last session.
  Certainly, our ability to reform long-term care will depend not only 
on establishing a consumer-oriented, consumer-driven home and 
community-based benefit that is available to the severely disabled of 
all ages, but also on establishing a more balanced and cost-effective 
allocation of public support of long-term care services by eliminating 
the current bias toward institutional care.
  As I noted above, an analysis by the CBO estimated the lost revenue 
from eliminating the State mandate on home and community-based services 
at $20 million in the first year, and $260 million over 5 years. 
However, in their spending and revenue options document for 1994, CBO 
estimates that the proposed regulation of nursing home bed growth would 
generate savings of $35 million in the first year, and $625 million 
over 5 years. The combined effect of this proposal, then, would be to 
generate about $15 million in savings in the first year, and $365 
million over 5 years.
  Mr. President, taken together, the change in the estate recovery 
provisions and the slowing of nursing home bed growth, these two 
provisions will help shift the current distorted Federal long-term care 
policy away from the institutional bias that currently exists and 
toward a more balanced approach that emphasizes home and community-
based services.
  This is the direction that we will need to take if we are to achieve 
significant long-term care reform.
  Mr. President, I ask unanimous consent that the text of the 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 86

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

     SECTION 1. MEDICAID ESTATE RECOVERIES.

       Section 1917(b)(1)(B) of the Social Security Act (42 U.S.C. 
     1396p(b)(1)(B)) is amended by striking ``consisting of--'' 
     and all that follows and inserting the following: 
     ``consisting of--
       ``(i) nursing facility services and related hospital and 
     prescription drug services; and
       ``(ii) at the option of the State, any additional items or 
     services under the State plan.''

     SEC. 2. REQUIRING STATES TO REGULATE GROWTH IN THE NUMBER OF 
                   NURSING FACILITY BEDS.

       (a) In General.--A nursing facility shall not receive 
     reimbursement under the medicare program under title XVIII of 
     the Social Security Act, the medicaid program under title XIX 
     of such Act, or any other Federal program for services 
     furnished with respect to any beds first operated by such 
     facility on or after the date of the enactment of this Act 
     unless a certificate of need is issued by the State with 
     respect to such beds.
       (b) Issuance of Certificate.--A certificate of need may be 
     issued by a State with respect to a geographic area only if 
     the ratio of the number of nursing facility beds in such area 
     to the total population in such area that is likely to need 
     such beds is below the ratio included in guidelines that are 
     established by the State and approved by the Secretary of 
     Health and Human Services under subsection (c).
       (c) Approval of Guidelines.--The Secretary of Health and 
     Human Services shall promulgate regulations under which 
     States may submit proposed guidelines for the issuance of 
     certificates of need under subsection (b) for review and 
     approval.
                                 ______

      By Mr. INOUYE:
  S. 87. A bill to amend the Foreign Trade Zones Act to permit the 
deferral of payment of duty on certain production equipment; to the 
Committee on Finance.


           THE FOREIGN TRADE ZONES ACT AMENDMENT ACT OF 1995

  Mr. INOUYE. Mr. President, I am introducing legislation today to 
amend Chapter 74 of Title 38, United States Code, to revise certain 
provisions relating to the appointment of clinical and counseling 
psychologists in the Veterans Health Administration [VHA].
  The VHA has a long history of maintaining a staff of the very best 
health care professionals to provide care to those men and women who 
have served their country in the Armed Forces. It is certainly fitting 
that this should be done.
  Recently a quite distressing situation regarding the care of our 
veterans has come to my attention. In particular, the recruitment and 
retention of psychologists in the VHA of the Department of Veterans 
Affairs has become a significant problem.
  The Congress has recognized the important contribution of the 
behavioral sciences in the treatment of several conditions from which a 
significant portion of our veterans suffer. For example, programs 
related to homelessness, substance abuse, and post traumatic stress 
disorder [PTSD] have received funding from the Congress in recent 
years.
  Certainly, psychologists, as behavioral science experts, are 
essential to the successful implementation of these programs. However, 
the high vacancy and turnover rates for psychologists in the VHA (over 
11% and 18% respectively as reported in one recent survey) might 
seriously jeopardize these programs and will negatively impact overall 
patient care in the VHA.
  Recruitment of psychologists by the VHA is hindered by a number of 
factors including a pay scale not commensurate with private sector 
rates of pay as well as by the low number of clinical and counseling 
psychologists appearing on the register of the Office of Personnel 
Management [OPM]. Most new hires have no post-doctoral experience and 
are hired immediately after a VA internship. Recruitment, when 
successful, takes up to six months or more.
  Retention of psychologists in the VA system poses an even more 
significant problem. I have been informed that almost 40% of VHA 
psychologists had five years or less of post-doctoral experience. 
Without doubt, our veterans would benefit from a higher percentage of 
senior staff who are more experienced in working with veterans and 
their particular concerns. May bill provides incentives for 
psychologists to continue their work with the VHA and seek additional 
education and training.
  Several factors are associated with the difficulties in retention of 
VHA psychologists including low salaries and lack of career advancement 
opportunities. It seems that psychologists are apt to leave the VA 
system after 5 years because they have almost reached peak levels for 
salary and professional development in the VHA. Furthermore, under the 
present system psychologists cannot be recognized nor appropriately 
compensated for excellence or for taking on additional responsibilities 
such as running treatment programs.
  In effect, the current system for hiring psychologists in the VHA 
supports mediocrity, not excellence and mastery. Our veterans with 
behavioral disorders and mental health problems are deserving of better 
psychological care from more experienced professionals than they are 
currently receiving.
  A hybrid Title 38 appointment authority for psychologists would help 
ameliorate the recruitment and retention problems in several ways. The 
length of time it takes to recruit psychologists could be abbreviated 
by eliminating the requirement for applicants to be rated by the Office 
of Personnel Management. This would also facilitate the recruitment of 
applicants who are not recent VA interns by reducing the amount of time 
between 
[[Page S309]] identifying a desirable applicant and being able to offer 
that applicant a position.
  It is expected that problems in retention of behavioral science 
experts will be greatly alleviated with the implementation of a hybrid 
Title 38 system for VA psychologists, primarily through offering 
financial incentives for psychologists to pursue professional 
development with the VHA. Achievements that would merit salary 
increases under Title 38 should include such activities as assuming 
supervisory responsibilities for clinical programs, implementing 
innovative clinical treatments that improve the effectiveness and/or 
efficiency of patient care, making significant contributions to the 
science of psychology, earning the ABPP diplomat status, and becoming a 
Fellow of the American Psychological Association.
  Currently, psychologists are the only doctoral level health care 
providers in the VHA who are not included in Title 38. This is, without 
question, a significant factor in the recruitment and retention 
difficulties that I have addressed. Ultimately, an across-the-board 
salary increase might be necessary. However, the conversion of 
psychologists to a hybrid Title 38, as proposed by this amendment, 
would provide relief for these difficulties and enhance the quality of 
care for our Nation's veterans and their families.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. DEFERRAL OF DUTY ON CERTAIN PRODUCTION EQUIPMENT.

       (a) In General.--Section 3 of the Act of June 18, 1934 
     (commonly known as the Foreign Trade Zones Act, 19 U.S.C. 
     81c) is amended by adding at the end thereof the following 
     new subsection:
       ``(e) Production Equipment.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, if all applicable customs laws are complied with (except 
     as otherwise provided in this subsection), merchandise which 
     is entered into a foreign trade zone for use within such zone 
     as production equipment or as parts for such equipment, shall 
     not be subject to duty until such merchandise is completely 
     assembled, installed, tested, and used in the production for 
     which it was entered. The duty imposed on such merchandise 
     shall be at the same rate as would have been imposed (but for 
     the provisions of this subsection) on such merchandise had 
     duty been imposed on such merchandise at the time of entry 
     into the customs territory of the United States.
       ``(2) Foreign trade zone.--For purposes of this subsection, 
     the term `foreign trade zone' includes a subzone as defined 
     in section 146.1(b)(17) of chapter 19, Code of Federal 
     Regulations.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to merchandise entered, or withdrawn 
     from warehouse for consumption, after the date that is 15 
     days after the date of the enactment of this Act.
                                 ______

      By Mr. INOUYE:
  S. 89. A bill to amend the Science and Engineering Equal 
Opportunities Act; to the Committee on Labor and Human Resources.


 the science and engineering equal opportunities act amendment act of 
                                  1995

  Mr. INOUYE. Mr. President, I rise to introduce a bill that begins to 
address the need for culturally sensitive math and science education 
targeted toward Native American, Native Hawaiian and Pacific Islander 
students.
  Native American, Native Hawaiian and Pacific Island students perform 
significantly below the national average in these subjects at the 
elementary and secondary levels and are extremely underrepresented in 
math and science majors at the college level. My legislation would 
provide for the development and implementation of culturally sensitive 
math and science curricula emphasizing the scientific achievements of 
these native cultures.
  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. 89

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

     SECTION 1. AMENDMENT TO THE SCIENCE AND ENGINEERING EQUAL 
                   OPPORTUNITIES ACT.

       (a) Opportunities for Students.--Section 32 of the Science 
     and Engineering Equal Opportunities Act (42 U.S.C. 1885) is 
     amended by adding at the end the following new subsection:
       ``(c)(1) The Congress finds that Native Hawaiian students, 
     students who are Pacific Islanders, and Native American 
     students are underrepresented in science, computer science, 
     and engineering. Such students face both cultural barriers to 
     the study of science and geographical isolation.
       ``(2) The Director is authorized to make awards to 
     institutions of higher education, including community 
     colleges, and local educational agencies to work in 
     partnership with community organizations to develop and 
     implement science, computer science, technology, and 
     mathematics curricula that--
       ``(A) are in accord with the traditional cultural values of 
     the students described in paragraph (1);
       ``(B) emphasize the scientific achievements of the native 
     cultures of such students; and
       ``(C) encourage enrollment of such students in higher 
     education.''.
                                 ______

      By Mr. HATFIELD:
  S. 88. A bill to increase the overall economy and efficiency of 
Government operations and enable more efficient use of Federal funding, 
by enabling local governments and private, nonprofit organizations to 
use amounts available under certain Federal assistance programs in 
accordance with approved local flexibility plans; to the Committee on 
Governmental Affairs.
  S. 90. A bill to amend the Job Training Partnership Act to improve 
the employment and training assistance programs for dislocated workers, 
and for other purposes; to the Committee on Labor and Human Resources.
                                 ______

      By Mr. HATFIELD (for himself and Mrs. Murray):
  S. 92. A bill 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.
                                 ______

      By Mr. HATFIELD.
  S. 93. A bill to amend the Federal Land Policy and Management Act of 
1976 to provide for ecosystem management, and for other purposes; to 
the Committee on Energy and Natural Resources.


                         LEGISLATIVE PRIORITIES
  Mr. HATFIELD. Mr. President, this country has crossed many thresholds 
of change in the past two hundred years. As we being the 104th Congress 
today, we face another set of challenges. The opportunity to change 
direction in our national domestic policy is again offered to us, 
facilitated by the recent change in leadership.
  The Republican call to return to the essence of democracy--
federalism--is especially exciting. I intend to dedicate myself this 
Congress to redefining Federal programs to enhance the efforts already 
underway in the States. I am convinced, as are many of my colleagues, 
that the best policy making in this country is bubbling forth from 
laboratories commonly known as our United States.
  To inaugurate the new year and the new Congress, I am introducing 
five of my key legislative priorities today. First, in what I intend to 
be a series of proposals, are three bills designed to decrease the 
burden of Federal compliance and oversight measures in key policy 
areas. In exchange for loosening the Federal regulatory straightjacket, 
we will transform accountability from paperwork requirements to 
performance-based results. I call this the ``flexibility factor'' in 
government and it entails finding a path through every Federal agency 
where innovation at the State and local level is nurtured and rewarded. 
We have already had some success in this area in the Department of 
Education--Secretary Riley and his staff have worked with Congress to 
capitalize on being more responsive and flexible with States which are 
on the cutting edge of educational reform. This example will help guide 
us through the same land mines in other Federal agencies.
  Second, I am introducing today two bills which focus on some of the 
major issues in the Northwest. The first deals with stabilizing the 
longterm outlook for the major provider of power supply in the 
Northwest, the Bonneville Power Administration, and the second 
considers the future of natural resource management.
  Mr. President, this is not an exclusive list of my priorities for the 
104th Congress. I will have other proposals-- 
[[Page S310]] particularly in the areas of small business development, 
youth violence prevention, international arms transfers, and recycling, 
to enumerate just a few. Yet the initiatives I have put forth today 
define two of the major themes I have exercised throughout my political 
career and will continue to advance in the current Congress--enhancing 
the innovation in our State laboratories by removing Federal restraints 
to reform, and wise utilization and management of our Nation's natural 
resources.
  The bills I submit for consideration by the Senate are the following:
     I. The Local Empowerment and Flexibility Act of 1995 (Local-
         Flex)
  Flexibility, accountability, and efficiency are qualities we, as 
consumers, expect from private industry. Americans expect and deserve 
to have those same qualities present in their government as well, 
whether at the Federal, State, or local level. As the Congress plans 
its Federal government reforms, it should use these qualities as its 
measures of success.
  We have already witnessed some substantive steps in addressing these 
goals. This reform oriented approach is apparent in the unfunded 
mandate legislation and in the Administration's proposal to restructure 
and consolidate Federal agencies and programs. While these proposals 
have merit, I believe that rash reform decisions can lead to the 
omission of a reservoir of great ideas.
  This reservoir of ideas is located throughout the country in our 
State, local, and community governments. In order to tap into this 
stock of ideas and innovation I am introducing The Local Empowerment 
and Flexibility Act of 1995. I introduced a similar bill in the 103d 
Congress which was passed in the Senate by a vote of 97-0 as an 
amendment to the National Competitiveness Act.
  The Local Empowerment and Flexibility Act of 1995 is premised on two 
ideas. First, Federal regulation treats all communities alike despite 
their inherent differences. Local governments are eligible for hundreds 
of separate Federal categorical grants to provide services and 
implement Federal programs. To be effective those programs must 
recognize the differences among communities and permit variation in 
spending and enforcement based on local needs. Second, regulatory red 
tape has stifled the very resources designed to provide services and 
address problems. Many programs are too narrow, and this regulatory 
rigidity translates into funding spent wastefully in audits and record-
keeping rather than directed to meet community needs.
  The Local Empowerment and Flexibility Act of 1995 would establish a 
framework for local governments to prepare ``Local Flexibility Plans'' 
including a road map for integrating Federal funds at the local level 
to meet local needs. The local government would identify all Federal, 
State, local and private resources they would use, and any Federal, 
State and local regulations which would need to be waived. This would 
enable local governments and non-profit organizations to adapt Federal 
funds and related programs to their local area by drawing on 
appropriations from more than one Federal program and integrating funds 
across existing Federal categories. By involving the community in 
developing these ``Local Flexibility Plans'', efficiency of Federal, 
State, and local resources would be greatly increased.
  Mr. President, at a time when the our Federal treasury is being 
squeezed from all sides for funding priorities, it is imperative that 
funds are allocated in the most efficient and effective manner 
possible. I know this legislation would assist the Federal, State, and 
local governments in the accomplishment of that goal.
  I ask unanimous consent that the text of the bill, along with a 
section-by-section analysis be included in the Record, following my 
remarks.
     II. The Worker Retraining Flexibility Act of 1995 (Labor 
         Flex)
  It is no secret, Mr. President, that dislocation of the labor force 
has been a significant issue in my State and in the entire Northwest--
an area heavily impacted by the Endangered Species Act. The Northern 
Spotted Owl was just the tip of the iceberg in terms of transition to 
new employment for many of the natural resources workers in my State. 
In fact, we have lost over 15,000 jobs in the forest products industry 
in my State since the owls listing in 1990.
  Most of these jobs have been in rural areas built up around saw mills 
which are dependent on Federal timber supply. Our State, with its 
growing high tech industry, has been able to cushion this blow in terms 
of total employment, but the rural areas dependent on Federal timber 
are continuing to be devastated. For example, just before Christmas in 
the Eastern Oregon town of Burns, with a population of 2,880, Snow 
Mountain Pine announced that, due to the lack of Federal timber supply, 
it would be permanently closing its doors on 184 workers in early 1995. 
This work force reduction and others are coming as a direct result of 
the forest protection policies of this Administration and more are 
anticipated in the future. Retraining of our labor force, particularly 
those dislocated due to Federal policy, continues to be one of my 
highest priorities.
  For the last 3 years I have introduced various forms of legislation 
in this area, specifically the Endangered Species Employment Transition 
Assistance Act and the Environmental Employment Transition Assistance 
Act. The premise of these bills has been that if workers lose their 
jobs due to Federal environmental laws or regulation, the Federal 
government has a responsibility to see that their basic needs are met 
while they participate in worker retaining programs. The objective of 
these bills was to create a new set aside under our national retraining 
programs that would have provided dislocated workers easier access to 
needs-based related payments after their 26 weeks of unemployment 
insurance ended so that they could complete their long-term retraining 
programs. Congress has created similar set asides over the years for 
workers dislocated due to Federal efforts to clean the air and promote 
or increase trade.
  But the sands have shifted in the last year. In 1994, the Government 
Accounting Office reported to me that the Federal government has an 
inventory of 154 Federal vocational educational and retraining programs 
which, collectively, create an enormous potential for duplication of 
effort, raising questions concerning administrative
 costs at all levels of government. For this, as well as other reasons, 
I believe that a review and consolidation of these programs is in 
order. Rather than adding further to this current administrative 
burden, I have redrafted my legislation to improve the existing Job 
Training Partnership Act without creating a new program.

  The Worker Retraining Flexibility Act of 1995 which I am introducing 
today will make three important changes to the existing JTPA statute in 
order to provide a great deal more flexibility in addressing the long-
term needs of dislocated workers. Specifically, the bill would: remove 
the limitation in the statute which prohibits States from using more 
than 25 percent of the funds on needs-related payments and supportive 
services while still maintaining the 15 percent ceiling on 
administrative costs; modify the State waiver which permits a governor 
to reduce to 30 percent the requirement that not less than 50 percent 
of the funds be used for retraining services; and finally, permit 
needs-related payments to those who have enrolled in retraining 
programs after the sixth week of a discretionary grant award rather 
than after the 13th week of being laid-off. Finally, the bill will 
create a new section requiring the Secretary of Labor to expend the 
Administration's commitment of $12 million from the discretionary 
reserve based on need, to provide retraining funding to dislocated 
workers in the Pacific Northwest.
  These provisions will eliminate major impediments that dislocated 
workers face while participating in long-term retraining programs and 
will enable communities to provide both the training and income support 
these workers need to re-enter the work force. It is an example of 
retooling a traditional federal program, based on advice and counsel 
from a State which has been managing a great deal of JTPA funds over 
the past several years. I included most of these provisions in the 
fiscal year 1995 Appropriations bill for the Department of Labor. 
However, these changes will only last for a single program year under 
the Job Training Partnership Act. I think 
[[Page S311]] we will soon see the need to make these changes permanent 
which is why I am offering this legislation. Until we streamline and 
consolidate our current retraining programs, I am committed to 
operating them in as flexible a manner as possible so States like 
Oregon can better assist our dislocated workers as they make the 
transition to new high skill family wage jobs.
  I ask unanimous consent that the text of the bill, along with a 
letter of support from the Oregon Economic Development Department, be 
included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 88

       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 ``Local Empowerment and 
     Flexibility Act of 1995''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) historically, Federal programs have addressed the 
     Nation's problems by providing categorical financial 
     assistance with detailed requirements relating to the use of 
     funds;
       (2) while the assistance described in paragraph (1) has 
     been directed at critical problems, some program requirements 
     may inadvertently impede the effective delivery of services;
       (3) the Nation's local governments and private, nonprofit 
     organizations are dealing with increasingly complex problems 
     which require the delivery of many kinds of services;
       (4) the Nation's communities are diverse, and different 
     needs are present in different communities;
       (5) it is more important than ever to provide programs 
     that--
       (A) promote more effective and efficient local delivery of 
     services to meet the full range of needs of individuals, 
     families, and society;
       (B) respond flexibly to the diverse needs of the Nation's 
     communities;
       (C) reduce the barriers between programs that impede local 
     governments' ability to effectively deliver services; and
       (D) empower local governments and private, nonprofit 
     organizations to be innovative in creating programs that meet 
     the unique needs of their communities while continuing to 
     address national policy goals; and
       (6) many communities have innovative planning and community 
     involvement strategies for providing services, but Federal, 
     State, and local regulations often hamper full implementation 
     of local plans.

     SEC. 3. PURPOSES.

       The purposes of this Act are to--
       (1) enable more efficient use of Federal, State, and local 
     resources;
       (2) place less emphasis in Federal service programs on 
     measuring resources and procedures and more emphasis on 
     achieving Federal, State, and local policy goals;
       (3) enable local governments and private, nonprofit 
     organizations to adapt programs of Federal financial 
     assistance to the particular needs of their communities, by--
       (A) drawing upon appropriations available from more than 
     one Federal program; and
       (B) integrating programs and program funds across existing 
     Federal financial assistance categories; and
       (4) enable local governments and private, nonprofit 
     organizations to work together and build stronger cooperative 
     partnerships to address critical service problems.

     SEC. 4. DEFINITIONS.

       For purposes of this Act--
       (1) the term ``approved local flexibility plan'' means a 
     local flexibility plan that combines funds from Federal, 
     State, local government or private sources to address the 
     service needs of a community (or any part of such a plan) 
     that is approved by the Flexibility Council under section 5;
       (2) the term ``community advisory committee'' means such a 
     committee established by a local government under section 9;
       (3) the term ``Flexibility Council'' means the council 
     composed of the--
       (A) Assistant to the President for Domestic Policy;
       (B) Assistant to the President for Economic Policy;
       (C) Secretary of the Treasury;
       (D) Attorney General;
       (E) Secretary of the Interior;
       (F) Secretary of Agriculture;
       (G) Secretary of Commerce;
       (H) Secretary of Labor;
       (I) Secretary of Health and Human Services;
       (J) Secretary of Housing and Urban Development;
       (K) Secretary of Transportation;
       (L) Secretary of Education;
       (M) Secretary of Energy;
       (N) Secretary of Veterans Affairs;
       (O) Secretary of Defense;
       (P) Director of Federal Emergency Management Agency;
       (Q) Administrator of the Environmental Protection Agency;
       (R) Director of National Drug Control Policy;
       (S) Administrator of the Small Business Administration;
       (T) Director of the Office of Management and Budget; and
       (U) Chair of the Council of Economic Advisers.
       (4) the term ``covered Federal financial assistance 
     program'' means an eligible Federal financial assistance 
     program that is included in a local flexibility plan of a 
     local government;
       (5) the term ``eligible Federal financial assistance 
     program''--
       (A) means a Federal program under which financial 
     assistance is available, directly or indirectly, to a local 
     government or a qualified organization to carry out the 
     specified program; and
       (B) does not include a Federal program under which 
     financial assistance is provided by the Federal Government 
     directly to a beneficiary of that financial assistance or to 
     a State as a direct payment to an individual;
       (6) the term ``eligible local government'' means a local 
     government that is eligible to receive financial assistance 
     under 1 or more covered Federal programs;
       (7) the term ``local flexibility plan'' means a 
     comprehensive plan for the integration and administration by 
     a local government of financial assistance provided by the 
     Federal Government under 2 or more eligible Federal financial 
     assistance programs;
       (8) the term ``local government'' means a subdivision of a 
     State that is a unit of general local government (as defined 
     under section 6501 of title 31, United States Code);
       (9) the term ``priority funding'' means giving higher 
     priority (including by the assignment of extra points, if 
     applicable) to applications for Federal financial assistance 
     submitted by a local government having an approved local 
     flexibility program, by--
       (A) a person located in the jurisdiction of such a 
     government; or
       (B) a qualified organization eligible for assistance under 
     a covered Federal financial assistance program included in 
     such a plan;
       (10) the term ``qualified organization'' means a private, 
     nonprofit organization described in section 501(c)(3) of the 
     Internal Revenue Code of 1986 that is exempt from taxation 
     under section 501(a) of the Internal Revenue Code of 1986; 
     and
       (11) the term ``State'' means the 50 States, the District 
     of Columbia, Puerto Rico, American Samoa, Guam, and the 
     Virgin Islands.

     SEC. 5. PROVISION OF FEDERAL FINANCIAL ASSISTANCE IN 
                   ACCORDANCE WITH APPROVED LOCAL FLEXIBILITY 
                   PLAN.

       (a) Payments to Local Governments.--Notwithstanding any 
     other provision of law, amounts available to a local 
     government or a qualified organization under a covered 
     Federal financial assistance program included in an approved 
     local flexibility plan shall be provided to and used by the 
     local government or organization in accordance with the 
     approved local flexibility plan.
       (b) Eligibility for Benefits.--An individual or family that 
     is eligible for benefits or services under a covered Federal 
     financial assistance program included in an approved local 
     flexibility plan may receive those benefits only in 
     accordance with the approved local flexibility plan.

     SEC. 6. APPLICATION FOR APPROVAL OF LOCAL FLEXIBILITY PLAN.

       (a) In General.--A local government may submit to the 
     Flexibility Council in accordance with this section an 
     application for approval of a local flexibility plan.
       (b) Contents of Application.--An application submitted 
     under this section shall include--
       (1)(A) a proposed local flexibility plan that complies with 
     subsection (c); or
       (B) a strategic plan submitted in application for 
     designation as an enterprise community or an empowerment zone 
     under section 1391 of the Internal Revenue Code of 1986;
       (2) certification by the chief executive of the local 
     government, and such additional assurances as may be required 
     by the Flexibility Council, that--
       (A) the local government has the ability and authority to 
     implement the proposed plan, directly or through contractual 
     or other arrangements, throughout the geographic area in 
     which the proposed plan is intended to apply; and
       (B) amounts are available from non-Federal sources to pay 
     the non-Federal share of all covered Federal financial 
     assistance programs included in the proposed plan; and
       (3) any comments on the proposed plan submitted under 
     subsection (d) by the Governor of the State in which the 
     local government is located;
       (4) public comments on the plan including the transcript of 
     at least 1 public hearing and comments of the appropriate 
     community advisory committee established under section 9; and
       (5) other relevant information the Flexibility Council may 
     require to approve the proposed plan.
       (c) Contents of Plan.--A local flexibility plan submitted 
     by a local government under this section shall include--
       (1) the geographic area to which the plan applies and the 
     rationale for defining the area;
       (2) the particular groups of individuals, by service needs, 
     economic circumstances, or other defining factors, who shall 
     receive services and benefits under the plan;
       (3)(A) specific goals and measurable performance criteria, 
     a description of how the plan is expected to attain those 
     goals and criteria;
     [[Page S312]]   (B) a description of how performance shall be 
     measured; and
       (C) a system for the comprehensive evaluation of the impact 
     of the plan on participants, the community, and program 
     costs;
       (4) the eligible Federal financial assistance programs to 
     be included in the plan as covered Federal financial 
     assistance programs and the specific benefits that shall be 
     provided under the plan under such programs, including--
       (A) criteria for determining eligibility for benefits under 
     the plan;
       (B) the services available;
       (C) the amounts and form (such as cash, in-kind 
     contributions, or financial instruments) of nonservice 
     benefits; and
       (D) any other descriptive information the Flexibility 
     Council considers necessary to approve the plan;
       (5) except for the requirements under section 8(b)(3), any 
     Federal statutory or regulatory requirement applicable under 
     a covered Federal financial assistance program included in 
     the plan, the waiver of which is necessary to implement the 
     plan;
       (6) fiscal control and related accountability procedures 
     applicable under the plan;
       (7) a description of the sources of all non-Federal funds 
     that are required to carry out covered Federal financial 
     assistance programs included in the plan;
       (8) written consent from each qualified organization for 
     which consent is required under section 6(b)(2); and
       (9) other relevant information the Flexibility Council may 
     require to approve the plan.
       (d) Procedure for Applying.--(1) To apply for approval of a 
     local flexibility plan, a local government shall submit an 
     application in accordance with this section to the Governor 
     of the State in which the local government is located.
       (2) A Governor who receives an application from a local 
     government under paragraph (1) may, by no later than 30 days 
     after the date of that receipt--
       (A) prepare comments on the proposed local flexibility plan 
     included in the application;
       (B) describe any State laws which are necessary to waive 
     for successful implementation of a local plan; and
       (C) submit the application and comments to the Flexibility 
     Council.
       (3) If a Governor fails to act within 30 days after 
     receiving an application under paragraph (2), the applicable 
     local government may submit the application to the 
     Flexibility Council.

     SEC. 7. REVIEW AND APPROVAL OF LOCAL FLEXIBILITY PLANS.

       (a) Review of Applications.--Upon receipt of an application 
     for approval of a local flexibility plan under this Act, the 
     Flexibility Council shall--
       (1) approve or disapprove all or part of the plan within 45 
     days after receipt of the application;
       (2) notify the applicant in writing of that approval or 
     disapproval by not later than 15 days after the date of that 
     approval or disapproval; and
       (3) in the case of any disapproval of a plan, include a 
     written justification of the reasons for disapproval in the 
     notice of disapproval sent to the applicant.
       (b) Approval.--(1) The Flexibility Council may approve a 
     local flexibility plan for which an application is submitted 
     under this Act, or any part of such a plan, if a majority of 
     members of the Council determines that--
       (A) the plan or part shall improve the effectiveness and 
     efficiency of providing benefits under covered Federal 
     programs included in the plan by reducing administrative 
     inflexibility, duplication, and unnecessary expenditures;
       (B) the applicant local government has adequately 
     considered, and the plan or part of the plan appropriately 
     addresses, any effect that administration of each covered 
     Federal program under the plan or part of the plan shall have 
     on administration of the other covered Federal programs under 
     that plan or part of the plan;
       (C) the applicant local government has or is developing 
     data bases, planning, and evaluation processes that are 
     adequate for implementing the plan or part of the plan;
       (D) the plan shall more effectively achieve Federal 
     financial assistance goals at the local level and shall 
     better meet the needs of local citizens;
       (E) implementation of the plan or part of the plan shall 
     adequately achieve the purposes of this Act and of each 
     covered Federal financial assistance program under the plan 
     or part of the plan;
       (F) the plan and the application for approval of the plan 
     comply with the requirements of this Act;
       (G) the plan or part of the plan is adequate to ensure that 
     individuals and families that receive benefits under covered 
     Federal financial assistance programs included in the plan or 
     part shall continue to receive benefits that meet the needs 
     intended to be met under the program; and
       (H) the local government has--
       (i) waived the corresponding local laws necessary for 
     implementation of the plan; and
       (ii) sought any necessary waivers from the State.
       (2) The Flexibility Council may not approve any part of a 
     local flexibility plan if--
       (A) implementation of that part would result in any 
     increase in the total amount of obligations or outlays of 
     discretionary appropriations or direct spending under covered 
     Federal financial assistance programs included in that part, 
     over the amounts of such obligations and outlays that would 
     occur under those programs without implementation of the 
     part; or
       (B) in the case of a plan or part that applies to 
     assistance to a qualified organization under an eligible 
     Federal financial assistance program, the qualified 
     organization does not consent in writing to the receipt of 
     that assistance in accordance with the plan.
       (3) The Flexibility Council shall disapprove a part of a 
     local flexibility plan if a majority of the Council 
     disapproves that part of the plan based on a failure of the 
     part to comply with paragraph (1).
       (4) In approving any part of a local flexibility plan, the 
     Flexibility Council shall specify the period during which the 
     part is effective. An approved local flexibility plan shall 
     not be effective after the date of the termination of 
     effectiveness of this Act under section 13.
       (5) Disapproval by the Flexibility Council of any part of a 
     local flexibility plan submitted by a local government under 
     this Act shall not affect the eligibility of a local 
     government, a qualified organization, or any individual for 
     benefits under any Federal program.
       (c) Memoranda of Understanding.--(1) The Flexibility 
     Council may not approve a part of a local flexibility plan 
     unless each local government and each qualified organization 
     that would receive financial assistance under the plan enters 
     into a memorandum of understanding under this subsection with 
     the Flexibility Council.
       (2) A memorandum of understanding under this subsection 
     shall specify all understandings that have been reached by 
     the Flexibility Council, the local government, and each 
     qualified organization that is subject to a local flexibility 
     plan, regarding the approval and implementation of all parts 
     of a local flexibility plan that are the subject of the 
     memorandum, including understandings with respect to--
       (A) all requirements under covered Federal financial 
     assistance programs that are to be waived by the Flexibility 
     Council under section 8(b);
       (B)(i) the total amount of Federal funds that shall be 
     provided as benefits under or used to administer covered 
     Federal financial assistance programs included in those 
     parts; or
       (ii) a mechanism for determining that amount, including 
     specification of the total amount of Federal funds that shall 
     be provided or used under each covered Federal financial 
     assistance program included in those parts;
       (C) the sources of all non-Federal funds that shall be 
     provided as benefits under or used to administer those parts;
       (D) measurable performance criteria that shall be used 
     during the term of those parts to determine the extent to 
     which the goals and performance levels of the parts are 
     achieved; and
       (E) the data to be collected to make that determination.
       (d) Limitation on Confidentiality Requirements.--The 
     Flexibility Council may not, as a condition of approval of 
     any part of a local flexibility plan or with respect to the 
     implementation of any part of an approved local flexibility 
     plan, establish any confidentiality requirement that would--
       (1) impede the exchange of information needed for the 
     design or provision of benefits under the parts; or
       (2) conflict with law.

     SEC. 8. IMPLEMENTATION OF APPROVED LOCAL FLEXIBILITY PLANS; 
                   WAIVER OF REQUIREMENTS.

       (a) Payments and Administration in Accordance With Plan.--
     Notwithstanding any other law, any benefit that is provided 
     under a covered Federal financial assistance program included 
     in an approved local flexibility plan shall be paid and 
     administered in the manner specified in the approved local 
     flexibility plan.
       (b) Waiver of Requirements.--(1) Notwithstanding any other 
     law and subject to paragraphs (2) and (3), the Flexibility 
     Council may waive any requirement applicable under Federal 
     law to the administration of, or provision of benefits under, 
     any covered Federal assistance program included in an 
     approved local flexibility plan, if that waiver is--
       (A) reasonably necessary for the implementation of the 
     plan; and
       (B) approved by a majority of members of the Flexibility 
     Council.
       (2) The Flexibility Council may not waive a requirement 
     under this subsection unless the Council finds that waiver of 
     the requirement shall not result in a qualitative reduction 
     in services or benefits for any individual or family that is 
     eligible for benefits under a covered Federal financial 
     assistance program.
       (3) The Flexibility Council may not waive any requirement 
     under this subsection--
       (A) that enforces any constitutional or statutory right of 
     an individual, including any right under--
       (i) title VI of the Civil Rights Act of 1964 (42 U.S.C. 
     2000d et seq.);
       (ii) section 504 of the Rehabilitation Act of 1973 (29 
     U.S.C. 701 et seq.);
       (iii) title IX of the Education Amendments of 1972 (86 
     Stat. 373 et seq.);
       (iv) the Age Discrimination Act of 1975 (42 U.S.C. 6101 et 
     seq.); or
       (v) the Americans with Disabilities Act of 1990;
       (B) for payment of a non-Federal share of funding of an 
     activity under a covered Federal financial assistance 
     program; or
     [[Page S313]]   (C) for grants received on a maintenance of 
     effort basis.
       (c) Special Assistance.--To the extent permitted by law, 
     the head of each Federal agency shall seek to provide special 
     assistance to a local government or qualified organization to 
     support implementation of an approved local flexibility plan, 
     including expedited processing, priority funding, and 
     technical assistance.
       (d) Evaluation and Termination.--(1) A local government, in 
     accordance with regulations issued by the Flexibility 
     Council, shall--
       (A) submit such reports on and cooperate in such audits of 
     the implementation of its approved local flexibility plan; 
     and
       (B) periodically evaluate the effect implementation of the 
     plan has had on--
       (i) individuals who receive benefits under the plan;
       (ii) communities in which those individuals live; and
       (iii) costs of administering covered Federal financial 
     assistance programs included in the plan.
       (2) No later than 90 days after the end of the 1-year 
     period beginning on the date of the approval by the 
     Flexibility Council of an approved local flexibility plan of 
     a local government, and annually thereafter, the local 
     government shall submit to the Flexibility Council a report 
     on the principal activities and achievements under the plan 
     during the period covered by the report, comparing those 
     achievements to the goals and performance criteria included 
     in the plan under section 6(c)(3).
       (3)(A) The Flexibility Council may terminate the 
     effectiveness of an approved local flexibility plan, if the 
     Flexibility Council, after consultation with the head of each 
     Federal agency responsible for administering a covered 
     Federal financial assistance program included in such, 
     determines--
       (i) that the goals and performance criteria included in the 
     plan under section 6(c)(3) have not been met; and
       (ii) after considering any experiences gained in 
     implementation of the plan, that those goals and criteria are 
     sound.
       (B) In terminating the effectiveness of an approved local 
     flexibility plan under this paragraph, the Flexibility 
     Council shall allow a reasonable period of time for 
     appropriate Federal, State, and local agencies and qualified 
     organizations to resume administration of Federal programs 
     that are covered Federal financial assistance programs 
     included in the plan.
       (e) Final Report; Extension of Plans.--(1) No later than 45 
     days after the end of the effective period of an approved 
     local flexibility plan of a local government, or at any time 
     that the local government determines that the plan has 
     demonstrated its worth, the local government shall submit to 
     the Flexibility Council a final report on its implementation 
     of the plan, including a full evaluation of the successes and 
     shortcomings of the plan and the effects of that 
     implementation on individuals who receive benefits under 
     those programs.
       (2) The Flexibility Council may extend the effective period 
     of an approved local flexibility plan for such period as may 
     be appropriate, based on the report of a local government 
     under paragraph (1).

     SEC. 9. COMMUNITY ADVISORY COMMITTEES.

       (a) Establishment.--A local government that applies for 
     approval of a local flexibility plan under this Act shall 
     establish a community advisory committee in accordance with 
     this section.
       (b) Functions.--A community advisory committee shall advise 
     a local government in the development and implementation of 
     its local flexibility plan, including advice with respect 
     to--
       (1) conducting public hearings; and
       (2) reviewing and commenting on all community policies, 
     programs, and actions under the plan which affect low income 
     individuals and families, with the purpose of ensuring 
     maximum coordination and responsiveness of the plan in 
     providing benefits under the plan to those individuals and 
     families.
       (c) Membership.--The membership of a community advisory 
     committee shall--
       (1) consist of--
       (A) persons with leadership experience in the private and 
     voluntary sectors;
       (B) local elected officials;
       (C) representatives of participating qualified 
     organizations; and
       (D) the general public; and
       (2) include individuals and representatives of community 
     organizations who shall help to enhance the leadership role 
     of the local government in developing a local flexibility 
     plan.
       (d) Opportunity for Review and Comment by Committee.--
     Before submitting an application for approval of a final 
     proposed local flexibility plan, a local government shall 
     submit the final proposed plan for review and comment by a 
     community advisory committee established by the local 
     government.
       (e) Committee Review of Reports.--Before submitting annual 
     or final reports on an approved Federal assistance plan, a 
     local government or private nonprofit organization shall 
     submit the report for review and comment to the community 
     advisory committee.

     SEC. 10. TECHNICAL AND OTHER ASSISTANCE.

       (a) Technical Assistance.--(1) The Flexibility Council may 
     provide, or direct that the head of a Federal agency provide, 
     technical assistance to a local government or qualified 
     organization in developing information necessary for the 
     design or implementation of a local flexibility plan.
       (2) Assistance may be provided under this subsection if a 
     local government makes a request that includes, in accordance 
     with requirements established by the Flexibility Council--
       (A) a description of the local flexibility plan the local 
     government proposes to develop;
       (B) a description of the groups of individuals to whom 
     benefits shall be provided under covered Federal assistance 
     programs included in the plan; and
       (C) such assurances as the Flexibility Council may require 
     that--
       (i) in the development of the application to be submitted 
     under this title for approval of the plan, the local 
     government shall provide adequate opportunities to 
     participate to--
       (I) individuals and families that shall receive benefits 
     under covered Federal financial assistance programs included 
     in the plan; and
       (II) governmental agencies that administer those programs; 
     and
       (ii) the plan shall be developed after considering fully--
       (I) needs expressed by those individuals and families;
       (II) community priorities; and
       (III) available governmental resources in the geographic 
     area to which the plan shall apply.
       (b) Details to Council.--At the request of the Flexibility 
     Council and with the approval of an agency head who is a 
     member of the Council, agency staff may be detailed to the 
     Flexibility Council on a nonreimbursable basis.

     SEC. 11. FLEXIBILITY COUNCIL.

       (a) Functions.--The Flexibility Council shall--
       (1) receive, review, and approve or disapprove local 
     flexibility plans for which approval is sought under this 
     Act;
       (2) upon request from an applicant for such approval, 
     direct the head of an agency that administers a covered 
     Federal financial assistance program under which substantial 
     Federal financial assistance would be provided under the plan 
     to provide technical assistance to the applicant;
       (3) monitor the progress of development and implementation 
     of local flexibility plans;
       (4) perform such other functions as are assigned to the 
     Flexibility Council by this Act; and
       (5) issue regulations to implement this Act within 180 days 
     after the date of its enactment.
       (b) Reports.--No less than 18 months after the date of the 
     enactment of this Act, and annually thereafter, the 
     Flexibility Council shall submit a report on the 5 Federal 
     regulations that are most frequently waived by the 
     Flexibility Council for local governments with approved local 
     flexibility plans to the President and the Congress. The 
     President shall review the report and determine whether to 
     amend or terminate such Federal regulations.

     SEC. 12. REPORT.

       No later than 54 months after the date of the enactment of 
     this Act, the Comptroller General of the United States shall 
     submit to the Congress, a report that--
       (1) describes the extent to which local governments have 
     established and implemented approved local flexibility plans;
       (2) evaluates the effectiveness of covered Federal 
     assistance programs included in approved local flexibility 
     plans; and
       (3) includes recommendations with respect to local 
     flexibility.

     SEC. 13. CONDITIONAL TERMINATION.

       This Act is repealed on the date that is 5 years after the 
     date of the enactment of this Act unless extended by the 
     Congress through the enactment of the resolution described 
     under section 14.

     SEC. 14. JOINT RESOLUTION FOR THE CONTINUATION AND EXPANSION 
                   OF LOCAL FLEXIBILITY PROGRAMS.

       (a) Description of Resolution.--A resolution referred to 
     under section 13 is a joint resolution the matter after the 
     resolving clause is as follows: ``That Congress approves the 
     application of local flexibility plans to all local 
     governments in the United States in accordance with the Local 
     Empowerment and Flexibility Act of 1995, and that--
       ``(1) if the provisions of such Act have not been repealed 
     under section 13 of such Act, such provisions shall remain in 
     effect; and
       ``(2) if the repeal under section 13 of such Act has taken 
     effect, the provisions of such Act shall be effective as 
     though such provisions had not been repealed.''.
       (b) Introduction.--No later than 30 days after the 
     transmittal by the Comptroller General of the United States 
     to the Congress of the report required in section 12, a 
     resolution as described under subsection (a) shall be 
     introduced in the Senate by the chairman of the Committee on 
     Governmental Affairs, or by a Member or Members of the Senate 
     designated by such chairman, and shall be introduced in the 
     House of Representatives by the Chairman of the Committee on 
     Government Operations, or by a Member or Members of the House 
     of Representatives designated by such chairman.
       (c) Referral.--A resolution as described under subsection 
     (a) shall be referred to the Committee on Governmental 
     Affairs of the Senate and the Committee on Government 
     Operations of the House of Representatives. 
     [[Page S314]] The committee shall make its recommendations to 
     the Senate or House of Representatives within 30 calendar 
     days of the date of such resolution's introduction.
       (d) Discharge From Committee.--If the committee to which a 
     resolution is referred has not reported such resolution at 
     the end of 30 calendar days after its introduction, that 
     committee shall be deemed to be discharged from further 
     consideration of such resolution and such resolution shall be 
     placed on the appropriate calendar of the House involved.
       (e) Vote on Final Passage.--When the committee has reported 
     or has been deemed to be discharged from further 
     consideration of a resolution described under subsection (a), 
     it is at any time thereafter in order for any Member of the 
     respective House to move to proceed to the consideration of 
     the resolution.
       (f) Rules of the Senate and House.--This section is enacted 
     by Congress--
       (1) as an exercise of the rulemaking power of the Senate 
     and House of Representatives, respectively, and as such it is 
     deemed a part of the rules of each House, respectively, but 
     applicable only with respect to the procedure to be followed 
     in that House in the case of a resolution described in 
     subsection (a), and it supersedes other rules only to the 
     extent that it is inconsistent with such rules; and
       (2) with full recognition of the constitutional right of 
     either House to change the rules (so far as relating to the 
     procedure of that House) at any time, in the same manner, and 
     to the same extent as in the case of any other rule of that 
     House.
             Local Empowerment and Flexibility Act of 1995

                      Section-By-Section Analysis


                              introduction

       To increase the overall economy and efficiency of 
     Government operations and enable more efficient use of 
     Federal funding, by enabling local governments and private, 
     nonprofit organizations to use amounts available under 
     certain Federal assistance programs in accordance with 
     approved local flexibility plans.


                         section 1. short title

       Section 1 sets the short title of this Act as the ``Local 
     Empowerment and Flexibility Act of 1995.''


                          section 2. findings

       Section 2 states that Federal programs often contain 
     detailed requirements relating to the use of categorical 
     financial assistance which may inadvertently impede the 
     effective delivery of services. Section 2 also states that in 
     order to reduce the barriers that impede local government's 
     ability to effectively deliver services, the federal 
     government should empower local governments and private, 
     nonprofit organizations to be innovative in creating programs 
     that meet the unique needs of their communities while 
     continuing to address national policy goals.


                          section 3. purposes

       Section 3 states that the purposes of this Act are to: (1) 
     enable more efficient use of Federal, State, and local 
     resources; (2) place less emphasis in Federal programs on 
     measuring resources and procedures and more emphasis on 
     achieving Federal, State, and local policy goals; (3) enable 
     local governments and private, nonprofit organizations to 
     adapt programs of Federal financial assistance to the 
     particular needs of their communities; and (4) enable local 
     governments and private, nonprofit organizations to work 
     together and build stronger cooperative partnerships to 
     address critical service problems.


                         section 4. definitions

       Section 4 contains definitions that apply to this act 
     including the ``Flexibility Council'' which is charged with 
     approving local flexibility plans submitted by state and 
     local governments. This section also defines ``eligible 
     Federal financial assistance program'' as: (1) a Federal 
     program under which financial
      assistance is available, directly or indirectly, to a local 
     government or a qualified organization to carry out a 
     specified program; and (2) does not include a Federal 
     program under which financial assistance is provided by 
     the Federal Government directly to a beneficiary of that 
     financial assistance or to a State as a direct payment to 
     an individual.


SECTION 5. PROVISION OF FEDERAL FINANCIAL ASSISTANCE IN ACCORDANCE WITH 
                    APPROVED LOCAL FLEXIBILITY PLAN

       Section 5 provides that upon approval of a local 
     flexibility plan, Federal financial assistance which is 
     included in the approved local flexibility plan shall be 
     provided to an used by the local government or organization 
     in accordance with the approved local flexibility plan. 
     Section 5 also provides that upon approval of a local 
     flexibility plan, individuals or families that are eligible 
     for benefits or services under a covered Federal financial 
     assistance program may receive those benefits only in 
     accordance with the approved local flexibility plan.


     SECTION 6. APPLICATION FOR APPROVAL OF LOCAL FLEXIBILITY PLAN

       Section 6 establishes that a local flexibility plan shall 
     be; (1) a strategic plan submitted during the application for 
     designation as an enterprise community or empowerment zone; 
     or (2) shall include the geographic area to which the plan 
     applies, the particular groups of individuals who shall 
     receive services and benefits under the plan, a description 
     of how the plan is expected to attain specific goals and 
     measurable performance criteria, the eligible Federal 
     financial assistance programs to be included in the plan, any 
     Federal statutory or regulatory requirement applicable under 
     a covered Federal financial assistance program that needs to 
     be waived to implement the plan, a description of the sources 
     of all non-Federal funds that are required to carry out the 
     plan, written consent from each qualified organization 
     included in the plan, and any other relevant information the 
     Flexibility Council may require to approve the plan.
       In addition, Section 6 requires certification by the chief 
     executive of the local government that the local government 
     has the ability and authority to implement the proposed plan, 
     and that amounts are available from non-Federal sources to 
     pay the non-Federal share of all covered Federal financial 
     assistance programs included in the proposed plan. Section 6 
     requires that the plan include any comments on the proposed 
     plan submitted by the Governor of the State in which the 
     local government is located, public comments on the plan 
     including transcripts of a least one public hearing on the 
     plan, and comments of the community advisory committee 
     established to review the plan.
       Section 6 also establishes the procedure for applying for 
     approval of a local flexibility plan. Local flexibility plans 
     must first be submitted to the Governor of the State in which 
     the local government is located. The Governor then has 30 
     days after receipt to prepare comments on the plan, describe 
     any State laws which are necessary to be waived for 
     implementation of the plan, and submit the application and 
     comments to the Flexibility Council. If the Governor fails to 
     act within 30 days, the local government may submit the 
     application directly to the Flexibility Council.


       SECTION 7. REVIEW AND APPROVAL OF LOCAL FLEXIBILITY PLANS

       Section 7 establishes the responsibilities of the 
     Flexibility Council in reviewing applications for approval of 
     local flexibility plans. Within 45 days of receipt of the 
     application, the Flexibility Council shall approve or 
     disapprove all or part of the local flexibility plan. The 
     Council must also, within 15 days after the approval or 
     disapproval, notify the applicant in writing of its decision 
     and in the case of any disapproval, include a written 
     justification of the reasons for the disapproval.
       Section 7 also requires that approval of the plan be based 
     on; (1) the plan or part of the plan shall improve the 
     effectiveness and efficiency of providing benefits under 
     covered Federal programs included in the plan; (2) the 
     applicant has adequately considered any effect that 
     administration of each covered Federal program under the plan 
     or part of the plan shall have on administration of other 
     covered Federal programs under the plan; (3) the applicant 
     has or is developing data bases, planning, and evaluation 
     procedures that are adequate for implementing the plan; (4) 
     implementation of the plan or part of the plan shall 
     adequately achieve the purposes of this Act and each covered 
     Federal financial assistance program under the plan; (5) the 
     plan is adequate to ensure that individuals and families that 
     receive benefits under covered Federal financial assistance 
     programs included in the plan shall continue to receive 
     benefits that meet the needs intended to be met under the 
     program; and (6) the local government has waived the 
     corresponding local laws and sought any waivers from State 
     laws necessary for implementation of the plan.
       Section 7 forbades the Flexibility Council from approving a 
     plan which would result in any increase in the total amount 
     of obligations or outlays of discretionary appropriations or 
     direct spending under Federal financial assistance programs 
     included in the plan. The Council shall also specify the 
     period during with the plan is effective, not to exceed 
     beyond the termination of this Act which is five years after 
     enactment. This section also states that disapproval for all, 
     or any part of the plan, shall not affect the eligibility of 
     an applicant for benefits under any Federal program.
 section 8. implementation of approved local flexibility plans; waiver 
                            of requirements

       Section 8 requires that any funds included in a local 
     flexibility plan be paid and administered in the manner 
     specified in the approved local flexibility plan. This 
     section also states that the Flexibility Council may waive 
     any requirement applicable under Federal law to the 
     administration of, or provision of benefits under, any 
     covered Federal assistance program included in an approved 
     plan if that waiver is reasonably necessary for the 
     implementation of the plan. The Flexibility Council may not 
     waive any requirement that does result in a qualitative 
     reduction in services or benefits for any individual or 
     family that is eligible for benefits under a covered Federal 
     financial assistance program.
       Section 8 forbids the Flexibility Council from waiving any 
     requirement under title VI of the Civil Rights Act of 1964, 
     section 504 of the Rehabilitation Act of 1973, title IX of 
     the Education Amendments of 1972, the Age Discrimination Act 
     of 1975, or the Americans with Disabilities Act of 1990.
       [[Page S315]] Section 8 also calls for the head of each 
     Federal agency to seek to provide special assistance to 
     applicants to support implementation of an approved local 
     flexibility plan, including expedited processing, priority 
     funding, and technical assistance.
       Section 8 states that no later than 90 days after the end 
     of the one year period of the approval of a local flexibility 
     plan, the local government shall submit to the Flexibility 
     Council a report on the principal activities and achievements 
     under the plan during the period covered by the report. The 
     Flexibility Council may terminate a local flexibility plan if 
     it determines that the goals and performance criteria 
     included in the plan have not been met.


                section 9. community advisory committees

       Section 9 establishes the composition and function of the 
     Community Advisory Committees. The Community Advisory 
     Committees shall advise the local government in developing 
     local flexibility plans by conducting public hearings and 
     reviewing and commenting on all actions under the plan. The 
     composition of the committee shall consist of persons from 
     the private and voluntary sectors, local elected officials, 
     representatives of participating organizations, and the 
     general public.
               section 10. technical and other assistance

       Section 10 states that the Flexibility Council may provide 
     or direct that the head of a Federal agency provide technical 
     assistance to an applicant of a local flexibility plan.


                    section 11. flexibility council

       Section 11 describes the functions of the Flexibility 
     Council. The Council shall receive, review, and approve or 
     disapprove local flexibility plans. The Council shall also 
     monitor the progress of development and implementation of 
     local flexibility plans and issue regulations to implement 
     this Act within 180 days after the date of its enactment. No 
     later than 18 months after the date of the enactment of this 
     Act, and annually thereafter, the Flexibility Council shall 
     submit a report on the five Federal regulations that are most 
     frequently waived by the Flexibility Council to the President 
     and the Congress.


                           section 12. report

       Section 12 states that no later than 54 months after the 
     date of the enactment of this Act, the Comptroller General of 
     the United States shall submit to the Congress, a report 
     that; (1) describe the extent to which local governments have 
     established and implemented approved local flexibility plans; 
     (2) evaluates the effectiveness of covered Federal assistance 
     programs included in approved local flexibility plans; and 
     (3) includes recommendations with respect to local 
     flexibility.


                  section 13. conditional termination

       Section 13 repeals this Act five years after the date of 
     enactment unless it is extended by Congress through the 
     enactment of the resolution described in section 14.


  section 14. joint resolution for the continuation and expansion of 
                       local flexibility programs

       Section 14 describes the resolution that shall be 
     introduced 30 days after the Comptroller General's report is 
     submitted which is 54 months after enactment of this Act. The 
     resolution would continue this Act as if section 13 of this 
     Act had been repealed.
                           the oregon option

  Mr. HATFIELD. Mr. President, recently the State of Oregon and several 
federal agencies signed a unique memorandum of understanding to create 
a new partnership designed to deliver government services in a better 
and more efficient manner. When this revolutionary partnership, called 
the Oregon Option, is fully implemented, Federal grants or transfers to 
State and local governments in Oregon will be based on results rather 
than compliance with regulatory procedures. Because I believe that this 
project has the potential to vastly improve the delivery of government 
services in my state and may well prove to be a national model for 
future partnerships between state and federal agencies, I am today 
introducing a sense of the Senate resolution highlighting the Federal 
Government's partnership in this effort.
  As we all know, a great deal of time and energy is spent by our local 
and State agencies trying to comply with regulations set forth by all 
levels of government. Billions of dollars are spent on compliance 
rather than on providing better services to improve people's lives. The 
new partnership set forth in the Oregon Option will dramatically 
streamline and coordinate Federal, State and local regulations so that 
local and State governments can respond to specific problems flexibly. 
This flexibility will be exchanged for a transformed measurement of 
accountability--progress towards meeting performance goals.
  In 1991, the Oregon legislature endorsed various performance goals 
which had been developed over several years and have become known as 
the Oregon Benchmarks. Benchmarks do not measure progress by such 
standards as the number of programs created, money expended or people 
served, rather, Oregon's benchmarks focus on the outcomes and goals in 
literally dozens of specific areas. For example, one benchmark is to 
increase the immunization rate for 2-year-olds in Oregon from 47 
percent in 1992 to 100 percent by the year 2000. Our state agencies are 
judged on their ability to move towards this goal and their budget 
submissions reflect targeting towards this as one of the ``key'' 
benchmarks identified as a state priority.
  Under the Oregon Option project, Federal departments will coordinate 
and streamline the Administration of their programs, develop an 
expedited waiver process with a single point of application and 
response, support state and local efforts to measure outcomes, provide 
technical assistance and develop a data system necessary to assess 
progress toward benchmarks. The State's role will be to deliver 
Federal, State, and local services in a coordinated way, in tandem with 
local governments. Services will be delivered at the local level, and 
progress towards achieving the benchmarks will be measured locally.
  The initial work of the Oregon Option will focus on three clusters of 
human investment benchmarks: family stability, early childhood 
development, and workforce preparation. Immediate focuses will be 
reducing childhood poverty, improving access to prenatal care and 
increasing employment and employability of Oregonians through a 
statewide community based model.
  The Oregon Option builds on the strengths of Federal, State, and 
local government. The Federal Government plays an important role in 
setting national goals and protecting our Nation's most needy people. 
However, States and local governments, I believe, are better at knowing 
how to develop programs to meet these goals that fit their local 
situation. By using policy goals and shifting success from compliance 
to results, the Oregon Option creates a good balance between protecting 
the intent and goals of Federal policy and allowing States the freedom 
and flexibility to find appropriate solutions to their own community 
problems.
  My resolution is a simple endorsement of this project, for I believe 
it has the potential to redefine how the federal government interacts 
with the states. I urge my colleagues to become familiar with this 
model.
  I ask unanimous consent that the text of the bill, as well as the 
memorandum of understanding and letters of support, be included in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 90

       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 ``Worker Retraining 
     Flexibility Act of 1995''.

     SEC. 2. RETRAINING SERVICES.

       Section 315(a)(2) of the Job Training Partnership Act (29 
     U.S.C. 1661d(a)(2)) is amended--
       (1) by striking ``(2)'' and inserting ``(2)(A)''; and
       (2) by striking the last 2 sentences and inserting the 
     following new subparagraph:
       ``(B)(i) The Governor may grant the waiver, in whole or in 
     part, if the substate grantee demonstrates that the waiver--
       ``(I) is appropriate due to the availability of low-cost 
     retraining services;
       ``(II) is necessary to facilitate the provision of needs-
     related payments to accompany long-term training; or
       ``(III) is necessary to facilitate the provision of 
     appropriate basic readjustment services.
       ``(ii) The Governor shall prescribe criteria for the 
     demonstration required by clause (i).''.

     SEC. 3. NEEDS-RELATED PAYMENTS AND OTHER SUPPORTIVE SERVICES.

       Section 315 of the Job Training Partnership Act (29 U.S.C. 
     1661d) is amended--
       (1) by striking subsection (b); and
       (2) by redesignating subsections (c), (d), and (e) as 
     subsections (b), (c), and (d).

     SEC. 4. NEEDS-RELATED PAYMENTS FOR FEDERAL DELIVERY OF 
                   DISLOCATED WORKER SERVICES.

       Section 323 of the Job Training Partnership Act (29 U.S.C. 
     1662b) is amended by adding at the end the following new 
     subsection:
       ``(e) Needs-Related Payments.--In making funds available 
     from the amounts reserved for this part under section 
     302(a)(2) to carry out programs and activities, the Secretary 
     may make funds available for needs-related payments described 
     in section 314(e). 
     [[Page S316]] The Secretary may make such a payment to a 
     participant in such a program or activity who, in lieu of 
     meeting the requirements relating to enrollment in training 
     specified in the last sentence of section 314(e)(1), is 
     enrolled in training by the end of the sixth week after the 
     Secretary makes the funds available for the program or 
     activity.''.

     SEC. 5. NORTHWEST ECONOMIC ADJUSTMENT INITIATIVE.

       Section 323 of the Job Training Partnership Act (29 U.S.C. 
     1662b) (as amended by section 4) is further amended by adding 
     at the end the following new subsection:
       ``(f) Northwest Economic Adjustment Initiative.--From the 
     amount reserved for this part under section 302(a)(2) for 
     each of fiscal years 1996 and 1997, the Secretary shall 
     expend, on the basis of need as demonstrated by a State, not 
     less than $12,000,000 to carry out the retraining of eligible 
     dislocated workers, as described in the Interagency 
     Memorandum of Understanding for Economic Adjustment and 
     Community Assistance (relating to the Northwest Economic 
     Adjustment Initiative).''.
                                                                    ____

                                                December 30, 1994.
     Senator Mark O. Hatfield,
     U.S. Senate,
     Washington, DC.

     Subject: Proposed legislation: Worker Retraining Flexibility 
         Act of 1995.

       Dear Senator Hatfield: It is my great pleasure to endorse 
     the ``Worker Retraining Flexibility Act of 1995'' which you 
     will introduce on January 4, 1995. This legislation places 
     the focus where it needs to be--on the dislocated worker. Too 
     often the constraints in Federal laws and regulation hamper 
     our ability to concentrate efforts on the person rather than 
     on administrative requirements.
       When the objective becomes the amount of funds expended for 
     retaining as opposed to readjustment services rather than the 
     type of service that is needed, then we must ask if we are 
     pursuing the right purpose. These amendments to Title III of 
     the Job Training Partnership Act will allow State and local 
     programs to concentrate on providing the right mix of 
     retraining and readjustment services that are indicated 
     through individual assessment.
       We have found that providing services to dislocated workers 
     requires the ability to quickly respond to a variety of 
     factors, e.g., timing of dislocation, the economic 
     environment, etc., This bill goes a loan way toward building 
     flexibility into the law and freeing up programs to provide 
     the services necessary for the dislocated worker to succeed 
     in reentering the workforce.
       Thank you, Senator Hatfield, for your continuing interest 
     and concern for the citizens of Oregon, in particular for 
     those who have suffered the loss of their jobs through no 
     fault of their own.
           Sincerely,

                                                   Bill Easly,

                                     Program Manager, Job Training
                             Partnership Act Administration--OEDD.
 the bonneville power administration appropriations refinancing act of 
                                  1995

  Mr. HATFIELD. Mr. President, today I am introducing legislation which 
will end the decade-long battle to increase the electric power rates of 
the Bonneville Power Administration [BPA] in the Pacific Northwest. 
This legislation is a realistic, sensible, achievable, and scoreable 
deficit reduction alternative to the recently discussed absurdity of 
selling the Bonneville Power Administration. 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 deficits 
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.
  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.

  I have vigorously 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 have been built 
with no expectation of payback by the users of the facilities. Unlike 
these other situations, however, 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 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./Madam 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.
  A significant opportunity to ensure the stability of BPA occurred 
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. 
In my opinion, however, the $100 million price tag is analogous to the 
costs a business might experience when settling litigation. 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 that 
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.
  Let me take a moment to describe the specifics of the proposal I am 
introducing today. The legislation will require that BPA's outstanding 
repayment obligations on appropriations be reconstituted by re-setting 
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 by using the 
Treasury Department's yield curve calculation. 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 
will make under the recently enacted Confederated Tribes of the 
Colville Reservation Grand Coulee Settlement Act of 1994--Public Law 
103-436. The United States and the Confederated Tribes of the Colville 
Reservation have settled 
[[Page S317]] the Tribes' claims that they are entitled to a share of 
the power production revenues of the Grand Coulee Dam. 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 Public 
Law 103-436. This new legislation contains repayment credit provisions 
that are different in timing than Public Law 103-436 but would achieve 
the same results in terms of the present value cost to ratepayers and 
taxpayers. This new timing was proposed by the administration at the 
end of the 103d Congress.
  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 ask unanimous consent that a letter, dated September 15, 1994, 
through which Energy Secretary Hazel O'Leary officially communicated 
this legislation to the Senate after months of negotiations, be placed 
in the Record along with the text of the bill and a section-by-section 
analysis.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 92

       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 Appropriations Refinancing Act''.

     SEC. 2. DEFINITIONS.

       For the purposes of this Act--
       (1) ``Administrator'' means the Administrator of the 
     Bonneville Power Administration;
       (2) ``capital investment'' means a capitalized cost funded 
     by Federal appropriations that--
       (A) is for a project, facility, or separable unit or 
     feature of a project or facility;
       (B) 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;
       (C) excludes a Federal irrigation investment; and
       (D) 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 the Federal Columbia River Transmission System 
     Act (16 U.S.C. 838(k));
       (3) ``new capital investment'' means a capital investment 
     for a project, facility, or separable unit or feature of a 
     project or facility, placed in service after September 30, 
     1995;
       (4) ``old capital investment'' means a capital investment 
     whose capitalized cost--
       (A) was incurred, but not repaid, before October 1, 1995, 
     and
       (B) was for a project, facility, or separable unit or 
     feature of a project or facility, placed in service before 
     October 1, 1995;
       (5) ``repayment date'' means the end of the period within 
     which the Administrator's rates are to assure the repayment 
     of the principal amount of a capital investment; and
       (6) ``Treasury rate'' means--
       (A) for an old capital investment, a rate determined by the 
     Secretary of the Treasury, taking into consideration 
     prevailing market yields, during the month preceding October 
     1, 1995, on outstanding interest-bearing obligations of the 
     United States with periods to maturity comparable to the 
     period between October 1, 1995, and the repayment date for 
     the old capital investment; and
       (B) for a new capital investment, a rate determined by the 
     Secretary of the Treasury, taking into consideration 
     prevailing market yields, during the month preceding the 
     beginning of the fiscal year in which the related project, 
     facility, or separable unit or feature is placed in service, 
     on outstanding interest-bearing obligations of the United 
     States with periods to maturity comparable to the period 
     between the beginning of the fiscal year and the repayment 
     date for the new capital investment.

     SEC. 3. NEW PRINCIPAL AMOUNTS.

       (a) Effective October 1, 1995, an old capital investment 
     has a new principal amount that is the sum of--
       (1) the present value of the old payment amounts for the 
     old capital investment, calculated using a discount rate 
     equal to the Treasury rate 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) With the approval of the Secretary of the Treasury 
     based solely on consistency with this Act, the Administrator 
     shall determine the new principal amounts under section 3 and 
     the assignment of interest rates to the new principal amounts 
     under section 4.
       (c) For the purposes of this section, ``old payment 
     amounts'' means, for an old capital investment, the annual 
     interest and principal that the Administrator would have paid 
     to the United States Treasury from October 1, 1995, if this 
     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) with respect to 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) with respect to an old capital investment for which the 
     Administrator has not assigned an interest rate before 
     October 1, 1993, at a rate determined by the Secretary of the 
     Treasury, taking into consideration prevailing market yields, 
     during the month preceding the beginning of the fiscal year 
     in which the related project, facility, or separable unit or 
     feature is placed in service, on outstanding interest-bearing 
     obligations of the United States with periods to maturity 
     comparable to the period between the beginning of the fiscal 
     year and the repayment date for the old capital investment.
     SEC. 4. INTEREST RATE FOR NEW PRINCIPAL AMOUNTS.

       As of October 1, 1995, the unpaid balance on the new 
     principal amount established for an old capital investment 
     under section 3 bears interest annually at the Treasury rate 
     for the old capital investment until the earlier of the date 
     that the new principal amount is repaid or the repayment date 
     for the new principal amount.

     SEC. 5. REPAYMENT DATES.

       As of October 1, 1995, the repayment date for the new 
     principal amount established for an old capital investment 
     under section 3 is no earlier than the repayment date for the 
     old capital investment assumed in section 3(c)(1).

     SEC. 6. PREPAYMENT LIMITATIONS.

       During the period October 1, 1995, through September 30, 
     2000, the total new principal amounts of old capital 
     investments, as established under section 3, that the 
     Administrator may pay before their respective repayment dates 
     shall not exceed $100,000,000.

     SEC. 7. INTEREST RATES FOR NEW CAPITAL INVESTMENTS DURING 
                   CONSTRUCTION.

       (a) The principal amount of a new capital investment 
     includes interest in each fiscal year of construction of the 
     related project, facility, or separable unit or feature at a 
     rate equal to the one-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, ``one-year rate'' for 
     a fiscal year means a rate determined by the Secretary of the 
     Treasury, taking into consideration prevailing market yields, 
     during the month preceding the beginning of the fiscal year, 
     on outstanding interest-bearing obligations of the United 
     States with periods to maturity of approximately one year.
     SEC. 8. INTEREST RATES FOR NEW CAPITAL INVESTMENTS.

       The unpaid balance on the principal amount of a new capital 
     investment bears interest at the Treasury rate for the new 
     capital investment from the date the related project, 
     facility, or separable unit or feature is placed in service 
     until the earlier of the date the new capital investment is 
     repaid or the repayment date for the new capital investment.
     SEC. 9. APPROPRIATED AMOUNTS.

       The Confederated Tribe of the Colville Reservation Grand 
     Coulee Dam Settlement Act (Pub. L. No. 103-436) is amended by 
     striking section 6 and its catchline and inserting the 
     following:

     ``SEC. 6. APPROPRIATED AMOUNTS.

                           *   *   *   *   *


       ``(b) For the purposes of this section--
       (1) ``Settlement agreement'' means that settlement 
     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 settlement 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; and
       (2) ``Tribes'' means the Confederated Tribes of the 
     Colville Reservation, a federally recognized Indian Tribe.

     SEC. 10. CONTRACT PROVISIONS.

       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 as the 
     case may be, shall offer to amend to 
     [[Page S318]] include, 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 3 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 4 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 3 of this Act and to pay the interest on the 
     principal amount under section 4 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 this Act; and
       (4) the contract provisions specified in 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.

     SEC. 11. SAVINGS PROVISIONS.

       (a) This Act does 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 the Federal Columbia River Transmission System 
     Act (16 U.S.C. 838k(b)).
       (b) Except as provided in section 6 of this Act, this Act 
     does 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.
                                 ______



                                      The Secretary of Energy,

                               Washington, DC, September 15, 1994.
     Hon. Al Gore,
     President of the Senate
     Washington, DC.
       Dear Mr. President: Enclosed is proposed legislation 
     entitled the ``Bonneville Power Administration Appropriations 
     Refinancing Act.''
       Since the early 1980's, criticism has been directed at the 
     relatively low interest rates outstanding on many of the 
     Federal Columbia River Power System investments funded by 
     Federal appropriations and the flexible method used by the 
     Bonneville Power Administration to schedule principal 
     payments on its Federal obligations. This legislation 
     addresses long-standing subsidy criticisms in a way that 
     benefits the taxpayer while minimizing the impact on 
     Bonneville's power and transmission rates.
       Last fall, as part of the President's National Performance 
     Review initiative, the Administration proposed legislation 
     that called for Bonneville to buy out its outstanding, low 
     interest repayment obligations on appropriations with debt 
     that Bonneville would issue in the open market. Although the 
     proposed legislation would have increased the present value 
     of Bonneville's debt service payments to the U.S. Treasury, 
     it was scored as adding to the Federal deficit because 
     Bonneville would have incurred issuance costs and a higher 
     rate of interest than if the buy-out were financed through 
     the U.S. Treasury. That legislation also raised concerns that 
     Bonneville open-market access could conflict with the 
     Treasury's overall debt management plans.
       Since last fall, Bonneville has collaborated with its 
     customers and with other agencies in the Executive Branch to 
     develop revised legislation that avoids the issues raised by 
     Bonneville open-market access. The enclosed legislation calls 
     for Bonneville's outstanding repayment on appropriations to 
     be reconstituted by re-setting outstanding principal at the 
     present value of the principal and annual interest that 
     Bonneville would pay to the U.S. Treasury, plus $100 million. 
     Interest rates on the new principal would be reassigned at 
     current Treasury interest rates. The bill also restricts 
     prepayments of reconstituted obligations to $100 million in 
     the period from October 1, 1995 through September 30, 2000. 
     Other repayment terms and conditions would remain unaffected.
       Benefits to the Government of this legislation are that it 
     provides a minimum $100 million increase in the present value 
     of Bonneville's debt service payments to the U.S. Treasury. 
     This increase represents agreement between ratepayers and the 
     Government to resolve the subsidy criticisms for outstanding 
     appropriation repayment obligations. It would reduce the 
     Federal deficit by an estimated $45 million because 
     Bonneville cash transfers to Treasury and rates will 
     increase. Bonneville's customers recognize that recurring 
     subsidy criticisms must be addressed once and for all because 
     of the risk they pose to Bonneville's financial stability and 
     rate competitiveness. The legislation includes assurances to 
     ratepayers that the Government will not increase the 
     repayment obligations in the future. The legislation will 
     enhance the ability of Bonneville to maintain its customer 
     base, improve its competitive position, and strengthen its 
     ability to meet future payments to the U.S. Treasury on time 
     and in full.
       The legislation also proposes that certain appropriations 
     be provided to Bonneville in connection with payments 
     Bonneville would make under a proposed litigation settlement. 
     The United States and the Confederated Tribes of the Colville 
     Reservation propose to settle the Tribes' claims that they 
     are entitled to a share of the power production revenues of 
     Grand Coulee Dam. The settlement would have the Tribes 
     dismiss the claims in return for a one-time cash payment of 
     $53 million payable from the Judgment Fund (authorized in 
     section 1304 of title 31, United States Code), and annual 
     payments from Bonneville through the revenue-generating life 
     of Grand Coulee Dam. The annual payments from Bonneville 
     would begin at approximately $15 million in FY 1996, and 
     escalate under provisions in the settlement. Bonneville would 
     receive appropriations equal to 100 percent of the annual 
     payments in each of fiscal years 1996 through 2000. In fiscal 
     years thereafter, Bonneville would receive an appropriation 
     equal to approximately $4 million per year. These 
     appropriations, together with the one-time Judgment Fund 
     payment, represent an equitable allocation of the costs of 
     the settlement between Bonneville ratepayers and Federal 
     taxpayers.
       The Administration recently submitted Colville Settlement 
     legislation that contains repayment credit provisions rather 
     than the appropriation that is in the legislation being 
     forwarded here. The appropriations in section 9 of the 
     enclosed Bonneville Power Administration Appropriations 
     Refinancing legislation supersede those in the 
     Administration's Colville Settlement legislative proposal. 
     The Administration is open to the concept of merging these 
     two proposals in the legislative process. By the same token, 
     because the same results associated with implementing the 
     settlement agreement are achieved with respect to the Tribes, 
     the Treasury, and the rate payers, we are comfortable with 
     proceeding with the Colville debt repayment concept at this 
     time and then enacting the Bonneville Power Administration 
     Appropriations Refinancing Act subsequently.
       The Omnibus Budget Reconciliation Act of 1990 requires that 
     all revenue and direct spending legislation meet a pay-as-
     you-go requirement through fiscal year 1998. That is, no 
     revenue and direct spending bill should result in an increase 
     in the deficit, and if it does, it will trigger a sequester 
     if it is not fully offset. The provisions of this legislation 
     taken together would decrease net Federal outlays by 
     approximately $45 million over fiscal year 1996 through 
     fiscal year 1998.
       The Office of Management and Budget advises that the 
     enactment of this legislative proposal would be in accord 
     with the program of the President.
           Sincerely,
                                                 Hazel R. O'Leary.
       Enclosure.
                                                                    ____

Bonneville Power Administration Appropriations Refinancing Act 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 rates 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 
     at the relatively low interest rates applicable to many of 
     these Federal Columbia River Power System (FCRPS) 
     investments. The purpose of this legislation is to resolve 
     permanently the subsidy criticisms in a way that benefits the 
     taxpayer while minimizing the impact of 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 rates applicable to the reset 
     principal amounts are based on the U.S. Treasury's borrowing 
     costs 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 
     [[Page S319]] 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 $45 million over the current budget window.


                         SECTION 1. SHORT TITLE

       This section sets the short title of this Act as the 
     ``Bonneville Power Administration Appropriations Refinancing 
     Act.''


                         SECTION 2. DEFINITIONS

       This section contains definitions that apply to this Act.
       Paragraph (1) is self-explanatory.
       Paragraph (2) 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 Federal Columbia River Transmission System Act.
       Paragraph (3) defines new capital investments as those 
     capital investments that are placed in service after 
     September 30, 1995.
       Paragraph (4) 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 unit or 
     feature 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 section 2(2).
       Paragarph (5) 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.
       Paragraph (6) defines the term ``Treasury rate.'' The term 
     Treasury rate is used to establish both the discount rates 
     for determining the present value of the old capital 
     investments (section 3(a)) and the interest rates that will 
     apply to the new principal amounts of the old capital 
     investments (section 4). The term Treasury rate is also used 
     under section 8 in determining the interest rates that apply 
     to new capital investments, as that term is defined.
       In the case of each old capital investment, Treasury rate 
     means a rate determined by the Secretary of the Treasury, 
     taking into consideration prevailing market yields, during 
     the month preceding October 1, 1995, on outstanding interest-
     bearing obligations of the United States with periods to 
     maturity comparable to the period between October 1, 1995, 
     and the repayment date for the old capital investment. Thus, 
     the interest rates and discount rates for old capital 
     investments reflect the Treasury yield curve proximate to 
     October 1, 1995. Likewise, in the case of each new capital 
     investment, the Treasury rate means a rate determined by the 
     Secretary of the Treasury, taking into consideration 
     prevailing market yields during the month preceding the 
     beginning of the fiscal year in which the related facilities 
     are placed in service, on outstanding interest-bearing 
     obligations of the United States with periods to maturity 
     comparable to the period between the beginning of the fiscal 
     year in which the related facilities are placed in service 
     and the repayment date for the new capital investment. Thus, 
     the interest rates for new capital investments reflect the 
     Treasury yield curve proximate to beginning of the fiscal 
     year in which the facilities the new capital investment 
     concerns are placed in service.
       The term 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 7) and the interest rates for 
     determining the interest that would have been paid in the 
     absence of this Act on old capital investments that are 
     placed in service after the date of this Act but prior to 
     October 1, 1995 (section 3(b)(2)). These latter interest 
     rates reflect rate methodologies very similar to those 
     specified by the term Treasury rate, but apply to 
     different features of this Act.
       It is expected that the Secretary of the Treasury will use 
     an interest rate formulation that the Secretary uses to 
     determine rates for federal lending and borrowing programs 
     generally.


                    SECTION 3. NEW PRINCIPAL AMOUNTS

       Section 3 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 after October 1, 1995, 
     because the discount rate will not be determined, and 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 for 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 Federal Columbia 
     River Transmission System Act.
       The discount rate used to determine the present value is 
     the Treasury rate for the old capital investment and is 
     identical to the interest rate that applies to the new 
     principal amounts of the old capital investments. Thus, the 
     Secretary of the Treasury is responsible for determining the 
     interest rate and the discount rate assigned to each old 
     capital investment.
       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 for 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 a rate determined by the Secretary of 
     the Treasury proximate to the beginning of the fiscal year in 
     which the related project or facility, or the separable unit 
     or feature of a project or facility, was placed in service. 
     Section 3(c)(2)(B) provides the manner in which these 
     interest rates are established.) Thus, for purposes of 
     determining the present value of a given interest payment on 
     a capital investment, the discount period for the payment is 
     between October 1, 1995, and 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 3 provides that with the approval 
     of the Secretary of the Treasury based solely on consistency 
     with this Act, the Administrator shall determine the new 
     principal amounts under section 3 and the assignment of 
     interest rates to the new principal amounts under section 4. 
     The Administrator will calculate the new principal amount of 
     each old capital investment in accord with section 3 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 3(a)(2), the total principal amount of all old 
     capital investments. The Administrator will provide this data 
     to the Secretary of the Treasury so that the Secretary can 
     approve that the calculation of each new principal amount is 
     consistent with this section and that the assignment of the 
     interest rate to each new 
     [[Page S320]]  principal amount is consistent with section 4.
       The approval by the Secretary of the Treasury will be 
     completed as soon as practicable after the data on the new 
     principal amounts and the interest rates are provided by the 
     Administrator. It is expected that the approval by the 
     Secretary will not require substantial time.


          section 4. interest rates for new principal amounts

       Section 4 provides that the unpaid balance of the new 
     principal amount of each old capital investment shall bear 
     interest at the Treasury rate for the old capital investment, 
     as determined by the Secretary of the Treasury under section 
     2(6)(A). 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 repayment date for the 
     investment.
                       section 5. repayment dates

       Section 5, in conjunction with the term ``repayment date'' 
     as that term is defined in section 2(5), 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 in making the present value calculations in 
     section 3. Under existing law, the Administrator is obligated 
     to establish rates to repay capital investments within a 
     reasonable number of years. Section 5 confirms that the 
     Administrator retains this obligation notwithstanding the 
     enactment of this Act.


                   section 6. prepayment limitations

       Section 6 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.


     section 7. interest rates for new capital investments during 
                              construction

       Section 7 establishes in statute a key element of the 
     repayment practices relating to new capital investments. 
     Section 7 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 taking into consideration the prevailing market 
     yields on outstanding obligations of the United States with 
     periods to maturity of approximately 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, section 7 provides 
     that amounts for interest during construction shall be 
     included in the principal amount of a new capital investment. 
     Thus, the Administrator's obligation with respect to the 
     payment of this interest arises when construction is 
     complete, at which point the interest during construction is 
     included in the principal amount of the capital investment.
         section 8. interest rates for new capital investments

       Section 8 establishes in statute an important component of 
     BPA's repayment practice, that is, the methodology for 
     determining the interest rates for new capital investments. 
     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, section 8 provides that the interest rate assigned 
     to capital investments made in a project, facility, or 
     separable unit or 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 and interest rates at the time the related 
     facility is placed in service. The interest rate applicable 
     to these capital investments is the Treasury rate, as defined 
     in section 2(6)(B). Each of these investments would bear 
     interest at the rate as assigned until the earlier of the 
     date it is repaid or the end of its repayment period.


                    section 9. appropriated amounts

       Pursuant to the settlement agreement with the Tribes, the 
     Administrator is obligated to pay amounts to the Tribes so 
     long as Grand Coulee Dam produces electric power. Section 9 
     appropriates certain amounts to the Administrator. (The 
     definitions of Tribes and Settlement Agreements are found in 
     paragraph (b) of section 9). In effect, the appropriations 
     partially offset the Bonneville rate impacts of the annual 
     payments by the Administrator to the Tribes under the 
     settlement agreement. Thus, the taxpayers, through the 
     appropriated amounts under section 9 and amounts that are to 
     be paid from the judgment fund to the Tribes under the 
     settlement agreement, and Bonneville's ratepayers, through 
     the Administrator's obligation to pay annual amounts under 
     the settlement agreement, each bear an equitable share of the 
     costs of the settlement.
       Although the amounts appropriated to the Administrator in 
     section 9 are made in connection with the settlement 
     agreement, the Administrator may obligate against these 
     amounts for any authorized purpose of the Administrator. In 
     addition, these amounts are made available without fiscal 
     year limitation, meaning that the amounts remain available to 
     the Administrator until expended. In this manner the amounts 
     appropriated under section 9 are the equivalent of other 
     amounts available in the Bonneville fund and constitute an 
     ``appropriation by Congress for the fund'' within the meaning 
     of section 11(a)(3) of the Federal Columbia River 
     Transmission System Act (16 U.S.C.S. 838i(a)(3)).


                    section 10. contract provisions

       Section 10 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 section 10 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 section 10 also provides assurance to 
     ratepayers 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 section 10 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 10 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 
     section 10 also contractually fixes the interest obligation 
     on the new principal obligation at the amount determined 
     pursuant to section 4 of this Act.
       Paragraph (3) of section 10 is intended to assure BPA 
     ratepayers that the contract provisions described in 
     paragraphs (1) and (2) of section 10 are not indirectly 
     circumvented by requiring BPA ratepayers 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 section 10. 
     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 section 10 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 section 10 of this Act, and that no 
     appropriation, other than the judgment fund, is available to 
     pay such a judgment.
       Paragraph (4)(A) of section 10 establishes that the 
     contract protections required by section 10 of this Act 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 section 10 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 costs or allocate costs 
     and benefits. This Act, including the contract provisions 
     under section 10, 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.


                     SECTION 11. SAVINGS PROVISIONS

       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 the Administrator may repay 
     all or a portion of the principal associated with a capital 
     investment before the end of its repayment period, except as 
     limited by section 6 of this Act.
                                 ______



                  the ecosystem Management Act of 1995

  Mr. HATFIELD. Mr. President, the last proposal I will introduce today 
relates to the ecosystem management 
[[Page S321]] and watershed protection. These are the ``buzz words'' 
for a new generation of land management philosophies and techniques. A 
number of federal land management agencies are now working to implement 
ecosystem management on a landscape levels, including the Bureau of 
Land Management, the Forest Service and the Bureau of Reclamation.
  In 1992 the BLM released its Resource Management Plans for Western 
Oregon which developed the first comprehensive strategy for management 
of forest ecosystems and watersheds in the nation. Since that time, the 
Forest Service and Interior Department joined in the act with the 
development of the Forest Ecosystem Management Assessment Team report, 
better known as Option 9, for the forest ecosystems of the Pacific 
Northwest. In addition, Interior is continually working on Ecosystem 
management plans for other areas of the nation, such as the Florida 
Everglades and the area inhabited by the Southern California 
gnatcatcher.
  While this work is admirable and perhaps necessary in the evolution 
of land management policy, a great deal of apprehension and concern 
still surrounds this method of managing our water, air, land and fish 
and wildlife resources on a comprehensive scale. As keepers of the 
taxpayers' purse strings, Congress is required to provide the funding 
to allow the agencies to engage in this type of management.
  Unfortunately, we as legislators and appropriators understand little 
about this new and innovative land management technique. Each federal 
government agency, state agency, interest group and Congress-person has 
his or her own idea of what ecosystem management means for the people 
and ecology of their particular state or region. As appropriators, we 
are required to fund these actions with little more than faith that the 
agencies' recommendations are based on sound science and a firm 
understanding of the needs of ecosystems and the people who live there.
  Numerous additional questions surround not only the integrity but the 
functionality of the ecosystem management boat we have already 
launched. For example, what is ecosystem management, how should it be 
implemented and who should be implementing it? How does the ecosystem 
oriented work of the federal agencies, states, municipalities, 
counties, and interest groups mesh? And is the existing structure of 
our government agencies adequate to meet the requirements of managing 
land across which state and county lines have been drawn? Finally, with 
a decreasing resource production receipt base, how shall we pay for 
ecosystem management? Direct federal appropriations? Consolidation of 
federal, state, local and private funds? And if we determine how to pay 
for ecosystem management, who coordinates collection of these funds and 
how are they distributed?
  I do not disagree with the theory that holistic, coordinated 
management of our natural resources is necessary. On the contrary, I 
and many of my Senate colleagues are prepared to move in that 
direction. It makes eminent sense to manage resources by the natural 
evolution of river basins and watersheds rather than according to the 
artificial boundaries established by counties, states and nations. 
Nevertheless, as our nation's funding resources become more scarce and 
our government agencies, states, localities and private interests seek 
to coordinate their ecosystem restoration efforts, Congress and the 
Executive Branch need to avail themselves of the best information in 
order to make educated, informed decisions about how ecosystem 
management will affect our nation's people environment and federal 
budget.
  To help answer these questions, I am introducing legislation today to 
create an Ecosystem Management Study Commission. This bipartisan 
Commission will be composed of the Chairman and Ranking Minority 
members of following Senate committees: Energy and Natural Resources; 
Appropriations; Interior and Related Agencies Subcommittee
 of Appropriations; and the Public Lands, National Parks and Forests 
Subcommittee of Energy and Natural Resources. In addition, Chairman and 
Ranking Members from the following House committees will also serve: 
Committee on Resources; Appropriations; Interior Subcommittee of 
Appropriations; and the National Parks, Forests and Public Lands 
Subcommittee of the Committee on Resources.
  The Commission will submit a report to Congress 1 year after 
enactment which: Defines ecosystem management; Identifies constraints 
and opportunities for coordinated ecosystem planning; examines existing 
laws and Federal agency budgets to determine whether any changes are 
necessary to facilitate ecosystem management; Identifies incentives, 
such as trust funds, to encourage parties to engage in the development 
of ecosystem management strategies; and identifies, through case 
studies representing different regions of the United States, 
opportunities for and constraints on ecosystem management.
  To assist the Ecosystem Study Commission with its report, a 13-member 
Advisory Committee will be appointed by the Secretary of the Interior, 
and would include 2 tribal nominees, 3 nominees from the Western 
Governors Association, 2 members of conservation groups, 2 members from 
industry, 2 members from professional societies familiar with ecosystem 
management, and 2 members of the legal community.
  I expect this Commission and its Advisory Committee to build the base 
of knowledge and data surrounding ecosystem management that we in 
Congress so desperately need in order to make intelligent, informed 
decisions on legislative and funding issues relating to ecosystem 
management. At the very least, this exercise will bring people and 
groups together who often find themselves in adversarial positions on 
natural resource management issues, much as the Northwest Salmon Summit 
did back in 1990 with environmental, State, and industry interests.
  It is time to look beyond the polarized positions of ``economic 
growth'' and ``environmental protection'' which have crippled our 
system of land management planning and implementation in recent years. 
Instead we must work toward the creation of cooperative, regionally-
based, incentive-driven planning for the management of our water, air, 
land and fish and wildlife resources in perpetuity.
  The quest for ecosystem management becomes even more urgent as we 
realize that the world's population will double from 5.5 to 11 billion 
people over the next 40 years, and the resources to support those 
people will come under increasing demand, especially as they become 
more scarce. We have learned since childhood that food, water, shelter, 
and clothing are basic to human survival on this planet. Equally 
important is a clean environment, healthy ecosystems and an 
understanding of their interdependence and integrated nature. This 
knowledge is crucial for the de-polarization of our current land 
management framework and to the re-empowerment of our citizens with the 
task of preserving the health and welfare of the river basins and 
watersheds in which the future generations of their families will live 
and work.
  I urge my colleagues to join me in paving the way for a greater 
understanding of ecosystems, their dependent parts and the tools 
necessary to implement true, on-the-ground ecosystem management for the 
good of both our human and our natural resources. I am not wedded to 
this particular approach of accomplishing a greater understanding of 
ecosystems. My purpose in introducing this legislation today is to 
underscore the importance of this issue and to foster much needed 
debate in relation to it. I look forward to working with my colleagues 
here in Congress, the Administration, and private groups on 
constructive proposals to enhance our understanding of ecosystem 
management.
  I ask unanimous consent that the text of the bill and a section-by-
section analysis be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 93

       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 ``Ecosystem Management Act of 
     1995''.

     SEC. 2. ECOSYSTEM MANAGEMENT.

       (a) Definitions.--Section 103 of the Federal Land Policy 
     and Management Act of 1976 (43 U.S.C. 1702) is amended by 
     adding at the end the following new subsections:
       ``(q) The term `Indian tribe' means any Indian tribe, band, 
     nation, or other organized 
     [[Page S322]] group or community (including any Alaska Native 
     village or Regional Corporation established pursuant to the 
     Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.)) 
     that is recognized as eligible for the special services 
     provided by the United States to Indians because of their 
     status as Indians.
       ``(r) The term `systems approach', with respect to an 
     ecosystem, means an interdisciplinary scientific method of 
     analyzing the ecosystem as a whole that takes into account 
     the interconnections of the ecosystem.
       ``(s) The term `tribal organization' has the meaning given 
     such term in section 4(l) of the Indian Self-Determination 
     and Education Assistance Act (25 U.S.C. 450b(l)).''.
       (b) Ecosystem Management.--Title II of the Federal Land 
     Policy and Management Act of 1976 (43 U.S.C. 1711 et seq.) is 
     amended by adding at the end the following new sections:


                         ``ECOSYSTEM MANAGEMENT

       ``Sec. 216. It is the policy of the Federal Government to 
     carry out ecosystem management with respect to public lands 
     in accordance with the following principles:
       ``(1) Human populations form an integral part of 
     ecosystems.
       ``(2) It is important to address human needs in the context 
     of other environmental attributes--
       ``(A) in recognition of the dependency of human economies 
     on viable ecosystems; and
       ``(B) in order to ensure diverse, healthy, productive, and 
     sustainable ecosystems.
       ``(3) A systems approach to ecosystem management furthers 
     the goal of conserving biodiversity.
       ``(4) Ecosystem management provides for the following:
       ``(A) The promotion of the stewardship of natural 
     resources.
       ``(B) The formation of partnerships of public and private 
     interests to achieve shared goals for the stewardship of 
     natural resources.
       ``(C) The promotion of public participation in decisions 
     and activities related to the stewardship of natural 
     resources.
       ``(D) The use of the best available scientific knowledge 
     and technology to achieve the stewardship of natural 
     resources.
       ``(E) The establishment of cooperative planning and 
     management activities to protect and manage ecosystems that 
     cross jurisdictional boundaries.
       ``(F) The implementation of cooperative, coordinated 
     planning activities among Federal, tribal, State, local, and 
     private landowners.


                   ``ecosystem management commission

       ``Sec. 217. (a) Establishment.--There is established an 
     Ecosystem Management Commission (referred to in this section 
     as the `Commission').
       ``(b) Purposes of the Commission.--The purposes of the 
     Commission are as follows:
       ``(1) To advise the Secretary and Congress concerning 
     policies relating to ecosystem management on public lands.
       ``(2) To examine opportunities for and constraints on 
     achieving cooperative and coordinated ecosystem management 
     strategies that provide for cooperation between the Federal 
     Government and Indian tribes, States and political 
     subdivisions of States, and private landowners to incorporate 
     a multijurisdictional approach to ecosystem management.
       ``(c) Members.--The Commission shall consist of the 
     following 16 individuals:
       ``(1) From the Committee on Energy and Natural Resources of 
     the Senate:
       ``(A) The Chairman (or a designee of the Chairman) and the 
     Ranking Minority Member (or a designee of the Member).
       ``(B) The Chairman (or a designee of the Chairman) and the 
     Ranking Minority Member (or a designee of the Member) of the 
     Subcommittee on Public Lands, National Parks and Forests.
       ``(2) From the Committee on Appropriations of the Senate:
       ``(A) The Chairman (or a designee of the Chairman) and the 
     Ranking Minority Member (or a designee of the Member).
       ``(B) The Chairman (or a designee of the Chairman) and the 
     Ranking Minority Member (or a designee of the Member) of the 
     Subcommittee on Interior and Related Agencies.
       ``(3) From the Committee on Natural Resources of the House 
     of Representatives:
       ``(A) The Chairman (or a designee of the Chairman) and the 
     Ranking Minority Member (or a designee of the Member).
       ``(B) The Chairman (or a designee of the Chairman) and the 
     Ranking Minority Member (or a designee of the Member) of the 
     Subcommittee on National Parks, Forests, and Public Lands.
       ``(4) From the Committee on Appropriations of the House of 
     Representatives:
       ``(A) The Chairman (or a designee of the Chairman) and the 
     Ranking Minority Member (or a designee of the Member).
       ``(B) The Chairman (or a designee of the Chairman) and the 
     Ranking Minority Member (or a designee of the Member) of the 
     Subcommittee on Interior.
       ``(d) Chairman.--The Commission shall elect a Chairman from 
     among the members of the Commission.
       ``(e) Duties of the Commission.--The duties of the 
     Commission are as follows:
       ``(1) To conduct studies to accomplish the following:
       ``(A) To develop, in a manner consistent with section 216, 
     a definition of the term `ecosystem management'.
       ``(B) To identify appropriate geographic scales for 
     coordinated ecosystem-based planning.
       ``(C) To identify, with respect to the Federal Government, 
     the governments of Indian tribes, States and political 
     subdivisions of States, and private landowners, constraints 
     on, and opportunities for, ecosystem management in order to 
     facilitate the coordination of planning activities for 
     ecosystem management among the governments and private 
     landowners.
       ``(D) To identify strategies for implementing ecosystem 
     management that recognize the following:
       ``(i) The role of human populations in the operation of 
     ecosystems.
       ``(ii) The dependency of human populations on sustainable 
     ecosystems for the production of goods and the provision of 
     services.
       ``(E) To examine this Act, and each other Federal law or 
     policy that directly or indirectly affects the management of 
     public lands, including Federal lands that have been 
     withdrawn from the public domain, to determine whether any 
     legislation or changes to administrative policies, practices, 
     or procedures are necessary to facilitate ecosystem 
     management by the Federal Government in accordance with 
     section 216.
       ``(F) To examine the budget and operation of each Federal 
     department or agency with responsibilities related to 
     ecosystem management to determine whether changes are needed 
     to facilitate ecosystem management.
       ``(G) To identify incentives, such as trust funds, to 
     encourage Indian tribes, States and political subdivisions of 
     States, and private landowners to assist the Federal 
     Government in the development of ecosystem management 
     strategies.
       ``(H) To identify disincentives that may be used to 
     discourage the entities described in subparagraph (G) from 
     refusing to assist the Federal Government in the development 
     of ecosystem management strategies.
       ``(I) To determine the necessity for one or more 
     governmental entities--
       ``(i) to establish a new river basin commission or other 
     regional entity,
       ``(ii) to enter into a new interstate compact, or
       ``(iii) to take any other related action,

     in order to facilitate the implementation of ecosystem 
     management and to ensure the coordination of planning 
     activities with other governmental entities in a manner 
     consistent with section 216 and this section.
       ``(J) To identify, through the use of case studies that 
     represent different regions of the United States (including 
     the Columbia River Basin in the Western United States and the 
     New York-New Jersey Highlands area in the Eastern United 
     States), opportunities for and constraints on the 
     coordination of planning activities of the Federal 
     Government, Indian tribes, State governments, and the 
     governments of political subdivisions of States, and private 
     landowners to accomplish the following:
       ``(i) To implement ecosystem management.
       ``(ii) To serve as a framework for cooperative planning 
     efforts across the United States.
       ``(2) To develop recommendations concerning the findings of 
     the studies described in paragraph (1).
       ``(3) To submit to Congress and the Secretary, not later 
     than 1 year after the date of enactment of this section, a 
     report that contains the findings of the studies conducted 
     pursuant paragraph (1) and the recommendations developed 
     pursuant to paragraph (2).
       ``(f) Meetings.--
       ``(1) Not later than 180 days after the date of enactment 
     of this section, the Commission shall hold its initial 
     meeting.
       ``(2) Subsequent meetings shall be held at the call of the 
     Chairman.
       ``(g) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       ``(h) Powers of the Commission .--(1) The Commission may 
     hold such hearings, sit and act at such times and places, 
     take such testimony, and receive such evidence as the 
     Commission considers appropriate to carry out this section.
       ``(2) The Commission may secure directly from any Federal 
     department or agency such information as the Commission 
     considers necessary to carry out the duties of the 
     Commission, specified in subsection (e). Upon request of the 
     Chairman of the Commission, the head of such Federal 
     department or agency shall furnish such information to the 
     Commission.
       ``(3) The Commission may use the United States mails in the 
     same manner and under the same conditions as other Federal 
     departments or agencies.
       ``(4) The Commission may accept, use, and dispose of gifts 
     or donations of services or property.
       ``(i)  Personnel and Services.--The Secretary shall detail 
     without reimbursement such personnel, and provide such 
     services without reimbursement to the Commission as the 
     Commission may require to carry out the duties specified in 
     subsection (e). An employee of the Federal Government 
     detailed to the Commission under this subsection shall serve 
     without interruption or loss of civil service status or 
     privilege.
       ``(j) Travel Expenses.--The members of the Commission shall 
     be allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from 
     [[Page S323]] 
	 their homes or regular places of business in 
     the performance of services for the Commission.
       ``(k) Advisory Committee.--(1) Not later than 90 days after 
     the date of enactment of this section, the Secretary shall 
     establish an Ecosystem Management Advisory Committee 
     (referred to in this section as the `Advisory Committee') to 
     assist the Commission in preparing and reviewing the report 
     required by subsection (e)(3).
       ``(2) The Secretary shall appoint 13 members to the 
     Advisory Committee by the date specified in paragraph (1) as 
     follows:
       ``(A) Two members shall be selected from nominations 
     submitted by tribal organizations located in States that have 
     a significant amount of public lands (as determined by the 
     Secretary).
       ``(B) Three members shall be officials of a government of a 
     State or political subdivision of a State or a community 
     organization (as determined by the Secretary) selected from 
     nominations from the Governors of States described in 
     subparagraph (A) or from the Western Governors Association.
       ``(C) Two members shall be representatives of conservation 
     groups who have substantial experience and expertise in 
     public land policies.
       ``(D) Two members shall be representatives of industrial 
     concerns who have substantial experience and expertise in 
     public land policies.
       ``(E) Two members shall be representatives of scientific or 
     professional societies who are familiar with the concept of 
     ecosystem management.
       ``(F) Two members shall be representatives from the legal 
     community with recognized legal expertise in the areas of--
       ``(i) constitutional or land use law; and
       ``(ii) public land policy.
       ``(3) The Advisory Committee shall select a Chairman from 
     among the members of the Advisory Committee.
       ``(4) The Advisory Committee shall hold an initial meeting 
     not later than 30 days after the Commission holds its initial 
     meeting pursuant to subsection (f)(1). Subsequent meetings 
     shall be held at the call of the Chairman.
       ``(5) The Advisory Committee shall have same authorities 
     granted to the Commission under paragraphs (1) through (4) of 
     subsection (h).
       ``(6) The members of the Advisory Committee shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Advisory 
     Committee.
       ``(l) Termination of Commission and Advisory Committee.--
     The Commission and Advisory Committee shall terminate on the 
     date that is 30 days after the Commission submits a report to 
     the Secretary and to Congress under subsection (e)(3).
       ``(m) Exemption From Federal Advisory Committee Act.--The 
     Federal Advisory Committee Act (5 U.S.C. App.) shall not 
     apply to the Commission or to the Advisory Committee.
       ``(n) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Department of the 
     Interior $3,000,000 to carry out this section.''.

     SEC. 3. CONFORMING AMENDMENTS.

       (a) Amendment to Table of Contents.--The table of contents 
     at the beginning of the Federal Land Policy and Management 
     Act of 1976 is amended by adding at the end of the items 
     relating to title II the following new items:

``Sec. 215. Authority with respect to certain withdrawals.
``Sec. 216. Ecosystem management.
``Sec. 217. Ecosystem Management Commission.''.
       (b) Technical Amendment.--Before section 215 of the Federal 
     Land Policy and Management Act of 1976 (43 U.S.C. 1723) 
     insert the following new heading:


``AUTHORITY WITH RESPECT TO CERTAIN WITHDRAWALS''.
                                                                    ____

                Outline and Section-by-Section Analysis


 amends title ii of the federal lands and policy management act of 1976

       I. Principles: Set Ecosystem Management principles, 
     including: A recognition of human needs; The need for 
     partnerships and cooperation between public and private 
     interests; The importance of resource stewardship; The 
     importance of public participation; The need for the use of 
     the best available science.
       II. Commission: Establish an Ecosystem Management 
     Commission to:
       A. Advise the Secretary and Congress concerning policies 
     relating to ecosystem management on public lands;
       B. Examine opportunities for and constraints on achieving 
     cooperative and coordinated ecosystem management strategies 
     between the Federal Government, Indian tribes, states, and 
     private landowners.
       III. Membership: Membership of the Commission includes the 
     Chairman and Ranking Members from the following Congressional 
     committees:
       Senate: Energy and Natural Resources Committee; Public 
     Lands, National Parks and Forests Subcommittee of the Senate 
     Energy Committee; Appropriations Committee; Interior and 
     Related Agencies Subcommittee of the Appropriations 
     Committee.
       House: Natural Resources Committee; Subcommittee on 
     National Parks, Forests and Public Lands of the Natural 
     Resources Committee; Appropriations Committee; Interior 
     Subcommittee of the Appropriations Committee.
       IV. Report: The Commission shall submit a report to 
     Congress with recommendations one year after enactment which:
       1. Defines ``ecosystem management;''
       2. Identifies constraints on and opportunities for 
     coordinated ecosystem planning;
       3. Examines existing laws and federal agency budgets 
     affecting public lands management to determine whether any 
     changes are necessary to facilitate ecosystem management;
       4. Identifies incentives, such as trust funds, to encourage 
     parties to engage in the development of ecosystem management 
     strategies;
       5. Identifies, through case studies that represent 
     different regions of the U.S., opportunities for and 
     constraints on ecosystem management.
       V. Advisory Committee: An Advisory Committee shall be 
     appointed to assist the Commission not later than 90 days 
     after enactment. Members of the Advisory Committee shall 
     include 13 members appointed by the Secretary of the 
     Interior:
       Two tribal nominees;
       Three nominees from the Western Governors Association;
       Two members of conservation groups;
       Two members from industry with public lands concerns;
       Two members professional societies familiar with the 
     concept of ecosystem management;
       Two members of the legal community.
       VI. Appropriations: Authorized appropriations are $3 
     million.
     

                          ____________________


                              HEALTH CARE

  Mr. HATFIELD. Finally Mr. President, I would like to take this 
opportunity to remind my colleagues of where we ended the 103d 
Congress--on an issue near and dear to all of us,--health care. At the 
end of last session, when it became apparent that comprehensive health 
care reform would not pass, I joined my colleague Senator Graham of 
Florida in introducing a health care reform proposal with a different 
approach--the Health Innovation Partnership Act. Rather than 
federalizing health care, this bill would encourage the States to 
innovate and help build the best approaches to addressing our health 
care problems--a return to federalism.
  The purpose of this bill is to give States incentives to innovate in 
the area of health care by simplifying and expediting the waiver 
process and providing limited Federal funding to assist them in meeting 
three Federal goals. These goals are: expanding access, controlling 
costs, and maintaining quality health care.
  I mention this today because I see the Health Innovation Partnership 
Act as the cornerstone of my flexibility agenda and I intend to join 
Senator Graham in introducing this bill again by the end of the month. 
Also included within this bill is another of my major priorities which 
I will reintroduce--the national fund for health research. With the 
focus now on other issues, the problems of our health care system have 
fallen from attention. However, the problems have not gone away. Now 
more than ever, it is critical for us to lift the roadblocks to State 
reform and allow States to continue to build the database for 
appropriate national reform. I will continue to push for reform at 
every possible opportunity.
  Mr. President, let me close my remarks with simple note--anything 
worth achieving is worth working for. Meaningful policy change is 
difficult and yet, once accomplished, well worth every ounce of effort. 
I hope this Congress will nurture a reasoned dialogue about the many 
policy challenges which face our country. I come from a State with a 
long tradition of involving its citizens in their Government--as long 
as I continue to stand as their representative, I will do all that I 
can to insure that this Congress is one of the most productive in 
history.
  And that is building from the people up rather than trying to impose 
the will of Congress and the Federal Government down on the people.
                                 ______

      By Mr. HATCH (for himself and Mr. Kennedy):
  S. 96. A bill to amend the Public Health Service Act to provide for 
the conduct of expanded studies and the establishment of innovative 
programs with respect to traumatic brain injury, and for other 
purposes; to the Committee on Labor and Human Resources.
              [[Page S324]] THE TRAUMATIC BRAIN INJURY ACT

  Mr. HATCH. Mr. President, as we begin the 104th Congress I feel it is 
imperative that we complete the process of approving the Traumatic 
Brain Injury Act, S. 725 during the previous Congress. I regret that we 
were unable to pass this important legislation in the 103d Congress. I 
have the pleasure of reintroducing this legislation with Senator 
Kennedy. Our colleague Representative Greenwood is introducing a 
companion measure on the House side today.
  Sustaining a traumatic brain injury can be both catastrophic and 
devastating. The financial and emotional costs to the individual, 
family, and community are enormous. Traumatic brain injury is the 
leading cause of death and disability among Americans under the age of 
35. In the State of Utah, for example, the mean affected age is 28, 
which often is the beginning of an individual's maximum productivity.
  There are 8 million Americans who currently suffer form traumatic 
brain injuries with an annual incidence rate of over 2 million. Over 
500,000 individuals require hospitalization for such injuries and 
resultant medical and surgical complications. The statistics are even 
more revealing when you consider that every 15 seconds someone receives 
a head injury in the U.S.; every 5 minutes, one of these people will 
die and another will become permanently disabled. Of those who survive, 
each year, approximately 70,000 to 90,000 will endure lifelong 
debilitating loss of function. An additional 2,000 will exist in a 
persistent
 vegetative state.

  With the passage of the Traumatic Brian Injury Act will come the 
authorization for research, not only for the treatment of TBI, but also 
for prevention and awareness programs which will help decrease the 
occurrence of traumatic brain injury and improve the long-term outcome.
  This measure will authorize the Centers for Disease Control and 
Prevention to conduct projects to reduce the incidence of traumatic 
brain injury.
  It will provide matching grants to the states through the Health 
Resources and Services Administration for demonstration projects to 
improve access to health and other services regarding traumatic brain 
injury.
  The bill will provide for an HHS study evaluating the number of 
factors relating to traumatic brain injury and for a national consensus 
conference on traumatic brain injury.
  Additionally, the bill will address the causes, consequences, and 
costs of the sequelae for traumatic brain injury. A comprehensive 
uniformed reporting system will be developed for hospitals, State and 
local health-related agencies. Practice guidelines, prevention 
projects, and outcome studies are all integral parts of the TBI Act.
  A survivor of a severe brain injury typically faces 5 to 10 years of 
intensive services and estimated lifetime costs can exceed $4 million. 
The economic costs for traumatic brain injury alone approach $25 
billion per year.
  Mr. President, this legislation can provide the mechanism for the 
prevention, treatment and the improvement of the quality of life for 
those Americans and their families who may sustain such a devastating 
disability. I ask my colleagues' support in speedily enacting the 
Traumatic Brain Injury Act.
  Mr. KENNEDY. Mr. President. Each year 2 million persons suffer 
serious head injuries, and nearly one hundred thousand die. Such 
injuries are the leading cause of death and disability among young 
Americans in the 15-24 year age group. For survivors, the picture is 
often grim. Tens of thousands suffer irreversible, debilitating life-
long impairments.
  Medical treatment, rehabilitative efforts and disability payments for 
such injuries are as high as $25 billion a year. The cost to society is 
heavy, and emotional and financial burden for families is often 
unbearable.
  In 1988, Congress recommended that the Secretary of Health and Human 
Services establish an Interagency Head Injury Task Force to identify 
gaps in research, training, medical management, and rehabilitation. 
This legislation responds to the prevention, research, and service 
needs identified by the Task Force.
  This bill will promote coordination in the delivery system and assure 
greater access to services for victims suffering from the disabling 
consequences of these injuries. By improving the quality of care, we 
can reduce severely the disabling effects and reduce the heavy toll 
from these injuries.
  The best treatment, however, is still prevention. More effective 
strategies to avert these injuries are critical. The community 
education programs established under this bill, will broaden public 
awareness and encourage prevention.
  Finally, other provisions in this legislation will authorize the 
Centers for Disease Control and Prevention to develop effective 
strategies for reducing the incidence of traumatic brain injury and to 
expand biomedical research activities at the National Institutes of 
Health.
  This measure has great potential for saving lives, reducing 
disabilities and reducing health care costs and I urge my colleagues to 
support Traumatic Brain Injury Act.
  I ask that the text of this bill be included in the Record.
  There being no objection, the material was ordered to printed in the 
Record, as follows:
                                 S. 96

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

     SECTION 1. PROGRAMS OF CENTERS FOR DISEASE CONTROL AND 
                   PREVENTION.

       Part B of title III of the Public Health Service Act (42 
     U.S.C. 241 et seq.) is amended by inserting after section 
     317F the following section:


                 ``prevention of traumatic brain injury

       ``Sec. 317G. The Secretary, acting through the Director of 
     the Centers for Disease Control and Prevention, may carry out 
     projects to reduce the incidence of traumatic brain injury. 
     Such projects may be carried out by the Secretary directly or 
     through awards of grants or contracts to public or nonprofit 
     private entities. The Secretary may directly or through such 
     awards provide technical assistance with respect to the 
     planning, development, and operation of such projects.
       ``(b) Certain Activities.--Activities under subsection (a) 
     may include--
       ``(1) the conduct of research into identifying effective 
     strategies for the prevention of traumatic brain injury; and
       ``(2) the implementation of public information and 
     education programs for the prevention of such injury and for 
     broadening the awareness of the public concerning the public 
     health consequences of such injury.
       ``(c) Coordination of Activities.--The Secretary shall 
     ensure that activities under this section are coordinated as 
     appropriate with other agencies of the Public Health Service 
     that carry out activities regarding traumatic brain injury.
       ``(d) Definition.--For purposes of this section, the term 
     `traumatic brain injury' means an acquired injury to the 
     brain. Such term does not include brain dysfunction caused by 
     congenital or degenerative disorders, nor birth trauma, but 
     may include brain injuries caused by anoxia due to near 
     drowning. The Secretary may revise the definition of such 
     term as the Secretary determines necessary.''.

     SEC. 2. PROGRAMS OF NATIONAL INSTITUTES OF HEALTH.

       Section 1261 of the Public Health Service Act (42 U.S.C. 
     300d-61) is amended--
       (1) in subsection (d)--
       (A) in paragraph (2), by striking ``and'' after the 
     semicolon at the end;
       (B) in paragraph (3), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following paragraph:
       ``(4) the authority to make awards of grants or contracts 
     to public or nonprofit private entities for the conduct of 
     basic and applied research regarding traumatic brain injury, 
     which research may include--
       ``(A) the development of new methods and modalities for the 
     more effective diagnosis, measurement of degree of injury, 
     post-injury monitoring and prognostic assessment of head 
     injury for acute, subacute and later phases of care;
       ``(B) the development, modification and evaluation of 
     therapies that retard, prevent or reverse brain damage after 
     acute head injury, that arrest further deterioration 
     following injury and that provide the restitution of function 
     for individuals with long-term injuries;
       ``(C) the development of research on a continuum of care 
     from acute care through rehabilitation, designed, to the 
     extent practicable, to integrate rehabilitation and long-term 
     outcome evaluation with acute care research; and
       ``(D) the development of programs that increase the 
     participation of academic centers of excellence in head 
     injury treatment and rehabilitation research and training.''; 
     and
       (2) in subsection (h), by adding at the end the following 
     paragraph:
       ``(4) The term `traumatic brain injury' means an acquired 
     injury to the brain. Such term does not include brain 
     dysfunction caused by congenital or degenerative disorders, 
     nor birth trauma, but may include brain injuries caused by 
     anoxia due to near drowning. The Secretary may revise the 
     definition of such term as the Secretary determines 
     necessary.''.
     [[Page S325]] SEC. 3. PROGRAMS OF HEALTH RESOURCES AND 
                   SERVICES ADMINISTRATION.

       Part E of title XII of the Public Health Service Act (42 
     U.S.C. 300d-51 et seq.) is amended by adding at the end the 
     following section:

     ``SEC. 1252. STATE GRANTS FOR DEMONSTRATION PROJECTS 
                   REGARDING TRAUMATIC BRAIN INJURY.

       ``(a) In General.--The Secretary, acting through the 
     Administrator of the Health Resources and Services 
     Administration, may make grants to States for the purpose of 
     carrying out demonstration projects to improve access to 
     health and other services regarding traumatic brain injury.
       ``(b) State Advisory Board.--
       ``(1) In general.--The Secretary may make a grant under 
     subsection (a) only if the State involved agrees to establish 
     an advisory board within the appropriate health department of 
     the State or within another department as designated by the 
     chief executive officer of the State.
       ``(2) Functions.--An advisory board established under 
     paragraph (1) shall advise and make recommendations to the 
     State on ways to improve services coordination regarding 
     traumatic brain injury. Such advisory boards shall encourage 
     citizen participation through the establishment of public 
     hearings and other types of community outreach programs.
       ``(3) Composition.--An advisory board established under 
     paragraph (1) shall be composed of--
       ``(A) representatives of--
       ``(i) the corresponding State agencies involved;
       ``(ii) public and nonprofit private health related 
     organizations;
       ``(iii) other disability advisory or planning groups within 
     the State;
       ``(iv) members of an organization or foundation 
     representing traumatic brain injury survivors in that State; 
     and
       ``(v) injury control programs at the State or local level 
     if such programs exist; and
       ``(B) a substantial number of individuals who are survivors 
     of traumatic brain injury, or the family members of such 
     individuals.
       ``(c) Matching Funds.--
       ``(1) In general.--With respect to the costs to be incurred 
     by a State in carrying out the purpose described in 
     subsection (a), the Secretary may make a grant under such 
     subsection only if the State agrees to make available, in 
     cash, non-Federal contributions toward such costs in an 
     amount that is not less than $1 for each $2 of Federal funds 
     provided under the grant.
       ``(2) Determination of amount contributed.--In determining 
     the amount of non-Federal contributions in cash that a State 
     has provided pursuant to paragraph (1), the Secretary may not 
     include any amounts provided to the State by the Federal 
     Government.
       ``(d) Application for Grant.--The Secretary may make a 
     grant under subsection (a) only if an application for the 
     grant is submitted to the Secretary and the application is in 
     such form, is made in such manner, and contains such 
     agreements, assurances, and information as the Secretary 
     determines to be necessary to carry out this section.
       ``(e) Coordination of Activities.--The Secretary shall 
     ensure that activities under this section are coordinated as 
     appropriate with other agencies of the Public Health Service 
     that carry out activities regarding traumatic brain injury.
       ``(f) Report.--Not later than 2 years after the date of the 
     enactment of this section, the Secretary shall submit to the 
     Committee on Energy and Commerce of the House of 
     Representatives, and to the Committee on Labor and Human 
     Resources of the Senate, a report describing the findings and 
     results of the programs established under this section, 
     including measures of outcomes and consumer and surrogate 
     satisfaction.
       ``(g) Definition.--For purposes of this section, the term 
     `traumatic brain injury' means an acquired injury to the 
     brain. Such term does not include brain dysfunction caused by 
     congenital or degenerative disorders, nor birth trauma, but 
     may include brain injuries caused by anoxia due to near 
     drowning. The Secretary may revise the definition of such 
     term as the Secretary determines necessary.
       ``(h) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary for each of the fiscal years 1995 
     through 1997.''.

     SEC. 4. STUDY; CONSENSUS CONFERENCE.

       (a) Study.--
       (1) In general.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary''), acting 
     through the appropriate agencies of the Public Health 
     Service, shall conduct a study for the purpose of carrying 
     out the following with respect to traumatic brain injury:
       (1) In collaboration with appropriate State and local 
     health-related agencies--
       (A) determine the incidence and prevalence of traumatic 
     brain injury; and
       (B) develop a uniform reporting system under which States 
     report incidents of traumatic brain injury, if the Secretary 
     determines that such a system is appropriate.
       (2) Identify common therapeutic interventions which are 
     used for the rehabilitation of individuals with such 
     injuries, and shall, subject to the availability of 
     information, include an analysis of--
       (A) the effectiveness of each such intervention in 
     improving the functioning of individuals with brain injuries;
       (B) the comparative effectiveness of interventions employed 
     in the course of rehabilitation of individuals with brain 
     injuries to achieve the same or similar clinical outcome; and
       (C) the adequacy of existing measures of outcomes and 
     knowledge of factors influencing differential outcomes.
       (3) Develop practice guidelines for the rehabilitation of 
     traumatic brain injury at such time as appropriate scientific 
     research becomes available.
       (2) Dates certain for reports.--
       (A) Not later than 18 months after the date of the 
     enactment of this Act, the Secretary shall submit to the 
     Committee on Energy and Commerce of the House of 
     Representatives, and to the Committee on Labor and Human 
     Resources of the Senate, a report describing the findings 
     made as a result of carrying out paragraph (1)(A).
       (B) Not later than 3 years after the date of the enactment 
     of this Act, the Secretary shall submit to the Committees 
     specified in subparagraph (A) a report describing the 
     findings made as a result of carrying out subparagraphs (B) 
     and (C) of paragraph (1).
       (b) Consensus Conference.--The Secretary, acting through 
     the Director of the National Center for Medical 
     Rehabilitation Research within the National Institute for 
     Child Health and Human Development, shall conduct a national 
     consensus conference on managing traumatic brain injury and 
     related rehabilitation concerns.
       (c) Definition.--For purposes of this section, the term 
     ``traumatic brain injury'' means an acquired injury to the 
     brain. Such term does not include brain dysfunction caused by 
     congenital or degenerative disorders, nor birth trauma, but 
     may include brain injuries caused by anoxia due to near 
     drowning. The Secretary may revise the definition of such 
     term as the Secretary determines necessary.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section such sums as may 
     be necessary for each of the fiscal years 1995 through 1997.
                                                                    ____

                 The Traumatic Brain Injury Act of 1994


                           GOALS OF THE BILL

       1. To expand efforts to identify methods to prevent 
     traumatic brain injury.
       2. To expand biomedical research efforts to prevent or 
     minimize the extent, severity and progression of dysfunction 
     as a result of traumatic brain injury.
       3. To develop initiatives to improve the quality of care.

                 Summary of Traumatic Brain Injury Act

                  Prevention of Traumatic Brain Injury

       Authorizes CDC to identify effective strategies for 
     prevention of TBI; and to implement public information and 
     education programs. The Secretary will ensure that the CDC 
     will coordinate their TBI activities with other agencies of 
     the Public Health Service.

                   Basic and Applied Research at NIH

       Authorizes NIH to conduct basic and applied research on 
     limiting primary and secondary mechanical, biochemical, and 
     metabolic injury to the brain and minimize the severity of 
     the injury.

          Traumatic Brain Injury Services Coordination at HRSA

       Authorizes HRSA to make grants to States for demonstration 
     projects to improve access to health and other services for 
     individuals with traumatic brain injury. Each project would 
     have an advisory board, a patient advocacy and service 
     coordination system, a traumatic brain injury registry and 
     develop standards for the marketing of rehabilitation 
     services to individuals with traumatic brain injury or their 
     family members.
                                 ______

      By Mr. INOUYE:
       S. 97. A bill to amend the Job Training Partnership Act to 
     provide authority for the construction of vocational 
     education and job training centers for Native Hawaiians and 
     Native American Samoans, and for other purposes; to the 
     Committee on Labor and Human Resources.


         THE JOB TRAINING PARTNERSHIP ACT AMENDMENT ACT OF 1995

  Mr. INOUYE. Mr. President, I rise to introduce a bill to provide much 
needed centers of job training assistance for Native Hawaiians and 
Native American Samoans. These populations, facing unemployment rates 
far above the state and national averages, are in desperate need of 
accessible, effective, and culturally sensitive programs to gain the 
skills necessary to compete in today's workplace.
  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. 97

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

     SECTION 1. CONSTRUCTION OF VOCATIONAL EDUCATION AND JOB 
                   TRAINING CENTERS FOR NATIVE HAWAIIANS AND 
                   NATIVE AMERICAN SAMOANS.

       Title IV of the Job Training Partnership Act is amended by 
     inserting after section 401 (29 U.S.C. 1671) the following 
     new section:
     [[Page S326]] ``SEC. 401A. CONSTRUCTION OF VOCATIONAL 
                   EDUCATION AND JOB TRAINING CENTERS FOR NATIVE 
                   HAWAIIANS AND NATIVE AMERICAN SAMOANS.

       ``(a) Definition.--As used in this section, the term 
     `Native American Samoan' means a person who is a citizen or 
     national of the United States and who is a lineal descendant 
     of an inhabitant of the Samoan Islands on April 18, 1900. For 
     purposes of this section. Swains Island shall be considered 
     part of the Samoan Islands.
       ``(b) Contracts.--The Secretary shall enter into contracts 
     with appropriate entities for the construction of education 
     and training centers for Hawaiian Natives and Native American 
     Samoans. Each such center shall provide comprehensive 
     vocational education and employment and training services 
     through programs authorized under other provisions of this 
     Act and the Carl D. Perkins Vocational and Applied Technology 
     Education Act (20 U.S.C. 2301 et seq.).''.

     SEC. 2. AUTHORIZATION OF APPROPRIATIONS.

       Section 3(c)(2)(A)(i) of the Job Training Partnership Act 
     (29 U.S.C. 1502(c)(2)(A)(i)) is amended by striking ``section 
     401'' and inserting ``sections 401 and 401A, from which the 
     Secretary shall reserve not less than $5,000,000 for fiscal 
     year 1996 to carry out section 401A''.
                                 ______

      By Mr. BRADLEY (for himself, Mr. Daschle and Mr. Kerry):
  S. 98. A bill to amend the Congressional Budget Act of 1974 to 
establish a process to identify and control tax expenditures; to the 
Committee on the Budget and the Committee on Governmental Affairs, 
jointly, pursuant to the order of August 4, 1977, with instructions 
that if one Committee reports, the other Committee have thirty days to 
report or be discharged.


   Tax Expenditure and Legislative Appropriations Line Item Veto Act

  Mr. BRADLEY. Mr. President, today, on the first day the Senate is 
convened, I have introduced the Tax Expenditure and Legislative 
Appropriations Line-Item Veto Act of 1995.
  The short explanation of what I am proposing is that the Congress 
this year enact a line-item veto. Last Congress, I introduced the same 
bill. We got 53 votes on the floor of the U.S. Senate at that time. It 
was the highest number of votes ever for a line-item veto. We were in a 
parliamentary situation where we needed 60 votes, so it did not pass.
  Today, I am reintroducing the same piece of legislation in hopes that 
the Congress will pass the line-item veto this year.
  Mr. President, we begin this Congress with two obligations: first, to 
change the way we do business, and, second, to cut government spending. 
Reforms that have been bottled up for years in partisan finger-pointing 
need to be released and must become our first priorities. Both the 
Congress and White House must learn to say no: no to unnecessary 
programs, no to those Members who would build monuments to themselves, 
and a firm no to those lobbyists who would work every angle to slip 
special provisions into the tax code that benefit the fortunate few and 
cost every other American millions. For decades, Presidents of both 
parties have insisted that the deficit would be lower if they had the 
power to say no, in the form of the line-item veto.
  This legislation, if enacted, would grant the President the power to 
say no. In sponsoring this legislation, I urge our colleagues in both 
the Senate and House of Representatives to pass a line-item veto that 
covers spending in both appropriations and tax bills. Any line-item 
veto that fails to give the President the ability to prevent additional 
loopholes from entering the tax code only does half the job.
  Although I did not support the line-item veto when I initially joined 
the Senate, I watched for 12 years as the deficit quintupled, shameless 
pork-barrel projects persisted in appropriations and tax bills, and our 
Presidents again and again denied responsibility for the decisions that 
led to these devastating trends. Therefore, in 1992, I decided that it 
was time to change the rules.
  Rather than simply joining one of the appropriations line-item veto 
bills then in existence, I felt that we needed to be honest about the 
fact that for each example of unnecessary, special-interest pork-barrel 
spending through an appropriations bill, there are similar examples of 
such spending buried in tax bills. The tax code provides special 
exceptions from taxes that total over $400 billion a year, more than 
the entire federal deficit.
  For every $2.48 million, earmarked in an appropriations bill, to 
teach civilian marksmanship skills, there is a $300 million special 
provision allowing taxpayers to rent their homes for two weeks without 
having to report any income. For every $150,000 appropriated for 
acoustical pest control studies in Oxford, MS, there is a $2.9 billion 
special tax exemption for ethanol fuel production. As a member of the 
Finance Committee, I have seen an almost endless stream of requests for 
preferential treatment through the tax code, including special 
depreciation schedules for rental tuxedos, an exemption from fuel 
excise taxes for crop dusters, and tax credits for clean-fuel vehicles. 
In singling out these pork-barrel projects, I do not mean to pass 
judgment on their merits.
  Because many of these tax code provisions single out narrow 
subclasses for benefit, the rest of us must pay more in taxes. 
Therefore, I have developed an alternative that would authorize the 
President to veto wasteful spending not just in appropriations bills 
but also in the tax code.
  If the President had the power to excise special interest spending, 
but only in appropriations, we would simply find the special interest 
lobbyists who work appropriations turning themselves into tax 
lobbyists, pushing for the same spending in the Tax Code. Spending is 
spending whether it comes in the form of a government check, or in the 
form of a special exception from the tax rates that apply to everyone 
else. Tax spending does not, as some pretend, simply allow people to 
keep more of what they have earned. It gives them a special exception 
from the rules that oblige everyone to share in the responsibility of 
our national defense and protecting the young, the aged, and the 
infirm. The only way to let everyone keep more of what they have
 earned is to minimize these tax expenditures along with appropriated 
spending and the burden of the national debt so that we can bring down 
tax rates fairly, for everyone. Therefore, Mr. President, I urge all of 
our colleagues, particularly those in leadership positions in the 
Senate and House of Representatives, to pass a line-item veto bill that 
includes both appropriations and tax provisions.

  Although it is true that the line-item veto would give the President 
more power than our founders probably envisioned, there is also truth 
in the conclusion of the National Economic Commission in 1989 that 
``the balance of power on budget issues has swung too far from the 
Executive toward the Legislative branch.'' There is no tool to 
precisely calibrate this balance of power, but if we have to swing a 
little too far in one direction or another, at this critical moment, we 
should lean toward giving the President the power that he, and other 
Presidents, have said they need to control wasteful spending. We have a 
right to expect that the President will use this power for the good of 
all.
  I also agree with the more recent economic commission chaired by my 
colleagues Senators Domenici and Nunn that a line-item veto is not in 
itself deficit reduction. But if the President is willing to use it, it 
is the appropriate tool to cut a certain kind of wasteful spending--the 
pork-barrel projects that tend to crop up in appropriations and tax 
bills. Presidential leadership can eliminate these projects when 
Congress, for institutional reasons, usually cannot. Individual 
Senators and Representatives, who must represent their own local 
interests, find it difficult to challenge their colleagues on behalf of 
the general interest. The line-item veto will allow the President to 
juxtapose the narrow special interests with the broad public interest.
  Pork-barrel spending on appropriations and taxes is only one of the 
types of spending that drive up the deficit, and is certainly not as 
large as the entitlements for broad categories of the population that 
we are starting to tackle. But until we control these expenditures for 
the few, we cannot ask for shared sacrifice from the many who benefit 
from entitlements, or the many who pay taxes.
  The particular legislation that I am introducing today is identical 
to a bill I introduced in the 103d Congress and is modeled on a bill my 
colleague Senator Hollings has introduced in several Congresses. I want 
to thank and commend Senator Hollings for working so hard to develop a 
workable line-item 
[[Page S327]]  veto strategy, one that goes beyond political 
demagoguery to the real question of how to limit spending. This bill 
will require that each line item in any appropriations bill and any 
bill affecting revenues be enrolled as a separate bill after it is 
passed by Congress, so that the President can sign the full bill or 
single out individual items to sign and veto. It differs from other 
bills in that it avoids obvious constitutional obstacles and in that it 
applies to spending through the tax code as well as appropriated 
spending.
  Although I acknowledge that separate enrollment, especially separate 
enrollment of appropriations provisions, may prove difficult at times, 
in the face of a debt rapidly approaching $5 trillion, I do not believe 
that we have the luxury of shying away from making difficult decisions. 
If, because of our appropriations process, we are unable to easily 
disaggregate appropriations into individual spending items for the 
President's consideration, then, rather than throw out this line-item 
veto proposal, I believe that we should reconsider how we appropriate 
the funds that are entrusted to us.
  As I noted previously, the legislation that I am proposing would 
remain in effect for just 2 years. That period should constitute a real 
test of the idea. First, it will provide enough time for the Federal 
courts to address any questions about whether this approach is 
constitutionally sound, or if a constitutional amendment is necessary. 
Only courts can answer this question, which is in dispute among legal 
scholars. Second, we should have a formal process to determine whether 
the line-item veto works as intended: did it contribute to significant 
deficit reduction? Did the President use it judiciously to cut special-
interest spending, or, as some worry, did he use it to blackmail 
Members of Congress into supporting his own special interest 
expenditures? Did it alter the balance of power over spending, either 
restoring the balance or shifting it too far in the other direction?
  As the recent elections amply demonstrated, the American people have 
no more patience for finger-pointing or excuses. We can no longer 
tolerate a deficit that saps our economic strength while politicians in 
Washington insist that it's someone else who really has the power to 
spend or cut spending. This President or any other must have no excuses 
for failing to lead.
  I list Mr. Campbell, Mr. Coats, and Mr. Robb as original sponsors of 
this legislation.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 98

       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 ``Tax Expenditure Control Act 
     of 1995''.

     SEC. 2. TAX EXPENDITURES INCLUDED IN BUDGET RESOLUTION.

       Section 301 of the Congressional Budget Act of 1974 is 
     amended--
       (1) in subsection (a)(2) by inserting after ``Federal 
     revenues'', both places it appears, the following: ``and tax 
     expenditures (including income tax expenditures or other 
     equivalent base narrowing tax provisions applying to other 
     Federal taxes)''; and
       (2) in subsection (a)(4) by inserting after ``budget 
     outlays,'' the following: ``tax expenditures (including 
     income tax expenditures or other equivalent base narrowing 
     tax provisions applying to other Federal taxes),''.

     SEC. 3. TAX EXPENDITURE ANALYSIS IN REPORT ACCOMPANYING 
                   BUDGET RESOLUTION.

       Section 301(e)(1) of the Congressional Budget Act of 1974 
     is amended by inserting after ``revenues'' the following: 
     ``and tax expenditures''.

     SEC. 4. RECONCILIATION MAY INCLUDE TAX EXPENDITURE CHANGES.

       Section 310(a)(2) of the Congressional Budget Act of 1974 
     is amended by inserting after ``revenues'' the following: 
     ``and tax expenditures''.

     SEC. 5. CONGRESSIONAL BUDGET OFFICE REPORT.

       Section 202(f)(1) of the Congressional Budget Act of 1974 
     is amended in the matter following subparagraph (B) by 
     striking ``and budget outlays'' and inserting ``, budget 
     outlays, and tax expenditures''.

     SEC. 6. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect on the date of enactment of this Act.
  Mr. DASCHLE. Mr. President, my distinguished colleague from New 
Jersey, Senator Bradley, and I are introducing today a bill that I 
believe should be an important item on our agenda for the 104th 
Congress.
  For nearly a decade now, one of our primary tasks has been to leash 
the burgeoning budget deficit and keep it under control. One of our 
more recent efforts in this regard, the Ominbus Budget Reconciliation 
Act of 1993, went a long way toward that goal, setting in motion nearly 
$500 billion in spending cuts as well as tax increases on those who 
could afford it most. In crafting last year's budget, we took further 
steps to cut unnecessary spending.
  But we are by no means out of the woods yet. Deficits are expected to 
begin rising again in the near future, spurred mainly by increases in 
health care costs.
  The process of reducing the budget deficit is a painstaking one, 
during which every item of direct spending is scrutinized. Even 
entitlements have faced the budget ax in recent years, as we have tried 
to balance the costs and benefits of spending in one area or another.
  As part of this process, programs are reviewed by the President in 
submitting his budget, and cuts are suggested in an array of programs 
across the board. Thereafter, the Budget Committee prepares it annual 
budget resolution in which every item of direct spending, including 
entitlements, is divided into budget function groups. Spending targets 
are set for each budget category, with instructions to the committees 
of jurisdiction to attempt to reach those targets.
  The intense scrutiny, however, is reserved for direct spending items. 
Yet, one of our largest areas of spending in the Federal budget is tax 
expenditures--exclusions, exemptions, deductions, credits, preferential 
rates, and deferrals of tax liability. While, at the margin, we can 
debate exactly what constitutes a tax expenditure, these items drain 
about $400 billion from Federal revenues every year.
  Make no mistake, I am not advocating that there be massive 
elimination of tax expenditures, just as I would not suggest cutting 
discretionary programs and entitlements in half without regard to 
merit.
  What I am saying is that this very large and important part of 
Federal spending--for, clearly, that is what it is--deserves the same 
scrutiny as direct spending.
  Currently tax expenditures receive only minimal attention on an 
annual basis. First, the President must submit a list of these 
expenditures in his annual budget submission to Congress. Second, 
levels of tax expenditures are included in an annual report released by 
the Congressional Budget Office. And third, the report accompanying the 
annual budget resolution must include estimated levels of tax 
expenditures by major functional category.
  The scrutiny stops there.
  Nowhere is this information incorporated in the budget process in a 
meaningful way--a way that spurs action to limit this form of spending. 
There are no targets for tax expenditures called for in the budget 
resolution, and there is nothing to force Members to view tax 
expenditures by budget function, comparing aggregate spending in any 
given area through both direct spending and tax expenditures.
  Frankly, there is no reason to require the President, CBO, or the 
budget committees to list or estimate levels of tax expenditures if, 
thereafter, we may simply ignore them.
  The bill that Senator Bradley and I am introducing today would 
incorporate consideration of tax expenditures in the budget process in 
a responsible and more effective way. Essentially, it would subject tax 
expenditures to the same annual scrutiny that entitlement spending 
currently receives. That should be the minimum.
  The bill would require setting targets for tax expenditures in the 
annual budget resolution and would require that the total level of tax 
expenditures be broken down according to functional category in the 
budget resolution itself. With this information, Congress and the 
public could compare how much is being spend on a particular budget 
function both through direct spending and through tax expenditures. 
These and other changes contained in 
[[Page S328]] the legislation, which has been discussed in detail by my 
colleague from New Jersey, will help translate awareness into action.
  As we tackle other important budget issues in this session of 
Congress, I urge my colleagues to review our legislation carefully and 
consider lending their support for its passage.
                                 ______

      By Mrs. FEINSTEIN:
  S. 99. A bill to provide for the conveyance of lands to certain 
individuals in Butte County, CA; to the Committee on Energy and Natural 
Resources.

                      THE BUTTE COUNTY ACT OF 1995

 Mrs. FEINSTEIN. Mr. President, today I am introducing a bill to 
resolve a title problem on the Plumas National Forest in Butte County, 
CA. The bill would provide for the conveyance of approximately 30 acres 
of land to 13 individuals who have had a cloud on the title of their 
property as a result of a 1992 Bureau of Land Management survey.
  The legislation is identical to S. 399 which I sponsored and H.R. 457 
which Congressman Wally Herger sponsored in the 103d Congress. The 
House passed H.R. 457 and the Senate Energy and Natural Resources 
Committee approved the legislation, but Congress adjourned before we 
could complete action.
  Mr. President, this legislation is essential to resolve a hardship to 
individuals that was caused by an error on the part of the Federal 
Government.
  The problem stems from 1961 when the Forest Service accepted what now 
appears to be an incorrect survey of the Plumas National Forest 
boundary. The surveyor could not locate the original survey corner 
established in 1869 so he established a new corner. Since then, private 
landowners used the 1961 corner to establish boundaries and build 
improvements. In 1992 the Bureau of Land Management conducted a new 
survey which showed that land previously thought to be outside the 
boundaries of the Plumas National Forest is actually within the forest 
boundaries, and thus is Federal property. The property owners relied 
upon the earlier erroneous survey which they believed to be accurate 
and have occupied and improved their property in good faith.
  I believe the property owners should be granted relief as this 
legislation provides. The bill authorizes and directs the Secretary of 
Agriculture to convey without consideration all right, title, and 
interest in the Federal lands, consisting of less than 30 acres, to the 
13 claimants. The bill describes the property in question and the 
claimants who are entitled to relief. The bill also describes the 
process to be followed and assigns to the Federal Government the 
responsibility to provide for a survey to monument and mark the lands 
to be conveyed.
  Mr. President, there is no Federal interest in this property and the 
Department of Agriculture has repeatedly testified favorably on this 
legislation. Thus, I hope the 104th Congress will more quickly to enact 
this measure.
  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. 99

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

     SECTION 1. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds and declares that--
       (1) certain landowners in Butte County, California who own 
     property adjacent to the Plumas National Forest have been 
     adversely affected by certain erroneous surveys;
       (2) these landowners have occupied or improved their 
     property in good faith and in reliance on erroneous surveys 
     of their properties that they believed were accurate; and
       (3) the 1992 Bureau of Land Management dependent resurvey 
     of the Plumas National Forest will correctly establish 
     accurate boundaries between such forest and private lands.
       (b) Purpose.--It is the purpose of this Act to authorize 
     and direct the Secretary of Agriculture to convey, without 
     consideration, certain lands in Butte County, California, to 
     persons claiming to have been deprived of title to such 
     lands.

     SEC. 2. DEFINITIONS.

       For the purpose of this Act--
       (1) the term ``affected lands'' means those Federal lands 
     located in the Plumas National Forest in Butte County, 
     California, in sections 11, 12, 13, and 14, township 21 
     north, range 5 east, Mount Diablo Meridian, as described by 
     the dependent resurvey by the Bureau of Land Management 
     conducted in 1992, and subsequent Forest Service land line 
     location surveys, including all adjoining parcels where the 
     property line as identified by the 1992 BLM dependent 
     resurvey and National Forest boundary lines before such 
     dependent resurvey are not coincident;
       (2) the term ``claimant'' means an owner of real property 
     in Butte County, California, whose real property adjoins 
     Plumas National Forests lands described in subsection (a), 
     who claims to have been deprived by the United States of 
     title to property as a result of previous erroneous surveys; 
     and
       (3) the term ``Secretary'' means the Secretary of 
     Agriculture.

     SEC. 3. CONVEYANCE OF LANDS.

       Notwithstanding any other provision of law, the Secretary 
     is authorized and directed to convey, without consideration, 
     all right, title, and interest of the United States in and to 
     affected lands as described in section 2(1), to any claimant 
     or claimants, upon proper application from such claimant or 
     claimants, as provided in section 4.

     SEC. 4. TERMS AND CONDITIONS OF CONVEYANCE.

       (a) Notification.--Not later than 2 years after the date of 
     enactment of this Act, claimants shall notify the Secretary, 
     through the Forest Supervisor of the Plumas National Forest, 
     in writing of their claim to affected lands. Such claim shall 
     be accompanied by--
       (1) a description of the affected lands claimed;
       (2) information relating to the claim of ownership of such 
     lands; and
       (3) such other information as the Secretary may require.
       (b) Issuance of Deed.--(1) Upon a determination by the 
     Secretary that issuance of a deed for affected lands is 
     consistent with the purpose and requirements of this Act, the 
     Secretary shall issue a quitclaim deed to such claimant for 
     the parcel to be conveyed.
       (2) Prior to the issuance of any such deed as provided in 
     paragraph (1), the Secretary shall ensure that--
       (A) the parcel or parcels to be conveyed have been surveyed 
     in accordance with the Memorandum of Understanding between 
     the Forest Service and the Bureau of Land Management, dated 
     November 11, 1989;
       (B) all new property lines established by such surveys have 
     been monumented and marked; and
       (C) all terms and conditions necessary to protect third 
     party and Government Rights-of-Way or other interests are 
     included in the deed.
       (3) The Federal Government shall be responsible for all 
     surveys and property line markings necessary to implement 
     this subsection.
       (c) Notification to BLM.--The Secretary shall submit to the 
     Secretary of the Interior an authenticated copy of each deed 
     issued pursuant to this Act no later than 30 days after the 
     date such deed is issued.

     SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as 
     necessary to carry out the purposes of this Act.
                                 ______

      By Mr. GLENN:
  S. 100. A bill to reduce Federal agency regulatory burdens on the 
public, improve the quality of agency regulations, increase agency 
accountability for regulatory actions, provide for the review of agency 
regulations, and for other purposes; to the Committee on Governmental 
Affairs.

                     REGULATORY ACCOUNTABILITY ACT

  Mr. GLENN. Mr. President, I rise today to address the issue of 
regulations and the need to improve regulatory decision-making--to 
improve their quality and reduce their burdens.
  In our system of government, we the lawmakers rely on administrative 
agencies to issue regulations to implement our laws. The rulemaking 
process is an open one compared to many countries--agencies must 
consider the views of the public, make their decisions on the basis of 
a rulemaking record, and be prepared to defend their decisions in 
court. These are the strengths of our administrative process. 
Unfortunately, there are also weaknesses. General rulemaking principles 
have not proven rigorous enough--agencies too often promulgate rules 
whose costs outweigh the benefits, where the regulated risks are 
insignificant compared to other societal risks, and where State and 
local governments or the private sector are unnecessarily burdened with 
overly detailed red-tape. The list can go on and on.
  The problem is not that the Government is trying to fix something 
that ``ain't broke.'' The Government has been responding to the call of 
the people to address public issues and concerns. In the area of 
environmental protection, for example, the American people continue to 
want Government 
[[Page S329]] to do more to protect our natural environment. The 
problem is more complicated. The problem is that the Government is not 
working well enough, it is not delivering on its promises to solve 
problems efficiently and effectively. The American public and Members 
of Congress know that we simply are not getting enough results for all 
the legislation, regulation, and expenditure of taxpayer dollars.
  Programmatically, each agency and each congressional committee must 
examine their policies and programs to determine what works and 
eliminate what doesn't work. The administration has made impressive 
strides in this area through the continuing work of the National 
Performance Review. This effort also will be helped in the coming years 
as agencies begin performance reporting under the Government 
Performance and Results Act of 1993, which I co-sponsored with my 
friend and colleague on the Governmental Affairs Committee, Senator 
Roth. This law blinds agencies to performance goals and reporting on 
results, which will help us answer basic questions about how well 
Government programs are working. In this new Congress, our committee 
will continue our bi-partisan oversight of the implementation of this 
important law.
  On the process side of the equation, we can and should put into place 
analytic requirements to guide Federal rulemaking. It may sound 
simplistic, but most of the complaints about Federal regulation can be 
addressed just by ensuring that agencies stop and think before 
regulating. In this Congress, I know that several different approaches 
are already being considered. Most address single problem areas. I 
believe that it is our responsibility to design a comprehensive 
regulatory analysis and review process that is straightforward, 
understandable by agencies and the public, and can lead to better and 
fewer regulations. For this purpose, I am today introducing the 
Regulatory Accountability Act of 1995. I ask unanimous consent that a 
summary of this legislation be included with my remarks.
  This legislation requires Federal agencies, as I have said, to stop 
and think before regulating. Agencies would have to involve affected 
members of the public, spell out the need for and desired outcome of a 
regulatory proposal, analyze its costs and benefits, assess the risks 
of the behavior or substance proposed for regulation, consider 
alternatives to the proposed rule, weigh the effects on other 
governmental action--including State and local governments--and analyze 
any issues that might affect private property rights under the fifth 
amendment to the Constitution. These analytic requirements would apply 
to all proposed regulations, with more in-depth analyses required for 
major rules.
  In addition to the agency requirements, this legislation would place 
into law a Presidential regulatory review process to be run by the 
Office of Management and Budget [OMB]. While President Clinton's 
regulatory review Executive order has been generally well received, 
continuing calls for farther reaching controls strongly suggest that 
Congress put into place a workable regulatory review process to ensure 
integrity and accountability in rulemaking, and relief from overly 
burdensome and unnecessary regulations.
  Under this act, OMB would oversee all agency regulatory analyses, 
review agency rules before they are issued, and supervise an annual 
regulatory planning process that would include the review of existing 
rules. To ensure accountability for this review process, there would be 
a 90-day time limit on review--with public notice of extensions, the 
resolution of disputes at Presidential direction, disclosure of the 
status of actions undergoing review, and after-the-fact disclosure of 
regulatory review communications.
  Over the years, there has been much controversy about the propriety 
of Presidential regulatory review. I have always supported such review. 
But I have opposed its use as a secret backdoor channel for special 
interests. I believe that my legislation appropriately formalizes the 
President's responsibility to ensure effective and efficient regulatory 
decisionmaking and establishes sufficient protections to provide for 
the integrity of and accountability for those decisions.
  These regulatory issues have been a major concern of the Governmental 
Affairs Committee during the four Congresses in which I was committee 
Chair. I know that my good friend, Senator Roth, who is now chairing 
the committee, shares this commitment and will continue the committee's 
leadership in this area. I look forward to our committee's work on 
these issues and trust that we will soon report out legislation and 
bring the debate back to the floor of the Senate.
  I ask unanimous consent that a summary of the legislation be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
          Summary of the Regulatory Accountability Act of 1995


                 1. agency regulatory analysis (sec. 4)

       For every regulatory action, Federal agencies must 
     consider:
       The need for and desired outcome of the rule;
       Costs and benefits;
       Regulated risks and their relation to other relevant risks;
       Alternatives to the proposed action;
       Effects on other governmental action (e.g., duplication of 
     other rules, and impact on State and local governments);
       Takings impacts on constitutional private property rights.
       Major rules (e.g., $100 million annual economic effect) 
     require more in-depth formal analysis and certification that:
       Benefits justify costs;
       Regulatory analysis supported by best available scientific 
     and technical information;
       Rule will substantially advance protections of public 
     health and safety or the environment.


               2. presidential regulatory review (sec. 5)

       Regulatory review by OMB to:
       Oversee agency regulatory analysis;
       Review agency proposals before publication (including 
     authority to return proposals for agency reconsideration);
       Oversee annual regulatory planning process (including 
     review of existing regulations).
       Regulatory review time limit of 90 days, subject to 
     extension for good cause and with public notice. 
     Disagreements among agencies and OMB to be resolved by the 
     President or by a designated reviewing entity (such reviewer 
     would also be subject to the Act, e.g., time limits and 
     public disclosure).


          3. public participation and accountability (sec. 6)

       Agencies must improve public participation in rulemaking:
       Seek involvement of those benefited and burdened by the 
     regulatory action;
       Publish summaries of regulatory analyses and regulatory 
     review results in Federal Register notices;
       Place regulatory review-related communications in the 
     rulemaking record.
       OMB must provide public and agency access to regulatory 
     review information:
       Disclose to the public information about the status of 
     regulatory actions undergoing review;
       Disclose to the public (no later than the date of 
     publication of the rule) written communications between OMB 
     and the regulatory agency or any person outside of the 
     executive branch, and a record of oral communications between 
     OMB and any person outside of the executive branch.
       Disclose to the public (no later than the date of 
     publication of the rule) a written explanation of the review 
     decision;
       Disclose to the agency on a timely basis written 
     communications and a record of oral communications between 
     OMB and any person outside of the executive branch, and a 
     written explanation of any review decision.


                   4. rules of construction (sec. 7)

       Nothing in the Act alters an agency's statutory rulemaking 
     authority or any mandated criteria or deadline for 
     rulemaking.


                      5. judicial review (sec. 8)

       There would be no judicial review of compliance with the 
     Act. If judicial review of a rule is otherwise undertaken, 
     any regulatory analysis and regulatory review information 
     would constitute part of the record undergoing review.
                                 ______

      By Mr. LEVIN (for himself, Mr. Cohen, Mr. Glenn, Mr. Wellstone, 
        Mr. Lautenberg, and Mr. Feingold):
  S. 101. A bill to provide for the disclosure of lobbying activities 
to influence the Federal Government, and for other purposes; to the 
Committee on Governmental Affairs.


                  the lobbying disclosure act of 1995

 Mr. LEVIN. Mr. President, I introduce the Lobbying Disclosure Act of 
1995. Our existing lobbying registration laws have been characterized 
by the Department of Justice as ineffective, inadequate, and 
unenforceable; they breed disrespect for the law because they are so 
widely ignored; they have been a sham and a shambles since they were 
first enacted almost 50 years ago. At a time when the American public 
is 
[[Page S330]] increasingly skeptical that their Government really 
belongs to them, our lobbying registration laws have become a joke, 
leaving more professional lobbyists unregistered than registered.
  The Lobbying Disclosure Act of 1995 would change all of that and 
ensure that we finally know who is paying how much to whom, to lobby 
what Federal agencies and congressional committees on what issues. This 
bill would close the loopholes in existing lobbying registration laws. 
It would cover all professional lobbyists, whether they are lawyers or 
nonlawyers, in-house or independent, whether they lobby Congress or the 
executive branch, and whether their clients are for-profit or non-
profit. It would streamline reporting requirements and eliminate 
unnecessary paperwork. And it would provide, for the first time, 
effective administration and enforcement of disclosure requirements by 
an independent office.
  Mr. President, this bill would also enhance public confidence by 
fixing the congressional gift rules. These rules currently permit 
Members and staff to accept unlimited meals from lobbyists or anybody 
else. They permit the acceptance of football tickets, baseball tickets, 
opera tickets, and theater tickets. They permit Members and staff to 
travel to purely recreational events, such as charitable golf and 
tennis tournaments, at the expense of special interest groups. To a 
cynical public, these rules reinforce an image of a Congress more 
closely tied to the special interests than to the public interest. That 
isn't good for the Congress and it isn't good for the country.
  The bill before us would tighten the gift rules, and it would tighten 
them dramatically. Under this bill, lobbyists would be prohibited from 
providing meals, entertainment, travel, or virtually anything else of 
value to Members of Congress and congressional staff. Acceptance of 
gifts from others would also be restricted significantly. To give just 
one example, this bill would prohibit private interests from paying for 
any recreational expenses, such as green fees, for Members of Congress, 
whether in Washington or in the course of travel outside Washington. In 
fact, private interests would be prohibited from paying for 
congressional travel to any event, the activities of which are 
substantially recreational in nature. If this bill passes, recreational 
activities paid for by interest groups will be a thing of the past.
  Make no mistake about this: the enactment of this bill would 
fundamentally change the way business is conducted on Capitol Hill. The 
proposed rules are not perfect, because these issues are complicated 
and no rule can anticipate the proper outcome of every individual case. 
Much is left to the judgment of individual Members and to guidance to 
be provided by the congressional ethics Committees. However, the 
proposed rules are strong, they are clear, and I believe they will go a 
long way toward rebuilding public confidence in this institution.
  Mr. President, we hear again and again that the American people have 
lost confidence in their elected officials. There is a widespread 
belief that Government today is too susceptible to the influence of 
well-connected and well-heeled lobbyists. In one recent poll more than 
70 percent of Americans said they believe that our Government is 
controlled by special interests, rather than the public interest. Part 
of the gridlock so prevalent in Washington is attributed to special 
interests and their ability to block needed legislation.
  The election of a new congressional majority cannot change that 
unless real reform measures are actually enacted, and we cannot pretend 
that we have enacted comprehensive congressional reform until we enact 
this bill. For 50 years, the lobbying laws have been a patchwork of 
loopholes and exceptions in need of reform. For 50 years, Congress has 
failed to overhaul those laws. This Congress can be different, but only 
if we act where other Congresses have failed to act.
  Mr. President, the right to petition the Federal Government is a 
constitutionally protected right. Lobbying is as much a part of our 
Government process today as on-the-record rulemakings or public 
hearings. But we cannot expect the public to have confidence in our 
actions unless we conduct our business in the sunshine. The public has 
a right to know, and the public should know, who is being paid how much 
by whom to lobby on what issues. This bill is designed to meet that 
objective, while imposing minimal paperwork and the least possible 
burden on even those who are paid to lobby.
  Mr. President, this bill is not intended to, and should not, create 
any significant new paperwork burdens on the private sector. Indeed, 
the bill would significantly streamline lobbying disclosure 
requirements by consolidating filing in a single form and a single 
location--one-stop shopping--instead of the multiple filings required 
by current law. It would replace quarterly reports with semiannual 
reports and it would authorize the development of computer-filing 
systems and simplified forms.
  This bill would substantially reduce paperwork burdens associated 
with lobbying registration by requiring a single registration by each 
organization whose employees lobby, instead of separate registrations 
by each employee-lobbyist--as are required by current law. The names of 
the employee-lobbyists--and any high-ranking Government position in 
which they served in the previous 2 years--would simply be listed in 
the employer's registration forms.
  In addition, this bill would simplify reporting of receipts and 
expenditures by substituting estimates of total, bottom-line lobbying 
income (by category of dollar value) for the current requirement to 
provide 29 separate lines of financial information with supporting 
data, most of it meaningless. To further ensure that the statute will 
not impose new burdens on the private sector, the bill includes 
specific provisions allowing entitles that are already required to 
account for lobbying expenditures under the Internal Revenue Code to 
use data collected for the IRS for disclosure purposes as well.
  The bill also includes de minimis rules, exempting from registration 
any individual who spends less than 10 percent of his or her time on 
lobbying activities and any organization whose lobbying expenditures do 
not exceed $5,000 in a semi-annual period. Most small local 
organizations and entities located outside Washington are likely to be 
exempt from registration under these provisions, even if their 
employees make occasional lobbying contacts. Because the lobbying 
registration requirements in the bill apply separately to local 
chapters of national organizations if the local chapters are separate 
legal entities, many such local chapters may be exempt from 
registration as well.
  In short, we have exempted small organizations from registration 
requirements, even if those organizations have paid employees who 
lobby, as long as those paid lobbying activities are minimal. We have 
scrupulously avoided imposing any burden at all on citizens who are not 
professional lobbyists, but merely contact the Federal Government to 
express their personal views.
  Mr. President, while we want to avoid any unnecessary burdens on the 
private sector with this legislation, we must ensure that the public 
gets basic information about who is paying how much to whom to lobby on 
what issues. Effective public disclosure of lobbying activities can 
ensure that the public, Federal officials, and other interested parties 
are aware of the pressures that are brought to bear on public policy by 
paid lobbyists. Such public awareness should inform the public of the 
broad array of lobbying efforts on all sides of an issue. In some 
cases, it may alert other interested parties of the need to provide 
their own views to decision-makers. It also may encourage lobbyists and 
their clients to be sensitive to even the appearance of improper 
influence.
  One of the reasons why the public is suspicious and distrustful of 
the relationship between lobbyists and government officials is the 
cloak of secrecy that currently covers too many lobbyists and their 
activities. Current law simply does not ensure even the most basic 
disclosure. For example, we have learned that:
  Fewer than 4,000 of the 13,500 individuals and organizations listed 
in the book ``Washington Representatives'' were registered as 
lobbyists. Three-quarters of the unregistered representatives 
interviewed by the GAO said that they contact Members of Congress 
[[Page S331]]  their staffs, deal with Federal legislation, and seek to 
influence actions of either Congress or the executive branch.
  Only 825 persons were registered as active foreign agents, i.e., 
persons employed to conduct political activities on behalf of a foreign 
principal under the Foreign Agents Registration Act. In one case 
examined by the subcommittee, we found that 42 of 48 lobbyists for 
foreign manufacturers and their domestic subsidiaries were not 
registered under FARA.
  Lobbyists who do register disclose expenditures as trivial as $27 
lunch bills, $45 phone bills, $6 cab fares, and $16 messenger fees. One 
lobbyist even disclosed quarterly lobbying payments of $1.31 to one of 
its employees. Because of the way these costs are calculated, however, 
it is impossible to reach any accurate conclusion as to total lobbying 
expenditures.
  Under existing statutes, there is no disclosure requirement when 
White House and other executive branch officials are lobbied, and only 
sporadic disclosure of lobbying by lawyers.
  If enacted, the Lobbying Disclosure Act would replace existing 
lobbying disclosure laws with a single, uniform statute, covering the 
paid lobbying of Congress and the executive branch on behalf of both 
domestic and foreign persons. The new statute would replace the Federal 
Regulation of Lobbying Act; the disclosure requirements of the so-
called Byrd amendment; the provisions of the Foreign Agents 
Registration Act (FARA) which apply to private persons and companies; 
and the HUD disclosure statues. The provisions of the Byrd amendment 
prohibiting lobbying with appropriated funds would be left intact, as 
would the FARA provisions applicable to representatives of foreign 
governments and political parties.
  The bill has three essential features: It would broaden the coverage 
of existing disclosure statutes to ensure that all professional 
lobbyists are registered; streamline disclosure requirements to make 
sure that only meaningful information is disclosed and needless burdens 
are avoided; and create a new, more effective and equitable system for 
administering and enforcing these requirements.
  On the first point, the bill would require registration of all 
professional lobbyists, i.e., anyone who is paid to make lobbying 
contacts with either the legislative or the executive branch of the 
Federal Government. People who spend less than 10 percent of their time 
lobbying, and organizations that spend less than $5,000 on lobbying in 
a semi-annual period, would not be covered.
  The bill would define lobbying contacts to include communications 
with Members of Congress and their staff, officers and employees in the 
Executive Office of the President, and ranking officials in other 
Federal agencies. Activities that don't constitute lobbying--such as 
communications by public officials and media organizations; requests 
for appointments or for the status of an action and other ministerial 
communications; communications with regard to ongoing judicial or law 
enforcement proceedings; testimony before congressional committees and 
public meetings; participation in agency adjudicatory proceedings; the 
filing of written comments in rulemaking proceedings; and routine
 negotiations of contracts, grants, loans, and other federal assistance 
would be exempt from coverage.

  On the second point, the bill would significantly streamline lobbying 
disclosure requirements by consolidating filing in a single form and a 
single location; replacing quarterly reports with semi-annual reports; 
and authorizing the development of computer-filing systems and 
simplified forms. The bill would require a single registration by each 
organization whose employees lobby, instead of separate registrations 
by each employee-lobbyist. It would simplify reporting of receipts and 
expenditures by substituting estimates of total receipts or 
expenditures (by category of dollar value) for the current requirement 
to provide a detailed accounting of all receipts and expenditures. The 
bill would also replace the requirement of FARA and the Byrd Amendment 
to list each official contacted with a simpler requirement to identify 
the executive branch agencies, and the Houses and Committees of 
Congress, that were contacted.
  At the same time, the bill would close a loophole in existing law by 
requiring the disclosure of the identity of coalition members who both 
pay for and supervise the lobbying activities. The bill would also 
enhance the effectiveness of public disclosure by requiring the 
disclosure of any foreign entity which supervises, directs, or controls 
the client, or which has a direct interest in the outcome of the 
lobbying activity. Any foreign entity with a 20 percent equitable 
ownership of a client would have to be disclosed.
  Finally, the bill would improve the administration of the lobbying 
disclosure laws by creating a new Office of Lobbying Registration and 
Public Disclosure to administer the statute; requiring the issuance of 
new rules, forms, and procedural regulations after notice and an 
opportunity for public comment; making guidance and assistance 
(including published advisory opinions) available to the public for the 
first time; authorizing the creation of computer systems to enhance 
public access to filed materials; avoiding intrusive audits or 
inspections through an informal dispute resolution process; and 
substituting a system of administrative fines (subject to judicial 
review) for the existing criminal penalties for non-compliance.
  Mr. President, in the last Congress, the Lobbying Disclosure Act was 
passed by the Senate on a 95-2 vote. The gift portion of the bill was 
passed on a 95-4 vote. A conference report was then passed by the House 
and sent to the Senate for final consideration. Unfortunately, 
objections by a number of Senators to certain provisions related to 
grass roots lobbying made it impossible to enact the bill at that time.
  That failure, however, cannot change the fact that 95 Members of this 
body are in record as favoring the enactment of this measure. If we act 
quickly, we can still have new congressional gift rules in place by the 
May 31, 1995, deadline provided by the legislation considered by the 
Senate last year.
  The so-called grass roots lobbying provisions in the conference 
report to S. 349, to which some objected in the last Congress, are no 
longer in this bill. We have instead returned
 to the original Senate provisions on these points. In particular, the 
bill has been revised to make the following changes:

  The definition of grass roots communications has been deleted;
  The requirement to disclose persons paid to conduct grass roots 
lobbying communications has been deleted;
  The requirement to separately disclose grass roots lobbying expenses 
has been deleted;
  The original Senate provision with regard to the treatment of 
lobbyists' efforts to stimulate grass roots lobbying in the definition 
of lobbying activities has been restored;
  The requirement to disclose when somebody other than the client pays 
for the lobbying activities has been deleted;
  All references to individual members of a coalition or association as 
clients have been deleted;
  The descriptive language in the religious organizations exemption has 
been deleted;
  The maximum penalty for violations has been reduced from $200,000 to 
$100,000 (as originally reported by the Senate Governmental affairs 
Committee); and
  Provisions authorizing registrants who are covered by IRS lobbying 
provisions to use IRS numbers and definitions for the purpose of 
reporting under the Lobbying Disclosure Act (to avoid double-
bookkeeper) have been clarified and strengthened.
  Mr. President, I have been working on this legislation for more than 
4 years now. The two major elements of the bill have already passed the 
Senate, in this Congress, on votes of 95-2 and 95-4. This bill has 
strong support of the President and it has the strong support of the 
public. The need for reform of our outdated and loophole-ridden 
lobbying registration and laws and gift rules could not be more clear. 
We should enact this bill this year.
                                 ______

      By Mr. GLENN:
  S. 102. A bill to amend the Nuclear Non-Proliferation Act of 1978 and 
the Atomic Energy Act of 1954 to improve the organization and 
management of the United States nuclear export controls, and for other 
purposes; to the Committee on Governmental Affairs.
            [[Page S332]] NUCLEAR EXPORT REORGANIZATION ACT

  Mr. GLENN. In remarks at the White House on October 18, 1994, 
President Clinton stated the following:

       There is nothing more important to our security and to the 
     world's stability than preventing the spread of nuclear 
     weapons and ballistic missiles.

  And I certainly agree with that. That statement echoes the national 
security goal that was established a half century ago, and yet much of 
our nuclear proliferation effort is so scattered and so uncoordinated 
that it too often is ineffective, as I view it. This bill would help 
correct a lot of that. It is the Nuclear Export Reorganization Act. It 
deals largely with those areas of dual-use items--those items that may 
have a regular civilian use but which may be also key to the 
development of nuclear weapons. We have not monitored these carefully 
enough, and this act would take care of that, I think, and make a 
better, more coordinate effort.
  By all indications, our Government will in the years ahead have to 
accomplish a lot more with a lot fewer resources. As the budgetary belt 
tightens, it becomes all the more vital that we get our priorities 
straight and that we use these resources much more efficiently and 
effectively than they have been used in the past. Our civil servants 
and diplomats who administer our foreign and defense policies need 
unambiguous guidance as to what needs to be done to advance the 
national interest.
  I am certain that this specific Presidential priority is strongly 
shared by an overwhelming bipartisan majority in the Congress. I am 
sure the Congress will be able to work with the President in pursuit of 
measures to address this dangerous threat to our Nation.
  By all indications, there is a lot of work for us all to do. Now that 
the President has so clearly articulated the challenge that lies ahead, 
it is important for Congress to have an equally clear statement of what 
needs to be done to address that challenge. A key question facing the 
new Congress must be this: is our Government organized today to meet 
this challenge?
  I believe the answer to this question is decidedly, no, especially 
with respect to the organization of our national system for processing 
export licenses for what are called nuclear dual-use goods--items that 
can be used for civilian purposes or for building nuclear weapons.
  To illustrate the problem, I will refer to a major report prepared by 
the Offices of the Inspector General in the Departments of Commerce, 
Defense, Energy, and State, dated September 1993, and another study 
prepared at my request by the General Accounting Office and released by 
the Committee on Governmental Affairs in May 1994.
  Mr. President, I ask unanimous consent to insert at the end of my 
remarks two detailed committee staff summaries of these reports.
  Quoting from the report by the four Inspectors General, here is what 
they had to say about our system for administering nuclear dual-use 
export controls:


                           no accountability

  The Energy IG found that Energy's recordkeeping was not in compliance 
with the Export Administration Act and that Energy's degree of 
compliance with the Nuclear Non-Proliferation Act could not be 
determined. The IG report found licensing authorities using their own 
unwritten criteria to make decisions. They found documentation of the 
grounds of these decisions to be poor to nonexistent.


               severe interagency communication problems

  Defense once had to get Customs to block a shipment of goods that had 
been licensed by Commerce. The Energy IG found that communications 
between the export control and intelligence shops at Energy were poor--
at one point, an outside facilitator had to be brought in to patch up 
relations. Some key national security offices have no idea what the 
Commerce Department is approving for export.


                lack of followup on licensing decisions

  The State IG found that considerable disarray exists in the operation 
of pre-license and post-shipment checks; the system was haphazard and 
often ineffective; and the program suffered from insufficient 
historical records and program tracking. Commerce lacks a strategic 
plan to conduct such checks; its database is erroneous and misleading 
and contains numerous errors and misrepresentations. The report 
documents numerous other problems surrounding the lack of followup on 
licensing decisions.


                            skeleton staffs

  The reports noted that staffing was thin in the respective agencies, 
despite the high priority that was supposed to be given to 
nonproliferation issues.


                  gridlock on the information highway
  When asked what intelligence database was used in Energy's export 
control office, a supervisor said, himself; he added that Energy had no 
structured intelligence data base for licensing use. There are 
inconsistencies--about 25 percent of licenses surveyed--in the 
databases of Energy and Commerce, which the Energy IG said call into 
question the integrity of the export licensing process. Disorganized 
files at State made information on export trends almost impossible to 
ascertain.
  [Source: The Federal Government's Export Licensing Processes for 
Munitions and Dual-Use Commodities, Final Report, Offices of the 
Inspector General at the U.S. Departments of Commerce, Defense, Energy, 
and State, September 1993, available from Office of the Inspector 
General, Department of Commerce, (202) 482-1243.]
  As for the GAO, here is a summary of what they found about U.S. 
exports of nuclear dual-use goods:
  The U.S. issued 336,000 export licenses between FY 1985-92 for 
nuclear-related dual-use items--valued at $264 billion; 54,862 licenses 
(worth over $29 billion) were approved for exports to 36 countries of 
proliferation concern; 24,048 of these licenses were approved for goods 
going to 8 countries that have sought or are now seeking nuclear 
weapons. Over 1,500 licenses covered items (worth over $350 million) 
going specifically to key players in these bomb programs. (FY 1988-92)
  U.S. license approvals have covered goods with uses in nuclear 
weapons development, weapons testing, uranium enrichment, implosion 
systems development, and weapons detonation.
  Commerce approved 87 percent of dual-use licenses going to controlled 
countries turning down only 1 in a hundred licenses. (FY 1988-92)
  Licenses are being required for fewer and fewer goods: the number of 
licenses for nuclear dual-use goods dropped 81 percent from FY 1987 to 
1992.
  The most popular item is computer equipment, which made up 86 percent 
of all U.S. nuclear dual-use exports between FY 1985-92. Citing new 
liberalized controls, GAO predicts a substantial decline in license 
requirements for computers.
  Commerce has unilaterally approved the export of dual-use items 
without referral to other agencies--of licenses sent to Energy, 80 
percent are not forwarded for further interagency review. Only Energy 
and Commerce have full access to all nuclear dual-use license 
applications.
  The U.S. often uses foreign nationals to conduct pre-license and 
post-export licensing activities. On-site inspections, which are rarely 
done, also tend to focus on less dangerous items. Inspectors typically 
lack technical expertise. Commerce has not given inspectors ``specific 
guidance'' for conducting inspections.
  The U.S. does not systematically verify compliance with government-
to-government assurances on the use of nuclear-related dual-use items--
GAO.
  [Source: ``Export Licensing Procedures for Dual-Use Items Need to Be 
Strengthened,'' Report to Sen. John Glenn, Chairman of the Committee on 
Governmental Affairs, U.S. Senate, April 1994, GAO/NSIAD-94-119, 
available from GAO at (212) 512-6000.]
  There is precious little in either of these reports to reassure 
members of Congress that our system for licensing nuclear dual-use 
items is up to par. At the very least, the system falls far short of 
reflecting the high priority that the President has determined should 
be accorded to halting the proliferation of nuclear weapons, a problem 
that is constantly aggravated by dangerous exports.
  As author of the Nuclear Non-Proliferation Act of 1978, I have long 
been aware that our nuclear export control process was in need of 
reform. On May 27, 1993, I introduced S. 1055, a bill that contained 
many of the proposals I am 
[[Page S333]] introducing today in the Nuclear Export Reorganization 
Act of 1995. It is useful to note that the reports by the Inspectors 
General and the GAO were prepared well after I introduced my original 
bill in
 1993--the reports nevertheless underscore the obvious need for major 
reforms in the nuclear dual-use export licensing process.

  In summary, the bill I am introducing today--the Nuclear Export 
Reorganization Act of 1995--includes improvements in export controls 
and measures to face up to the challenge of the global plutonium 
economy.
  First, as I have said before on several occasions, we must do more to 
take the profits out of proliferation. Specifically, I believe the 
President should have clear and unambiguous authority to impose 
sanctions against companies that engage in illicit sales of nuclear 
technology and to require new sanctions against countries that traffic 
specifically in bomb parts or critical bomb design information. The 
sanctions provisions--which include a ban on government contracting 
with firms that materially and knowingly assist other nations to 
acquire the bomb, and additional severe penalties against nations that 
traffic in bomb parts or critical bomb design information--were enacted 
last year as an amendment to the State Department authorization bill. 
My bill today will remove a sunset clause that was added to this 
sanctions authority in the last Congress.
  Second, I am proposing some significant improvements in the export 
licensing process. My proposal is designed to be responsive both to the 
legitimate needs of the exporting community for an efficient and 
effective licensing process and to the compelling interest of all 
citizens in protecting our national security.
  In particular, the export control reforms would accomplish the 
following:
  1. It would vest authority to issue dual-use export licenses in the 
Commerce Department, while ensuring that key agencies with national 
security responsibilities have full rights to review license 
applications and to oppose approvals when they would be contrary to the 
country's nuclear nonproliferation interests.
  2. It would establish the interagency Subgroup on Nuclear Export 
Coordination--which has existed in regulatory form for about a decade--
as a formal statutory entity within the National Security Council and 
would endow it with a clear structure and mission.
  3. It would ensure timely access by relevant agencies to export 
licensing data and expand information available to the public about 
dual-use nuclear exports.
  4. It would clarify in law the terms for denying export licenses by 
adopting a standard that is now applied by 26 major nuclear supplier 
nations, not just the United States. And consistent with this 
multilateral standard, there are no loopholes or special country 
exemptions in the legislation I am introducing today.
  5. It would encourage the basic goal of developing in the United 
States a domestic industry capable of competing in international 
markets to sell energy technologies that do not contribute to nuclear 
weapons proliferation.
  6. It would establish a mechanism by which private U.S. industry can 
assist the Government in identifying foreign competitors that are 
engaging in illicit nuclear sales, and by so doing, assist in the 
implementation of appropriate sanctions.
  7. It would encourage private firms to adopt voluntary codes of 
conduct to regulate sales activities without active Government 
intervention.
  8. It would upgrade the role of the Department of Defense in 
reviewing and approving proposed U.S. agreement for nuclear cooperation 
and proposed exports of U.S. nuclear technology.
  9. It would defined in law for the first time in U.S. history a term 
that lies at the heart of all our nuclear nonproliferation efforts, 
namely, a ``nuclear explosive device.''
  10. It would establish in law specific deadlines on the processing of 
licenses to export dual-use nuclear items.
  11. It would establish an Export Control Bulletin to address the 
needs of exporters for more detailed information both about the 
evolution of U.S. nuclear regulations and the nature of the global 
threat of nuclear weapons proliferation.
  12. It would provide a means by which potential exporters can obtain 
advisory opinions from the Subgroup with respect to activities that may 
subject exporters to possible sanctions under existing nuclear export 
control laws.
  The bill also includes several findings and declarations by the 
Congress with respect to growing international commercial uses of 
plutonium, and a requirement for the President to review and modify, as 
appropriate, a 1981 policy that served to promote such uses. Ever since 
1981, America has been turning a blind eye toward the global 
proliferation and environmental risks from large-scale commercial uses 
of weapons-usable plutonium in Europe, Russia, and Japan. It is time 
for that policy to be reviewed and brought into line with the high 
priority our country is supposed to be giving to the goal of reducing 
the risks of nuclear weapons proliferation.
                               conclusion

  Bernard Baruch once said over 45 years ago that ``we are here to make 
a choice between the quick and the dead.'' Today, I can say that we 
have several new choices to make, each one potentially affecting the 
future of this planet. We must choose between leadership and 
acquiescence, between quick profits and the defense of our national 
security interests, and between the rule of law and the law of the 
jungle. The security threat we must collectively address--both 
politically here at home and in partnership with other nations--is 
nuclear war. We have an obligation to do all we can to prevent all 
forms of nuclear weapons proliferation, and--as in the recent cases of 
South Africa and Brazil--to work to roll back existing bomb programs 
wherever they may be.
  Mr. President, I will have more to say about the proposed legislation 
in the months ahead and look forward to working with the new 
congressional majority and the Administration in ensuring its early 
enactment. These reforms are long overdue. I encourage my colleagues to 
join me in this effort to revitalize these key elements of our 
nonproliferation strategy.
  I ask unanimous consent that additional material be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                          Summary of IG Report

       The Federal Government's Export Licensing Processes for 
     Munitions and Dual-Use Commodities, Final Report, Offices of 
     the Inspector General at the U.S. Departments of Commerce, 
     Defense, Energy, and State, September 1993, available from 
     Office of the Inspector General, Department of Commerce, 
     (202) 482-1243.


                           no accountability

       The Energy IG found that Energy's record-keeping ``was not 
     in compliance'' with the Export Administration Act and that 
     Energy's ``degree of compliance'' with the Nuclear Non-
     Proliferation Act ``could not be determined.'' Neither Energy 
     nor Defense has written procedures for processing licenses or 
     resolving internal disputes over licenses. There is ``no 
     reliable audit trail'' at Energy on license decisions. Energy 
     officials used unwritten criteria to review cases, such as 
     the official's own views on foreign policy issues; one Energy 
     analyst said ``he conducted a mental examination and did not 
     record the thought processes that he used'' in making 
     licensing decisions. Energy IG investigators were told that 
     key documents would be ``almost impossible'' to find due to 
     the ``poor organization'' of Energy's files. Such documents 
     ``could not be produced'' when requested by these 
     investigators. Some referral policies are worked out in an 
     informal interagency group that ``does not maintain formal 
     records of its meetings or policies.'' Commerce computer 
     records are ``sometimes changed'' with no ``reliable record 
     of who made these changes and when they were made.''


                         communication problems

       Defense once had to get Customs to block a shipment of 
     goods that had been licensed by Commerce. The Energy IG found 
     that ``communications'' between the export control and 
     intelligence shops at Energy ``were poor''--at one point, an 
     outside ``facilitator'' had to be brought in to patch up 
     relations. Commerce's Census Bureau will not share export 
     data with Commerce's export licensing office. Commerce will 
     not show its licensing manual to other agencies. State IG 
     found State's internal license review procedures 
     ``scattered'' and ``an awkward mechanism.'' Energy refers 
     most of its licenses to the weapons labs with the least 
     intelligence resources, and the fewest of licenses went to 
     the lab (Livermore) with the most resources. Commerce still 
     does not grant full access to its licensing database to other 
     agencies handling nuclear dual-use exports. The Defense 
     [[Page S334]] IG found that DoD licensing officers ``need to 
     communicate'' more with relevant offices in Defense. State 
     gets a total of 3,000 licenses annually from Commerce, while 
     Energy gets about 6,700 referrals (dealing just with nuclear 
     dual-use items).


                           lack of follow-up

       The State IG found that ``considerable disarray exists'' in 
     the operation of pre-license and post-shipment checks; the 
     system was ``haphazard and often ineffective''; and the 
     program suffered from ``insufficient historical records and 
     program tracking.'' Commerce lacks a ``strategic plan'' to 
     conduct such checks; its database in ``erroneous and 
     misleading'' and contains ``numerous errors and 
     misrepresentations.'' Foreign US posts complain about the 
     lack of information to do the checks, which are sometimes 
     performed by telephone because of a lack of funds. Checks are 
     often done using foreign nationals--at times without even a 
     U.S. escort. While Commerce officials complain of a 
     ``dwindling budget'' and ``budget constraints,'' some checks 
     have been canceled due to ``a lack of funds.'' Foreign US 
     posts either have not seen or read Commerce's guide on ``How 
     To'' perform such checks. Several posts kept ``very 
     disorganized files'' and one kept ``no files at all.'' Checks 
     are typically performed by US officials sent abroad to 
     promote US trade (the Foreign Commercial Service). The 
     Commerce IG found a mere ``four percent compliance rate'' by 
     exporters with conditions placed on licenses and, due to 
     scarce resources, Commerce ``was not taking action'' to fix 
     the problem.


                              thin staffs

       Respondents told the Energy IG that Energy's export control 
     staff was ``awfully thin''--the IG report said Energy's 
     export control office had ``only two individuals'' 
     experienced in processing cases . . . and one was leaving. 
     The Defense IG found that Defense's nonproliferation office 
     had just two persons working nuclear export issues. An Oak 
     Ridge manager said his office was often staffed by only two 
     persons due to heavy travel demands. For Energy, the IG 
     estimated that the average time analysis had per license was 
     ``substantially less than 40 minutes.''


                  gridlock on the information highway

       When asked what intelligence database was used in Energy's 
     export control office, a supervisor said, ``himself''; he 
     added that Energy ``had no structured intelligence data 
     base'' for licensing use. Energy's information system has a 
     field category for intelligence, but it is always marked ``no 
     information.'' Energy's database is cleared to store very 
     limited classified data--Commerce's system is unclassified. 
     There are ``inconsistencies'' (about 25% of licenses 
     surveyed) in the databases of Energy and Commerce, which the 
     Energy IG said ``call into question the integrity of the 
     export licensing process.'' One lab scientist called 
     licensing information ``a gold mine that's not being mined.'' 
     Defense's database does not log final agency positions on 
     licenses. Neither of the license databases of Energy and 
     Commerce shows whether or not a good was ever shipped; the 
     Energy database does not even show if licenses were finally 
     approved. Disorganized files at State made information on 
     export trends ``almost impossible to ascertain.''
                                                                    ____

Four U.S. Inspectors General Identify Serious Problems in U.S. Dual-Use 
                            Export Controls


                            key findings of

       The Federal Government's Export Licensing Processes for 
     Munitions and Dual-Use Commodities, Final Report, Offices of 
     the Inspector General at the U.S. Departments of Commerce, 
     Defense, Energy, and State, September 1993, available from 
     Office of the Inspector General, Department of Commerce, 
     (202) 482-1243.
       [Note:--SNEC=Subgroup on Nuclear Export Coordination; 
     ECOD=Energy's Export Control Operations Division; 
     EIS=Energy's Export Information System; EAA=Export 
     Administration Act; Energy's ECASS=Export Control Automated 
     Support System; NNPA=Nuclear Non-Proliferation Act; 
     EAR=Export Administration Regulations; LANL=Los Alamos 
     National Laboratory; ORNL=Oak Ridge National Laboratory; 
     FORDTIS=Foreign Disclosure and Technical Information System 
     (the Pentagon's export license database); DTSA=Defense 
     Technology Security Administration; DTC=State's Office of 
     Defense Trade Controls.]


                     licensing procedure and policy

       The Energy IG report ``found that the ECOD did not have 
     current written procedures for processing export cases . . . 
     [and] that the ECOD did not retain records documenting the 
     bases for its advice, recommendations, or decisions regarding 
     its reviews of export license cases or revisions to lists of 
     controlled commodities and, therefore, was not in compliance 
     with certain provisions of the Export Administration Act . . 
     . and Energy records management directives.'' The report also 
     ``found that the degree of compliance by Energy with the 
     export licensing review criteria contained in the Export 
     Administration Regulations and the Nuclear Non-Proliferation 
     Act of 1978 could not be determined because ECOD did not 
     retain records documenting the bases for its advice and 
     recommendations on export cases.'' [C-35]
       The Defense IG found that ``the DTSA License Directorate 
     uses no formal, written criteria to resolve differences 
     between Component positions . . . licensing officers 
     consistently use . . . informal, unwritten criteria . . .''. 
     [B-13]
       ``This interagency review identified numerous areas in the 
     export licensing processes that could be improved.'' [5]
       ``Energy's intelligence capability may not be fully 
     utilized in support of export case reviews.'' [5]
       ``The number of dual-use license applications has decreased 
     dramatically over the past five years, from 98,233 in 1988 to 
     24,068 in 1992.'' [1]
       [On interagency license referrals] ``. . . Export 
     Administration officials were unable to provide a master file 
     of the various delegations of authority, nor was there a 
     central location that could be checked to confirm their 
     existence.'' [15] ``While the [internal Commerce] operating 
     manual that is used for referral decisions is to incorporate 
     these delegations and informal decisions, it is not reviewed 
     by the other federal agencies, and the other agencies do not 
     participate in its development . . . various
      officials of the other agencies had differing opinions in 
     certain instances as to whether there was an agreed to 
     referral policy.''[15] ``. . . it is clear that there is 
     not full accord among the agencies on the referral 
     criteria.''[17] ``. . . it is obvious that significant 
     differences on referral procedures still exist between the 
     various federal agencies.''[17]
       Based on statistics for the nine-month period ending 
     September 30, 1992, the average time to process a non-
     referred application is nine calendar days. The average time 
     to process referred applications is 50 calendar days. This 
     six-week difference . . . puts pressure on the process to 
     avoid referring cases unnecessarily.''[15]
       ``Resolution of referral issues is important to avoid 
     situations such as occurred in October 1992 when Defense 
     found it necessary to request the U.S. Customs Service to 
     stop shipment of a commodity for national security reasons 
     even though the shipment had been licensed by Commerce.''[16]
       ``Our [Energy IG] analysis indicted that Commerce may have 
     improperly referred eight percent . . . of the cases to 
     Energy.'' [C-13]
       The State IG report found that ``the State Department 
     receives for review and comment approximately 3,000 export 
     license applications annually from Commerce''[D-8]; in 
     contrast, the Energy IG report found that ``Commerce 
     currently refers approximately 6,700 nuclear dual-use export 
     cases annually to Energy for review.''[C-6] In its 
     description of the referral process for nuclear licenses, the 
     State IG report said that ``License applications involving 
     nuclear technology and technical assistance requests are sent 
     by Commerce to the Bureau [of Oceans and International 
     Environmental and Scientific Affairs at State] as chair of 
     the Subgroup on Nuclear Export Coordination.''[D-9] Note: The 
     contrast between the 6,700 nuclear dual-use licenses sent by 
     Commerce to Energy vs. the grand total of 3,000 licenses (not 
     just nuclear) referred to State is not explained in the IG 
     reports.
       The State IG ``discovered that the scattered referral 
     process [inside State] is an awkward mechanism for processing 
     and tracking dual-use license applications. . . three bureaus 
     maintain their own files, two of which are manual systems 
     and, as a result, tracking referred license applications at 
     State is difficult. Moreover, information on overall export 
     trends is almost impossible to ascertain.''[D-12]
       ``In two other cases, Commerce determined--without 
     consulting other agencies--that an exporter did not need an 
     individual validated license for the shipment of specified 
     commodities to a proscribed destination. Upon learning of the 
     decisions, Defense disputed the shipment of the goods, and 
     the general license determinations were revoked.''[16]
       The Defense IG found that the Pentagon's Office of Non-
     Proliferation Policy''. . . has two managers, one action 
     officer for missile technology, two for nuclear issues, and 
     two for chemical and biological issues.''[B-7]
       ``In view of the number [about 6700] of nuclear dual-use 
     export cases that were referred to ECOD annually and the 
     relatively small staff assigned to review them,
      the average amount of time that would be available for an 
     analyst to review a case is very limited. Not taking into 
     account time off for annual leave, sick leave, training, 
     travel, or other activities, we estimated that a maximum 
     of 40 minutes per case would be available.''[C-11] ``. . . 
     the ECOD export control analysts had, on the average, a 
     maximum of 40 minutes to review each nuclear dual-use 
     export case. The actual average time spent on a case is 
     probably substantially less than 40 minutes.''[C-20]
       ``. . . according to ECOD and Energy national laboratory 
     personnel, the ECOD is awfully thin' in terms of experienced 
     export analysts who can process export cases in an effective 
     and timely fashion. ECOD and laboratory personnel told us 
     that the loss of two of the key export analysts in the ECOD 
     would cause the Department `severe problems'.''[C-20]
       The Energy IG report found that: ``At the time of our 
     review, only two individuals in ECOD, the Export Control 
     Supervisor and an export control analyst, were experienced in 
     processing export cases. We learned that the Supervisor was 
     subsequently detailed from 
     [[Page S335]] ECOD, leaving only one individual experienced 
     in processing cases. We believe that the lack of experienced 
     analysts in ECOD and the lack of current procedures on `how 
     to' process export cases could possibly lead to errors in the 
     processing of export cases and a longer review cycle for 
     cases referred to Energy.''[C-36]
       ``The Export Control Supervisor [at Energy] also used 
     considerations in his review that had not been formally 
     established at ECOD as criteria for the review of export 
     cases. For example, the Supervisor said that he included 
     available intelligence in his review . . . [and] he also 
     considered foreign policy and national security issues. 
     According to the Supervisor, he had training and expertise in 
     those two areas.''[C-12]
       ``Regarding the Letters Delegating Authority, an ECOD 
     export control analyst said that the ECOD did not have a 
     central file of the letters in the office's administrative 
     files. When asked to provide us copies of the letters from 
     other files in the office, the export control analyst said 
     that the task to retrieve the letters would be `almost 
     impossible' given the poor organization of the ECOD's 
     files.''[C-17]
       ``. . . an analyst at LANL explained that the Critical 
     Technology Group (IT-3) had only one individual with time 
     available to read all the intelligence information received . 
     . . [an ORNL manager] explained that his office at times was 
     staffed with only two individuals because personnel were 
     required to travel frequently. He added that even when the 
     office was fully staffed, the personnel were not able to 
     process all the available intelligence information.''[C-25] 
     Analysts at both LANL and ORNL told Energy IG investigators 
     that they ``did not have the necessary resources to analyze 
     all the intelligence information'' they received from 
     Energy.[C-25]
       The Energy IG found that although ``LLNL had the most 
     intelligence resources,'' of the 500 cases that Energy 
     referred to the labs, 200 went each to ORNL and LANL, and 
     only 12 went to LLNL (with the rest going to other labs). 
     ``Although LLNL, we believe, has resources to conduct the 
     most complete intelligence analysis, LLNL received the fewest 
     number of export cases. In contrast, LANL and ORNL received 
     the bulk of the cases referred to the laboratories, but had 
     fewer resources to analyze proliferation intelligence.''[C-
     25]
       ``An analyst in IN-10 [Energy intelligence office] 
     discussed additional problems in providing intelligence 
     support to AN-30 [license review office]. The analyst said 
     that IN-10's limited resources at Energy Headquarters and 
     broader mission of proliferation analysis prevented IN-10 
     from being involved specifically with export control 
     analysis.'' [C-28]
       The State IG report found that ``. . . problems still exist 
     regarding procedures for coordinating referred dual-use cases 
     from the Commerce Department and the management of the Blue 
     Lantern program for end-use checks . . . Although the Blue 
     Lantern program for prelicense and postshipment end-use 
     checks has improved steadily since its inception in September 
     1990, considerable disarray exists in its operations at most 
     of the 11 posts visited during the review.'' [D-2]


                   INFORMATION/COMMUNICATION PROBLEMS

       ``When asked upon what intelligence `data base' the ECOD 
     depended, the ECOD Export Control Supervisor said 
     `himself'.'' The Energy IG investigators further reported 
     that this supervisor ``believed that talking with . . . three 
     or four people whom he usually contacted for intelligence 
     `had no . . . substitute'. Additionally, he said that these 
     contacts were the `only people whom he trusted' to provide 
     export-related intelligence.'' [C-27]
       ``The ECOD Export Control Supervisor . . . [told Energy IG 
     investigators] that ECOD had no structured intelligence data 
     base to use in support of export case reviews. He said that 
     Energy's automated Export Information System (EIS) had a 
     field for intelligence, but the field always reflected ``no 
     information'' available. He explained that ECOD had no 
     process in place or no dedicated employee to update the 
     intelligence field in the EIS. He also said that the EIS was 
     only authorized to process information classified SECRET and 
     below. Furthermore, he said that most of the intelligence 
     useful to the ECOD for export cases had a higher 
     classification than SECRET, or was subject to limited 
     distribution.'' [C-27]
       ``Currently, each agency now has on-line access [to the 
     ECASS] to a limited degree. Each agency's access to the ECASS 
     system varies as to which cases they can view, what 
     information is available, and when they can view it. 
     Consequently, it would seem desirable that in the long term, 
     expanded access to and use of the ECASS system by all 
     involved agencies could enhance the effectiveness of the 
     licensing review process. In addition to providing greater 
     assurance that the most current data is being reviewed, 
     increased access by the agencies can enhance their ability to 
     effectively review applications. For example, it would permit 
     agencies to identify patterns and other trends of exporting 
     which might have a significant bearing on their decisions.'' 
     [20]
       ``. . . the databases at Commerce and Energy showed 
     inconsistencies in almost a quarter of the dual-use nuclear 
     export cases in our sample (14 of 60).'' [5]
       The Defense IG found that ``Even through the DTSA had the 
     information available, it
      did not update the FORDTIS with the final U.S. Government 
     decision on munition and dual-use applications . . . We 
     did not find a final U.S. Government position in any of 
     the FORDTIS files for our sample of 60 dual-use 
     applications.'' [B-16]
       The Defense IG found that ``The DTSA licensing officers 
     need to communicate to affected DoD Components the results of 
     unilateral actions taken on applications.'' [B-18]
       According to the Energy IG report, several analysts noted a 
     ``lack of cooperation'' between the export control and 
     intelligence offices at Energy; according to the report, 
     ``the analysts' general consensus was that communications 
     between AN and IN were poor.'' [C-27]
       ``We found that, because most of the Energy national 
     laboratories lack access to information available on all 
     export cases reviewed by Energy, Energy may not be receiving 
     the maximum benefit of the technical and analytical 
     capabilities of the laboratories in the review of export 
     cases.'' [C-21]
       The Chief Scientist of the Livermore National Laboratory's 
     Z Division told Commerce IG investigators that export 
     licensing information was a ``. . . a gold mine that's not 
     being mined.'' [C-22]
       ``The EIS . . . currently does not include information on 
     whether a commodity was approved/disapproved, and if 
     approved, was purchased and shipped.'' [C-23-24]
       The Energy IG report stated that ``According to the 
     Director, Office of Information Resources Management, 
     Commerce, the ECASS did not contain information concerning 
     the purchase and shipment of commodities approved for export. 
     The Director said that the Bureau of Census, Commerce, 
     received the `Shippers Export Declaration' from the U.S. 
     Customs Service, Department of Treasury, which contained 
     purchasing and shipment information. He said that the Bureau 
     of Census, Commerce, however, did not provide this 
     information to the Bureau of Export Administration, Commerce, 
     which managed the ECASS.''[C-31]
       The Energy IG investigators stated that they believe ``. . 
     . that the lack of information concerning the final 
     disposition of export license applications may limit Energy's 
     ability to provide assessments and analyses . . . the lack of 
     information may limit Energy's ability to provide expert 
     technical and analytical capability to other agencies within 
     the intelligence community and to produce and disseminate 
     foreign intelligence in support of the Department.'' [C-31]
       We found inconsistencies in license application data for 
     the same cases in the separate export licensing data bases 
     maintained by Commerce and Energy. Specifically, we found 
     differences in the data bases for 23 percent (14 of 60 export 
     license cases) of the sample nuclear dual-use export cases 
     that we reviewed.'' [C-32] The Energy IG report concluded 
     that ``we believe that inconsistencies in agency records . . 
     . could be detrimental to the government's position in 
     responding to an appeal of a license application decision or 
     a court challenge of the government's decision. We also 
     believe that differences in the records maintained by the 
     agencies involved in a license application decision call into 
     question the integrity of the export licensing process. We 
     believe that changes in licensing
      data, which are not passed by Commerce to agencies reviewing 
     license applications, could potentially result in improper 
     referrals and erroneous licensing decisions, as well as 
     lessen the value of any analyses and reports based upon 
     the records.'' [C-34]


                      verification and enforcement

       ``Energy does not have the information maintained by 
     Commerce and State regarding the final disposition of export 
     cases referred to Energy.'' [5]
       ``Pre-license checks are used to verify end-user 
     information prior to the issuance of a license; post-shipment 
     verifications are used to verify compliance with the terms of 
     a license. Both programs at Commerce lack a strategic plan 
     for carrying out the programs' objectives. We also identified 
     problems with the way the checks are being conducted.'' [3] 
     ``Many of the overseas posts believe they need more 
     information to effectively perform checks and verifications. 
     Finally, the database information for both activities was 
     often erroneous and misleading. As a result, there is no 
     assurance that either the pre-license checks or the post-
     shipment verifications are as effective as they should be.'' 
     [A-2] Commerce officials ``expressed concern that they did 
     not have the needed resources to fully accomplish'' the 
     report's recommendations on improving compliance with 
     conditions on licenses; Commerce officials agreed to seek 
     improvements ``within their budget constraints'' and ``in 
     light of their dwindling budget.'' [A-2]
       ``Export Administration's database tracks the progress and 
     status of pre-license checks. Our review found numerous 
     errors and misrepresentations with the pre-license check 
     information contained in the database. This is due to a 
     combination of initial mistakes by Enforcement Support staff 
     and the inability to correct errors once they are identified 
     . . . there is no assurance that statistics and information 
     derived from the database are reliable.'' [A-16] ``For three 
     countries we visited, 64 pre-license checks were requested 
     from January 1, 1992 to September 30, 1992. For 12 (19 
     percent), the status of the check (favorable, unfavorable, 
     canceled, pending) was misidentified. Several checks that had 
     been canceled and never performed were listed on the printout 
     as `favorable' . . . The relative high error rate calls into 
     question the reliability of any statistics generated from 
     [[Page S336]] this system and provides misleading information 
     for licensing decisions.'' [A-16] The Commerce IG found that 
     ``. . . canceled checks are counted as completed checks.'' 
     [A-16]
       ``Post-shipment verification information maintained in a 
     separate database also contained errors . . . [the cases 
     reviewed by the Commerce IG] represent an error rate of 21 
     percent.'' [A-16, 17]
       ``There is no strategic plan with stated objectives and 
     priorities for conducting random testing within the checks 
     and verification programs. Without such a plan, there is no 
     assurance that the random checks and verifications are 
     obtaining the maximum benefits for the programs. Without 
     stated objectives, the effectiveness of the programs is 
     difficult to measure. In fiscal year 1992, 132 requested pre-
     license checks were canceled for a variety of reasons, 
     including a lack of funds. There is no assurance that these 
     were low priority cases.'' [A-14]
       ``Enforcement Support [at Commerce] published the guide 
     ``How to Conduct Pre-License Checks and Post-Shipment 
     Verifications'' in August 1992. However, almost all the posts 
     we visited had either not received it or not read it at the 
     time of our visit . . .''. [A-14]
       `` Six of the 11 posts used foreign . . . nationals 
     (Commerce employees who are not U.S. citizens) to conduct 
     pre-license checks even though Export Administration guidance 
     strongly discourages it. Five of the posts used foreign . . . 
     nationals for post-shipment verifications. The new Export 
     Administration guidance prohibits foreign service nationals 
     from performing these verifications except under 
     extraordinary circumstances.'' [A-15]
       ``Five posts conducted pre-license checks by telephone 
     because they lacked funds for on-site visits.'' [A-15]
       ``Three posts kept very disorganized files for pre-license 
     checks and post-shipment verifications (all papers were filed 
     in one folder), and one post kept no files at all.'' [A-15]
       ``The commercial officers also wanted to know how they 
     could recognize potential or actual improper usage of the 
     particular product they were to review. For example, one of 
     the commercial officers indicated that performing post-
     shipment verifications on chemicals is very difficult; the 
     barrels shown could be full of water, and the officers would 
     never be able to tell the difference.'' [A-15]
       ``The lack of detailed information contained in the cables 
     requesting pre-licensing checks and post-shipment 
     verifications makes the program less effective and results in 
     wasted time and money.'' [A-16]
       ``The team found that Commerce does not maintain sufficient 
     documentation to provide a reliable audit trail of the 
     actions taken on applications.'' [2] ``. . . there is no 
     reliable audit trail for the actions taken on the 
     applications.'' [A-8] ``[A-14]
       ``Checks and verifications are usually performed by 
     Commerce's U.S. and Foreign Commercial Service.'' [A-13] 
     [Note: This enforcement role contrasts with the export 
     promotion role of the FCS as highlighted in the United States 
     Government Manual of 1993/4; according to this manual, the 
     Director General of the FCS ``. . . supports overseas trade 
     promotion events; manages a variety of export promotion 
     services and products; promotes U.S. products and services 
     throughout the world market; conducts conferences and 
     seminars in the United States; assists State and private-
     sector organizations on export financing; and promotes the 
     export of U.S. fish . . .''.]
       ``Individual validated dual-use licenses are frequently 
     issued with conditions that exporters must comply with for 
     the license to be valid . . . Our review of documentation 
     sent in by exporters disclosed only a four-percent compliance 
     rate with that requirement. In addition, Commerce was not 
     taking any action to contact exporters who failed to submit 
     the required information. Consequently, Commerce officials 
     cannot assure that exporters have complied with conditions 
     placed on licenses.'' [3] ``Furthermore, not all licenses 
     that required follow-up action to monitor compliance with 
     conditions were included in Export Administration's tracking 
     system. As a result, Export Administration's management does 
     not have
      reasonable assurance that exporters have complied with 
     conditions placed on licenses.'' [A-2] [and A-10] ``. . . 
     Export Administration officials do not have reasonable 
     assurance that exporters have complied with the conditions 
     placed on licenses. Equally troubling is the likelihood 
     that a substantial number of licenses requiring exporter 
     follow up are not even in the tracking system.'' [A-12]
       In response to Commerce IG concerns about the lack of 
     follow-up on license conditions, Commerce licensing officials 
     ``expressed concern that they did not have the needed 
     resources to follow up on all conditions as the report 
     suggests inasmuch as 100 percent auditing is extremely 
     difficult and not cost effective.'' [A-12]
       ``Although there are currently 36 standard conditions 
     [applied to licenses], only 11 require the exporter to 
     provide information to Export Administration. These 11 
     conditions are the only ones to appear in the follow-up 
     system . . . [the rest] are not monitored [by Commerce].'' 
     [A-10, 11]
       The NRC ``. . . must be informed about applications for 
     exporting certain nuclear-related commodities to specific 
     countries. Our review [by the Commerce IG] identified two 
     cases that were not processed in accordance with this 
     policy.'' [A-19]
       Of the 3,133 ``outstanding licenses'' in the ``follow-up 
     queue'' of licenses requiring monitoring by Commerce, ``only 
     123 (4 percent) of the cases had exporters provided 
     documentation to confirm that they had complied with the 
     license's conditions. In addition, exporters submitted 
     information on 313 cases that were not on the list. This may 
     imply that the follow-up queue should contain substantially 
     more than the 3,133 cases in our printout.'' [A-11] The 
     Commerce Operations Branch director ``contended that the 
     branch was never officially assigned the responsibility for 
     following up on conditions'' attached to licenses. [A-11]
       ``Export Administration officials agreed that our findings 
     [i.e., Commerce IG's findings on pre-license and post-
     shipment activities] address an import issue in light of 
     their dwindling budget.'' [A-17]
       Concerning the State Department's Blue Lantern program 
     [verifying the bona fides of customers of goods licensed by 
     State, including nuclear-related items on the Munitions 
     List], the State IG ``. . . found that improvement are still 
     needed in program management and implementation, especially 
     in conducting end-use checks. DTC is unable to evaluate the 
     effectiveness of Blue Lantern operations overseas or even to 
     identify all the designated Blue Lantern officials because of 
     insufficient historical records and program tracking. We 
     found that the overseas operations are haphazard and often 
     ineffective, largely because of uncertainty about the role of 
     various post officials and inadequate record keeping . . . 
     DTC was unable to provide us with a current and complete list 
     of Blue Lantern officials in preparation for fieldwork 
     overseas'' [D-14, 15]
       The State IG found that the State Department (like the 
     Commerce Department) uses foreign nationals to conduct export 
     verification activities. The IG's report found that ``Blue 
     Lantern checks at many of the posts we visited were being 
     conducted inefficiently . . . [U.S. Customs] has generally 
     been delegated the Blue Lantern responsibility. In response 
     to a Blue Lantern request, Customs officials
      most often relay the request to the foreign government 
     customs officials who would then investigate the 
     transaction and inform U.S. Customs of the result.'' [D-
     15]


                             ACCOUNTABILITY

       ``ECOD personnel could not provide us documentation that 
     they followed the written procedures in the EAR, NNPA, and 
     Energy guidelines regarding export licensing activities.'' 
     [C-20]
       ``While we found no evidence of inappropriate or incorrect 
     recommendations by Energy, the Export Control Operation 
     Division does not retain records to show the basis for its 
     advice, recommendations, or decisions or to justify its 
     changes to the lists of controlled commodities. The division 
     is therefore not in compliance with certain provisions of the 
     Export Administration Act of 1979 . . . and with records 
     management directives from Energy. As a result, it was not 
     possible to determine the extent to which Energy used the 
     criteria in the Export Administration Regulations and the 
     Nuclear Non-Proliferation Act of 1978 in making licensing 
     recommendations. In addition, the Export Control Operation 
     Division did not have current written procedures for 
     processing export cases.'' [5] [Also see C-14]
       ``. . . Energy maintains its records of export cases 
     processed by the ECOD in the Export Information System (EIS). 
     We determined, however, that the EIS does not contain 
     information concerning the factual or analytical bases for 
     Energy's advice, recommendations, or decisions regarding 
     export cases. We further found that the ECOD did not have 
     current written procedures for processing export cases.'' [C-
     18]
       The Commerce IG investigators ``. . . believe that the 
     records [in Energy's Export Information System (EIS)] lack 
     certain required information. Specifically, the EIS did not 
     contain information concerning the `factual and analytical 
     basis' for Energy's `advice, recommendations or decisions' 
     regarding the export cases.'' [C-15] ``An ECOD [Energy] 
     export control analyst said that he destroyed paper copies of 
     information that he received or wrote pertaining to export 
     cases . . . He also said that he lacked the time and space to 
     file and retain documents regarding the cases. He said that 
     technical specifications . . . were examples of paper records 
     that he destroyed.'' [C-16]
       We could not conclusively determine if the ECOD export 
     control analysts considered the Part 778.4 factors in their 
     review of export cases. ECOD analysts said that they had no 
     records to document that they applied the Part 778.4 factors 
     to their analyses of export cases in determining the 
     significance of the commodities for nuclear explosive 
     purposes. One ECOD export control analyst said that, although 
     he considered the Part 778.4 factors in processing export 
     cases, he conducted a mental examination and did not record 
     the thought process that he used in making his 
     determinations.'' [C-18, 19]
       ``We also could not determine conclusively if the Energy 
     national laboratories considered the Part 778.4 factors in 
     reviewing export cases . . . According to an ECOD export 
     control analyst, the laboratories are not required to address 
     the Part 778.4 factors for their technical reviews of export 
     cases . . . Laboratory personnel . . .
      told us that they use the export factors in Part 778.4 of 
     the EAR to review the cases . . . Personnel at two of the 
     three Energy national laboratories that we visited said 
     that they probably did not retain documentation regarding 
     the bases of the advice and recommendations that they 
     provided to the ECOD on export cases.'' [C-19]
       [[Page S337]] ``We could not conclusively determine if ECOD 
     personnel considered the NNPA criteria in their decisions to 
     refer export cases to the SNEC. Based on a limited review of 
     records in the EIS, we determined that the EIS did not 
     contain records regarding the factual or analytical bases for 
     recommendations to refer export cases to the SNEC. The ECOD 
     Export Control Supervisor said that he made a mental 
     determination whether a case should be referred to the SNEC 
     by applying the criteria cited above . . . He said that no 
     record was generated by the EIS regarding the basis for his 
     referral [to the SNEC] and that he made no paper copy of his 
     analysis.'' [C-19]
       The Commerce IG investigators found that Energy's record-
     keeping procedure which only requires retention of relevant 
     export licensing records for two months ``is not consistent 
     with'' the requirements of the Export Administration Act 
     (EAA), which requires Energy to retain the ``analytical 
     basis'' for its license recommendations. [C-16]
       One ECOD [Energy] export control analyst, according to 
     Commerce IG investigators, said that he obtained 
     recommendations on licenses from the national laboratories 
     but that ``he did not enter the bases for the laboratories' 
     recommendations'' into the Energy license database; after 
     entering the labs' recommendations, the analyst ``destroyed 
     any documentation that the laboratories provided'' and the 
     analyst ``did not retain records'' of telephonic responses by 
     the labs. [C-16]
       ``During an interview with the Director, ECOD [Energy's 
     Export Control Operations Division], we asked for a copy of 
     the Division's Records Inventory and Disposition Schedule. 
     The Director, ECOD, was not aware that ECOD had a Records 
     Inventory and Disposition Schedule.'' [C-16]
       ``We asked ECOD personnel to provide specific documents 
     [e.g., memos pertaining to letters delegating review 
     authority, National Security Directive 53 on procedures for 
     processing cases, and the latest revisions of commodity 
     control lists] that, in our opinion, should have been 
     retained in accordance with the provisions of the EAA . . . 
     [several] ``could not be produced by ECOD personnel from 
     their records.'' [C-16]
       ``We could not determine the degree of compliance by Energy 
     with the export licensing review criteria contained in the 
     Export Administration Regulations (EAR) and the Nuclear Non-
     Proliferation Act of 1978 (NNPA) because the Export Control 
     Operations Division (ECOD) did not retain records documenting 
     the bases for its advice and recommendations on export 
     cases.''
       ``Agency officials also advised us that some of the 
     referral policy [for interagency reviews of licenses] 
     incorporated in the manual is based on the decisions of an 
     informal interagency working group consisting of 
     representatives of Commerce, Defense, Energy, State, the 
     National Security Agency, and the Arms Control and
      Disarmament Agency. We were informed that this working group 
     does not maintain formal records of its meetings or 
     policies.'' [15]
       ``[Commerce IG found that] Commerce does not maintain 
     sufficient documentation for the export license applications 
     received and for subsequent licensing actions taken. As a 
     result, audit trails for the actions taken on applications 
     are often incomplete.'' [A-1]
       ``The team found that Commerce does not maintain sufficient 
     documentation to provide a reliable audit trail of the 
     actions taken on applications.'' [2] ``. . . thee is no 
     reliable audit trail for the actions taken on the 
     applications.'' [A-8]
       ``The computer record of the application is sometimes 
     changed by Export Administration during the review process . 
     . . While there may be valid reasons for these changes, the 
     current documentation of the process does not provide a 
     reliable record of who made these changes and when they were 
     made. There is no permanent record of what was originally 
     submitted by the applicant or of daily transactions by Export 
     Administration officials.'' [A-8]
       ``The Blue Lantern process at a number of the posts we 
     visited was haphazard and inadequately documented. Blue 
     Lantern officials at three of the posts visited did not keep 
     files or records of their Blue Lantern checks or other 
     program activities. In addition, most of the posts did not 
     have complete sets of the DTC Blue Lantern guidance readily 
     available.'' [D-16]


                 weaknesses in the laws and regulations

       ``While the Export Administration Act gives decision-making 
     authority for dual-use license applications to Commerce and 
     seems to encourage that this be done with limited referral to 
     other agencies, certain sections of the act impact on this 
     authority. At best, the statute is somewhat ambiguous . . . 
     we recommend that the respective roles of the various 
     agencies involved in the dual-use export licensing process be 
     clarified in reauthorizing the Export Administration Act.'' 
     [6]
       ``. . . there is still disagreement among most of the 
     agencies regarding which applications should be referred for 
     comments. Until this issue is resolved, the agencies will not 
     have adequate assurance that the license review process is 
     working as efficiently and effectively as it should . . . the 
     underlying problem is the unclear and apparently conflicting 
     guidance given to the process by legislative mandates and 
     Presidential directives . . . there is no ongoing process to 
     resolve the differing views on what to refer.'' [2]
       [Commerce should] ``Report to the Congress the cases 
     referred to the Sub-Group on Nuclear Export Coordination when 
     the cases are delayed more than 120 days.'' [A-7]
       ``Part 778.4 of the EAR does not specifically direct Energy 
     to consider these factors.'' [C-10] [Note: This pertains to 
     specific nonproliferation-related ``factors'' that licensing 
     officials are supposed to consider when reviewing 
     applications to export nuclear dual-use goods.] ``Part 778.4 
     does not specifically identify what agency will use the 
     factors in reviewing export cases.'' [C-18]
       ``. . . we asked each individual in ECOD who we interviewed 
     if ECOD had formal procedures for processing export cases. 
     None of the ECOD personnel replied that ECOD had such 
     procedures . . .''. [C-20]
       After reviewing deficiencies in Energy's use of 
     intelligence information in reviewing licenses at Energy 
     Headquarters, the Energy IG report concluded that ``if AN 
     [Energy's export license review office] is reducing its 
     emphasis on intelligence in reviewing export cases, we 
     believe that AN management should clearly state this 
     policy.'' [C-29]
                                                                    ____

                         Summary of GAO Report

       ``Export Licensing Procedures for Dual-Use Items Need to Be 
     Strengthened,'' Report to Sen. John Glenn, Chairman of the 
     Committee on Governmental Affairs, U.S. Senate, April 1994, 
     GAO/NSIAD-94-119, available from GAO at (212) 512-6000.
       The U.S. issued 336,000 export licenses between FY 1985-92 
     for nuclear-related dual-use items--valued at $264 billion.
       54,862 licenses (worth over $29 billion) were approved for 
     exports to 36 ``countries of proliferation concern.''
       24,048 of these licenses were approved for goods going to 8 
     countries that have sought or are now seeking nuclear weapons 
     . . . over 1,500 licenses covered items (worth over $350 
     million) going specifically to ``key players' in these bomb 
     programs. (FY 1988-92)
       U.S. license approvals have covered goods with uses in 
     nuclear weapons development, weapons testing, uranium 
     enrichment, implosion systems development, and weapons 
     detonation.
       Commerce approved 87% of dual-use licenses going to 
     controlled countries . . . turning down only 1 in a hundred 
     licenses. (FY 1988-92)
       Licenses are being required for fewer and fewer goods: the 
     number of licenses for nuclear dual-use goods dropped 81% 
     from FY 1987 to 1992.
       The most popular item is computer equipment, which made up 
     86% of all U.S. nuclear dual-use exports between FY 1985-92. 
     Citing new liberalized controls, GAO predicts ``a substantial 
     decline'' in license requirements for computers.
       Commerce has ``unilaterally approved'' the export of dual-
     use items without referral to other agencies--of licenses 
     sent to Energy, 80% are not forwarded for further interagency 
     review. Only Energy and Commerce have full access to all 
     nuclear dual-use license applications.
       The U.S. often uses foreign nationals to conduct pre-
     license and post-export licensing activities. On-site 
     inspections, which are rarely done, also tend to focus on 
     less dangerous items. Inspectors ``typically lack technical 
     expertise.'' Commerce has not given inspectors ``specific 
     guidance'' for conducting inspections.
       The U.S. ``does not systematically verify compliance with 
     government-to-government assurances on the use of nuclear-
     related dual-use items''--GAO.
                                                                    ____

               Weaknesses in U.S. Nuclear Export Controls


                            key findings of

       ``Export Licensing Procedures for Dual-Use Items Need to Be 
     Strengthened,'' Report to Sen. John Glenn, Chairman of the 
     Committee on Government Affairs, U.S. Senate, April 1994, 
     GAO/NSIAD-94-119, available from GAO at (212) 512-6000.


            summary: u.s. exports of nuclear dual-use goods

       Total Nuclear Dual-Use items approved in 336,000 licenses 
     issued (in FY 1985-92): $264 billion.
       Items going to controlled countries (FY 1985-1992): 
     $29,046,890,812.
       Items going to sensitive facilities in 8 countries (FY 
     1988-1992): $350,010,337.
       In 1,508 licenses approved by the U.S. Government, for 
     items going to: Argentina--$12.9 million; Brazil--$109 
     million; India--$19.7 million; Iran--$0.9 million; Iraq--$4.1 
     million; Israel--$193 million; Pakistan--$2.1 million; and 
     South Africa--$6.7 million.


              specific examples of u.s. license approvals

       [Note.--SNEC=Subgroup on Nuclear Export Coordination, an 
     interagency forum for reviewing nuclear dual-use goods; 
     members are State, ACDA, Defense, Energy, Commerce, and the 
     NRC; NRL=Nuclear Referral List, which identifies nuclear 
     dual-use goods that require an export license; PLC=``pre-
     license check'' on bona fides of end users; PSV=``post-
     shipment verification'' of peaceful end use.]
       ``In late 1989, the U.S. government approved a license to a 
     military end user in Pakistan for two four-axis grinding 
     machines capable of manufacturing critical nuclear weapons 
     components. According to the Department of Energy's Nuclear 
     Proliferation Watch List, the end user is involved, among 
     other things, in sensitive nuclear activities, such as the 
     design, manufacture, or 
     [[Page S338]] testing of nuclear weapons or production of 
     special nuclear materials.'' [29] ``The decision to approve 
     the grinding machines, valued at $1.5 million, came after the 
     SNEC had recommended denial of less valuable NRL licenses to 
     the same end user . . . The SNEC had recommended denial of 
     these licenses on grounds that there was an unacceptable risk 
     of diversion to nuclear proliferation activities.'' [29] The 
     license was approved ``on the condition that the exporter 
     provide the SNEC with periodic reports of the status of the 
     item; however, according to Commerce officials, no such 
     reports have ever been provided.'' [29]
       ``During fiscal years 1988 to 1992, the United States 
     issued 238 licenses for computers to certain Israeli end 
     users linked to the unsafeguarded Israeli nuclear program . . 
     . [including some that] were also more powerful than those 
     used to develop many of the weapons in the U.S. nuclear 
     arsenal.'' [30] ``For 62 of the 238 licenses, the United 
     States received government-to-government assurances against 
     nuclear use . . . although the U.S. government has not 
     verified compliance.'' [30]
       ``The U.S. government approved 23 licenses during fiscal 
     years 1988 and 1989 for computer equipment to end users later 
     determined by the United Nations to be involved in Iraq's 
     nuclear weapons program . . . [specifically including] Iraqi 
     state establishments involved in uranium enrichment 
     activities. According to a U.S. government assessment, Iraq 
     may have made use of such computers to perform nuclear 
     weapons design work, as well as to operate machine tools 
     which may have been used in fabricating nuclear weapons, 
     centrifuges, and electromagnetic uranium enrichment 
     components . . . At the time these licenses were approved, 
     only the Iraqi Atomic Energy Commission was identified as a 
     sensitive end user; other Iraqi state establishments were not 
     identified as potentially involved in nuclear weapons 
     activities.'' [30-31]
       ``The United States approved 33 licenses to a nuclear 
     research center in India that operates an unsafeguarded 
     reactor and unsafeguarded isotopic separation facilities . . 
     . [according to the CIA director] the center is also involved 
     in thermonuclear weapons design work . . . [The US] also 
     approved six licenses involving NRL items such as computers 
     and equipment for ammonia production for Indian fertilizer 
     factories [that] make heavy water as a by-product. . .''.[31]
       Between fiscal years 1988 and 1991, GAO identified ``two 
     cases were Commerce approved licenses even though a majority 
     of other SNEC agencies had voted that they be denied.'' [36-
     37] The cases involved a flash X-ray system going to an ``end 
     user suspected of engaging in proscribed nuclear activities'' 
     and a computer ``to an end user which at the time was a known 
     diverter.'' [37]


                          SCOPE OF U.S. SALES

       ``During the past several years, the Department of Commerce 
     approved a significant number of nuclear-related dual-use 
     export licenses for countries that pose a proliferation 
     concern--the 36 countries on the Special Country List.'' [17]
       ``From fiscal years 1985 to 1992, the United States issued 
     about 336,000 nuclear-related dual-use licenses for exports 
     valued at $264 billion. Of these, about 55,000 (16 percent) 
     were for items valued at $29 billion exported to the 36 
     countries that the United States has identified as posing a 
     potential proliferation concern.'' [3] ``Computers accounted 
     for 86 percent on nuclear-related dual-use licenses to these 
     36 countries.'' [3]
       ``During the 8-year period, Commerce approved 87 percent of 
     such [nuclear-related dual-use] licenses to Special Country 
     List destinations, denied 1.2 percent, and returned 11.8 
     percent without action (meaning that the exporter failed to 
     provide sufficient information or withdrew the application, 
     or Commerce determined that the item did not require a 
     validated license).'' [18] ``This approval rate was only 
     slightly lower than that for all countries--on average, 
     Commerce approved 89.1 percent of nuclear-related dual-use 
     licenses during this period, denied 1.5 percent, and returned 
     8.9 without action.'' [18]
       ``Of the 92 categories of items listed in the Export 
     Administration Regulations since fiscal year 1985 as 
     controlled for nuclear proliferation reasons, 59 were 
     licensed to Special Country List destinations between fiscal 
     years 1985 and 1992. Worldwide, 67 of the 92 NRL items were 
     licensed during this period.'' [19]
       ``. . . over 1,500 nuclear-related dual-use licenses were 
     approved by the U.S. government to end users in these 
     countries involved or suspected of being involved in nuclear 
     proliferation acitivies.
      Some licenses involved technically significant items or 
     facilities that have been denied licenses in other cases 
     because of the risk of diversion to nuclear proliferation 
     purposes. These approvals, although generally consistent 
     with U.S. policy implementation guidelines, do present a 
     relatively greater risk that U.S. exports could contribute 
     to nuclear weapons proliferation.'' [24]
       [U.S. nuclear-related dual-use goods were approved for 
     export to]'' . . . end users [that] have been or are 
     suspected to be key players in their countries' nuclear 
     weapons programs.'' [29] ``Although most of the licensing 
     decisions for the eight countries we reviewed were in accord 
     with the goal of minimizing proliferation risk, we did 
     identify a number of licenses that were approved for exports 
     to end users engaged in, or suspected of being engaged in, 
     nuclear weapons proliferation.'' [27]
       ``. . . of the 24,048 licenses approved for these eight 
     countries [Argentina, Brazil, India, Iran, Iraq, Israel, 
     Pakistan, and South Africa], 1,508 (6 percent) were for end 
     users involved in or suspected of being involved in nuclear 
     weapons development or the manufacture of special nuclear 
     materials . . . [including] sensitive end users that have 
     played key roles in their countries' nuclear weapons 
     development programs and for which U.S. officials have denied 
     a large number of dual-use licenses.'' [4] [Also see table on 
     page 28.] ``Generally, the end users for these 1,508 licenses 
     were government agencies, research organizations, 
     universities, and defense companies that, while participating 
     in proscribed and/or unsafeguarded nuclear activities, are 
     also engaged in other activities.'' [28]
       ``During this period [fiscal years 1988 to 1992], the 
     United States reviewed 27,567 nuclear-related dual-use 
     license applications for the eight countries [Argentina, 
     Brazil, India, Iran, Iraq, Israel, Pakistan, and South 
     Africa] and approved 24,048 or approximately 87 percent . . 
     .''. [25] [Note: according to data on page 25, only one 
     percent--one license in a hundred--were officially denied.]
       ``The volume of licenses of NRL items has declined since 
     fiscal year 1987 . . . License applications for computer 
     exports should further decline in the future because of 
     additional liberalization steps.'' [17] ``The number of NRL 
     licenses worldwide declined 81 percent from fiscal years 1987 
     to 1992, compared with a 65-percent drop in NRL licenses to 
     Special Country List destinations . . .''. [21]
       ``. . . the liberalization in computer licensing 
     requirements has had the greatest impact [on the drop in 
     licensing requirements]: computers represented 92 percent of 
     the decline in licenses for NRL items to Special Country List 
     destinations and 86 percent of the decline for all 
     countries.'' [23]
       ``On October 6, 1993, the Commerce Department published an 
     interim rule further easing licensing requirements for 
     computer exports . . . This new policy will almost certainly 
     result in a substantial decline in the number of computer 
     license applications. We estimate that if these policy 
     changes had been in effect in fiscal year 1992, there would 
     have been approximately 86 percent fewer license applications 
     for computer exports to counties on the Special Country 
     List.'' [23]
       ``Computers account for the largest share of nuclear-
     related dual-use licenses. Between fiscal years 1985 and 
     1992, 86 percent of such licenses approved to Special Country 
     List destinations involved computers and computer-related 
     equipment, compared with 77 percent for all countries.'' [18]
       ``The NRL items most commonly licensed have a variety of 
     applications for nuclear weapons development, including 
     weapons testing, uranium enrichment (isotopic separation), 
     implosion systems development, and weapons detonation. 
     According to Energy officials, these items are in greater 
     demand than the rest of the NRL because they have wide 
     civilian applications.'' [20] ``In contrast, NRL items with 
     relatively few nonnuclear uses were approved in small numbers 
     or not at all, especially to Special County List 
     destinations.'' [20]
                   licensing procedures and policies

       ``The Commerce Department did not always refer nuclear-
     related dual-use license applications to the Department of 
     Energy as required by regulations. From fiscal years 1988 to 
     1992, Commerce unilaterally approved the export of computers 
     and other nuclear-related items to countries of proliferation 
     concern, even though these licenses should have been referred 
     to Energy. Commerce also approved without Energy consultation 
     numerous licenses for other items going to end users engaged 
     in nuclear weapons activities, despite regulations requiring 
     referral of such licenses.''[4]
       ``[From fiscal years 1988 to 1992], Energy did not forward 
     to the Subgroup on Nuclear Export Coordination about 80 
     percent of the licenses it received from Commerce for end 
     users of nuclear proliferation concern . . . [including 
     goods] intended for end users suspected of developing nuclear 
     explosives or special nuclear materials.''[4-5] ``We found 
     that the Commerce Department did not always send to Energy 
     all those licenses requiring referral and that Energy 
     recommended approval of a majority of licenses for end users 
     engaged in nuclear weapons activities without subjecting them 
     to interagency review.''[33]
       ``From fiscal years 1988 to 1992, Commerce decided without 
     Energy consultation about 50 percent of the 34,281 nuclear-
     related dual-use license applications to Special Country List 
     destinations. Of the licenses Commerce referred, Energy made 
     recommendations to Commerce on about 93 percent without 
     subjecting them to interagency review.''[36]
       From October 1987 to May 1992, ``Commerce approved about 
     130 licenses for NRL items going to Special Country List 
     destinations without obtaining Energy review, even though no 
     Energy delegations of authority applied.''[37] ``In addition 
     to the NRL licenses, Commerce approved without Energy review 
     nearly 1,500 licenses for non-NRL items going to end users on 
     Energy's Watch List, even though regulations require Energy 
     review of non-NRL licenses involving nuclear end users.''[37] 
     ``Of these licenses, about 500 were for sensitive end 
     users.''[37]
       [[Page S339]] ``. . . Defense and Arms Control and 
     Disarmament Agency representatives to the Subgroup identified 
     a number of licenses that they believed warranted interagency 
     review but were not placed on the Subgroup's agenda.''[5] 
     [See also p. 33.] ``Defense and ACDA officials stated that 
     not all nuclear-related dual-use licenses that could be of 
     concern to various SNEC agencies are being referred to the 
     SNEC. In addition, Defense and ACDA officials said they have 
     only a limited ability to hold Energy accountable for its 
     licensing recommendations because they lack access to 
     licensing information.''[40] ``They believe Energy has a 
     policy perspective that could lead it to recommend approval 
     of some licenses that Defense and ACDA want denied.''[40]
       Of the licenses between March 1991 and July 1992 that 
     involved interagency disagreements, ``Defense and ACDA voted 
     at the SNEC for denial 63 and 50 percent of the time, 
     respectively, while Energy voted for denial 47 percent of the 
     time, Commerce 13 percent, and State 8 percent.''[40] Energy 
     and Commerce ``. . . are the only agencies with access to all 
     nuclear-related dual-use license applications.''[41] Other 
     agencies are ``limited in their ability to hold Commerce and 
     Energy accountable for their licensing decisions because they 
     rarely are given information on licenses decided without 
     interagency review.''[41]
       Energy cites ``resource constraints'' as a reason why it 
     does not regularly notify the SNEC about licenses the 
     Department has approved--``Energy has not provided the NSEC 
     with information on licenses approved without SNEC review 
     since October 1991.''[41]
       From fiscal years 1988 to 1992, ``Energy referred to the 
     SNEC only 26 percent of the license applications it received 
     from Commerce for end users listed as sensitive on its 
     Nuclear Proliferation Watch List. Of the licenses not 
     referred by Energy, 79 percent were ultimately approved, less 
     than 1 percent were denied, and the remainder were generally 
     returned without action.''[39]
       ``. . . [SNEC agencies] are limited in their ability to 
     influence which licenses Energy selects for interagency 
     review and are unable to hold Commerce and Energy accountable 
     for their review decisions because they lack consistent 
     access to licensing information.'' [5]
       In February 1992, Defense proposed in the SNEC that Energy 
     should refer to the SNEC all licenses involving goods 
     controlled under the Nuclear Suppliers Group guidelines going 
     to certain countries not in the Group; the SNEC, however, did 
     not accept this proposal, due to opposition from Commerce, 
     State, and Energy. Defense also proposed that Energy share 
     with the SNEC information on all approved licenses that were 
     not reviewed by the SNEC--but SNEC rejected this proposal as 
     well. [41]
       Commerce opposes ACDA's proposal to refer to the SNEC all 
     licenses that Commerce refers to Energy. [41]
       ``. . . in certain circumstances licenses will be approved 
     for Special Country List destinations even if the end user is 
     involved in proscribed or unsafeguarded nuclear activities . 
     . .'' [25]
       ``In some instances, decisions to approve licenses for 
     sensitive end users were also influenced by special country 
     considerations--for example, the close bilateral relationship 
     between the United States and Israel.'' [28]


                  VERIFICATION AND ENFORCEMENT ISSUES

       ``During fiscal years 1991 and 1992, Commerce selected a 
     number of cases for inspection involving items of low 
     technical significance . . . approximately 63 percent of 
     nuclear-related prelicense checks in the eight countries of 
     proliferation concern . . . were [for items] of lesser 
     proliferation concern . . . about 39 percent of nuclear-
     related pre-license checks in the eight countries were 
     conducted for end users that had already been identified by 
     the Department of Energy as posing a nuclear proliferation 
     concern.'' [5]
       ``GAO . . . found that (1) U.S. embassy officials who 
     perform the pre-license checks and post-shipment 
     verifications typically lack technical expertise in how 
     nuclear-related dual-use items could be diverted; (2) 
     Commerce's requests for inspections frequently omitted vital 
     information, such as the reason for the inspection or 
     licensing conditions; and (3) embassy officials frequently 
     sent foreign . . . nationals to conduct inspections of their 
     own countries' facilities.'' [5-6]
       ``The U.S. government does not systematically verify 
     compliance with government-to-government assurances on the 
     use of nuclear-related dual-use items . . . Thus, the U.S. 
     government cannot be certain that exports licensed with 
     government-to-government assurances are being used for their 
     intended purposes.'' [6]
       ``Only a small proportion of the nuclear-related dual-use 
     licenses referred to the Department of Energy have been 
     subjected to PLCs and PSVs. During fiscal years 1991 and 
     1992, Commerce conducted PLCs for 221 (2.6 percent) of the 
     8,370 nuclear-related dual-use licenses referred to Energy.'' 
     [44] ``Over 60 percent of these inspections related to 
     computers.'' [45]
       ``A total of 47 of these PLCs and PSVs involved end users 
     on the Department of Energy's Watch List, and 35 of these had 
     favorable results.'' [46]
       Between fiscal years 1991 and 1992, seven licenses were 
     approved despite unfavorable PLCs; of these two involved end 
     users on the Watch List. [46-47]
       A Commerce official told GAO that the department did not 
     have specific criteria for conducting PLCs and PSVs involving 
     nuclear dual-use goods. [47] Current guidelines apply more 
     generally
      to all export controlled items. ``Without this focus,'' GAO 
     found, ``Commerce cannot be certain that the licenses 
     presenting the greatest nuclear proliferation risk are 
     selected for inspection.'' [47] The selection criteria for 
     conducting PLCs and PSVs do not highlight the most 
     sensitive nuclear-related dual-use items ``or even 
     distinguish the relative importance of items having uses 
     in nuclear, chemical, or biological weapons, or with 
     military or missile technology applications.'' [48] GAO 
     found that Commerce ``has developed specific guidance for 
     conducting nuclear-related dual-use inspections.'' [49]
       GAO found that ``about 39 percent of nuclear-related PLCs 
     [designed to check the bona fides of end users] in the eight 
     countries of proliferation concern were performed on 
     Department of Energy Watch List end users.'' [49]
       Problems in specific cases:
       Pakistan:--In March 1988, ``the U.S. embassy in Pakistan 
     conducted a PLC for the proposed export of a computer to an 
     end user located on the premises of a military facility in 
     Pakistan. Although embassy officials did not visit the end 
     user, citing time and budget constraints, the reply cable 
     stated that the end user was a reliable recipient of U.S. 
     technology. A subsequent PLC conducted during fiscal year 
     1991 reported the same finding for an oscilloscope export. 
     The Energy Watch List, however, indicates that the military 
     facility is involved in sensitive nuclear activities.'' [50]
       Iraq:--May 1989, ``the U.S. embassy in Iraq conducted a PLC 
     for the proposed export of a machine tool to Bader General 
     Establishment. Inspectors toured the facility and viewed the 
     plant where the machine tool would be used. The reply cable 
     stated that Bader General Establishment was a reliable 
     recipient of U.S. technology. However, after the Persian Gulf 
     War, U.N. inspectors revealed that the facility was a primary 
     contributor to Iraq's nuclear weapons program.'' [50]
       Israel:--In December, ``the U.S. embassy in Israel 
     conducted a PLC at a government commission for a proposed 
     export to an end user involved in Israel's unsafeguarded 
     nuclear program. The inspecting official, an Israeli 
     national, interviewed the commission's public relations 
     official as well as a representative of the end user. The 
     U.S. embassy subsequently recommended approval of the 
     application based on the results of the PLC.'' [50] GAO also 
     found that ``According to U.S. officials at the U.S. embassy 
     in Israel, a foreign service national who was a former 
     employee of the Israeli Foreign Service has been primarily 
     responsible for conducting inspections. Officials said that 
     until the beginning of 1992, this individual conducted the 
     majority of inspections without an accompanying U.S. 
     official.'' [52] ``One laboratory official noted that 15 
     licenses were approved for exports of fibrous material to 
     Israel in fiscal year 1991. However, no PLCs were conducted 
     on license applications involving this item.'' [48]
       India:--In another example, ``26 licenses were approved for 
     corrosion-resistant sensing elements to India in fiscal year 
     1992. However, only three PLCs were conducted on these 
     license applications.'' [48]
       GAO found that ``at the U.S. consulate in Hong Kong, a 
     foreign service national has been responsible for performing, 
     without direct supervision, all nuclear-related dual-use 
     inspections for the past 17 years.'' [52]
       A recent Commerce Department guideline concerning the use 
     of foreign nationals in the conduct of inspections ``leaves 
     the decision on who should perform the inspections to the 
     discretion of the posts.'' [52]
       GAO found that inspecting officials ``lack technical 
     expertise in how nuclear-related dual-use items may be 
     diverted''; Commerce's requests for inspections ``omit vital 
     information''; foreign
      nationals ``conduct many inspections''; ``some inspection 
     reports do not provide an assessment of the end user's 
     reliability''; and ``U.S. embassy and consulate officials 
     may have difficulty gaining access to end-user 
     facilities.'' GAO found that ``without such expertise and 
     training, it is difficult for them [inspectors] to 
     effectively detect potential or actual attempts to divert 
     these items to a nuclear weapons program.'' [51] GAO also 
     found that ``Embassy officials do not always report on the 
     reliability of end users as required by Commerce.'' [52]
       GAO found that ``Embassy officials in some countries have 
     difficulty obtaining immediate access to foreign facilities 
     or cannot obtain access at all because the host government is 
     sensitive about inspections infringing on its sovereignty.'' 
     GAO cited India and Germany as two such countries.
       According to GAO, ``At several posts, including Hong Kong, 
     India, Pakistan, Germany, and Israel, foreign service 
     nationals were conducting nuclear-related dual-use 
     inspections.'' [52] in some cases, these foreign nationals 
     were not even accompanied by U.S. embassy officials, GAO 
     found.
       GAO found that ``there are no formal criteria for 
     determining when to seek an end-use assurance . . .''. [54]
       ``According to State, Defense, and ACDA officials, the U.S. 
     government does not systematically verify compliance with 
     these [government-to-government] assurances because they are 
     diplomatically negotiated agreements intended to carry the 
     weight of an official commitment by a foreign government. 
     Thus, it cannot be certain that the licensed exports are 
     being used only for their intended purposes.'' [53]
       [[Page S340]] According to U.S. officials, there is no 
     evidence of cases where end-use assurances have been 
     violated; however, officials also said there is no systematic 
     effort to verify compliance with such assurances because they 
     constitute an official commitment by a foreign government. 
     According to State Department officials, most end-use 
     assurances have no provisions for verifying compliance.'' 
     [55]
       GAO found that Israel and South Africa accounted for over 
     88 percent of all government-to-government assurances 
     obtained during fiscal years 1988 to 1992 that prohibited 
     specified nuclear end uses. [Table on page 54] ``For Israel, 
     the majority of nuclear assurances involved military end 
     users. The United States obtains end-use assurances for 
     certain exports to Israeli military end users in lieu of 
     conducting inspections of these end users.'' [55]
                                 ______

      By Mr. D'AMATO:
  S. 104. A bill to establish the position of Coordinator for Counter-
Terrorism within the office of the Secretary State; to the Committee on 
Foreign Relations.


       THE COORDINATOR FOR COUNTER-TERRORISM POSITION ACT OF 1995

 Mr. D'AMATO. Mr. President, I introduce a bill to permanently 
establish by statute the position of the Coordinator of Counter-
Terrorism within the office of the Secretary of State. If the State 
Department had its way it would downgrade the day-to-day 
responsibilities of the office, from an Assistant Secretary level, to 
one among several Deputy Assistant Secretaries under a new Assistant 
Secretary responsible for narcotics and international crime as well as 
terrorism. I am pleased that my colleague from New York, Representative 
Ben Gilman will be introducing identical legislation in the House of 
Representatives.
  Under my amendment, the Coordinator shall have the rank of 
``Ambassador-at-Large,'' a position that will require Senate 
confirmation, thereby giving the office an enhanced position in its 
relations with the other federal agencies that flight terrorism, and 
equal rank with similar officials of other nations.
  Last year, the administration proposed to downgrade the position--a 
decision that was wrong then and is still wrong today, for a number of 
important reasons. Let me explain.
  First, now is not the time to lower our guard against terrorism. 
Nearly 2 years ago, terrorism struck our shores when terrorists bombed 
the World Trade Center and planned additional bombings. Acts of 
terrorism have not lessened, but gotten more dangerous. We need look no 
farther then the heinous bombings in Buenos Aires, Panama, Tel Aviv, 
and the continuing Hamas campaign to disrupt the ongoing peace process, 
to see that the worldwide threat of terrorism is not receding but 
expanding.
  Second, downgrading the position sends a message that we are not 
serious about fighting terrorism and that we don't consider it a 
priority. What will the terrorists think if we downgrade an office 
designed to thwart their attacks on American targets? I think they will 
become emboldened. This move cannot have a positive effect on our 
counter-terrorism efforts.
  Third, downgrading the Counter-Terrorism office and placing it under 
a larger, more cumbersome portfolio that includes drugs and 
international crime, means that counter-terrorism will have a lower 
priority. The State Department
 contends that terrorism is explicitly tied to drug trafficking. This 
is a overly broad generalization and not a fact.

  Finally, downgrading the position makes it harder for the Coordinator 
to organize a coherent counter-terrorism policy because he or she will 
not be able to deal effectively with the other members of the Federal 
bureaucracy in the fight against terrorism.
  Mr. President, I would like to point out that according to the 
Congressional Research Service, between 1968 and 1993, including the 
attack on the World Trade Center, 769 Americans died in terrorist acts, 
worldwide. Moreover, in the World Trade Center bombing of February 26, 
1993, in which six people died, over 1,000 others were injured. Losses 
incurred in that bombing surpassed $1 billion. As we all know, the 
terrorists planned more elaborate and dangerous operations. 
Fortunately, they were caught before more damage could be done.
  Is now the time to put fight against terrorism on the backburner? Is 
now the time to tell the world that we don't consider terrorism 
important? I don't think so. Nor do I think that we, as a nation, can 
tell the families of these 769 people that the death of their loved 
ones are going to be forgotten. I don't think that anyone in this 
Chamber would want to tell them that we should relent in our fight 
against terrorism either. But, if we allow the administration plan to 
downgrade the Counter-Terrorism position to go forward, we will be 
doing just that.
  The 1990 Report of the President's Commission on Aviation Security 
and Terrorism, following the bombing of Pan Am Flight 103, called for 
the creation of such a position. Interestingly, four former counter-
terrorism and international narcotics control officials, in a letter to 
me begged, ``Don't gut our counter-terrorism capability.''
  In another letter to me, Lisa and Ilsa Klinghoffer, daughters of Leon 
Kinghoffer who was murdered by terrorist on the Achille Lauro in 
October 1985, urged that a separate and independent office be kept at 
the State Department as ``the most effective implementation of the 
administration's counter-terrorism policies and initiatives.''
  If we are going to be serious about the fight against terrorism, we 
must have the right resources. One of those resources is an Ambassador-
at-large for Counter-Terrorism. This Ambassador will act as the sole 
voice and have direct access to the Secretary of State and will 
coordinate our nation's fight against this scourge that we must stand 
up to, and that we must defeat.
  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. 104

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

     SECTION 1. COORDINATOR FOR COUNTER-TERRORISM.

       (a) Establishment.--There shall be within the office of the 
     Secretary of State a Coordinator for Counter-Terrorism 
     (hereafter in this section referred to as the 
     ``Coordinator'') who shall be appointed by the President, by 
     and with the advice and consent of the Senate.
       (b) Responsibilities.--(1) The Coordinator shall perform 
     such duties and exercise such power as the Secretary of State 
     shall prescribe.
       (2) The Coordinator shall have as his principal duty the 
     overall supervision (including policy oversight of resources) 
     of international counterterrorism activities. The Coordinator 
     shall be the principal advisor to the Secretary of State on 
     international counterterrorism matters. The Coordinator shall 
     be the principal counterterrorism official within the senior 
     management of the Department of State and report directly to 
     the Secretary of State.
       (c) Rank and Status.--The Coordinator shall have the rank 
     and status of Ambassador-at-Large. The Coordinator shall be 
     compensated at the annual rate of basic pay in effect for a 
     position at level IV of the Executive Schedule under section 
     5314 of title 5, United States Code, or, if the Coordinator 
     is appointed from the Foreign Service, the annual rate of pay 
     which the individual last received under the Foreign Service 
     Schedule, whichever is greater.
       (d) Diplomatic Protocol.--For purposes of diplomatic 
     protocol among officers of the Department of State, the 
     Coordinator shall take precedence after the Secretary of 
     State, the Deputy Secretary of State, and the Under 
     Secretaries of State and shall take precedence among the 
     Assistant Secretaries of State in the order prescribed by the 
     Secretary of State.
                                 ______

      By Mr. DASCHLE (for himself, Mr. Conrad, Mr. Dorgan, Mrs. 
        Kassebaum, and Mr. Baucus):
  S. 105. A bill to amend the Internal Revenue Code of 1986 to provide 
that certain cash rentals of farmland will not cause recapture of 
special estate tax valuation; to the Committee on Finance.


         THE SPECIAL USE VALUATION FOR FAMILY FARMS ACT OF 1995

  Mr. DASCHLE. Mr. President, since 1988, I have studied the effects on 
family farmers of a provision in the estate tax law--section 2032A. 
While section 2032A may seem a minor provision to some, it is 
critically important to family-run farms. A problem with respect to the 
Internal Revenue Service's interpretation of this provision has been 
festering for a number of years and threatens to force the sale of many 
family farms.
  Section 2032A, which bases the estate tax applicable to a family farm 
on its 
[[Page S341]] use as a farm, rather than on its market value, reflects 
the intent of Congress to help families keep their farms. A family that 
has worked hard to maintain a farm should not have to sell it to a 
third party solely to pay stiff estate taxes resulting from increases 
in the value of the land. Under section 2032A, inheriting family 
members are required to continue farming the property for at least 15 
years, in order to avoid having the IRS ``recapture'' the tax savings.
  At the time section 2032A was enacted, it was common practice for one 
or more family members to cash lease the farm from the other members of 
the family. This practice made sense where one family member was more 
involved than the other family members in the day-to-day farming of the 
land. Typically, however, the other family members would continue to be 
at risk as to the value of the farm and to participate in decisions 
affecting the farm's operation. Cash leasing among family members 
remained a common practice after the enactment of section 2032A. An 
inheriting child would cash lease from his or her siblings, with no 
reason to suspect from the statute or otherwise that the cash leasing 
arrangement might jeopardize the farm's qualification for special use 
valuation.
  Based at least in part on some language that I am told was included 
in a Joint Committee on Taxation publication in early 1982, the 
Internal Revenue Service has taken the position that cash leasing among 
family members will disqualify the farm for special use valuation. The 
matter has since been the subject of numerous audits and some 
litigation, though potentially hundreds of family farmers may yet be 
unaware of the change of events. Cases continue to arise under this 
provision.
  In 1988, Congress provided partial clarification of this issue for 
surviving spouses who cash lease to their children. Due to revenue 
concerns, however, no clarification was made of the situation where 
surviving children cash lease among themselves.
  My concern is that many families in which inheriting children or 
other family members have cash leased to each other may not even be 
aware of the IRS's
 position on this issue. At some time in the future, they are going to 
be audited and find themselves liable for enormous amounts in taxes, 
interest and penalties. For those who cash leased in the late 1970s, 
this could be devastating because the taxes they owe are based on the 
inflated land values that existed at that time.

  A case that arose in my State of South Dakota illustrates the 
unfairness and devastating impact of the IRS interpretation of section 
2032A. Janet Kretschmar, who lives with her husband, Craig, in 
Cresbard, SD, inherited her mother's farm along with her two sisters in 
1980. Because the property would continue to be farmed by the family 
members, estate taxes were paid on it pursuant to section 2032A, saving 
over $50,000 in estate tax.
  Janet and Craig continued to farm the land and have primary 
responsibility for its day-to-day operation. They set up a simple and 
straightforward arrangement with the other two sisters whereby Janet 
and Craig would lease the sisters' interests from them.
  Seven years later, the IRS told the Kretschmars that the cash lease 
arrangement had disqualified the property for special use valuation and 
that they owed $54,000 to the IRS. According to the IRS, this amount 
represented estate tax that was being ``recaptured'' as a result of the 
disqualification. This came as an enormous surprise to the Kretschmars, 
as they had never been notified of the change in interpretation of the 
law and had no reason to believe that their arrangement would no longer 
be held valid by the IRS for purposes of qualifying for special use 
valuation. The fact is that, if they had known this, they would have 
organized their affairs in one of several other acceptable, though more 
complicated, ways.
  For many years, I have sought inclusion in tax legislation of a 
provision that would clarify that cash leasing among family members 
will not disqualify the property for special use valuation. In 1992, 
such a provision was successfully included in H.R. 11, the Revenue Act 
of 1992 and passed by Congress. Unfortunately, H.R. 11 was subsequently 
vetoed.
  Today, I am introducing a bill the language of which is identical to 
the section 2032A measure that was passed in the Revenue Act of 1992. I 
am joined in this effort by my two colleagues from North Dakota, 
Senators Dorgan and Conrad, whose background and expertise on tax 
issues are well known, as well as by my distinguished colleagues 
Senators Kassebaum and Baucus.
  I must emphasize that there may be many other cases in other 
agricultural states where families are cash leasing the family farm 
among each other unaware that the IRS could come knocking at their door 
at any minute. I urge my colleagues in the Senate who may have such 
cases in their State to work with us and support this important 
clarification of the law.
  I intend to request the Joint Committee on Taxation to estimate the 
revenue impact of this proposal. At an appropriate time thereafter, I 
will recommend any necessary offsets over a 10-year period as required 
by the Budget Act.
  Mr. President, I ask that the full text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 105

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

     SECTION 1. CERTAIN CASH RENTALS OF FARMLAND NOT TO CAUSE 
                   RECAPTURE OF SPECIAL ESTATE TAX VALUATION.

       (a) In General.--Subsection (c) of section 2032A of the 
     Internal Revenue Code of 1986 (relating to tax treatment of 
     dispositions and failures to use for qualified use) is 
     amended by adding at the end the following new paragraph:
       ``(8) Certain cash rental not to cause recapture.--For 
     purposes of this subsection, a qualified heir shall not be 
     treated as failing to use property in a qualified use solely 
     because such heir rents such property on a net cash basis to 
     a member of the decedent's family, but only if, during the 
     period of the lease, such member of the decedent's family 
     uses such property in a qualified use.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply with respect to rentals occurring after December 
     31, 1976.
                                 ______

      By Mr. DASCHLE:
  S. 106. A bill to amend the Internal Revenue Code of 1986 to increase 
the standard mileage rate deduction for charitable use of passenger 
automobiles; to the Committee on Finance.


 The Deduction for Charitable use of PASSENGER Automobiles Act of 1995

  Mr. DASCHLE. Mr. President, today I am introducing legislation that 
addresses a small, but important, concern regarding the deduction of 
mileage expenses by individuals who volunteer their services to help 
carry out the activities of charitable organizations.
  Many individuals who volunteer for charitable organizations incur 
out-of-pocket expenses that are not reimbursed by the charity. One such 
expense occurs where an individual uses his or her own car to carry out 
charitable purpose activities. Examples of this are when an individual 
provides transportation to a hospital for veterans, delivers meals to 
the homeless or elderly on behalf of a charity, or transports children 
to scouting and other youth activities.
  In 1984, Congress set a standard mileage expense deduction rate of 12 
cents per mile for individuals who use their vehicles to carry out the 
tax-exempt goals of charitable organizations. The express purpose of 
the deduction was to support the efforts of volunteers, who do not 
receive any charitable deduction for the value of their contributed 
services, and to take into account the additional out-of-pocket costs 
of operation of a vehicle in doing so.
  At the time that Congress codified the standard charitable mileage 
deduction at 12 cents per mile, the standard deduction for mileage 
expenses incurred in connection with one's trade or business was 20.5 
cents for the first 15,000 miles and 11 cents for each mile thereafter. 
Since that time, the U.S. Department of the Treasury, through the 
Internal Revenue Service, has increased the standard mileage rate for 
business travel expenses to 28 cents per mile for unlimited mileage.
  Unfortunately, due to an anomaly in the tax code, the Secretary of 
the Treasury does not have the authority to make corresponding 
increases in the 
[[Page S342]] standard mileage rate for charitable use of one's 
vehicle. Thus, the standard charitable mileage rate remains today at 12 
cents per mile.
  The legislation I am introducing, which is identical to bills I have 
introduced in previous Congresses on this matter, would address this 
inconsistency in two ways. First, it would increase the standard 
charitable mileage expense deduction rate to 16 cents per mile. This 
would restore the ratio that existed in 1984 between the charitable 
mileage rate and the business mileage rate.
  Second, the legislation would give the Secretary of the Treasury the 
authority to make subsequent increases in the charitable mileage rate 
without further permission from Congress, just as it currently does 
with the mileage rate for business use of a vehicle. The intent of this 
provision of the legislation is to ensure that, as increases are made 
in the future to the standard business mileage rate, the charitable 
mileage deduction will be increased, as well, so as to maintain the 
ratio that existed between these two mileage rates in 1984.
  In 1993, the Joint Committee on Taxation estimated the cost of this 
proposal at $327 million over a five-year period. This amount is not 
insignificant despite the merits of this measure. Therefore, at an 
appropriate time, I intend to recommend offsets for the proposal over a 
ten-year period as required by the Budget Act.
  Mr. President, many charitable organizations today are being forced 
to take on a greater burden than ever before, due to cut-backs, 
especially in the 1980s, in federal programs for veterans, the elderly 
and other groups in need. As a result, these organizations must 
increasingly rely on volunteer assistance to provide the services that 
are central to their tax-exempt purposes. If we can do no more, at the 
very least we in Congress should ensure that helpful measures remaining 
in the law are not allowed to erode.
  On behalf of volunteers of every stripe, I urge my colleagues to 
support this legislation.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 106

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

     SECTION 1. INCREASE IN STANDARD MILEAGE RATE EXPENSE 
                   DEDUCTION FOR CHARITABLE USE OF PASSENGER 
                   AUTOMOBILE.

       (a) In General. Subsection (i) of section 170 of the 
     Internal Revenue Code of 1986 (relating to standard mileage 
     rate for use of passenger automobile) is amended to read as 
     follows:
       ``(i) Standard Mileage Rate For Use of Passenger 
     Automobile.--
       ``(1) General Rule.--Except as provided in paragraph (2), 
     for purposes of computing the deduction under this section 
     for use of passenger automobile, the standard mileage rate 
     shall be 16 cents per mile.
       ``(2) Taxable Years Beginning After 1993.-- Not later than 
     December 15 of 1995, and each subsequent calendar year, the 
     Secretary may prescribe an increase in the standard mileage 
     rate allowed under this section with respect to taxable years 
     beginning in the succeeding calendar year.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     1994.
                                 ______

  By Mr. DASCHLE:
  S. 107. A bill to amend the Internal Revenue Code of 1986 to allow a 
deduction for travel expenses of certain loggers; to the Committee on 
Finance.


      THE TRAVEL EXPENSE DEDUCTION FOR CERTAIN LOGGERS ACT OF 1995

  Mr. DASCHLE. Mr. President, today I am introducing legislation in my 
continuing effort to address what I feel is an unfair ruling by the 
Internal Revenue Service that severely affects a certain segment of 
American workers. It is a situation where pure tax policy simply is not 
practical in its application to everyday life.
  In my state of South Dakota, the Black Hills National Forest spreads 
over some 6,000 square miles. Many of my colleagues may be familiar 
with it.
  In this forest, there is a thriving logging industry that employs 
many South Dakotans. The logging companies that have operations there 
would not be able to do their business without the assistance of those 
who cut the logs and haul or ``skid'' them to the trucks on which they 
are carried to the mill. These workers--known as ``cutters'' and 
``skidders,'' and the contractors who employ them, are collectively 
referred to as ``loggers.''
  For a logger, traveling to work every day is very different from the 
experience of the average commuter. Loggers often travel as much as a 
couple of hours one way to the site where cutting is taking place. This 
may involve driving along miles of unpaved forest roads. It is 
impossible for them to live closer to their work site, not only because 
of its location, but also because that site may change from month to 
month. In addition, loggers must have vehicles that are capable of 
traversing rough forest terrain.
  Despite the number of miles the loggers must travel to work each day 
and the rough terrain, the IRS has said that their expenses of 
traveling from home to the work site and back again are non-deductible 
commuting expenses. This is true regardless of the location of the work 
site within the forest or its distance form the individual logger's 
home. For, according to the IRS, the entire 6,000-square-mile forest is 
the loggers' ``tax home'' or ``regular place of business'' for purposes 
of deducting mileage expenses.
  Despite the IRS's reasons for taking this position, the effect of the 
rule on loggers in the Black Hills is unfair. It imposes a hardship on 
them and fails to recognize the special circumstances of their jobs. 
True, other taxpayers are not permitted to deduct commuting mileage 
expenses. But other taxpayers generally are not forced to travel such 
long distances to and from work each day or to drive along dirt forest 
roads. Indeed, several loggers who challenged the IRS on this issue 
initially won their cases, only to be overturned on appeal.
  To rectify this situation, I introduced legislation in the 102d and 
103d Congresses that would have allowed loggers, in the Black Hills or 
elsewhere, to deduct their mileage expenses incurred while traveling 
between their homes and the cutting site, so long as the mileage is 
legitimately related to their business. Although that measure was not 
included in tax legislation last year primarily due to revenue 
concerns, in the 102d Congress a provision requiring the U.S. 
Department of the Treasury to study the issue was passed in H.R. 11, 
the Revenue Act of 1992, which ultimately was vetoed.
  Today I am reintroducing the bill that I introduced previously 
allowing loggers to deduct their mileage expenses incurred while 
traveling between their homes and the cutting site. I urge my 
colleagues, particularly those who have loggers in their state, to take 
a close look at it. To some, this may seem a small matter in the scheme 
of what we do here in the Senate, but it would restore a measure of 
fairness to loggers who currently are subject to the IRS's whims.
  Finally, I recognize that there will be some cost associated with 
this measure, and, at the appropriate time, I intend to recommend 
offsets to cover the cost of the measure over a 10-year period as 
required by the Budget Act.
  Mr. President, I ask that the full text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 107

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

     SECTION 1. DEDUCTION FOR TRAVEL EXPENSES OF CERTAIN LOGGERS.

       (a) In General.--Section 162 of the Internal Revenue Code 
     of 1986 (relating to trade or business expenses) is amended 
     by redesignating subsection (o) as subsection (p) and by 
     inserting after subsection (n) the following new subsection:
       ``(o) Special Travel Expense Rules for Loggers.--
       ``(1) In general.--Notwithstanding subsection (a)(2) and 
     section 262, in the case of an individual, there shall be 
     allowed as a deduction under this section an amount equal to 
     the travel expenses of such individual in connection with the 
     trade or business of logging (including the miles to and from 
     such individual's home).
       ``(2) Trade or business of logging.--For purpose of this 
     section, the term `trade or business of logging' means the 
     trade or business of the cutting and skidding of timber.''
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     1994.
      [[Page S343]] By Mr. DASCHLE (for himself and Mr. Jeffords):
  S. 108. A bill to amend the Internal Revenue Code of 1986 to allow 
the energy investment credit for solar energy and geothermal property 
against the entire regular tax and the alternative minimum tax; to the 
Committee on Finance.


      the promoting solar and geothermal technologies act of 1995

  Mr. DASCHLE. Mr. President, a successful national energy policy 
requires that we shift our reliance away from finite fossil fuels 
toward the infinite supply of renewable alternative technologies.
  To that end, in the 102d Congress I introduced legislation that would 
have extended for 5 years the business energy tax credits set forth in 
section 46 of the Internal Revenue Code for investments in solar and 
geothermal energy facilities. At the time, those credits were scheduled 
to expire at the end of 1992. In addition, I introduced a bill that 
would have allowed the credits to be taken against the alternative 
minimum tax or ``AMT'' for those businesses subject to its provisions.
  After much hard work, a provision making the solar and geothermal 
energy tax credits permanent was incorporated into the Energy Policy 
Act enacted into law last year. The proposal to allow the credits 
against the AMT, however, was not included in that legislation. 
Therefore, today I am re-introducing the bill that would permit 
businesses subject to the AMT to take advantage of the credits for 
investment in solar and geothermal energy facilities. I am joined by my 
distinguished colleague from Vermont, Senator Jeffords.
  These energy credits represent a small but important contribution to 
developing a broader, more sensible, and more reliable national energy 
strategy. To be sure, we must be careful of enacting provisions that 
threaten to erode the alternative minimum tax, but there are situations 
in which other policies should override this concern. In my view, the 
promotion of renewable energy sources is just such a situation.
  The promotion of renewable energy sources is more important now than 
ever before. This was demonstrated in the recent past by the events in 
the Persian Gulf. We should have learned from those events that we 
cannot continue to ignore our increasing dependence on imported oil. 
The world's oil supply will run out. Nothing can change that. To the 
extent that we foster and encourage the development of solar, 
geothermal and other new technologies, we can reduce our reliance on 
imported oil.
  The need to slow the detrimental effects on our environment of 
traditional sources of energy is as important as energy supply and 
security. Renewable energy sources are the answer to this need. I have 
often spoken on the merits of alcohol fuels in this regard. Solar and 
geothermal energy have similar potential for the environment. For 
example, in the solar mode of operation, solar technology has no 
combustion-related emissions at all. Even when using back-up fossil 
fuel to assure reliability, present generation solar technology 
produces far less carbon dioxide than natural gas, the cleanest fossil 
fuel alternative. Geothermal plants also emit substantially less carbon 
dioxide than gas, oil, or coal-fired plants for the same electrical 
output.
  Recent investment in solar and geothermal technologies is just 
beginning to yield potential return in the form of energy security and 
an improved environment. These technologies are not yet at the point, 
however, where they are commercially viable. The tax credits provide 
the margin needed to keep renewable projects in operation. It would be 
counterproductive not to extend the credits to those businesses falling 
under the AMT, in view of our national investment to date and our 
desire to lessen our dependence on imported oil.
  Finally, in the 103d Congress, the Joint Committee on Taxation 
estimated the cost of this measure at $212 million over 5 years. At the 
appropriate time, I intend to recommend offsets for the cost of the 
proposal over a 10-year period as required by the Budget Act.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in its entirety in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 108
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. CHANGES RELATING TO ENERGY CREDIT.

       (a) Energy Credit Allowable Against Entire Regular Tax and 
     Alternative Minimum Tax.--
       (1) Subsection (c) of section 38 of the Internal Revenue 
     Code of 1986 (relating to limitation based on amount of tax) 
     is amended by redesignating paragraph (3) as paragraph (4) 
     and adding after paragraph (2) the following new paragraph:
       ``(3) Special rules for energy credit.--
       ``(A) In general.--In the case of a C corporation--
       ``(i) this section and section 39 shall be applied 
     separately with respect to the energy credit, and
       ``(ii) in applying paragraph (1) to such credit--
       ``(I) subparagraph (A) of paragraph (1) shall not apply, 
     and
       ``(II) the limitation under paragraph (1) (as modified by 
     subclause (I)) shall be reduced by the credit allowed under 
     subsection (a) for the taxable year (other than the energy 
     credit).
       ``(B) Energy credit.--For purposes of this paragraph and 
     paragraph (2), the term `energy credit' means the credit 
     allowable under subjection (a) by reason of section 48(a).''
       (2) Subclause (II) of section 38(c)(2)(A)(ii) of such Code 
     is amended by inserting ``or the energy credit'' after 
     ``employment credit''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1994.
                                 ______

      By Mr. DASCHLE (for himself, Mr. Conrad, Mr. Dorgan, Mr. 
        Pressler, Mr. Grassley, Mr. Baucus, Mr. Burns and Mr. Harkin):
  S. 109. A bill to amend the Internal Revenue Code of 1986 relating to 
the treatment of livestock sold on account of weather-related 
conditions; to the Committee on Finance.


 THE TAX TREATMENT OF INCOME FROM INVOLUNTARY CONVERSION OF LIVESTOCK 
                              ACT OF 1995

  Mr. DASCHLE. Mr. President, today I am introducing legislation to 
provide equitable treatment under the tax law for farmers and ranchers 
who are forced to sell their livestock prematurely due to extreme 
weather conditions. I am joined in this effort by Senators Conrad, 
Dorgan, Pressler, Grassley, Baucus, Burns and Harkin.
  A couple summers ago, Midwestern States suffered severe floods, which 
devastated lives and property along these states rivers and shorelines. 
President Clinton responded quickly by providing disaster assistance, 
$2.5 billion, including $1 billion for agriculture, in emergency aid to 
flooded areas in the Midwest.
  In addition to receiving disaster payments, many farmers were able to 
take advantage of provisions in the Internal Revenue Code designed 
primarily to spread out the impact of taxes on farmers in these 
situations. Ironically, however, while farmers who lose their crops due 
to floods are covered under these provisions, farmers who must 
involuntarily sell livestock due to flood conditions are not.
  Normally, a taxpayer who uses the cash method of accounting, as most 
farmers do, must report income in the year in which he or she actually 
receives the income. The Tax Code, however, outlines certain exceptions 
to this rule where disaster conditions generate income to the farmer 
that otherwise would not have been received at that time. For example, 
one exception allows farmers who receive insurance proceeds or disaster 
payments when crops are destroyed or damaged due to drought, flood or 
any other natural disaster to include those proceeds in income in the 
year following the disaster, if that is when the income from the crops 
otherwise would have been received.
  Two other provisions deal with involuntary conversion of livestock. 
The first provision enables livestock producers who are forced to sell 
herds due to drought conditions to defer tax on any gain from these 
sales by reinvesting the proceeds in similar property within a 2-year 
period. The second provision allows livestock producers who choose not 
to reinvest in similar property to elect to include proceeds from the 
sale of the livestock in taxable income in the year following the sale.
  For no apparent reason, the two provisions dealing with livestock do 
not 
[[Page S344]] mention the situation where livestock is involuntarily 
sold due to flooding. Thus, floods and flood conditions do not trigger 
the benefits of those provisions. Yet, many livestock producers during 
the recent floods had no choice but to sell livestock because floods 
had destroyed crops needed to feed the livestock, fences for containing 
livestock were washed out, or other similar circumstances had occurred.
  Our proposal would expand the availability of the existing livestock 
tax provisions to include involuntary conversions of livestock due to 
flooding and other weather-related conditions. This would conform the 
treatment of crops and livestock in this respect.
  A provision similar to our bill was passed by Congress as part of the 
Revenue Act of 1992. Unfortunately, that legislation was subsequently 
vetoed.
  Let me emphasize that the tax provisions we are dealing with here 
affect the timing of tax payments, not forgiveness of tax liability. 
Nonetheless, I intend to request the Joint Committee on Taxation to 
prepare an estimate of the cost of this measure. At the appropriate 
time after that estimate is completed, I will recommend offsets over a 
10-year period as required by the Budget Act.
  We should not shut out some farmers--livestock producers--from the 
disaster-related provisions of the Tax Code simply because the natural 
disaster involved was a flood, instead of a drought. That just doesn't 
make sense, and I urge my colleagues to give this bill favorable 
consideration.
  Mr. President, I ask 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. 109

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

     SECTION 1. TREATMENT OF LIVESTOCK SOLD ON ACCOUNT OF WEATHER-
                   RELATED CONDITIONS.

       (a) Deferral of Income Inclusion.--Subsection (e) of 
     section 451 of the Internal Revenue Code of 1986 (relating to 
     special rules for proceeds from livestock sold on account of 
     drought) is amended--
       (1) by striking ``drought conditions, and that these 
     drought conditions'' in paragraph (1) and inserting 
     ``drought, flood, or other weather-related conditions, and 
     that such conditions''; and
       (2) by inserting ``, Flood, or Other Weather-Related 
     Conditions' after ``Drought'' in the subsection heading.
       (b) Involuntary Conversions.--Subsection (e) of section 
     1033 of such code (relating to livestock sold on account of 
     drought) is amended--
       (1) by inserting ``, flood, or other weather-related 
     conditions'' before the period at the end thereof; and
       (2) by inserting ``, Flood, or Other Weather-related 
     Conditions'' after ``Drought'' in the subsection heading.
       (c) Effective Date.--The amendments made by this section 
     shall apply to sales and exchanges after December 31, 1994.
                                 ______

      By Mr. DASCHLE (for himself, Mr. Grassley, Mr. Harkin, Mr. 
        Breaux, Mr. Baucus, Mr. Pressler, Mr. Conrad, Mr. Burns, and 
        Mr. Dorgan):
  S. 110. A bill to amend the Internal Revenue Code of 1986 to provide 
that a taxpayer may elect to include in income crop insurance proceeds 
and disaster payments in the year of the disaster or in the following 
year; to the Committee on Finance.


       THE TAX TREATMENT OF CROP DISASTER ASSISTANCE ACT OF 1995

  Mr. DASCHLE. Mr. President, I am introducing legislation today to 
address unnecessary inflexibility in a Tax Code provision that affects 
farmers who receive crop disaster assistance. I am joined by my 
distinguished colleagues Senators Grassley, Harkin, Breaux, Baucus, 
Pressler, Conrad, Burns, and Dorgan.
  Last year, a number of my colleagues in the Senate and I, as well as 
many members of the House of Representatives, introduced similar 
legislation to address a concern arising out of disaster payments 
received after the 1993 floods in the Midwest. While it may be too late 
to rectify this problem for some of the farmers who received those 
payments, this legislation would provide them the option to go back and 
amend their 1993 returns. Moreover, the measure is prospective, as it 
is nonetheless important to ensure fairness to farmers who suffer crop 
damage as result of future disasters.
  The legislation would make a permanent change to the Tax Code and 
impact farmers who receive disaster payments as a result of losses 
sustained from natural disasters. Due to any number of factors, farmers 
may not receive disaster assistance payments until the year following 
the disaster. This may have serious tax consequences for them if they 
normally would have recognized the income from the crops that were 
destroyed in the year of the disaster. Receipt of the disaster payment 
in the following year may prevent them from reporting it as income on 
the previous year's return. This, in turn, will result in a 
``bunching'' of income in the later year, possibly pushing them into a 
higher tax bracket than would otherwise be the case. It may also cause 
them to lose the benefit of personnel exemptions and certain 
nonbusiness itemized deductions.
  Ironically, Internal Revenue Code section 451(d) permits a farmer who 
happened to receive his disaster payment in, for example, 1993 to defer 
recognition of that income for tax purposes until 1994, if that is the 
year in which he otherwise would have recognized the income from the 
crops that were destroyed. But it does not allow a farmer who did not 
actually receive the payment until 1994 to recognize the payment as 
income on his 1993 return if that is when he normally would have 
received the income.
  The legislation we are introducing today would simply permit section 
451(d) to operate in either direction, so long as the farmer recognizes 
the disaster payment in the year in which he would otherwise have 
recognized the income from the crops that were destroyed.
  Let me emphasize again that the change made by this legislation would 
apply to future disasters and disaster payments, not just those arising 
out of the 1993 flooding. Last year, the Joint Committee on Taxation 
estimated the cost of this proposal at $9 million over a 6-year period. 
At the appropriate time, I intend to recommend offsets covering the 
cost over a 10-year period as required by the Budget Act.
  Mr. President, there really is no reason why the Tax Code should 
allow flexibility for farmers who want to recognize disaster payments 
in the year following the disaster, but not for those who receive their 
payments in the latter year and want to recognize them as income in the 
year of the disaster. In either case, the farmer would be required to 
show that he would have received the income from the destroyed crops in 
the year he is choosing to report the disaster assistance income. 
Without this two way rule, we will be imposing significant financial 
burdens on the very people we seek to help in passing disaster 
assistance legislation.
  I would also like to make clear that no one is pointing fingers here. 
The fact is that this situation can arise circumstantially, without 
fault on anyone's part. The timing of the disaster, the volume of 
applicants for disaster assistance, and many other factors could result 
in farmers receiving disaster assistance payments the year after the 
disaster. This situation was bound to arise sooner or later, and it 
makes sense to correct it as soon as possible for those who are 
affected.
  It is my intention to pursue passage of this measure at the earliest 
opportunity this year. I hope my colleagues will join me by supporting 
it.
  Mr. President, I ask that a copy of this legislation be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 110

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

     SECTION 1. SPECIAL RULE FOR CROP INSURANCE PROCEEDS AND 
                   DISASTER PAYMENTS.

       (a) In General.--Section 451(d) of the Internal Revenue 
     Code of 1986 (relating to special rule for crop insurance 
     proceeds and disaster payments) is amended to read as 
     follows:
       ``(d) Special Rule for Crop Insurance Proceeds and Disaster 
     Payments.--
       ``(1) General Rule.--In the case of any payment described 
     in paragraph (2), a taxpayer reporting on the cash receipts 
     and disbursements method of accounting--
       ``(A) may elect to treat any such payment received in the 
     taxable year of destruction or damage of crops as having been 
     received in the following taxable year if the taxpayer 
     establishes that, under the taxpayer's practice, 
     [[Page S345]] income from such crops involved would have been 
     reported in a following taxable year, or
       ``(B) may elect to treat any such payment received in a 
     taxable year following the taxable year of the destruction or 
     damage of crops as having been received in the taxable year 
     of destruction or damage, if the taxpayer establishes that, 
     under the taxpayer's practice, income from such crops 
     involved would have been reported in the taxable year of 
     destruction or damage.
       ``(2) Payments described.--For purposes of this subsection, 
     a payment is described in this paragraph if such payment--
       ``(A) is insurance proceeds received on account of 
     destruction or damage to crops, or
       ``(B) is disaster assistance received under any Federal law 
     as a result of--
       ``(i) destruction or damage to crops caused by drought, 
     flood, or other natural disaster, or
       ``(ii) inability to plant crops because of such a 
     disaster.''.
       (b) Effective Date.--The amendment made by this section 
     applies to payments received after December 31, 1992, as a 
     result of destruction or damage occurring after such date.
                                 ______

      By Mr. DASCHLE (for himself, Mr. Breaux, Mr. Campbell, Mr. Glenn, 
        Mr. Harkin, Mr. Johnston, and Mr. Pryor):
  S. 111. A bill to amend the Internal Revenue Code of 1986 to make 
permanent, and to increase to 100 percent, the deduction of self-
employed individuals for health insurance costs; to the Committee on 
Finance.

 THE TAX TREATMENT OF SELF-EMPLOYED HEALTH INSURANCE COSTS ACT OF 1995

  Mr. DASCHLE. Mr. President, I have long been aware of an inequity 
imposed on small businesses in our Federal Tax Code. Our tax system 
discriminates against small businesses by denying the self-employed a 
full deduction for the expenses they incur to obtain health insurance 
for themselves and their families.
  Corporations may deduct 100 percent of the costs of providing health 
insurance for their employees, but the self-employed, whether they 
operate as sole proprietorships or as partnerships, have been permitted 
to deduct only 25 percent of the cost of health insurance for 
themselves and their families. Furthermore, the 25 percent deduction 
has been extended on a piecemeal basis only and last expired on 
December 31, 1993. Unless we reinstate the deduction, the self-
employed, most of whom are hard-working middle-income taxpayers, will 
have to shoulder the full cost of their health insurance or forgo 
health insurance altogether.
  The importance of the deduction has grown substantially in recent 
years due to tremendous increases in health care costs generally. The 
annual double-digit increases in health care costs have far outstripped 
the rate of inflation and led to similar increases in the cost of 
health insurance. Corporations, which frequently are in a better 
position to absorb cost increases, may fully deduct the higher 
insurance expenses, while the self-employed must pay these costs with 
after-tax dollars. In some cases, this may mean forfeiting health 
insurance altogether.
  Last year, Congress attempted to pass comprehensive health care 
legislation which could have resolved this inequity on a permanent 
basis. Many of us deeply regretted the failure of health care reform 
efforts last year. The self-employed health insurance deduction was one 
of the many casualties of that failure.
  I remain committed to passing a health reform bill and hope my 
colleagues in the majority will join me in this effort. But, regardless 
of the success of that effort, I think it is time we put the self-
employed on an equal footing with corporations.
  I am reintroducing today legislation I have offered in past 
Congresses that would establish a full 100 percent deduction for health 
insurance costs paid by the self-employed. In addition, this 
legislation, which is identical to the bills I introduced previously, 
would make the deduction permanent, as it is for corporations. If this 
bill is enacted, the self-employed no longer will have to worry each 
year that their deduction for health insurance costs may be completely 
eliminated.
  My distinguished colleagues Senators Breaux, Campbell, Glenn, Harkin, 
Johnston, and Pryor have joined me in introducing this legislation.
  The cost of this measure is not insignificant, and I intend to work 
with my colleagues in the Senate who favor extension and expansion of 
the deduction to find an appropriate and adequate offset elsewhere in 
the budget to cover the cost of this measure over the 10-year period 
required under the Budget Act.
  Of course, consideration of this measure should in no way diminish 
the importance of or divert our attention away from the ultimate goal 
of reforming our health care system. Only through such reforms can we 
hope to rein in skyrocketing health care costs and provide health 
security to families that currently cannot afford insurance or live in 
fear of losing their coverage.
  I encourage my colleagues to cosponsor the legislation I am 
introducing today. In so doing, they not only will help restore 
fairness to the Tax Code with respect to small businesses, but they 
also will be supporting substantial tax relief for a large group of 
middle-income Americans.
  I ask unanimous consent that the full text of the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

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

                                 S. 111

     SECTION 1. HEALTH INSURANCE COSTS OF SELF-EMPLOYED 
                   INDIVIDUALS.

       (a) Deduction Made Permanent.--
       (1) In general.--Section 162(l) of the Internal Revenue 
     Code of 1986 (relating to special rules for health insurance 
     costs of self-employed individuals) is amended by striking 
     paragraph (6).
       (2) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     1993.
       (b) Increase in Amount of Deduction.--
       (1) In general.--Paragraph (1) of section 162(l) of such 
     Code is amended by striking ``25 percent of''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to taxable years beginning after December 31, 
     1994.
                                 ______

      By Mr. DASCHLE (for himself, Mr. Grassley, Mr. Harkin, Mr. 
        Conrad, and Mr. Dorgan):
  S. 112. A bill to amend the Internal Revenue Code of 1986 with 
respect to the treatment of certain amounts received by a cooperative 
telephone company; to the Committee on Finance.


        THE TAX TREATMENT OF TELEPHONE COOPERATIVES ACT OF 1995

  Mr. DASCHLE. Mr. President, today I am introducing legislation that 
reaffirms the intent of the U.S. Congress, originally expressed in 
1916, to grant tax-exempt status to telephone cooperatives. This 
exemption is now set forth in section 501(c)(12) of the Internal 
Revenue Code.
  I am joined by my distinguished colleagues Senators Grassley, Harkin, 
Conrad, and Dorgan.
  This legislation is identical to a bill I introduced in the 103d 
Congress and to a measure that was included in the Revenue Act of 1992, 
which ultimately was vetoed.
  Congress has always understood that tax exemption is necessary to 
ensure that reliable, universal telephone service is available in rural 
America at a cost that is affordable to the rural consumer. Telephone 
cooperative are non-profit entities that provide this service where it 
might otherwise not exist due to the high cost of reaching remote, 
sparsely populated areas.
  The facilities of a telephone cooperative are used to provide both 
local and long distance communications services. Perhaps the most 
important of these for rural users is long distance. Without these 
services, both local and long distance, people in rural areas could not 
communicate with their own neighbors, much less with the world. While 
telephone cooperative comprise only a small fraction of the U.S. 
telephone industry--about 1 percent--their services are vitally 
important to those who must rely upon them.
  Under Internal Revenue Code section 501(c)(12), a telephone 
cooperative qualifies for tax exemption only if at least 85 percent of 
its gross income consists of amounts collected from members for the 
sole purpose of meeting losses and expenses. Thus, the bulk of the 
revenues must be related to providing services needed by members of the 
cooperative, that is, rural consumers. No more than 15 percent of the 
cooperative's gross income may come from non-member sources, such as 
property rentals or interest earned on funds on deposit in a bank. For 
purposes of the 85 percent test, certain 
[[Page S346]] categories of income are deemed neither member nor non-
member income and are excluded from the calculation. The reason for the 
85 percent test is to ensure that cooperatives do not abuse their tax-
exempt status.
  A Technical Advise Memorandum [TAM] released by the Internal Revenue 
Service a few years ago threatens to change the way telephone 
cooperatives characterize certain expenses for purposes of the 85 
percent test. If the rationale set forth in the TAM is applied to all 
telephone cooperatives, the majority could lose their tax-exempt 
status.
  Specifically, the IRS now appears to take the position that all fees 
received by telephone cooperatives from long-distance companies for use 
of the local lines must be excluded from the 85 percent test and that 
fees received for billing and collection services performed by 
cooperatives on behalf of long-distance companies constitute non-member 
income to the cooperative.
  The legislation I am introducing today would clarify that access 
revenues paid by long distance companies to telephone cooperatives are 
to be counted as member revenues, so long as they are related to long 
distance calls paid for by members of the cooperative. In addition, the 
legislation would indicate that billing and collection fees are to be 
excluded entirely from the 85 percent test calculation.
  Mr. President, it is not secret that mere distance is the single most 
important obstacle to rural development. In the telecommunications 
industry today, we have the ability to bridge distances more 
effectively than ever before. Technology in this area has advanced at 
an incredible pace. But, maintaining and upgrading the rural 
telecommunications infrastructure is an exceedingly expensive 
proposition, and we must do all we can to encourage this development.
  Ensuring that telephone cooperatives may retain their legitimate tax-
exempt status is one vital step we can take. I believe that providing 
access to customers for long distance calls and billing and collecting 
for those calls on behalf of the cooperative's members and the long 
distance companies are indisputably part of the exempt function of 
providing telephone service, especially to rural communities. The 
nature and function of telephone cooperatives have not materially 
changed since 1916, and neither should the formula upon which they rely 
to obtain tax-exempt status.
  In the 103d Congress, the Joint Committee on Taxation estimated the 
cost of this legislation to be $59 million over a 5-year period. At the 
appropriate time, I will recommend appropriate offsets to cover the 
cost of this measure over the 10-year period required under the Budget 
Act.
  Mr. President, I ask 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. 112

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

     SECTION 1. TREATMENT OF CERTAIN AMOUNTS RECEIVED BY A 
                   COOPERATIVE TELEPHONE COMPANY.

       (a) Nonmember Income.--
       (1) In general.--Paragraph (12) of section 501(c) of the 
     Internal Revenue Code of 1986 (relating to list of exempt 
     organizations) is amended by adding at the end the following 
     new subparagraph:
       ``(E) In the case of a mutual or cooperative telephone 
     company (hereafter in this subparagraph referred to as the 
     `cooperative'), 50 percent of the income received or accrued 
     directly or indirectly from a nonmember telephone company for 
     the performance of communication services by the cooperative 
     shall be treated for purposes of subparagraph (A) as 
     collected from members of the cooperative for the sole 
     purpose of meeting the losses and expenses of the 
     cooperative.''
       (2) Certain billing and collection service fees not taken 
     into account.--Subparagraph (B) of section 501(c)(12) of such 
     Code is amended by striking ``or'' at the end of clause 
     (iii), by striking the period at the end of clause (iv) and 
     inserting ``, or'', and by adding at the end the following 
     new clause:
       ``(v) from billing and collection services performed for a 
     nonmember telephone company.''
       (3) Conforming amendment.--Clause (i) of section 
     501(c)(12)(B) of such Code is amended by inserting before the 
     comma at the end thereof ``, other than income described in 
     subparagraph (E)''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to amounts received or accrued after December 31, 
     1994.
       (5) No inference as to unrelated business income treatment 
     of billing and collection service fees.--Nothing in the 
     amendments made by this subsection shall be construed to 
     indicate the proper treatment of billing and collection 
     service fees under part III of subchapter F of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to taxation of 
     business income of certain exempt organizations).
       (b) Treatment of Certain Investment Income of Mutual or 
     Cooperative Telephone Companies.--
       (1) In general.--Paragraph (12) of section 501(c) of such 
     Code (relating to list of exempt organizations) is amended by 
     adding at the end the following new subparagraph:
       ``(F) In the case of a mutual or cooperative telephone 
     company, subparagraph (A) shall be applied without taking 
     into account reserve income (as defined in section 512(d)(2)) 
     if such income, when added to other income not collected from 
     members for the sole purpose of meeting losses and expenses, 
     does not exceed 35 percent of the company's total income. For 
     the purposes of the preceding sentence, income referred to in 
     subparagraph (B) shall not be taken into account.''
       (2) Portion of investment income subject to unrelated 
     business income tax.--Section 512 of such Code is amended by 
     adding at the end the following new subsection:
       ``(d) Investment Income of Certain Mutual or Cooperative 
     Telephone Companies.--
       ``(1) In general.--In determining the unrelated business 
     taxable income of a mutual or cooperative telephone company 
     described in section 501(c)(12)--
       ``(A) there shall be included, as an item of gross income 
     derived from an unrelated trade or business, reserve income 
     to the extent such reserve income, when added to other income 
     not collected from members for the sole purpose of meeting 
     losses and expenses, exceeds 15 percent of the company's 
     total income, and
       ``(B) there shall be allowed all deductions directly 
     connected with the portion of the reserve income which is so 
     included.
     For purposes of the preceding sentence, income referred to in 
     section 501(c)(12)(B) shall not be taken into account.
       ``(2) Reserve income.--For purposes of paragraph (1), the 
     term `reserve income' means income--
       ``(A) which would (but for this subsection) be excluded 
     under subsection (b), and
       ``(B) which is derived from assets set aside for the repair 
     or replacement of telephone system facilities of such 
     company.''
       (3) Effective date.--The amendments made by this subsection 
     shall apply to amounts received or accrued after December 31, 
     1994.
                                 ______

      By Mr. DASCHLE:
  S. 113. A bill to amend the Internal Revenue Code of 1986 to allow 
Indian tribes to receive charitable contributions of inventory; to the 
Committee on Finance.


       the charitable contributions of inventory to indian tribes

  Mr. DASCHLE. Mr. President, I am introducing legislation that would 
expand the current inventory charitable donation rule to include Indian 
tribes. This proposal is short and simple.
  Under current law, companies may obtain a special charitable donation 
tax deduction under Internal Revenue Code Section 170(e)(3) for 
contributing their excess inventory to ``the ill, the needy, or 
infants.'' While not limited to any particular type of company or 
inventory, this deduction commonly is used by food processing companies 
whose excess food inventories otherwise would spoil. Indian tribes have 
had difficulty obtaining these donations, however, because of an 
ambiguity in the law as to whether or not donating companies may deduct 
donations to organizations on Indian reservations.
  The current language in Section 170(e)(3) requires charitable 
donations of excess inventory to be made to organizations that are 
described in Section 501(c)(3) of the Code and exempt from taxation 
under Section 501(a). While Indian tribes are exempt from taxation, 
they are not among the organizations described in Section 501(c)(3). 
Accordingly, it is not clear that a direct donation of excess inventory 
to an Indian tribe would qualify for the charitable donation deduction 
under Section 170(e)(3).
  Ironically, the Indian Tribal Government Tax Status Act found in 
Section 7871 provides that an Indian tribal government shall be treated 
as a state for purposes of determining tax deductibility of charitable 
contributions made pursuant to Section 170. Unfortunately, the Act does 
not expressly extend to donations made under Section 170(e)(3) because 
that provision technically does not include states as eligible donees, 
either.
  [[Page S347]] Mr. President, it is well documented that Native 
Americans, like other citizens, may meet the qualifications for this 
special charitable donation. No one would argue that it is not within 
the intent of Section 170(e)(3) to allow contributions to Native 
American organizations to qualify for the special charitable donation 
deduction in that section of the code. The bill I am introducing today 
simply would allow those contributions to qualify for the deduction. By 
allowing companies to make qualified contributions to Indian tribes 
under Section 170(e)(3), the bill would clearly further the intended 
purpose of both Internal Revenue Code Section 170(e)(3) and the Indian 
Tribal Government Tax Status Act.
  The appropriateness of the measure is exhibited by the fact that it 
was included in the Revenue Act of 1992 (H.R. 11,), which, 
unfortunately, was vetoed, Moreover, at the time it was passed, the 
measure was supported on policy grounds by the Joint Committee on 
Taxation and Finance Committee staffs. Finally, in 1994, the Joint 
Committee on Taxation estimated that the proposal would have only a 
negligible effect on Treasury Receipts.
  I strongly encourage my colleagues to take a close look at this bill 
and consider supporting this worthy and reasonable measure.
  Mr President, I unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection the bill was order to be printed in the 
Record as follows:
                                 S. 113

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

     SECTION 1. CHARITABLE CONTRIBUTIONS OF INVENTORY TO INDIAN 
                   TRIBES.

       (a) In General.--Section 170(e)(3) of the Internal Revenue 
     Code of 1986 (relating to a special rule for certain 
     contributions of inventory or other property) is amended by 
     adding at the end the following new subparagraph:
       ``(D) Special rule for indian tribes.--
       ``(i) In general.--An Indian tribe (as defined in section 
     7871(c)(3)(E)(ii)) shall be treated as an organization 
     eligible to be a donee under subparagraph (A).
       ``(ii) Use of property.--For purposes of subparagraph 
     (A)(i), if the use of the property donated is related to the 
     exercise of an essential governmental function of the Indian 
     tribal government, such use shall be treated as related to 
     the purpose or function constituting the basis for the 
     organization's exemption.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     1994.
                                 ______

      By Mrs. BOXER:
  S. 114. A bill to authorize the Securities and Exchange Commission to 
require greater disclosure by municipalities that issue securities, and 
for other purposes; to the Committee on Banking, Housing, and Urban 
Affairs.


            THE MUNICIPAL SECURITIES DISCLOSURE ACT OF 1995

  Mrs. BOXER. Mr. President, I am introducing today The Municipal 
Securities Disclosure Act of 1995. This bill would give the Securities 
and Exchange Commission [SEC] the authority to require registration and 
disclosure by municipalities that issue securities. This bill will 
ensure that municipal securities investors are provided with more 
complete and comprehensive information about municipal issuers and 
their interests and obligations. The recent events in Orange County 
underscore the importance of providing municipal bond purchasers with 
this complete and comprehensive information.
  Municipal securities are currently exempt from the registration and 
disclosure requirements of the Securities Act of 1933 and the Exchange 
Act of 1934. Because of these regulatory exemptions, disclosure by 
issuers of municipal securities is voluntary. The quality and scope of 
information that is provided to municipal securities investors depends 
on the judgment of the issuing municipality. As a result, the 
information provided by municipalities varies enormously in extent and 
detail--from municipalities that provide comprehensive documents 
revealing information about the issuer, its revenue sources, the use of 
the funds raised, and the characteristics of the bonds being issued, to 
those that offer only limited and sketchy information.
  Municipal issuers are also not subject to any continuing disclosure 
requirements. As circumstances change or situations arise, 
municipalities are under no obligation to disclose the information to 
the market. Again, this limits the ability of investors to acquire 
necessary information to allow them to make intelligent and informed 
investment decisions.
  Complete and comprehensive disclosure is especially important for 
individual and smaller investors, who now represent a large and growing 
segment of municipal bond owners. Banks, insurance companies and other 
institutions once were the primary holders of municipal bonds. Today, 
households--both directly and through mutual funds--account for the 
largest ownership share of any investor group in the market. The 
growing importance of individuals in this market and their inevitable 
reliance on the recommendations of municipal dealers underscores the 
need for broad and detailed information so that these investors can 
make sound judgments about their municipal securities purchases.
  Complete and comprehensive disclosure is also important as new and 
more complex forms of municipal securities become more common. 
Investors in these more complex instruments need continuing and 
complete information in order to monitor and manage their interests in 
these securities.
  Corporations must register with the SEC and comply with a range of 
disclosure obligations. They must disclose detailed information about 
the company's business, management, debts and assets. A company must 
disclose information about its other securities and information about 
legal proceedings in which it may be involved. A company must also meet 
standards for accuracy in reporting of financial data. The company's 
books must be submitted to independent accountants and this information 
must be supplied in the formal registration filed with the SEC. This 
registration and disclosure regime serves investors by ensuring that 
the information on which they are relying to make their investment 
decision is accurate and comprehensive and complete.
  To protect investors and ensure a sound municipal securities system, 
municipal issuers must be subject to a similar disclosure regime. 
Comprehensive and accurate disclosure by issuers on an initial and 
ongoing basis is critical to investors in assessing prices at the 
offering, in making decisions as to which bonds to buy, and in deciding 
when to get out.
  The recent events on Orange County are an illustration of the kinds 
of disclosure problems that a municipal securities investor faces. It 
is unclear whether purchasers of bonds issued by Orange County or other 
governmental entities who had invested in the Orange County investment 
fund knew of the fact that the Orange County investment fund was 
experiencing serious losses. It is not clear whether they knew of the 
fund's investments in complex derivatives. It is not clear whether the 
risks of the funds's highly leveraged investment strategy were 
disclosed. What is clear is that the SEC was not given the opportunity 
to review offerings before sale to the public in order to raise 
appropriate questions or solicit more information.
  The Municipal Securities Disclosure Act of 1995 would give the SEC 
the flexibility and authority to require registration by municipal 
issuers and disclosure of relevant information. This legislation does 
not dictate what municipalities must disclose, but rather, it grants 
the SEC the power to be employed with the proper and appropriate scope.
  The goal is more information. More information about the issuers of 
municipal securities will allow investors to better evaluate the value 
of their securities and the possible risks. More information will mean 
that regulators can better ensure a safe and sound municipal securities 
market.
  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. 114

       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 ``Municipal Securities 
     Disclosure Act of 1995''.
     [[Page S348]] SEC. 2. MUNICIPAL SECURITIES TREATMENT UNDER 
                   SECURITIES EXCHANGE ACT OF 1934.

       (a) Exemption Authority.--Section 15B of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78o-4) is amended by striking 
     subsection (d) and inserting the following:
       ``(d) The Commission may, by rule or regulation, and 
     subject to such terms and conditions as may be prescribed in 
     accordance with those rules and regulations, add municipal 
     securities to the classes of securities exempted from the 
     application of any provision of this title, if the Commission 
     finds that the enforcement of such provision with respect to 
     such securities is not necessary in the public interest and 
     for the protection of investors.''.
       (b) Amendment to Definition of ``Exempted Security''.--
     Section 3(a)(12) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78c(a)(12)) is amended--
       (1) in subparagraph (A)--
       (A) by striking clause (ii); and
       (B) by redesignating clauses (iii) through (v) as clauses 
     (ii) through (iv), respectively; and
       (2) in subparagraph (B)--
       (A) by striking ``(i)''; and
       (B) by striking clause (ii).

     SEC. 3. MUNICIPAL SECURITIES TREATMENT UNDER SECURITIES ACT 
                   OF 1933.

       (a) Repeal of Exemption for Municipal Securities.--Section 
     3(a)(2) of the Securities Act of 1933 (15 U.S.C. 77c(a)(2)) 
     is amended in the first sentence--
       (1) by striking ``or any Territory thereof, or by the 
     District of Columbia, or by any State of the United States, 
     or by any political subdivision of a State or Territory, or 
     by any public instrumentality of one or more States or 
     Territories''; and
       (2) by striking ``or any security which is an industrial'' 
     and all that follows through ``does not apply to such 
     security;''.
       (b) Commission Authority To Exempt.--Section 3 of the 
     Securities Act of 1933 (15 U.S.C. 77c) is amended by adding 
     at the end the following new subsection:
       ``(d) Exemption Authority.--The Commission may, by rule or 
     regulation, and subject to such terms and conditions as may 
     be prescribed in accordance with those rules and regulations, 
     add to the securities exempted as provided in this section, 
     any class of securities issued by a State of the United 
     States or by any political subdivision of a State or by any 
     Territory of the United States or political subdivision of a 
     Territory or by any public instrumentality of one or more 
     States or Territories, if the Commission finds that the 
     enforcement of this title with respect to such securities is 
     not necessary in the public interest and for the protection 
     of investors.''.

     SEC. 4. EFFECTIVE DATE.

       The amendments made by this Act shall become effective 6 
     months after the date of enactment of this Act.

     SEC. 5. FUNDING.

       There are authorized to be appropriated to the Securities 
     and Exchange Commission such sums as may be necessary to 
     carry out this Act and the amendments made by this Act.
                                 ______

      By Mr. WARNER (for himself and Mr. Robb):
  S. 115. A bill to authorize the Secretary of the Interior to acquire 
and to convey certain lands or interests in lands to improve the 
management, protection, and administration of Colonial National 
Historical Park, and for other purposes; to the Committee on Energy and 
Natural Resources.


                    The Colonial Parkway Act of 1995

  Mr. WARNER. Mr. President, today I rise to reintroduce legislation 
which would authorize the Secretary of the Interior to acquire and to 
convey certain lands or interests in lands to improve the management, 
protection, and administration of the Colonial National Historical 
Park. While this bill passed the Senate in the 102d Congress and passed 
the House in the 103d Congress, it was not considered by the Senate 
prior to the October adjournment.
  This bill would authorize the Secretary of the Interior to convey 
land or interests in land and sewer lines, buildings, and equipment 
used for sewer system purposes to the County of York, VA, and to 
authorize the necessary funding to rehabilitate the Moore House sewer 
system to meet current Federal standards.
  The necessity for this legislation is evident based on the growing 
needs of the county and the limitations of the National
 Park Service's ability to continue to provide sewer services to the 
local community.

  In 1948 and 1956 Congress passed legislation which directed the 
National Park Service to design and construct sewer systems to serve 
Federal and non-Federal properties in the area of Yorktown, VA. In 
1956, the National Park Service acquired easements from the Board of 
Supervisors of York County and the town trustees of the Town of York. 
At that time York County was a rural area with limited financing and 
population. Now York County has a fully functioning Department of 
Environmental Services which operates sewer systems throughout York 
County.
  York County has the personnel, the expertise, and the equipment to 
better administer, maintain, and operate the sewer system than National 
Park Service staff. Negotiations to transfer the Yorktown and Moore 
House systems have been ongoing since the 1970's when York County took 
over operation of the Yorktown system through written agreement between 
York County and the National Park Service and a grant of approximately 
$73,500 to improve the Yorktown system.
  The purpose of this legislation is to fulfill the commitments made 
between the Park Service and York County to provide for the full 
transfer of ownership to York County.
  Mr. President, this legislation would also authorize the acquisition 
of a small parcel of land along the Colonial Parkway near Jamestown 
which is needed to protect the scenic integrity of the parkway. This 
area has the narrowest right-of-way of any portion of the parkway; the 
park boundary in this area is only 100 feet from the centerline of the 
parkway.
  The proposed acquisition would include one row of lots adjoining the 
parkway in a rapidly developing residential subdivision known as Page 
Landing. Development of those lots would have a severe impact on the 
scenic qualities of the Colonial Parkway. In order to deter development 
of Page Landing, the Conservation Fund has acquired the 20-acre parcel 
along the Colonial National Parkway from the developer to prevent the 
imminent construction on these lots. The Park Service identified this 
property as a high priority and the Conservation Fund would like to 
transfer the land to the National Park Service.
  The Colonial Parkway was authorized by Congress as part of Colonial 
National Historical Park in the 1930's to connect Jamestown, 
Williamsburg, and Yorktown with a scenic limited-access motor road. 
According to the 1938 Act of Congress, the parkway corridor is to be an 
average of 500 feet in width, and in most areas the roadway was built 
in the middle of this corridor. In the area between Mill Creek and Neck 
'O Land Road, however, the
 parkway was built closer to the northern boundary to avoid wetlands, 
placing the roadway very close to the adjoining private property in 
that location.

  This is the only area along the parkway where the National Park 
Service owns only 100 feet back from the centerline of the road. The 
National Park Service owns 250 feet or more from the centerline in all 
other areas of the 23-mile parkway in James City County and York 
County. The existing 100 feet is not sufficient to provide proper 
landscaping and screening from development on the adjacent property, 
especially during portions of the year when leaves are off the shrubs 
and trees.
  Mr. President, to ensure that the Colonial Parkway meets the same 
high scenic standards of the rest of the parkway it is imperative that 
this land should be purchased.
                                 ______

      By Mr. WELLSTONE:
  S. 116. A bill to amend the Federal Election Campaign Act of 1971 to 
provide for a voluntary system of spending limits and partial public 
financing of Senate primary and general election campaigns, to prohibit 
participation in Federal elections by multicandidate political 
committees, to establish a $100 limit on individual contributions to 
candidates, and for other purposes; to the Committee on Governmental 
Affairs.


           SENATE FAIR ELECTIONS AND GRASSROOTS DEMOCRACY ACT

                                 ______

      By Mr. WELLSTONE (for himself and Mr. FEINGOLD):
  S.117. A bill to amend rule XXXV of the Standing Rules of the Senate; 
to the Committee on Rules and Administration.
  Mr. WELLSTONE. Mr. President, as the 104th Congress begins today, I 
am reintroducing two key pieces of reform legislation that I had pushed 
hard to enact during the last Congress. The first is a bill which I 
believe should serve as a benchmark for profound and far-reaching 
reform of the way we finance our election campaigns here in Congress. 
According to the Federal 
[[Page S349]] Election Commission, House and Senate candidates spent a 
record $589.5 million on their 1994 campaigns through November 28. 
Final totals for the 1994 elections will be available next month, and 
are expected to be much higher. This out-of-control spending must be 
controlled, and thorough reform of our campaign laws is the only way to 
do it. The second initiative I am introducing is my bill to ban gifts, 
meals, lobbyist-sponsored vacation travel, and other perks to Members 
of Congress and staffers, which was killed at the end of last year by a 
Republican-led filibuster. I intend to work with Senator Levin and 
others to make sure that the lobbying and gift ban bill is enacted into 
law as a part of the Congressional Accountability Act to be considered 
by the Senate later this week.
  This year's election returns sent a signal to Congress loud and 
clear: Americans want us to clean up the political system, and rid it 
of the influence of special interests. They know that these huge 
amounts of money and special interest perks have an effect on the 
decisionmaking process here in Washington, because they give special 
access and undue influence to those who are well-heeled and well-
positioned to lobby Members of Congress directly. They continue to have 
grave and justifiable concerns about the rules under which we finance 
campaigns, and are demanding that we do something to radically reform 
this system. My campaign reform bill is an attempt to finally address 
that concern.
  I have been frustrated that for so many years real campaign reform
   has been killed in this body by those who prefer the status quo. 
Last year, even the modest reform package that had been agreed to, 
which was less far-reaching than my bill, was killed by a Republican 
filibuster in the final days of the session. Tough, sweeping reforms 
are needed if we are to begin to restore the confidence of Americans in 
the legislative process. We ought to enact it this year.

  In addition to real campaign reform, another means of special 
interest influence must be curbed, and that is the giving of gifts, 
lobbyist-sponsored vacation travel, and other perks to Members of 
Congress by lobbyists and others. That is why I am re-introducing today 
tough, comprehensive gift ban legislation similar to the bill I 
coauthored last year which was killed by Republican objections raised 
against S. 349, the underlying lobby disclosure bill to which it was 
attached. These objections were baseless; a frenzied campaign of lies, 
distortions, and misrepresentations about the impact of the bill on 
grassroots organizations who hire lobbyists to lobby Congress; some 
call these people astroturf lobbyists, to distinguish them from true 
grassroots political organizations. This campaign was generated by the 
House Republican leadership and rightwing radio talk show hosts, and 
was widely condemned by reporters and others who had followed closely 
the details of the debate.
  This bill would help to significantly change the Washington culture 
of special interest perks, favors, meals, travel, and gifts being 
provided to Members of Congress. These bills combined, and other 
similar reform initiatives such as that offered by the minority leader 
to extend coverage of certain Federal laws to Congress, are the kind of 
tough, comprehensive congressional reform that Americans have been 
demanding for years.
  I intend to work with my colleagues in the coming days to ensure that 
gift reform legislation is enacted as soon as possible. There is no 
doubt that these kinds of gifts and other favors from lobbyists have 
contributed to Americans' deepening distrust of government. They give 
the appearance of special access and influence, eroding public
 confidence in Congress as an institution and in each Member 
individually as a representative of his or her constituents. This bill 
imposes a sweeping ban on gifts, meals, entertainment, and lobbyist-
sponsored vacation travel, and imposes tough new restrictions on 
nonlobbyists. Its provisions should be passed this week, if necessary 
over the objections of those would-be reformers who have talked so much 
about reform out of one side of their mouths, while opposing it out of 
the other.

  It is not by chance that the so-called Contract with America contains 
not a word about real reforms like these that would clean up the way 
Washington works. I noticed to my surprise that the majority leader 
said this past Sunday on one of the talk shows that he would make an 
effort to kill any lobbying and gift reform amendments to the 
Congressional Accountability Act. I say I was surprised because it was 
only a couple of months ago that he and 36 or 37 of his Republican 
colleagues had introduced a virtually identifical gift ban bill, Senate 
Resolution 274, when they saw that the tough, comprehensive, 
Democratically sponsored bill that had come out of a bipartisan House-
Senate conference included the gift ban provisions for which we had 
pushed so hard.
  Whatever the ostensible Republican arguments were against the 
underlying lobby registration bill, one thing is clear--the gift 
provisions which I have long fought for should now have the support of 
virtually every Member of this body, since almost all of us have 
already voted for these same restrictions. In fact, as I said, Majority 
Leader Dole, Senators McConnell, Stevens, and 35 others on the now 
majority side cosponsored virtually identical gift provisions during 
the last days of the 103d Congress, in an attempt to inoculate 
themselves politically from media criticism for opposing the lobby ban/
gift reform bill. This year, I will be fighting to get these new rules 
enacted as soon as possible, including on the Congressional coverage 
bill. There is no reason for further delay or obstruction on gift and 
lobby reform. When Americans are clamoring for real change which 
reduces the influence of special interests, it
 would be bitterly ironic if we voted to exempt ourselves from 
conflict-of-interest gift rules under which the executive branch has 
lived for years--especially in a reform bill that extends coverage of 
many Federal laws to Congress. There is no way to justify that kind of 
exemption. That is why we must include the gift ban in the 
congressional coverage bill.

  The same kind of Republican opposition to and obstruction of the 
reform agenda could also be seen on campaign finance reform. Last year, 
after long and hard-fought battles in both the House and Senate, our 
Republican colleagues killed a compromise proposal that had been made 
by the Democratic House-Senate leadership, refusing even to allow a 
formal House-Senate conference to meet and discuss the measure.
  While I had hoped for even more far-reaching reforms than were 
contained in that compromise proposal, I was frustrated and angry that, 
again, those who had presented themselves to the American people as 
reformers of the political system were able to block real reform in the 
form of campaign finance reform legislation--and to get away with it. 
Let us make one thing crystal clear: more than any of the institutional 
changes being proposed--some cosmetic, some real--in congressional 
caucuses, committees, congressional staff, and the like, efforts to 
combat special interest influence in the form of real campaign finance 
and lobby reform are what would really change the way business is done 
here in Washington.
  But these reforms are being resisted by the Republican congressional 
leadership; in fact they apparently will be opposed. They will refuse 
to accept these immediate steps to limit the influence of wealthy 
special interests in the legislative process. This year, while the new 
majority leader and others in the House Republican leadership have made 
it clear that campaign finance reform is not on their agenda for this 
Congress, I want to make it equally clear that it will be at the top of 
the Democratic agenda. They have said political reform is off the 
table. I am going to ensure it gets back on the table--and stays there.
  That is why today I am re-introducing the Senate Fair Elections and 
Grassroots Democracy Act of 1995, legislation which I believe should 
serve as a benchmark for true campaign finance reform for U.S. Senate 
campaigns.
  As I worked on this bill, I had one goal in mind: to develop 
legislation designed to address the central ethical issue of politics 
in our time--the way in which big money special interests have come to 
dominate governmental decisionmaking. Last year's election continued 
the trend of vast amounts of 
[[Page S350]] money being poured into congressional campaigns from 
special interests.
  Perhaps nowhere can the connection between moneyed special interests 
and the legislative process be demonstrated more starkly than in the 
widely reported upon threats by the new House leadership to the 
corporate PAC's and other wealthy special interests here in Washington: 
pony up now before the elections with your huge contributions, or you 
will be iced out of the legislative process. For those PAC directors 
who refused to contribute to Republican coffers, there was a promise of 
two long, cold years. That, Mr. President, perhaps more than any other 
single recent event, reveals the breathtaking hypocrisy of these so-
called reformers. That the incoming House leadership would publicly 
threaten PAC directors and others with retribution or retaliation 
through the lawmaking process is unprecedented, and signals how far 
down the road of special interest control we have come. And how 
desperately the system cries out for reform.
  And what should be our measure of true reform? The essential standard 
of a truly representative democracy is this: every person should count 
as one, and no more than one. I believe my bill squarely meets that 
standard. For years, Americans have pressed for a complete overhaul of 
the way we finance and conduct Federal elections--not a set of modest, 
incremental changes. People feel ripped off by our political system, 
unrepresented, angry, and frustrated by gridlock. They are demanding 
change, we have promised change, and I intend to do whatever I can to 
ensure that the Senate delivers on that promise.
  They know that without real campaign reform, attempts to restructure 
America's health care system, create jobs and rebuild our cities, 
reduce defense spending, and solve other pressing problems will remain 
frustrated by the pressures of special interest, big-money politics. 
And they know that too often, their families get outbid in the bidding 
wars over Federal tax breaks that we seem to be about to embark upon, 
with virtually all of the tax benefits going to wealthy individuals 
with large stock portfolios, and wealthy corporations.
  The American people have demanded fundamental political reform, and 
they deserve nothing less. If we in the Congress are to earn back the 
trust of the American people, we must enact sweeping reform now.
  The Senate Fair Elections and Grassroots Democracy Act provides for 
individual limits of $100 on contributions to Senate candidates, a 
total ban on Political Action Committee [PAC] contributions, lower 
spending limits than in last year's S. 3 based on State voting-age 
population, a 90 percent reduction in the amount wealthy candidates can 
contribute to their own campaigns, to eliminate the problem of 
candidates spending millions of their own money to buy seats in 
Congress, a prohibition on soft money, plus free broadcast time, 
reduced mail rates for eligible candidates, and prohibitions of 
contributions from certain lobbyists--all within a comprehensive system 
of voluntary public financing of primary and general Senate campaigns 
patterned after the Presidential system. I believe these elements are 
key to true reform.
  This is the best time in two decades for fundamental reform, despite 
Republican attempts to sweep these much-needed changes under the rug. 
We must restore the basic democratic principle of one person, one vote 
by enacting true campaign reform, and ban outright the practice of 
Members of Congress being lavished with gifts and other perks and 
special favors from lobbyists. I urge my colleagues to support these 
bills. I ask unanimous consent that summaries of my comprehensive 
campaign finance reform bill, and of the lobbyist gift ban provisions 
from last year's conference report after which my bill is patterned, be 
printed in the Record at the end of my statement, and in addition, that 
a copy of a letter from Fred Werthiemer, executive director of Common 
Cause, to all Members of the Senate urging the prompt passage of these 
important reforms in both the House and the Senate be printed because I 
think it speaks to all of us about the need for strong campaign reform 
and lobbyist gift ban legislation. I ask further unanimous consent that 
a copy of my gift rule amendment, and the copy of my gift ban bill be 
printed in the Record following my statement.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 116

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

     SECTION 1. SHORT TITLE; AMENDMENT OF CAMPAIGN ACT; TABLE OF 
                   CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Senate 
     Fair Elections and Grassroots Democracy Act of 1995''.
       (b) Amendment of FECA.--When used in this Act, the term 
     ``FECA'' means the Federal Election Campaign Act of 1971 (2 
     U.S.C. 431 et seq.).
       (c) Table of Contents.--

Sec. 1. Short title; amendment of Campaign Act; table of contents.
Sec. 2. Findings and declarations of the Senate.

          TITLE I--CONTROL OF CONGRESSIONAL CAMPAIGN SPENDING

   Subtitle A--Senate Election Campaign Spending Limits and Benefits

Sec. 101. Senate spending limits and benefits.
Sec. 102. Ban on activities of political action committees in Federal 
              elections.
Sec. 103. Reporting requirements.
Sec. 104. Disclosure by noneligible candidates.
Sec. 105. Free broadcast time.

                     Subtitle B--General Provisions

Sec. 131. Extension of reduced third-class mailing rates to eligible 
              Senate committees.
Sec. 132. Reporting requirements for certain independent expenditures.
Sec. 133. Campaign advertising amendments.
Sec. 134. Definitions.
Sec. 135. Provisions relating to franked mass mailings.

                   TITLE II--INDEPENDENT EXPENDITURES

Sec. 201. Clarification of definitions relating to independent 
              expenditures.

                        TITLE III--EXPENDITURES

                   Subtitle A--Personal Loans; Credit

Sec. 301. Personal contributions and loans.
Sec. 302. Extensions of credit.

   Subtitle B--Provisions Relating to Soft Money of Political Parties

Sec. 311. Contributions to political party committees for grassroots 
              Federal election campaign activities.
Sec. 312. Provisions relating to national, State, and local party 
              committees.
Sec. 313. Restrictions on fundraising by candidates and officeholders.
Sec. 314. Reporting requirements.
Sec. 315. Limitations on combined political activities of political 
              committees of political parties.

                        TITLE IV--CONTRIBUTIONS

Sec. 401. Reduction of contribution limits.
Sec. 402. Contributions through intermediaries and conduits; 
              prohibition of certain contributions by lobbyists.
Sec. 403. Contributions by dependents not of voting age.
Sec. 404. Contributions to candidates from State and local committees 
              of political parties to be aggregated.
Sec. 405. Limited exclusion of advances by campaign workers from the 
              definition of the term ``contribution''.

                    TITLE V--REPORTING REQUIREMENTS

Sec. 501. Change in certain reporting from a calendar year basis to an 
              election cycle basis.
Sec. 502. Personal and consulting services.
Sec. 503. Reduction in threshold for reporting of certain information 
              by persons other than political committees.
Sec. 504. Computerized indices of contributions.

                     TITLE VI--PRESIDENTIAL DEBATES

Sec. 601. Findings and purposes.
Sec. 602. Presidential and vice presidential candidate debates.

                        TITLE VII--MISCELLANEOUS

Sec. 701. Prohibition of leadership committees.
Sec. 702. Polling data contributed to candidates.

              TITLE VIII--EFFECTIVE DATES; AUTHORIZATIONS

Sec. 801. Effective date.
Sec. 802. Sense of the Senate regarding funding of Senate Election 
              Campaign Fund.
Sec. 803. Severability.
Sec. 804. Expedited review of constitutional issues.
     SEC. 2. FINDINGS AND DECLARATIONS OF THE SENATE.

       (a) Necessity for Spending Limits.--The Senate finds and 
     declares that--
       (1) the current system of campaign finance has led to 
     public perceptions that political contributions and their 
     solicitation have unduly influenced the official conduct of 
     elected officials;
       (2) permitting candidates for Federal office to raise and 
     spend unlimited amounts of 
     [[Page S351]] money constitutes a fundamental flaw in the 
     current system of campaign finance; it has undermined public 
     respect for the Congress as an institution and has given 
     large private contributors undue influence with respect to 
     public policymaking by the Congress;
       (3) the failure to limit campaign expenditures has driven 
     up the cost of election campaigns and made it difficult for 
     qualified candidates without personal fortunes or access to 
     large contributors to mount competitive congressional 
     campaigns;
       (4) the failure to limit campaign expenditures has caused 
     individuals elected to the Senate to spend an increasing 
     proportion of their time in office as elected officials 
     raising funds, interfering with the ability of the Senate to 
     carry out its constitutional responsibilities;
       (5) the failure to limit campaign expenditures has damaged 
     the Senate as an institution, due to the time lost to raising 
     funds for campaigns;
       (6) to prevent the appearance of corruption and to restore 
     public trust in the Senate as an institution, it is necessary 
     to limit campaign expenditures, through a system that 
     provides substantial public benefits to candidates who agree 
     to limit campaign expenditures; and
       (7) serious and thoroughgoing reform of Federal election 
     law that imposes strict new rules on spending and 
     contributions would--
       (A) help eliminate access to wealth as a determinant of a 
     citizen's influence in the political process;
       (B) help to restore meaning to the principle of ``one 
     person, one vote'';
       (C) produce more competitive Federal elections; and
       (D) halt and reverse the escalating cost of Federal 
     elections.
       (b) Necessity for Prohibition of Political Action 
     Committees.--The Senate finds and declares that--
       (1) contributions by political action committees to 
     individual candidates have created the perception that 
     candidates are beholden to special interests, and leave 
     candidates open to charges of corruption;
       (2) contributions by political action committees to 
     individual candidates have undermined the Senate as an 
     institution; and
       (3) to prevent the appearance of corruption and to restore 
     public trust in the Senate as an institution, it is necessary 
     to ban participation by political action committees in 
     Federal elections.
       (c) Necessity for Attributing Cooperative Expenditures to 
     Candidates.--The Senate finds and declares that--
       (1) public confidence and trust in the system of campaign 
     finance would be undermined should any candidate be able to 
     circumvent a system of caps on expenditures through 
     cooperative expenditures with outside individuals, groups, or 
     organizations;
       (2) cooperative expenditures by candidates with outside 
     individuals, groups, or organizations would severely 
     undermine the effectiveness of caps on campaign expenditures, 
     unless they are included within such caps; and
       (3) to maintain the integrity of the system of campaign 
     finance, expenditures by any individual, group, or 
     organization that have been made in cooperation with any 
     candidate, authorized committee, or agent of any candidate 
     must be attributed to that candidate's cap on campaign 
     expenditures.
       (d) Necessity For Providing Substantial Public Financing 
     for Senate Elections.--The Senate finds and declares that the 
     replacement of private campaign contributions with partial or 
     complete public financing for Senate elections would enhance 
     American democracy by eliminating real and potential 
     conflicts of interest and increasing the accountability of 
     Members of Congress, thereby helping to restore public 
     confidence in the fairness of the electoral and policymaking 
     processes.
          TITLE I--CONTROL OF CONGRESSIONAL CAMPAIGN SPENDING
   Subtitle A--Senate Election Campaign Spending Limits and Benefits

     SEC. 101. SENATE SPENDING LIMITS AND BENEFITS.

       (a) In General.--FECA is amended by adding at the end the 
     following new title:
          TITLE I--CONTROL OF CONGRESSIONAL CAMPAIGN SPENDING
  Subtitle A--Senate Election Campaign Expenditure Limits and Benefits

     SEC. 101. SENATE EXPENDITURE LIMITS AND BENEFITS.

       (a) In General.--FECA is amended by adding at the end the 
     following new title:
    ``TITLE V--EXPENDITURE LIMITS AND BENEFITS FOR SENATE ELECTION 
                               CAMPAIGNS

     ``SEC. 501. ELIGIBILITY.

       ``(a) In General.--For purposes of this title, a candidate 
     is an eligible Senate candidate if--
       ``(1) the candidate and the candidate's authorized 
     committees meet the threshold contribution and ballot access 
     requirements of subsection (b);
       ``(2) the candidate and the candidate's authorized 
     committees do not make expenditures from personal funds in an 
     amount that exceeds the personal funds expenditure limit 
     except as permitted under section 502(e);
       ``(3) the candidate and the candidate's authorized 
     committees do not make expenditures in excess of the primary 
     election expenditure limit, the runoff election expenditure 
     limit, or the general election expenditure limit except as 
     permitted under section 502(e);
       ``(4) the candidate and the candidate's authorized 
     committees--
       ``(A) do not accept contributions for the primary or runoff 
     election in an amount that exceed the primary election 
     expenditure limit or the runoff election expenditure limit 
     except as permitted under section 503(e); and
       ``(B) do not accept contributions for the general election 
     except as permitted under section 503(e); and
       ``(5) the candidate's authorized committees do not accept 
     contributions from multicandidate political committees for 
     the primary election or runoff election in an amount that 
     exceeds the primary election multicandidate political 
     committee contribution limit or the runoff election 
     multicandidate political committee contribution limit that 
     may be in effect in accordance with section 502(f);
       ``(6)(A) with respect to a primary election, at least one 
     other candidate has qualified for the same primary election 
     ballot under the law of the candidate's State;
       ``(B) with respect to a general election, at least one 
     other candidate has qualified for the same general election 
     ballot under the law of the candidate's State;
       ``(7) the candidate and the candidate's authorized 
     committees do not accept any contribution in violation of 
     section 315;
       ``(8) the candidate and the candidate's authorized 
     committees deposit all payments received under this title in 
     an account insured by the Federal Deposit Insurance 
     Corporation from which funds may be withdrawn by check or 
     similar means of payment to third parties;
       ``(9) the candidate and the candidate's authorized 
     committees furnish campaign records, evidence of 
     contributions, and other appropriate information to the 
     Commission;
       ``(10) the candidate and the candidate's authorized 
     committees cooperate in the case of any examination and audit 
     by the Commission under section 505;
       ``(11) the candidate and the candidate's authorized 
     committees comply with all of the requirements of this Act 
     that apply to eligible candidates; and
       ``(12) the candidate, not later than 7 days after becoming 
     a candidate, files with the Commission a declaration that the 
     candidate and the candidate's authorized committees have 
     complied with and will continue to comply with all of the 
     requirements of this Act that apply to eligible Senate 
     candidates and their authorized committees.
       ``(b) Threshold Contribution and Ballot Access 
     Requirements.--
       (1) In general.--The requirements of this subsection are 
     met if--
       ``(A) the candidate and the candidate's authorized 
     committees have received allowable contributions during the 
     applicable period in an amount at least equal to 5 percent of 
     the general election expenditure limit from contributors at 
     least 60 percent of whom are residents of the candidate's 
     State; and
       ``(B) the candidate has qualified for the ballot for a 
     primary election, runoff election, or general election, 
     respectively, under State law.
       ``(2) Definitions.--For purposes of this section--
       ``(A) the term `allowable contributions'--
       ``(i) means contributions that are made as gifts of money 
     by an individual pursuant to a written instrument identifying 
     the individual as the contributor; and
       ``(ii) does not include--

       ``(I) contributions made directly or indirectly through an 
     intermediary or conduit that are treated as being made by the 
     intermediary or conduit under section 315(a)(8)(B); or
       ``(II) contributions from any individual during the 
     applicable period to the extent that such contributions 
     exceed $100; and

       ``(B) the term `applicable period' means--
       ``(i) with respect to a candidate who is or who is seeking 
     to become a candidate in a general election, the period 
     beginning on January 1 of the calendar year preceding the 
     calendar year of the general election and ending on the date 
     on which a candidate submits a first request to receive 
     benefits under section 503; or
       ``(ii) with respect to a candidate who is or who is seeking 
     to become a candidate in a special election, the period 
     beginning on the date the vacancy occurs in the office for 
     which the election is held and ending on the date of the 
     general election.

     ``SEC. 502. EXPENDITURE AND CONTRIBUTION LIMITS.

       ``(a) Personal Funds Expenditure Limit.--
       ``(1) In general.--The personal funds expenditure limit 
     applicable to an eligible Senate candidate is an aggregate 
     amount of expenditures equal to $25,000 made during an 
     election cycle by an eligible Senate candidate and the 
     candidate's authorized committees from the sources described 
     in paragraph (2).
       ``(2) Sources.--A source is described in this paragraph if 
     it is--
       ``(A) personal funds of the candidate and members of the 
     candidate's immediate family; or
       ``(B) personal debt incurred by the candidate and members 
     of the candidate's immediate family.
       ``(b) Primary Election Expenditure Limit.--The primary 
     election expenditure limit applicable to an eligible Senate 
     candidate is an amount equal to the lesser of--
       ``(1) 67 percent of the general election expenditure limit; 
     or
     [[Page S352]]   ``(2) $2,500,000.
       ``(c) Runoff Election Expenditure Limit.--The expenditure 
     limit applicable to an eligible Senate candidate is 20 
     percent of the general election expenditure limit.
       ``(d) General Election Expenditure Limit.--
       ``(1) In general.--The general election expenditure limit 
     applicable to an eligible Senate candidate is an amount equal 
     to the lesser of--
       ``(A) $4,500,000; or
       ``(B) the greater of--
       ``(i) $775,000; or
       ``(ii) $325,500, plus--

       ``(I) 30 cents multiplied by the voting age population not 
     in excess of 4,000,000; and
       ``(II) 25 cents multiplied by the voting age population in 
     excess of 4,000,000.

       ``(2) State with one television transmitter.--In the case 
     of an eligible Senate candidate in a State that has no more 
     than 1 transmitter for a commercial Very High Frequency (VHF) 
     television station licensed to operate in the State, 
     paragraph (1)(B)(ii) shall be applied by substituting--
       ``(A) `60 cents' for `30 cents' in subclause (I); and
       ``(B) `50 cents' for `25 cents' in subclause (II).
       ``(e) Exceptions.--
       ``(1) Legal and accounting compliance fund.--(A) An 
     eligible Senate candidate and the candidate's authorized 
     committees may accept contributions and make expenditures 
     without regard to the primary election expenditure limit, 
     runoff expenditure limit, or general election expenditure 
     limit for the purpose of maintaining a legal and accounting 
     compliance fund meeting the requirements of subparagraph (B), 
     out of which fund qualified legal and accounting expenditures 
     may be made.
       ``(B) A legal and accounting compliance fund meets the 
     requirements of this subparagraph if--
       ``(i) the only amounts transferred to the fund are amounts 
     received in accordance with the limitations, prohibitions, 
     and reporting requirements of this Act;
       ``(ii) the aggregate amounts transferred to, and 
     expenditures made from, the fund do not exceed the sum of--
       ``(I) the lesser of--

       ``(aa) 10 percent of the general election expenditure limit 
     for the general election for which the fund was established; 
     or
       ``(bb) $300,000, plus--

       ``(II) the amount determined under subparagraph (D); and
       ``(iii) no funds received by the candidate pursuant to 
     section 503(a)(3) are transferred to the fund.
       ``(C) For purposes of this paragraph, the term `qualified 
     legal and accounting expenditure' means the following:
       ``(i) An expenditure for costs of a legal or accounting 
     service provided in connection with--
       ``(I) any administrative or court proceeding initiated 
     pursuant to this Act during the election cycle for the 
     primary election, runoff election, or general election; or
       ``(II) the preparation of any documents or reports required 
     by this Act or the Commission.
       ``(ii) An expenditure for a legal or accounting service 
     provided in connection with the primary election, runoff 
     election, or general election for which the legal and 
     accounting compliance fund was established to ensure 
     compliance with this Act with respect to the election cycle 
     for the primary election, runoff election, or general 
     election.
       ``(D)(i) If, after a general election, a candidate 
     determines that the qualified legal and accounting 
     expenditures will exceed the limitation under subparagraph 
     (B)(ii)(I), the candidate may petition the Commission by 
     filing with the Secretary of the Senate a request for an 
     increase in such limitation. The Commission shall authorize 
     an increase in such limitation in the amount (if any) by 
     which the Commission determines the qualified legal and 
     accounting expenditures exceed that limitation. The 
     Commission's determination shall be subject to judicial 
     review under section 507.
       ``(ii) Except as provided in section 315, any contribution 
     received or expenditure made pursuant to this paragraph shall 
     not be taken into account for any contribution or expenditure 
     limit applicable to the candidate under this title.
       ``(E)(i) A candidate shall terminate a legal and accounting 
     compliance fund as of the earlier of--
       ``(I) the date of the first primary election for the office 
     following the general election for the office for which the 
     fund was established; or
       ``(II) the date specified by the candidate.
       ``(ii) Any amount remaining in a legal and accounting 
     compliance fund as of the date determined under clause (i) 
     shall be transferred--
       ``(I) to a legal and accounting compliance fund for the 
     election cycle for the next primary election, runoff 
     election, or general election; or
       ``(II) to the Senate Election Campaign Fund.
       ``(2) Payment of taxes.--An eligible Senate candidate and 
     the candidate's authorized committees may accept 
     contributions and make expenditures without regard to the 
     primary election expenditure limit, runoff expenditure limit, 
     or general election expenditure limit for the purpose of 
     funding and making expenditures for Federal, State, or local 
     income taxes with respect to the candidate's authorized 
     committees.
       ``(3) Independent expenditure amount and excess expenditure 
     amount.--An eligible Senate candidate who receives payment of 
     an independent expenditure amount under section 503(b)(1)(B) 
     or an excess expenditure amount under section 503(b)(1)(C) 
     may make expenditures from such payments to defray 
     expenditures for the primary election, runoff election, or 
     general election, respectively, without regard to the primary 
     expenditure limit, runoff election expenditure limit, or 
     general election expenditure limit.
       ``(4) Unmatched excess expenditures.--(A) An eligible 
     Senate candidate and the candidate's authorized committees 
     may accept contributions and make expenditures without regard 
     to the personal funds expenditure limit, primary election 
     expenditure limit, runoff election expenditure limit, or 
     general election expenditure limit if any one of the eligible 
     Senate candidate's opponents who is not an eligible Senate 
     candidate raises aggregate contributions or makes or becomes 
     obligated to make aggregate expenditures that exceed 200 
     percent of the primary election expenditure limit, runoff 
     expenditure limit, or general election expenditure limit, 
     respectively, applicable to the eligible Senate candidate.
       ``(B) An eligible Senate candidate and the candidate's 
     authorized committees may accept contributions without regard 
     to the primary election expenditure limit, runoff expenditure 
     limit, or general election expenditure limit in anticipation 
     of their being needed for the purpose of making expenditures 
     under subparagraph (A) if--
       ``(i) any opposing candidate in the primary election, 
     runoff election, or general election who is not an eligible 
     Senate candidate raises aggregate contributions or makes or 
     becomes obligated to make aggregate expenditures for the 
     primary election, runoff election, or general election that 
     exceed 75 percent of the primary election expenditure limit, 
     runoff election expenditure limit, or general election 
     expenditure limit applicable to the candidate; or
       ``(ii) any opposing candidate in the general election who 
     is the nominee of a major party is not an eligible Senate 
     candidate.
       ``(C) The amount of the contributions that may be accepted 
     and expenditures that may be made by reason of subparagraphs 
     (A) and (B) shall not exceed 100 percent of the primary 
     election expenditure limit, runoff election expenditure 
     limit, or general election expenditure limit, respectively.
       ``(f) Multicandidate Political Committee Contribution 
     Limits.--
       ``(1) Multicandidate political committee primary election 
     contribution limit.--The multicandidate political committee 
     primary election contribution limit applicable to an eligible 
     Senate candidate is an amount equal to 10 percent of the 
     primary election spending limit.
       ``(2) Multicandidate political committee runoff election 
     contribution limit.--The multicandidate political committee 
     runoff election contribution limit applicable to an eligible 
     Senate candidate is an amount equal to 10 percent of the 
     runoff election spending limit.
       ``(3) Periods when provisions are in effect.--This 
     subsection and other provisions in this title relating to 
     multicandidate political committees shall be of no effect 
     except during any period in which the prohibition under 
     section 324 is not in effect.
       ``(g) Indexing.--The $2,500,000 amount under subsection 
     (b)(2) and the amount otherwise determined under subsection 
     (d)(1) shall be increased as of the beginning of each 
     calendar year based on the increase in the price index 
     determined under section 315(c), except that, for purposes of 
     those provisions, the base period shall be calendar year 
     1995.
       ``(h) Expenditures.--For purposes of this title, the term 
     `expenditure' has the meaning stated in section 301(9), 
     except that in determining any expenditures made by, or on 
     behalf of, a candidate or a candidate's authorized 
     committees, section 301(9)(B) shall be applied without regard 
     to clause (ii) or (vi) thereof.

     ``SEC. 503. BENEFITS.

       ``(a) In General.--An eligible Senate candidate shall be 
     entitled to--
       ``(1) free broadcast time under title VI;
       ``(2) the mailing rates provided in section 3626(e) of 
     title 39, United States Code; and
       ``(3) payments in the amounts determined under subsection 
     (b).
       ``(b) Amount of Payments.--
       ``(1) In general.--For purposes of subsection (a)(3), the 
     amounts determined under this subsection are--
       ``(A) the public financing amount;
       ``(B) the independent expenditure amount; and
       ``(C) the excess expenditure amount.
       ``(2) Public financing amount.--For purposes of paragraph 
     (1), the public financing amount is--
       ``(A) in the case of an eligible Senate candidate who is a 
     major party candidate--
       ``(i) during the primary election period, an amount equal 
     to the amount of contributions received during that period 
     from individuals residing in the candidate's State (other 
     than the candidate and members of the candidate's immediate 
     family) in the aggregate amount of $100 or less, up to 50 
     percent of the primary election spending limit;
       ``(ii) during the runoff election period, an amount equal 
     to the amount of contributions received during that period 
     from individuals residing in the candidate's State (other 
     than the candidate and members of 
     [[Page S353]] the candidate's immediate family) in the 
     aggregate amount of $100 or less, up to 50 percent of the 
     runoff election spending limit, less the amount of any 
     unexpended campaign funds from the primary election, which 
     the candidate shall transfer to the runoff election; and
       ``(iii) during the general election period, an amount equal 
     to the general election expenditure limit applicable to the 
     candidate, less the amount of any unexpended campaign funds 
     from the primary election or runoff election, which the 
     candidate shall transfer to the general election; and
       ``(B) in the case of an eligible Senate candidate who is 
     not a major party candidate--
       ``(i) during the primary election period, an amount equal 
     to the amount of contributions received during that period 
     from individuals residing in the candidate's State (other 
     than the candidate and members of the candidate's immediate 
     family) in the aggregate amount of $100 or less, up to 50 
     percent of the primary election expenditure limit;
       ``(ii) during the runoff election period, an amount equal 
     to the amount of contributions received during that period 
     from individuals residing in the candidate's State (other 
     than the candidate and members of the candidate's immediate 
     family) in the aggregate amount of $100 or less, up to 50 
     percent of the runoff election expenditure limit, less the 
     amount of any unexpended campaign funds from the primary 
     election, which the candidate shall transfer to the runoff 
     election; and
       ``(iii) during the general election period, an amount equal 
     to the amount of contributions received during that period 
     from individuals residing in the candidate's State (other 
     than the candidate and members of the candidate's immediate 
     family) in the aggregate amount of $100 or less, up to 50 
     percent of the general election expenditure limit, less the 
     amount of any unexpended campaign funds from the primary 
     election or runoff election, which the candidate shall 
     transfer to the general election.
       ``(3) Independent expenditure amount.--For purposes of 
     paragraph (1), the independent expenditure amount is the 
     total amount of independent expenditures made, or obligated 
     to be made, during the primary election period, runoff 
     election period, or general election period, respectively, by 
     1 or more persons in opposition to, or on behalf of an 
     opponent of, an eligible Senate candidate that are required 
     to be reported by such persons under section 304(c) with 
     respect to each such period, respectively, and are certified 
     by the Commission under section 304(c).
       ``(4) Excess expenditure amount.--For purposes of paragraph 
     (1), the excess expenditure amount is the amount determined 
     as follows:
       ``(A) In the case of an eligible Senate candidate of an 
     eligible Senate candidate of major party who has an opponent 
     in the primary election, runoff election, or general 
     election, respectively, who receives contributions, or makes 
     (or obligates to make) expenditures, for such election in 
     excess of the primary election expenditure limit, the runoff 
     election expenditure limit, or the general election 
     expenditure limit, respectively, an amount equal to the sum 
     of--
       ``(i) if the excess is not greater than 133\1/3\ percent of 
     the primary election expenditure limit, the runoff election 
     expenditure limit, or the general election expenditure limit, 
     respectively, an amount equal to one-third of such limit 
     applicable to the eligible Senate candidate for the election; 
     plus
       ``(ii) if the excess equals or exceeds 133\1/3\ percent but 
     is less than 166\2/3\ percent of such limit, an amount equal 
     to one-third of such limit; plus
       ``(iii) if the excess equals or exceeds 166\2/3\ percent of 
     such limit, an amount equal to one-third of such limit.
       ``(B) In the case of an eligible Senate candidate who is 
     not a candidate of a major party who has an opponent in the 
     primary election, runoff election, or general election, 
     respectively, who receives contributions, or makes (or 
     obligates to make) expenditures, for such election in excess 
     of the primary election expenditure limit, the runoff 
     election expenditure limit, or the general election 
     expenditure limit, respectively, an amount equal to 50 
     percent of the amount of the excess of the contributions 
     received or expenditures made or obligated to be made by an 
     opponent over the primary election expenditure limit, the 
     runoff election expenditure limit, or the general election 
     expenditure limit, respectively, but not exceeding the amount 
     of contributions received by the eligible Senate candidate 
     during the primary election period, runoff election period, 
     or general election period, respectively, from individuals 
     residing in the candidate's State (other than the candidate 
     and members of the candidate's immediate family) in the 
     aggregate amount of $100 or less, up to 50 percent of the 
     excess primary election expenditure limit, the runoff 
     election expenditure limit, or the general excess expenditure 
     limit, respectively.
       ``(c) Use of Payments.--
       ``(1) Permitted use.--Payments received by an eligible 
     Senate candidate under subsection (a)(3) shall be used to 
     defray expenditures incurred with respect to the general 
     election primary election period, runoff election period, and 
     period for the candidate.
       ``(2) Prohibited use.--Payments received by an eligible 
     Senate candidate under subsection (a)(3) shall not be used--
       ``(A) except as provided in subparagraph (D), to make any 
     payments, directly or indirectly, to such candidate or to any 
     member of the immediate family of the candidate;
       ``(B) to make any expenditure other than expenditures to 
     further the primary election, runoff election, or general 
     election of the candidate;
       ``(C) to make any expenditures that constitute a violation 
     of any law of the United States or of the State in which the 
     expenditure is made; or
       ``(D) subject to section 315(i), to repay any loan to any 
     person except to the extent the proceeds of such loan were 
     used to further the primary election, runoff election, or 
     general election of the candidate.

     ``SEC. 504. CERTIFICATION BY COMMISSION.

       ``(a) In General.--
       ``(1) In general.--The Commission shall certify to any 
     candidate that meets the eligibility requirements of section 
     501 that the candidate is an eligible Senate candidate 
     entitled to benefits under this title. The Commission shall 
     revoke such a certification if it determines that a candidate 
     fails to continue to meet those requirements.
       ``(2) Requests to receive benefits.--(A) A candidate to 
     whom a certification has been issued may from time to time 
     file with the Commission a request to receive benefits under 
     section 503.
       ``(B) A request under subparagraph (A) shall--
       ``(i) contain such information and be made in accordance 
     with such procedures as the Commission may provide by 
     regulation; and
       ``(ii) contain a verification signed by the candidate and 
     the treasurer of the principal campaign committee of the 
     candidate stating that the information furnished in support 
     of the request, to the best of their knowledge, is correct 
     and fully satisfies the requirements of this title.
       ``(C) Not later than 3 business days after a candidate 
     files a request under subparagraph (A), the Commission shall 
     certify to the Secretary of the Treasury the amount of 
     benefits to which the candidate is entitled.
       ``(b) Determinations by Commission.--All determinations 
     (including certifications under subsection (a)) made by the 
     Commission under this title shall be final and conclusive, 
     except to the extent that they are subject to examination and 
     audit by the Commission under section 505 and judicial review 
     under section 507.

     ``SEC. 505. EXAMINATION AND AUDITS; REPAYMENTS; CIVIL 
                   PENALTIES.

       ``(a) Examination and Audits.--
       ``(1) Random audits.--After each general election, the 
     Commission shall conduct an examination and audit of the 
     campaign accounts of 10 percent of all candidates for the 
     office of United States Senator to determine, among other 
     things, whether such candidates have complied with the 
     expenditure limits and conditions of eligibility of this 
     title, and other requirements of this Act. Such candidates 
     shall be designated by the Commission through the use of an 
     appropriate statistical method of random selection. If the 
     Commission selects a candidate, the Commission shall examine 
     and audit the campaign accounts of all other candidates in 
     the general election for the office the selected candidate is 
     seeking.
       ``(2) Reason to investigate.--The Commission may conduct an 
     examination and audit of the campaign accounts of any 
     candidate in a general election for the office of United 
     States Senator if the Commission determines that there exists 
     reason to investigate whether the candidate may have violated 
     any provision of this title.
       ``(b) Excess Payments; Revocation of Status.--
       ``(1) Excess payments.--If the Commission determines that 
     payments were made to an eligible Senate candidate under this 
     title in excess of the aggregate amounts to which such 
     candidate was entitled, the Commission shall so notify such 
     candidate, and such candidate shall pay an amount equal to 
     the excess.
       ``(2) Revocation of status.--If the Commission revokes the 
     certification of a candidate as an eligible Senate candidate 
     under section 504(a)(1), the Commission shall notify the 
     candidate, and the candidate shall pay an amount equal to the 
     payments received under this title.
       ``(c) Misuse of Benefits.--If the Commission determines 
     that any amount of any benefit made available to an eligible 
     Senate candidate under this title was not used as provided 
     for in this title, the Commission shall so notify such 
     candidate and such candidate shall pay the amount of such 
     benefit.
       ``(d) Excess Expenditures.--If the Commission determines 
     that any eligible Senate candidate who has received benefits 
     under this title has made expenditures (except as permitted 
     under section 502(e)) that in the aggregate exceed--
       ``(1) the primary election expenditure limit;
       ``(2) the runoff election expenditure limit; or
       ``(3) the general election expenditure limit,
     the Commission shall so notify the candidate and the 
     candidate shall pay an amount equal to the amount of the 
     excess expenditures.
       ``(e) Civil Penalties for Excess Expenditures and 
     Contributions.--
       ``(1) In general.--If the Commission determines that a 
     candidate has committed a violation described in subsection 
     (c), the Commission may assess a civil penalty against the 
     candidate in an amount not greater than 200 percent of the 
     amount involved.
       ``(2) Low amount of excess expenditures.--An eligible 
     Senate candidate who makes expenditures that exceed the 
     primary 
     [[Page S354]] election expenditure limit, runoff election 
     expenditure, or general election expenditure limit by 2.5 
     percent or less shall pay an amount equal to the amount of 
     the excess expenditures.
       ``(3) Medium amount of excess expenditures.--An eligible 
     Senate candidate who makes expenditures that exceed the 
     primary election expenditure limit, runoff election 
     expenditure, or general election expenditure limit by more 
     than 2.5 percent and less than 5 percent shall pay an amount 
     equal to 3 times the amount of the excess expenditures.
       ``(4) Large amount of excess expenditures.--Any eligible 
     Senate candidate who makes expenditures that exceed the 
     primary election expenditure limit, runoff election 
     expenditure, or general election expenditure limit by 5 
     percent or more shall pay an amount equal to 3 times the 
     amount of the excess expenditures plus a civil penalty in an 
     amount determined by the Commission.
       ``(f) Unexpended Funds.-- Any amount received by an 
     eligible Senate candidate under this title may be retained 
     for a period not exceeding 120 days after the date of the 
     primary election, runoff election, or general election for 
     the liquidation of all obligations to pay expenditures for 
     the primary election, runoff election, or general election 
     incurred during the primary election period, runoff election 
     period, or general election period. At the end of such 120-
     day period, any unexpended funds received under this title, 
     except those that are transferred as required by section 
     503(b)(2) (A) (ii) or (iii) or (B) (ii) or (iii), shall be 
     promptly repaid.
       ``(g) Limit on Period for Notification.--No notification 
     shall be made by the Commission under this section with 
     respect to an election more than 3 years after the date of 
     such election.
       ``(h) Deposits.--The Secretary of the Treasury shall 
     deposit all payments received under this section into the 
     Senate Election Campaign Fund.

     ``SEC. 506. CRIMINAL PENALTIES.

       ``(a) Acceptance or Use of Benefits Expenditures in Excess 
     of Limits.--
       ``(1) Offense.--No person shall knowingly and willfully--
       ``(A) accept benefits under this title in excess of the 
     aggregate benefits to which the candidate on whose behalf 
     such benefits are accepted is entitled;
       ``(B) use such benefits for any purpose not provided for in 
     this title; or
       ``(C) make expenditures in excess of--
       ``(i) the primary election expenditure limit;
       ``(ii) the runoff election expenditure limit; or
       ``(iii) the general election expenditure limit,
     except as permitted under section 502(e).
       ``(2) Penalty.--A person who violates paragraph (1) shall 
     be fined not more than $25,000, imprisoned not more than 5 
     years, or both. An officer, employee, or agent of a political 
     committee who knowingly consents to any expenditure in 
     violation of paragraph (1) shall be fined not more than 
     $25,000, imprisoned not more than 5 years, or both.
       ``(b) Use of Benefits.--
       ``(1) Offense.--It is unlawful for a person who receives 
     any benefit under this title, or to whom any portion of any 
     such benefit is transferred, knowingly and willfully to use, 
     or to authorize the use of, the benefit or such portion other 
     than in the manner provided in this title.
       ``(2) Penalty.--A person who violates paragraph (1) shall 
     be fined not more than $10,000, imprisoned not more than 5 
     years, or both.
       ``(c) False Information.--
       ``(1) Offense.--It is unlawful for a person knowingly and 
     willfully--
       ``(A) to furnish any false, fictitious, or fraudulent 
     evidence, books, or information (including any certification, 
     verification, notice, or report) to the Commission under this 
     title, or to include in any evidence, books, or information 
     so furnished any misrepresentation of a material fact, or to 
     falsify or conceal any evidence, books, or information 
     relevant to a certification by the Commission or an 
     examination and audit by the Commission under this title; or
       ``(B) to fail to furnish to the Commission any records, 
     books, or information requested by it for purposes of this 
     title.
       ``(2) Penalty.--A person who violates paragraph (1) shall 
     be fined not more than $10,000, imprisoned not more than 5 
     years, or both.
       ``(d) Kickbacks and Illegal Payments.--
       ``(1) Offense.--It is unlawful for a person knowingly and 
     willfully to give or to accept any kickback or any illegal 
     payment in connection with any benefits received under this 
     title by an eligible Senate candidate.
       ``(2) Penalty.--(A) A person who violates paragraph (1) 
     shall be fined not more than $10,000, imprisoned not more 
     than 5 years, or both.
       ``(B) In addition to the penalty provided by subparagraph 
     (A), a person who accepts any kickback or illegal benefit in 
     connection with any benefits received by an eligible Senate 
     candidate pursuant to the provisions of this title, or 
     received by the authorized committees of such a candidate, 
     shall pay to the Secretary, for deposit into the Senate 
     Election Campaign Fund, an amount equal to 125 percent of the 
     kickback or benefit received.

     ``SEC. 507. JUDICIAL REVIEW.

       ``(a) Judicial Review.--Any agency action by the Commission 
     made under the provisions of this title shall be subject to 
     review by the United States Court of Appeals for the District 
     of Columbia Circuit upon petition filed in such court within 
     30 days after the agency action by the Commission for which 
     review is sought. It shall be the duty of the Court of 
     Appeals to expeditiously take action on all petitions filed 
     pursuant to this title.
       ``(b) Application of Title 5.--Chapter 7 of title 5, United 
     States Code, shall apply to judicial review of any agency 
     action by the Commission.
       ``(c) Agency Action.--For purposes of this section, the 
     term `agency action' has the meaning stated in section 
     551(13) of title 5, United States Code.

     ``SEC. 508. PARTICIPATION BY COMMISSION IN JUDICIAL 
                   PROCEEDINGS.

       ``(a) Appearances.--The Commission may appear in and defend 
     against any action instituted under this section and under 
     section 507 either by attorneys employed in its office or by 
     counsel whom it may appoint without regard to the provisions 
     of title 5, United States Code, governing appointments in the 
     competitive service, and whose compensation it may fix 
     without regard to the provisions of chapter 51 and subchapter 
     III of chapter 53 of such title.
       ``(b) Institution of Actions.--The Commission may, through 
     attorneys and counsel described in subsection (a), institute 
     actions in the district courts of the United States to seek 
     recovery of any amounts determined under this title to be 
     payable to the Secretary.
       ``(c) Injunctive Relief.--The Commission may, through 
     attorneys and counsel described in subsection (a), petition 
     the courts of the United States for such injunctive relief as 
     is appropriate in order to implement any provision of this 
     title.
       ``(d) Appeals.--The Commission may, on behalf of the United 
     States, appeal from, and to petition the Supreme Court for 
     certiorari to review, judgments, or decrees entered with 
     respect to actions in which it appears pursuant to the 
     authority provided in this section.
     ``SEC. 509. REPORTS TO CONGRESS; REGULATIONS.

       ``(a) Reports.--The Commission shall, as soon as 
     practicable after each election, submit a full report to the 
     Senate setting forth--
       ``(1) the expenditures (shown in such detail as the 
     Commission determines appropriate) made by each eligible 
     Senate candidate and the authorized committees of such 
     candidate;
       ``(2) the amounts certified by the Commission under section 
     504 as benefits available to each eligible Senate candidate;
       ``(3) the amount of repayments, if any, required under 
     section 505 and the reasons for each repayment required; and
       ``(4) the balance in the Senate Election Campaign Fund, and 
     the balance in any account maintained the Fund.

     Each report submitted pursuant to this section shall be 
     printed as a Senate document.
       ``(b) Regulations.--The Commission may prescribe 
     regulations, conduct such examinations and investigations, 
     and require the keeping and submission of such books, 
     records, and information, as it deems necessary to carry out 
     its functions and duties under this title.
       ``(c) Statement to Senate.--Thirty days before prescribing 
     a regulation under subsection (b), the Commission shall 
     transmit to the Senate a statement setting forth the proposed 
     regulation and containing a detailed explanation and 
     justification of the regulation.

     ``SEC. 510. PAYMENTS RELATING TO ELIGIBLE CANDIDATES.
       ``(a) Establishment of Campaign Fund.--
       ``(1) In general.--There is established on the books of the 
     Treasury of the United States a special fund to be known as 
     the `Senate Election Campaign Fund'.
       ``(2) Appropriations.--(A) There are appropriated to the 
     Fund for each fiscal year, out of amounts in the general fund 
     of the Treasury not otherwise appropriated, amounts equal 
     to--
       ``(i) any contributions by persons which are specifically 
     designated as being made to the Fund;
       ``(ii) amounts collected under section 505(h); and
       ``(iii) any other amounts that may be appropriated to or 
     deposited into the Fund under this title.
       ``(B) The Secretary of the Treasury shall, from time to 
     time, transfer to the Fund an amount not in excess of the 
     amounts described in subparagraph (A).
       ``(C) Amounts in the Fund shall remain available without 
     fiscal year limitation.
       ``(3) Availability.--Amounts in the Fund shall be available 
     only for the purposes of--
       ``(A) making payments required under this title; and
       ``(B) making expenditures in connection with the 
     administration of the Fund.
       ``(4) Accounts.--The Secretary shall maintain such accounts 
     in the Fund as may be required by this title or which the 
     Secretary determines to be necessary to carry out the 
     provisions of this title.
       ``(b) Payments Upon Certification.--Upon receipt of a 
     certification from the Commission under section 504, the 
     Secretary shall promptly pay the amount certified by the 
     Commission to the candidate out of the Senate Election 
     Campaign Fund.
     [[Page S355]] ``SEC. 511. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to the Commission 
     such sums as are necessary for the purpose of carrying out 
     its functions under this title.''.
       (b) Effective Dates.--(1) Except as provided in this 
     subsection, the amendment made by subsection (a) shall apply 
     to elections occurring after December 31, 1995.
       (2) For purposes of any expenditure or contribution limit 
     imposed by the amendment made by subsection (a)--
       (A) no expenditure made before January 1, 1994, shall be 
     taken into account, except that there shall be taken into 
     account any such expenditure for goods or services to be 
     provided after such date; and
       (B) all cash, cash items, and Government securities on hand 
     as of January 1, 1994, shall be taken into account in 
     determining whether the contribution limit is met, except 
     that there shall not be taken into account amounts used 
     during the 60-day period beginning on January 1, 1994, to pay 
     for expenditures which were incurred (but unpaid) before such 
     date.
       (c) Effect of Invalidity on Other Provisions of Act.--If 
     section 501, 502, or 503 of title V of FECA (as added by this 
     section), or any part thereof, is held to be invalid, all 
     provisions of, and amendments made by, this Act shall be 
     treated as invalid.

     SEC. 102. BAN ON ACTIVITIES OF POLITICAL ACTION COMMITTEES IN 
                   FEDERAL ELECTIONS.

       (a) In General.--Title III of FECA (2 U.S.C. 301 et seq.) 
     is amended by adding at the end the following new section:


  ``BAN ON FEDERAL ELECTION ACTIVITIES BY POLITICAL ACTION COMMITTEES

       ``Sec. 324. (a) Notwithstanding any other provision of this 
     Act, no person other than an individual or a political 
     committee may make contributions, solicit or receive 
     contributions, or make expenditures for the purpose of 
     influencing an election for Federal office.
       ``(b) In the case of individuals who are executive or 
     administrative personnel of an employer--
       ``(1) no contributions may be made by such individuals--
       ``(A) to any political committees established and 
     maintained by any political party; or
       ``(B) to any candidate for election to the office of United 
     States Senator or the candidate's authorized committees,

     unless such individuals certify that such contributions are 
     not being made at the direction of, or otherwise controlled 
     or influenced by, the employer; and
       ``(2) the aggregate amount of such contributions by all 
     such individuals in any calendar year shall not exceed--
       ``(A) $20,000 in the case of such political committees; and
       ``(B) $5,000 in the case of any such candidate and the 
     candidate's authorized committees.''.
       (b) Definition of Political Committee.--(1) Paragraph (4) 
     of section 301 of FECA (2 U.S.C. 431(4)) is amended to read 
     as follows:
       ``(4) The term `political committee' means--
       ``(A) the principal campaign committee of a candidate;
       ``(B) any national or State committee of a political party; 
     and
       ``(C) any local committee of a political party which--
       ``(i) receives contributions aggregating in excess of 
     $5,000 during a calendar year;
       ``(ii) makes payments exempted from the definition of 
     contribution or expenditure under paragraph (8) or (9) 
     aggregating in excess of $5,000 during a calendar year; or
       ``(iii) makes contributions or expenditures aggregating in 
     excess of $1,000 during a calendar year.''
       (2) Section 316(b)(2) of FECA (2 U.S.C. 441b(b)(2)) is 
     amended by striking subparagraph (C).
       (c) Candidate's Committees.-- Section 315(a) of FECA (2 
     U.S.C. 441a(a)) is amended by adding at the end the following 
     new paragraph:
       ``(9) For the purposes of the limitations provided by 
     paragraphs (1) and (2), any political committee which is 
     established or financed or maintained or controlled by any 
     candidate or Federal officeholder shall be deemed to be an 
     authorized committee of such candidate or officeholder.''.
       (d) Rules Applicable When Ban Not in Effect.--For purposes 
     of the Federal Election Campaign Act of 1971, during any 
     period beginning after the effective date in which the 
     prohibition under section 324 of such Act (as added by 
     subsection (a)) is not in effect--
       (1) the amendments made by subsections (a), (b), and (c) 
     shall not be in effect;
       (2) in the case of a candidate for election, or nomination 
     for election, to the United States Senate (and such 
     candidate's authorized committees), section 315(a)(2)(A) of 
     FECA (2 U.S.C. 441a(a)(2)(A)) shall be applied by 
     substituting ``$250'' for ``$5,000''; and
       (3) it shall be unlawful for a multicandidate political 
     committee to make a contribution to a candidate for election, 
     or nomination for election, to the United States Senate (or 
     an authorized committee) to the extent that the making of the 
     contribution will cause the amount of contributions received 
     by the candidate and the candidate's authorized committees 
     from multicandidate political committees to exceed the lesser 
     of--
       (A) $825,000; or
       (B) the greater of--
       (i) $375,000; or
       (ii) 20 percent of the sum of the general election 
     expenditure limit under section 502(b) of FECA plus the 
     primary election spending limit under section 502(d)(1)(A) of 
     FECA (without regard to whether the candidate is an eligible 
     Senate candidate (as defined in section 301(19)) of FECA).

     In the case of an election cycle in which there is a runoff 
     election, the limit determined under paragraph (3) shall be 
     increased by an amount equal to 20 percent of the runoff 
     election expenditure limit under section 501(d)(1)(A) of FECA 
     (without regard to whether the candidate is such an eligible 
     candidate). The $825,000 and $375,000 amounts in paragraph 
     (3) shall be increased as of the beginning of each calendar 
     year based on the increase in the price index determined 
     under section 315(c) of FECA, except that for purposes of 
     paragraph (3), the base period shall be the calendar year in 
     which the first general election after the date of the 
     enactment of paragraph (3) occurs. A candidate or authorized 
     committee that receives a contribution from a multicandidate 
     political committee in excess of the amount allowed under 
     paragraph (3) shall return the amount of such excess 
     contribution to the contributor.
       (e) Effective Dates.--(1) Except as provided in paragraph 
     (2), the amendments made by this section shall apply to 
     elections (and the election cycles relating thereto) 
     occurring after December 31, 1995.
       (2) In applying the amendments made by this section, there 
     shall not be taken into account--
       (A) contributions made or received on or before the date of 
     the enactment of this Act; or
       (B) contributions made to, or received by, a candidate 
     after such date, to the extent such contributions are not 
     greater than the excess (if any) of--
       (i) such contributions received by any opponent of the 
     candidate on or before such date, over
       (ii) such contributions received by the candidate on or 
     before such date.

     SEC. 103. REPORTING REQUIREMENTS.

       Title III of FECA is amended by adding after section 304 
     the following new section:
             ``REPORTING REQUIREMENTS FOR SENATE CANDIDATES

       ``Sec. 304A. (a) Candidate Other Than Eligible Senate 
     Candidate.--(1) Each candidate for the office of United 
     States Senator who does not file a certification with the 
     Secretary of the Senate under section 501(c) shall file with 
     the Secretary of the Senate a declaration as to whether such 
     candidate intends to make expenditures for the general 
     election in excess of the general election expenditure limit 
     applicable to an eligible Senate candidate under section 
     502(b). Such declaration shall be filed at the time provided 
     in section 501(c)(2).
       ``(2) Any candidate for the United States Senate who 
     qualifies for the ballot for a general election--
       ``(A) who is not an eligible Senate candidate under section 
     501; and
       ``(B) who either raises aggregate contributions, or makes 
     or obligates to make aggregate expenditures, for the general 
     election which exceed 75 percent of the general election 
     expenditure limit applicable to an eligible Senate candidate 
     under section 502(b),

     shall file a report with the Secretary of the Senate within 1 
     business day after such contributions have been raised or 
     such expenditures have been made or obligated to be made (or, 
     if later, within 1 business day after the date of 
     qualification for the general election ballot), setting forth 
     the candidate's total contributions and total expenditures 
     for such election as of such date. Thereafter, such candidate 
     shall file additional reports (until such contributions or 
     expenditures exceed 200 percent of such limit) with the 
     Secretary of the Senate within 1 business day after each time 
     additional contributions are raised, or expenditures are made 
     or are obligated to be made, which in the aggregate exceed an 
     amount equal to 10 percent of such limit and after the total 
     contributions or expenditures exceed 133\1/3\, 166\2/3\, and 
     200 percent of such limit.
       ``(3) The Commission--
       ``(A) shall, within 2 business days of receipt of a 
     declaration or report under paragraph (1) or (2), notify each 
     eligible Senate candidate in the election involved about such 
     declaration or report; and
       ``(B) if an opposing candidate has raised aggregate 
     contributions, or made or has obligated to make aggregate 
     expenditures, in excess of the applicable general election 
     expenditure limit under section 502(b), shall certify, 
     pursuant to the provisions of subsection (d), such 
     eligibility for payment of any amount to which such eligible 
     Senate candidate is entitled under section 503(a).
       ``(4) Notwithstanding the reporting requirements under this 
     subsection, the Commission may make its own determination 
     that a candidate in a general election who is not an eligible 
     Senate candidate has raised aggregate contributions, or made 
     or has obligated to make aggregate expenditures, in the 
     amounts which would require a report under paragraph (2). The 
     Commission shall, within 2 business days after making each 
     such determination, notify each eligible Senate candidate in 
     the general election involved about such determination, and 
     shall, when such contributions or expenditures exceed the 
     [[Page S356]] general election expenditure limit under 
     section 502(b), certify (pursuant to the provisions of 
     subsection (d)) such candidate's eligibility for payment of 
     any amount under section 503(a).
       ``(b) Reports on Personal Funds.--(1) Any candidate for the 
     United States Senate who during the election cycle expends 
     more than the limitation under section 502(a) during the 
     election cycle from his personal funds, the funds of his 
     immediate family, and personal loans incurred by the 
     candidate and the candidate's immediate family shall file a 
     report with the Secretary of the Senate within 1 business day 
     after such expenditures have been made or loans incurred.
       ``(2) The Commission within 2 business days after a report 
     has been filed under paragraph (1) shall notify each eligible 
     Senate candidate in the election involved about each such 
     report.
       ``(3) Notwithstanding the reporting requirements under this 
     subsection, the Commission may make its own determination 
     that a candidate for the United States Senate has made 
     expenditures in excess of the amount under paragraph (1). The 
     Commission within 2 business days after making such 
     determination shall notify each eligible Senate candidate in 
     the general election involved about each such determination.
       ``(c) Candidates for Other Offices.--(1) Each individual--
       ``(A) who becomes a candidate for the office of United 
     States Senator;
       ``(B) who, during the election cycle for such office, held 
     any other Federal, State, or local office or was a candidate 
     for such other office; and
       ``(C) who expended any amount during such election cycle 
     before becoming a candidate for the office of United States 
     Senator which would have been treated as an expenditure if 
     such individual had been such a candidate, including amounts 
     for activities to promote the image or name recognition of 
     such individual,

     shall, within 7 days of becoming a candidate for the office 
     of United States Senator, report to the Secretary of the 
     Senate the amount and nature of such expenditures.
       ``(2) Paragraph (1) shall not apply to any expenditures in 
     connection with a Federal, State, or local election which has 
     been held before the individual becomes a candidate for the 
     office of United States Senator.
       ``(3) The Commission shall, as soon as practicable, make a 
     determination as to whether the amounts included in the 
     report under paragraph (1) were made for purposes of 
     influencing the election of the individual to the office of 
     United States Senator.
       ``(d) Certifications.--Notwithstanding section 505(a), the 
     certification required by this section shall be made by the 
     Commission on the basis of reports filed in accordance with 
     the provisions of this Act, or on the basis of such 
     Commission's own investigation or determination.
       ``(e) Copies of Reports and Public Inspection.--The 
     Secretary of the Senate shall transmit a copy of any report 
     or filing received under this section or of title V as soon 
     as possible (but no later than 4 working hours of the 
     Commission) after receipt of such report or filing, and shall 
     make such report or filing available for public inspection 
     and copying in the same manner as the Commission under 
     section 311(a)(4), and shall preserve such reports and 
     filings in the same manner as the Commission under section 
     311(a)(5).
       ``(f) Definitions.--For purposes of this section, any term 
     used in this section which is used in title V shall have the 
     same meaning as when used in title V.''.

     SEC. 104. DISCLOSURE BY NONELIGIBLE CANDIDATES.

       Section 318 of FECA (2 U.S.C. 441d), as amended by section 
     133, is amended by adding at the end the following:
       ``(e) If a broadcast, cablecast, or other communication is 
     paid for or authorized by a candidate in the general election 
     for the office of United States Senator who is not an 
     eligible Senate candidate, or the authorized committee of 
     such candidate, such communication shall contain the 
     following sentence: `This candidate has not agreed to 
     voluntary campaign spending limits.'.''.

     SEC. 105. FREE BROADCAST TIME.

       (a) Amendment of Communications Act.--Title III of the 
     Communications Act of 1934 (47 U.S.C. 301 et seq.) is amended 
     by inserting after section 315 the following new section:


          ``FREE BROADCAST TIME FOR ELIGIBLE SENATE CANDIDATES

       ``Sec. 315A. (a) In General.--In addition to broadcast time 
     that a licensee makes available to a candidate under section 
     315(a), a licensee shall make available at no charge, to each 
     eligible Senate candidates in each State within its broadcast 
     area, 90 minutes of broadcast time during a prime time access 
     period (as defined in section 601 of the Federal Election 
     Campaign Act of 1971).
       ``(b) Appearances on News or Public Service Programs.--An 
     appearance by a candidate on a news or public service program 
     at the invitation of a broadcasting station or other 
     organization that presents such a program shall not be 
     counted toward time made available pursuant to subsection 
     (a).''.
       (b) Amendment of FECA.--FECA, as amended by section 101, is 
     amended by adding at the end the following new title:
           ``TITLE VI--DISSEMINATION OF POLITICAL INFORMATION

     ``SEC. 601. DEFINITIONS.

       ``In this title--
       ``(1) The term `free broadcast time' means time provided by 
     a broadcasting station during a prime time access period 
     pursuant to section 315A of the Communications Act of 1934.
       ``(2) The term `minor party' means a political party other 
     than a major party--
       ``(A) whose candidate for the Senate in a State received 
     more than 5 percent of the popular vote in the most recent 
     general election; or
       ``(B) which files with the Commission, not later than 90 
     days before the date of a general or special election in a 
     State, the number of signatures of registered voters in the 
     State that is equal to 5 percent of the popular vote for the 
     office of Senator in the most recent general or special 
     election in the State.
       ``(3) The term `prime time access period' means the time 
     between 6:00 p.m. and 8:00 p.m. of a weekday during the 
     period beginning on the date that is 60 days before the date 
     of a general election or special election for the Senate and 
     ending on the day before the date of the election.

     ``SEC. 602. USE OF FREE BROADCAST TIME.

       ``An eligible Senate candidate shall ensure that--
       ``(1) free broadcast time is used in a manner that promotes 
     a rational discussion and debate of issues with respect to 
     the elections involved;
       ``(2) in programs in which free broadcast time is used, not 
     more than 25 percent of the time of the broadcast consists of 
     presentations other than a candidate's own remarks;
       ``(3) free broadcast time is used in segments of not less 
     than 1 minute; and
       ``(4) not more than 15 minutes of free broadcast time is 
     used by the candidate in a 24-hour period.

     ``SEC. 603. REPORTS.

       ``(a) Candidate Reports to the Commission.--An eligible 
     Senate candidate that uses free broadcast time under section 
     602 shall include with the candidate's post-general election 
     report under section 304(a)(2)(A)(ii) or, in the case of a 
     special election, with the candidate's first report under 
     section 304(a)(2) filed after the special election, a 
     statement of the amount of free broadcast time that the 
     candidate used during the general election period or special 
     election period.
       ``(b) Commission Reports to Congress.--The Commission shall 
     submit to Congress, not later than June 1 of each year that 
     follows a year in which a general election for the Senate is 
     held, a report setting forth the amount of free broadcast 
     time used by eligible Senate candidates under section 602.

     ``SEC. 604. JUDICIAL PROCEEDINGS.

       ``(a) In General.--The Commission may appear in any action 
     filed under this section, either by attorneys employed in its 
     office or by counsel whom it may appoint without regard to 
     the provisions of title 5, United States Code, governing 
     appointments in the competitive service, and whose 
     compensation it may fix without regard to the provisions of 
     chapter 51 and title III of chapter 53 of that title.
       ``(b) Enforcement.--At its own instance or on the complaint 
     of any person, and whether or not proceedings have been 
     commenced or are pending under section 309, the Commission 
     may petition a district court of the United States for 
     declaratory or injunctive relief concerning any civil matter 
     arising under this title, through attorneys and counsel 
     described in subsection (a).
       ``(c) Appeals.--The Commission may, on behalf of the United 
     States, appeal from, and petition the Supreme Court of the 
     United States for certiorari to review, a judgment or decree 
     entered with respect to an action in which it appeared 
     pursuant to this section.''.
                     Subtitle B--General Provisions

     SEC. 131. EXTENSION OF REDUCED THIRD-CLASS MAILING RATES TO 
                   ELIGIBLE SENATE CANDIDATES.

       Section 3626(e) of title 39, United States Code, is 
     amended--
       (1) in paragraph (2)(A)--
       (A) by striking ``and the National'' and inserting ``the 
     National''; and
       (B) by striking ``Committee;'' and inserting ``Committee, 
     and, subject to paragraph (3), the principal campaign 
     committee of an eligible Senate candidate;'';
       (2) in paragraph (2)(B), by striking ``and'' after the 
     semicolon;
       (3) in paragraph (2)(C), by striking the period and 
     inserting ``; and'';
       (4) by adding after paragraph (2)(C) the following new 
     subparagraph:
       ``(D) The terms `eligible Senate candidate' and `principal 
     campaign committee' have the meanings given those terms in 
     section 301 of the Federal Election Campaign Act of 1971.''; 
     and
       (5) by adding after paragraph (2) the following new 
     paragraph:
       ``(3) The rate made available under this subsection with 
     respect to an eligible Senate candidate shall apply only to--
       ``(A) the general election period (as defined in section 
     301 of the Federal Election Campaign Act of 1971); and
       ``(B) that number of pieces of mail equal to the number of 
     individuals in the voting age population (as certified under 
     section 315(e) of such Act) of the State.''.

     SEC. 132. REPORTING REQUIREMENTS FOR CERTAIN INDEPENDENT 
                   EXPENDITURES.

       Section 304(c) of FECA (2 U.S.C. 434(c)) is amended--
     [[Page S357]]   (1) in paragraph (2), by striking out the 
     undesignated matter after subparagraph (C);
       (2) by redesignating paragraph (3) as paragraph (5); and
       (3) by inserting after paragraph (2), as amended by 
     paragraph (1), the following new paragraphs:
       ``(3)(A) Any independent expenditure (including those 
     described in subsection (b)(6)(B)(iii) of this section) 
     aggregating $1,000 or more made after the 20th day, but more 
     than 24 hours, before any election shall be reported within 
     24 hours after such independent expenditure is made.
       ``(B) Any independent expenditure aggregating $5,000 or 
     more made at any time up to and including the 20th day before 
     any election shall be reported within 48 hours after such 
     independent expenditure is made. An additional statement 
     shall be filed each time independent expenditures aggregating 
     $5,000 are made with respect to the same election as the 
     initial statement filed under this section.
       ``(C) Such statement shall be filed with the Secretary of 
     the Senate and the Secretary of State of the State involved 
     and shall contain the information required by subsection 
     (b)(6)(B)(iii) of this section, including whether the 
     independent expenditure is in support of, or in opposition 
     to, the candidate involved. The Secretary of the Senate shall 
     as soon as possible (but not later than 4 working hours of 
     the Commission) after receipt of a statement transmit it to 
     the Commission. Not later than 48 hours after the Commission 
     receives a report, the Commission shall transmit a copy of 
     the report to each candidate seeking nomination or election 
     to that office.
       ``(D) For purposes of this section, the term `made' 
     includes any action taken to incur an obligation for payment.
       ``(4)(A) If any person intends to make independent 
     expenditures totaling $5,000 during the 20 days before an 
     election, such person shall file a statement no later than 
     the 20th day before the election.
       ``(B) Such statement shall be filed with the Secretary of 
     the Senate and the Secretary of State of the State involved, 
     and shall identify each candidate whom the expenditure will 
     support or oppose. The Secretary of the Senate shall as soon 
     as possible (but not later than 4 working hours of the 
     Commission) after receipt of a statement transmit it to the 
     Commission. Not later than 48 hours after the Commission 
     receives a statement under this paragraph, the Commission 
     shall transmit a copy of the statement to each candidate 
     identified.
       ``(5) The Commission may make its own determination that a 
     person has made, or has incurred obligations to make, 
     independent expenditures with respect to any Federal election 
     which in the aggregate exceed the applicable amounts under 
     paragraph (3) or (4). The Commission shall notify each 
     candidate in such election of such determination within 24 
     hours of making it.
       ``(6) At the same time as a candidate is notified under 
     paragraph (3), (4), or (5) with respect to expenditures 
     during a general election period, the Commission shall 
     certify eligibility to receive benefits under section 503(a).
       ``(7) The Secretary of the Senate shall make any statement 
     received under this subsection available for public 
     inspection and copying in the same manner as the Commission 
     under section 311(a)(4), and shall preserve such statements 
     in the same manner as the Commission under section 
     311(a)(5).''.

     SEC. 133. CAMPAIGN ADVERTISING AMENDMENTS.

       Section 318 of FECA (2 U.S.C. 441d) is amended--
       (1) in the matter before paragraph (1) of subsection (a), 
     by striking ``an expenditure'' and inserting ``a 
     disbursement'';
       (2) in the matter before paragraph (1) of subsection (a), 
     by striking ``direct'';
       (3) in paragraph (3) of subsection (a), by inserting after 
     ``name'' the following ``and permanent street address''; and
       (4) by adding at the end the following new subsections:
       ``(c) Any printed communication described in subsection (a) 
     shall be--
       ``(1) of sufficient type size to be clearly readable by the 
     recipient of the communication;
       ``(2) contained in a printed box set apart from the other 
     contents of the communication; and
       ``(3) consist of a reasonable degree of color contrast 
     between the background and the printed statement.
       ``(d)(1) Any broadcast or cablecast communication described 
     in subsection (a)(1) or subsection (a)(2) shall include, in 
     addition to the requirements of those subsections an audio 
     statement by the candidate that identifies the candidate and 
     states that the candidate has approved the communication.
       ``(2) If a broadcast or cablecast communication described 
     in paragraph (1) is broadcast or cablecast by means of 
     television, the statement required by paragraph (1) shall--
       ``(A) appear at the end of the communication in a clearly 
     readable manner with a reasonable degree of color contrast 
     between the background and the printed statement, for a 
     period of at least 4 seconds; and
       ``(B) be accompanied by a clearly identifiable photographic 
     or similar image of the candidate.
       ``(e) Any broadcast or cablecast communication described in 
     subsection (a)(3) shall include, in addition to the 
     requirements of those subsections, in a clearly spoken 
     manner, the following statement--
       `             is responsible for the content of this 
     advertisement.'

     with the blank to be filled in with the name of the political 
     committee or other person paying for the communication and 
     the name of any connected organization of the payor; and, if 
     broadcast or cablecast by means of television, shall also 
     appear in a clearly readable manner with a reasonable degree 
     of color contrast between the background and the printed 
     statement, for a period of at least 4 seconds.''.

     SEC. 134. DEFINITIONS.

       (a) In General.--Section 301 of FECA (2 U.S.C. 431) is 
     amended by striking paragraph (19) and inserting the 
     following new paragraphs:
       ``(19) The term `eligible Senate candidate' means a 
     candidate who is eligible under section 502 to receive 
     benefits under title V.
       ``(20) The term `general election' means any election which 
     will directly result in the election of a person to a Federal 
     office, but does not include an open primary election.
       ``(21) The term `general election period' means, with 
     respect to any candidate, the period beginning on the day 
     after the date of the primary or runoff election for the 
     specific office the candidate is seeking, whichever is later, 
     and ending on the earlier of--
       ``(A) the date of such general election; or
       ``(B) the date on which the candidate withdraws from the 
     campaign or otherwise ceases actively to seek election.
       ``(22) The term `immediate family' means--
       ``(A) a candidate's spouse;
       ``(B) a child, stepchild, parent, grandparent, brother, 
     half-brother, sister or half-sister of the candidate or the 
     candidate's spouse; and
       ``(C) the spouse of any person described in subparagraph 
     (B).
       ``(23) The term `major party' has the meaning given such 
     term in section 9002(6) of the Internal Revenue Code of 1986, 
     except that if a candidate qualified under State law for the 
     ballot in a general election in an open primary in which all 
     the candidates for the office participated and which resulted 
     in the candidate and at least one other candidate qualifying 
     for the ballot in the general election, such candidate shall 
     be treated as a candidate of a major party for purposes of 
     title V.
       ``(24) The term `primary election' means an election which 
     may result in the selection of a candidate for the ballot in 
     a general election for a Federal office.
       ``(25) The term `primary election period' means, with 
     respect to any candidate, the period beginning on the day 
     following the date of the last election for the specific 
     office the candidate is seeking and ending on the earlier 
     of--
       ``(A) the date of the first primary election for that 
     office following the last general election for that office; 
     or
       ``(B) the date on which the candidate withdraws from the 
     election or otherwise ceases actively to seek election.
       ``(26) The term `runoff election' means an election held 
     after a primary election which is prescribed by applicable 
     State law as the means for deciding which candidate will be 
     on the ballot in the general election for a Federal office.
       ``(27) The term `runoff election period' means, with 
     respect to any candidate, the period beginning on the day 
     following the date of the last primary election for the 
     specific office such candidate is seeking and ending on the 
     date of the runoff election for such office.
       ``(28) The term `voting age population' means the resident 
     population, 18 years of age or older, as certified pursuant 
     to section 315(e).
       ``(29) The term `election cycle' means--
       ``(A) in the case of a candidate or the authorized 
     committees of a candidate, the term beginning on the day 
     after the date of the most recent general election for the 
     specific office or seat which such candidate seeks and ending 
     on the date of the next general election for such office or 
     seat; or
       ``(B) for all other persons, the term beginning on the 
     first day following the date of the last general election and 
     ending on the date of the next general election.
       ``(30) The term `personal funds expenditure limit' means 
     the limit applicable to an eligible Senate candidate under 
     section 502(a).
       ``(31) The term `primary election expenditure limit' means 
     the limit applicable to an eligible Senate candidate under 
     section 502(b).
       ``(32) The term `runoff election expenditure limit' means 
     the limit applicable to an eligible Senate candidate under 
     section 502(c).
       ``(33) The term `general election expenditure limit' means 
     the limit applicable to an eligible Senate candidate under 
     section 502(d).
       ``(34) The term `multicandidate political committee primary 
     election contribution limit' means the limit applicable to an 
     eligible Senate candidate under section 502(e)(1).
       ``(35) The term `multicandidate political committee runoff 
     election contribution limit' means the limit applicable to an 
     eligible Senate candidate under section 502(e)(2).
       ``(36) The terms `Senate Election Campaign Fund' and `Fund' 
     mean the Senate Election Campaign Fund established under 
     section 510.''.
       (b) Identification.--Section 301(13) of FECA (2 U.S.C. 
     431(13)) is amended by striking ``mailing address'' and 
     inserting ``permanent residence address''.

[[Page S358]]

     SEC. 135. PROVISIONS RELATING TO FRANKED MASS MAILINGS.

       Section 3210(a)(6) of title 39, United States Code, is 
     amended--
       (1) in subparagraph (A), by striking ``It is the intent of 
     Congress that a Member of, or a Member-elect to, Congress'' 
     and inserting ``A Member of, or Member-elect to, the House''; 
     and
       (2) in subparagraph (C)--
       (A) by striking ``if such mass mailing is postmarked fewer 
     than 60 days immediately before the date'' and inserting ``if 
     such mass mailing is postmarked during the calendar year''; 
     and
       (B) by inserting ``or reelection'' immediately before the 
     period.
                   TITLE II--INDEPENDENT EXPENDITURES

     SEC. 201. CLARIFICATION OF DEFINITIONS RELATING TO 
                   INDEPENDENT EXPENDITURES.

       (a) Independent Expenditure Definition Amendment.--Section 
     301 of FECA (2 U.S.C. 431) is amended by striking paragraphs 
     (17) and (18) and inserting the following:
       ``(17)(A) The term `independent expenditure' means an 
     expenditure for an advertisement or other communication 
     that--
       ``(i) contains express advocacy; and
       ``(ii) is made without the participation or cooperation of 
     a candidate or a candidate's representative.
       ``(B) The following shall not be considered an independent 
     expenditure:
       ``(i) An expenditure made by a political committee of a 
     political party.
       ``(ii) An expenditure made by a person who, during the 
     election cycle, has communicated with or received information 
     from a candidate or a representative of that candidate 
     regarding activities that have the purpose of influencing 
     that candidate's election to Federal office, where the 
     expenditure is in support of that candidate or in opposition 
     to another candidate for that office.
       ``(iii) An expenditure if there is any arrangement, 
     coordination, or direction with respect to the expenditure 
     between the candidate or the candidate's agent and the person 
     making the expenditure.
       ``(iv) An expenditure if, in the same election cycle, the 
     person making the expenditure is or has been--
       ``(I) authorized to raise or expend funds on behalf of the 
     candidate or the candidate's authorized committees; or
       ``(II) serving as a member, employee, or agent of the 
     candidate's authorized committees in an executive or 
     policymaking position.
       ``(v) An expenditure if the person making the expenditure 
     has advised or counseled the candidate or the candidate's 
     agents at any time on the candidate's plans, projects, or 
     needs relating to the candidate's pursuit of nomination for 
     election, or election, to Federal office, in the same 
     election cycle, including any advice relating to the 
     candidate's decision to seek Federal office.
       ``(vi) An expenditure if the person making the expenditure 
     retains the professional services of any individual or other 
     person also providing services in the same election cycle to 
     the candidate in connection with the candidate's pursuit of 
     nomination for election, or election, to Federal office, 
     including any services relating to the candidate's decision 
     to seek Federal office.
       ``(vii) An expenditure if the person making the expenditure 
     has consulted at any time during the same election cycle 
     about the candidate's plans, projects, or needs relating to 
     the candidate's pursuit of nomination for election, or 
     election, to Federal office, with--
       ``(I) any officer, director, employee or agent of a party 
     committee that has made or intends to make expenditures or 
     contributions, pursuant to subsections (a), (d), or (h) of 
     section 315 in connection with the candidate's campaign; or
       ``(II) any person whose professional services have been 
     retained by a political party committee that has made or 
     intends to make expenditures or contributions pursuant to 
     subsections (a), (d), or (h) of section 315 in connection 
     with the candidate's campaign.

     For purposes of this subparagraph, the person making the 
     expenditure shall include any officer, director, employee, or 
     agent of such person.
       ``(18) The term `express advocacy' means, when a 
     communication is taken as a whole, an expression of support 
     for or opposition to a specific candidate, to a specific 
     group of candidates, or to candidates of a particular 
     political party, or a suggestion to take action with respect 
     to an election, such as to vote for or against, make 
     contributions to, or participate in campaign activity.''.
       (b) Contribution Definition Amendment.--Section 301(8)(A) 
     of FECA (2 U.S.C. 431(8)(A)) is amended--
       (1) in clause (i), by striking ``or'' after the semicolon 
     at the end;
       (2) in clause (ii), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following new clause:
       ``(iii) any payment or other transaction referred to in 
     paragraph (17)(A)(i) that does not qualify as an independent 
     expenditure under paragraph (17)(A)(ii).''.
                        TITLE III--EXPENDITURES
                   Subtitle A--Personal Loans; Credit

     SEC. 301. PERSONAL CONTRIBUTIONS AND LOANS.

       Section 315 of FECA (2 U.S.C. 441a) is amended by adding at 
     the end the following new subsection:
       ``(i) Limitations on Payments to Candidates.--(1) If a 
     candidate or a member of the candidate's immediate family 
     made any loans to the candidate or to the candidate's 
     authorized committees during any election cycle, no 
     contributions received after the date of the general election 
     for such election cycle may be used to repay such loans.
       ``(2) No contribution by a candidate or member of the 
     candidate's immediate family may be returned to the candidate 
     or member other than as part of a pro rata distribution of 
     excess contributions to all contributors.''.

     SEC. 302. EXTENSIONS OF CREDIT.

       Section 301(8)(A) of FECA (2 U.S.C. 431(8)(A)), as amended 
     by section 201(b), is amended--
       (1) by striking ``or'' at the end of clause (ii);
       (2) by striking the period at the end of clause (iii) and 
     inserting ``; or''; and
       (3) by inserting at the end the following new clause:
       ``(iv) with respect to a candidate and the candidate's 
     authorized committees, any extension of credit for goods or 
     services relating to advertising on broadcasting stations, in 
     newspapers or magazines, or by mailings, or relating to other 
     types of general public political advertising, if such 
     extension of credit is--
       ``(I) in an amount of more than $500; and
       ``(II) for a period greater than the period, not in excess 
     of 60 days, for which credit is generally extended in the 
     normal course of business after the date on which such goods 
     or services are furnished or the date of the mailing in the 
     case of advertising by a mailing.''.
   Subtitle B--Provisions Relating to Soft Money of Political Parties

     SEC. 311. CONTRIBUTIONS TO POLITICAL PARTY COMMITTEES FOR 
                   GRASSROOTS FEDERAL ELECTION CAMPAIGN 
                   ACTIVITIES.

       (a) In General.--Section 315(a)(1)(C) of FECA (2 U.S.C. 
     441a(a)(1)(C)) is amended by striking ``$5,000.'' and 
     inserting ``5,000, plus an additional $5,000 that may be 
     contributed to a political committee established and 
     maintained by a State political party for the sole purpose of 
     conducting grassroots Federal election campaign activities 
     coordinated by the Congressional Campaign Committee and 
     Senatorial Campaign Committee of the party.''.
       (b) Increase in Overall Limit.--Paragraph (3) of section 
     315(a) of FECA (2 U.S.C. 441a(a)(3)) is amended by adding at 
     the end the following new sentence: ``The limitation under 
     this paragraph shall be increased (but not by more than 
     $5,000) by the amount of contributions made by an individual 
     during a calendar year to political committees which are 
     taken into account for purposes of paragraph (1)(C).''.
       (c) Definition.--Section 301(a) of FECA (2 U.S.C. 431(a)), 
     as amended by section 134, is amended by adding at the end 
     the following new paragraph:
       ``(37) The term `grassroots Federal election campaign 
     activity' means--
       ``(A) voter registration and get-out-the-vote activities;
       ``(B) campaign activities, including broadcasting, 
     newspaper, magazine, billboard, mass mail, and newsletter 
     communications, and similar kinds of communications or public 
     advertising that--
       ``(i) are generic campaign activities; or
       ``(ii) identify a Federal candidate regardless of whether a 
     State or local candidate is also identified;
       ``(C) the preparation and dissemination of campaign 
     materials that are part of a generic campaign activity or 
     that identify a Federal candidate, regardless of whether a 
     State or local candidate is also identified;
       ``(D) development and maintenance of voter files;
       ``(E) any other activity affecting (in whole or in part) an 
     election for Federal office; and
       ``(F) activities conducted for the purpose of raising funds 
     to pay for activities described in subparagraphs (A), (B), 
     (C), (D), and (E),
     to the extent that any such activity is allocable to Federal 
     elections under a regulation issued by the Commission.''.

     SEC. 312. PROVISIONS RELATING TO NATIONAL, STATE, AND LOCAL 
                   PARTY COMMITTEES.

       (a) Expenditures by State Committees in Connection With 
     Presidential Campaigns.--Section 315(d) of FECA (2 U.S.C. 
     441a(d)) is amended by inserting at the end the following new 
     paragraph:
       ``(4) A State committee of a political party, including 
     subordinate committees of that State committee, shall not 
     make expenditures in connection with the general election 
     campaign of a candidate for President of the United States 
     who is affiliated with such party which, in the aggregate, 
     exceed an amount equal to 4 cents multiplied by the voting 
     age population of the State, as certified under subsection 
     (e). This paragraph shall not authorize a committee to make 
     expenditures for audio broadcasts (including television 
     broadcasts) in excess of the amount which could have been 
     made without regard to this paragraph.''.
       (b) Contribution and Expenditure Exceptions.--(1) Section 
     301(8)(B) of FECA (2 U.S.C. 431(8)(B)) is amended--
       (A) in clause (xi), by striking ``direct mail'' and 
     inserting ``mail''; and
       (B) by repealing clauses (x) and (xii).
     [[Page S359]]   (2) Section 301(9)(B) of FECA (2 U.S.C. 
     431(9)(B)) is amended by repealing clauses (viii) and (ix).
       (c) Soft Money of Committees of Political Parties.--(1) 
     Title III of FECA, as amended by section 102(a), is amended 
     by inserting after section 324 the following new section:


                      ``POLITICAL PARTY COMMITTEES

       ``Sec. 325. (a) Any amount solicited, received, or expended 
     directly or indirectly by a national, State, district, or 
     local committee of a political party (including any 
     subordinate committee) with respect to an activity which, in 
     whole or in part, is in connection with an election to 
     Federal office shall be subject in its entirety to the 
     limitations, prohibitions, and reporting requirements of this 
     Act.
       ``(b) For purposes of subsection (a):
       ``(1) Any activity which is solely for the purpose of 
     influencing an election for Federal office is in connection 
     with an election for Federal office.
       ``(2) A grassroots Federal election campaign activity shall 
     be treated as in connection with an election for Federal 
     office.
       ``(3) The following shall not be treated as in connection 
     with a Federal election:
       ``(A) Any amount described in section 301(8)(B)(viii).
       ``(B) Any amount contributed to a candidate for other than 
     Federal office.
       ``(C) Any amount received or expended in connection with a 
     State or local political convention.
       ``(D) Campaign activities, including broadcasting, 
     newspaper, magazine, billboard, mass mail, and newsletter 
     communications, and similar kinds of communications or public 
     advertising that are exclusively on behalf of State or local 
     candidates and are conducted in a year that is not a 
     Presidential election year.
       ``(E) Research pertaining solely to State and local 
     candidates and issues.
       ``(F) Any other activity which is solely for the purpose of 
     influencing, and which solely affects, an election for non-
     Federal office.
       ``(4) For purposes of this subsection, the term `Federal 
     election period' means the period--
       ``(A) beginning on January 1 of any even-numbered calendar 
     year; and
       ``(B) ending on the date during such year on which 
     regularly scheduled general elections for Federal office 
     occur.

     In the case of a special election, the Federal election 
     period shall include at least the 60-day period ending on the 
     date of the election.
       ``(c) Solicitation by Committees.--A Congressional or 
     Senatorial Campaign Committee of a political party may not 
     solicit or accept contributions not subject to the 
     limitations, prohibitions, and reporting requirements of this 
     Act.
       ``(d) Amounts Received From State and Local Candidate 
     Committees.--(1) For purposes of subsection (a), any amount 
     received by a national, State, district, or local committee 
     of a political party (including any subordinate committee) 
     from a State or local candidate committee shall be treated as 
     meeting the requirements of subsection (a) and section 304(d) 
     if--
       ``(A) such amount is derived from funds which meet the 
     requirements of this Act with respect to any limitation or 
     prohibition as to source or dollar amount, and
       ``(B) the State or local candidate committee--
       ``(i) maintains, in the account from which payment is made, 
     records of the sources and amounts of funds for purposes of 
     determining whether such requirements are met, and
       ``(ii) certifies to the other committee that such 
     requirements were met.
       ``(2) Notwithstanding paragraph (1), any committee 
     receiving any contribution described in paragraph (1) from a 
     State or local candidate committee shall be required to meet 
     the reporting requirements of this Act with respect to 
     receipt of the contribution from such candidate committee.
       ``(3) For purposes of this subsection, a State or local 
     candidate committee is a committee established, financed, 
     maintained, or controlled by a candidate for other than 
     Federal office.''.
       (2) Section 315(d) of FECA (2 U.S.C. 441a(d)), as amended 
     by subsection (a), is amended by adding at the end the 
     following new paragraph:
       ``(5)(A) The national committee of a political party, the 
     congressional campaign committees of a political party, and a 
     State or local committee of a political party, including a 
     subordinate committee of any of the preceding committees, 
     shall not make expenditures during any calendar year for 
     activities described in section 325(b)(2) with respect to 
     such State which, in the aggregate, exceed an amount equal to 
     30 cents multiplied by the voting age population of the State 
     (as certified under subsection (e)).
       ``(B) Expenditures authorized under this paragraph shall be 
     in addition to other expenditures allowed under this 
     subsection, except that this paragraph shall not authorize a 
     committee to make expenditures to which paragraph (3) or (4) 
     applies in excess of the limit applicable to such 
     expenditures under paragraph (3) or (4).
       ``(C) No adjustment to the limitation under this paragraph 
     shall be made under subsection (c) before 1992 and the base 
     period for purposes of any such adjustment shall be 1990.
       ``(D) For purposes of this paragraph--
       ``(i) a local committee of a political party shall only 
     include a committee that is a political committee (as defined 
     in section 301(4)); and
       ``(ii) a State committee shall not be required to record or 
     report under this Act the expenditures of any other committee 
     which are made independently from the State committee.''.
       (3) Section 301(4) of FECA (2 U.S.C. 431(4)) is amended by 
     adding at the end the following new sentence:
     ``For purposes of subparagraph (C), any payments for get-out-
     the-vote activities on behalf of candidates for office other 
     than Federal office shall be treated as payments exempted 
     from the definition of expenditure under paragraph (9) of 
     this section.''.
       (d) Generic Activities.--Section 301 of FECA (2 U.S.C. 
     431), as amended by section 311(c), is amended by adding at 
     the end the following new paragraph:
       ``(38) The term `generic campaign activity' means a 
     campaign activity the purpose or effect of which is to 
     promote a political party rather than any particular Federal 
     or non-Federal candidate.''.

     SEC. 313. RESTRICTIONS ON FUNDRAISING BY CANDIDATES AND 
                   OFFICEHOLDERS.

       (a) State Fundraising Activities.--Section 315 of FECA (2 
     U.S.C. 441a), as amended by section 301, is amended by adding 
     at the end the following new subsection:
       ``(k) Limitations on Fundraising Activities of Federal 
     Candidates and Officeholders and Certain Political 
     Committees.--(1) For purposes of this Act, a candidate for 
     Federal office (or an individual holding Federal office) may 
     not solicit funds to, or receive funds on behalf of, any 
     Federal or non-Federal candidate or political committee--
       ``(A) which are to be expended in connection with any 
     election for Federal office unless such funds are subject to 
     the limitations, prohibitions, and requirements of this Act; 
     or
       ``(B) which are to be expended in connection with any 
     election for other than Federal office unless such funds are 
     not in excess of amounts permitted with respect to Federal 
     candidates and political committees under this Act, and are 
     not from sources prohibited by this Act with respect to 
     elections to Federal office.
       ``(2)(A) The aggregate amount which a person described in 
     subparagraph (B) may solicit from a multicandidate political 
     committee for State committees described in subsection 
     (a)(1)(C) (including subordinate committees) for any calendar 
     year shall not exceed the dollar amount in effect under 
     subsection (a)(2)(B) for the calendar year.
       ``(B) A person is described in this subparagraph if such 
     person is a candidate for Federal office, an individual 
     holding Federal office, or any national, State, district, or 
     local committee of a political party (including subordinate 
     committees).
       ``(3) The appearance or participation by a candidate or 
     individual in any activity (including fundraising) conducted 
     by a committee of a political party or a candidate for other 
     than Federal office shall not be treated as a solicitation 
     for purposes of paragraph (1) if--
       ``(A) such appearance or participation is otherwise 
     permitted by law; and
       ``(B) such candidate or individual does not solicit or 
     receive, or make expenditures from, any funds resulting from 
     such activity.
       ``(4) Paragraph (1) shall not apply to the solicitation or 
     receipt of funds, or disbursements, by an individual who is a 
     candidate for other than Federal office if such activity is 
     permitted under State law.
       ``(5) For purposes of this subsection, an individual shall 
     be treated as holding Federal office if such individual--
       ``(A) holds a Federal office; or
       ``(B) holds a position described in level I of the 
     Executive Schedule under section 5312 of title 5, United 
     States Code.''.
       (b) Tax-Exempt Organizations.--Section 315 of FECA (2 
     U.S.C. 441a), as amended by subsection (a), is amended by 
     adding at the end the following new subsection:
       ``(l) Tax-Exempt Organizations.--(1) If during any period 
     an individual is a candidate for, or holds, Federal office, 
     such individual may not during such period solicit 
     contributions to, or on behalf of, any organization which is 
     described in section 501(c) of the Internal Revenue Code of 
     1986 if a significant portion of the activities of such 
     organization include voter registration or get-out-the-vote 
     campaigns.
       ``(2) For purposes of this subsection, an individual shall 
     be treated as holding Federal office if such individual--
       ``(A) holds a Federal office; or
       ``(B) holds a position described in level I of the 
     Executive Schedule under section 5312 of title 5, United 
     States Code.''.

     SEC. 314. REPORTING REQUIREMENTS.

       (a) Reporting Requirements.--Section 304 of FECA (2 U.S.C. 
     434) is amended by adding at the end the following new 
     subsection:
       ``(d) Political Committees.--(1) The national committee of 
     a political party and any congressional campaign committee, 
     and any subordinate committee of either, shall report all 
     receipts and disbursements during the reporting period, 
     whether or not in connection with an election for Federal 
     office.
       ``(2) A political committee (not described in paragraph 
     (1)) to which section 325 applies shall report all receipts 
     and disbursements in connection with a Federal election (as 
     determined under section 325) and all payments for combined 
     activities under 326;
     [[Page S360]]   ``(3) Any political committee to which 
     paragraph (1) or (2) does not apply shall report any receipts 
     or disbursements which are used in connection with a Federal 
     election or for combined activities.
       ``(4) If any receipt or disbursement to which this 
     subsection applies exceeds $50, the political committee shall 
     include identification of the person from whom, or to whom, 
     such receipt or disbursement was made.
       ``(5) Reports required to be filed by this subsection shall 
     be filed for the same time periods required for political 
     committees under subsection (a).''.
       (b) Report of Exempt Contributions.--Section 301(8) of the 
     Federal Election Campaign Act of 1971 (2 U.S.C. 431(8)) is 
     amended by inserting at the end the following:
       ``(C) The exclusions provided in clauses (v) and (viii) of 
     subparagraph (B) shall not apply for purposes of any 
     requirement to report contributions under this Act, and all 
     such contributions in excess of $50 shall be reported.''.
        (c) Reporting of Exempt Expenditures.--Section 301(9) of 
     the Federal Election Campaign Act of 1971 (2 U.S.C. 431(9)) 
     is amended by inserting at the end the following:
       ``(C) The exclusions provided in clause (iv) of 
     subparagraph (B) shall not apply for purposes of any 
     requirement to report expenditures under this Act, and all 
     such expenditures in excess of $50 shall be reported.''.
       (d) Contributions and Expenditures of Political 
     Committees.--Section 301(4) of FECA (2 U.S.C. 431(4)) is 
     amended by adding at the end the following: ``For purposes of 
     this paragraph, the receipt of contributions or the making 
     of, or obligating to make, expenditures shall be determined 
     by the Commission on the basis of facts and circumstances, in 
     whatever combination, demonstrating a purpose of influencing 
     any election for Federal office, including, but not limited 
     to, the representations made by any person soliciting funds 
     about their intended uses; the identification by name of 
     individuals who are candidates for Federal office or of any 
     political party, in general public political advertising; and 
     the proximity to any primary, runoff, or general election of 
     general public political advertising designed or reasonably 
     calculated to influence voter choice in that election.''.
       (e) Reports by State Committees.--Section 304 of FECA (2 
     U.S.C. 434), as amended by subsection (a), is amended by 
     adding at the end the following new subsection:
       ``(e) Filing of State Reports.--In lieu of any report 
     required to be filed by this Act, the Commission may allow a 
     State committee of a political party to file with the 
     Commission a report required to be filed under State law if 
     the Commission determines such reports contain substantially 
     the same information.''.

     SEC. 315. LIMITATIONS ON COMBINED POLITICAL ACTIVITIES OF 
                   POLITICAL COMMITTEES OF POLITICAL PARTIES.

       Title III of FECA (2 U.S.C. 431 et seq.), as amended by 
     section 312(c), is amended by adding at the end the following 
     new section:


``limitations on combined political activities of political committees 
                          of political parties

       ``Sec. 326.  (a)(1) Political party committees that make 
     payments for combined political activity shall allocate a 
     portion of such payments to Federal accounts containing 
     contributions subject to the limitations and prohibitions of 
     this Act, as provided for in this section.
       ``(2) National party committees shall allocate as follows:
       ``(A) At least 65 percent of the costs of voter 
     registration drives, development and maintenance of voter 
     files, get-out-the-vote activities, and administrative 
     expenses shall be paid from a Federal account in Presidential 
     election years. At least 60 percent of the costs of voter 
     drives and administrative expenses shall be paid from a 
     Federal account in all other years.
       ``(B) The costs of fundraising activities which shall be 
     paid from a Federal account shall equal the ratio of funds 
     received into the Federal account to the total receipts from 
     each fundraising program or event.
       ``(C) The costs of activities subject to limitation under 
     section 315(d) which involve both Federal and non-Federal 
     candidates, shall be paid from a Federal account according to 
     the time or space devoted to Federal candidates.
       ``(3) State and local party committees shall allocate as 
     follows:
       ``(A) At least 50 percent of the costs of voter 
     registration drives, development and maintenance of voter 
     files, get-out-the-vote activities, and administrative 
     expenses shall be paid from a Federal account in Presidential 
     election years. In all other years, the costs of voter drives 
     and administrative expenses which shall be paid from a 
     Federal account shall be determined by the ballot composition 
     for the election cycle, but, in no event, shall the amount 
     paid from the Federal account be less than 33 percent.
       ``(B) The costs of fundraising activities which shall be 
     paid from a Federal account shall equal the ratio of funds 
     received into the Federal account to the total receipts from 
     each fundraising program or event.
       ``(C) The costs of activities exempt from the definition of 
     `contribution' or `expenditure' under section 301, when 
     conducted in conjunction with both Federal and non-Federal 
     elections, shall be paid from a Federal account according to 
     the time or space devoted to Federal candidates or elections.
       ``(D) The costs of activities subject to limitation under 
     section 315 (a) or (d) which involve both Federal and non-
     Federal candidates, shall be paid from a Federal account 
     according to the time or space devoted to Federal candidates.
       ``(b) For purposes of this subsection--
       ``(1) the term `combined political activity' means any 
     activity that is both--
       ``(A) in connection with an election for Federal office; 
     and
       ``(B) in connection with an election for any non-Federal 
     office.
       ``(2) Any activity which is undertaken solely in connection 
     with a Federal election is not combined political activity.
       ``(3) Except as provided in paragraph (4), combined 
     political activity shall include--
       ``(A) State and local party activities exempt from the 
     definitions of `contribution' and `expenditure' under section 
     301 and activities subject to limitation under section 315 
     which involve both Federal and non-Federal candidates, except 
     that payments for activities subject to limitation under 
     section 315 are not subject to the limitation of subsection 
     (a)(1);
       ``(B) voter drives including voter registration, voter 
     identification and get-out-the-vote drives or any other 
     activities that urge the general public to register, vote for 
     or support non-Federal candidates, candidates of a particular 
     party, or candidates associated with a particular issue, 
     without mentioning a specific Federal candidate;
       ``(C) fundraising activities where both Federal and non-
     Federal funds are collected through such activities; and
       ``(D) administrative expenses not directly attributable to 
     a clearly identified Federal or non-Federal candidate, except 
     that payments for administrative expenses are not subject to 
     the limitation of subsection (a)(1).
       ``(4) The following payments are exempt from the definition 
     of combined political activity:
       ``(A) Any amount described in section 301(8)(B)(viii).
       ``(B) Any payments for legal or accounting services, if 
     such services are for the purpose of ensuring compliance with 
     this Act.
       ``(5) The term `ballot composition' means the number of 
     Federal offices on the ballot compared to the total number of 
     offices on the ballot during the next election cycle for the 
     State. In calculating the number of offices for purposes of 
     this paragraph, the following offices shall be counted, if on 
     the ballot during the next election cycle: President, United 
     States Senator, United States Representative, Governor, State 
     Senator, and State Representative. No more than three 
     additional statewide partisan candidates shall be counted, if 
     on the ballot during the next election cycle. No more than 
     three additional local partisan candidates shall be counted, 
     if such offices are on the ballot in the majority of the 
     State's counties during the next election cycle.
       ``(6) The term `time or space devoted to Federal 
     candidates' means with respect to a particular communication, 
     the portion of the communication devoted to Federal 
     candidates compared to the entire communication, except that 
     no less than one-third of any communication shall be 
     considered devoted to a Federal candidate.''.
                        TITLE IV--CONTRIBUTIONS

     SEC. 401. REDUCTION OF CONTRIBUTION LIMITS.

       Section 315(a)(1)(A) of FECA (2 U.S.C. 441a(a)(1)(A)) is 
     amended by striking ``$1,000'' and inserting ``$100''.
     SEC. 402. CONTRIBUTIONS THROUGH INTERMEDIARIES AND CONDUITS; 
                   PROHIBITION OF CERTAIN CONTRIBUTIONS BY 
                   LOBBYISTS.

       (a) In General.--Section 315(a)(8) of FECA (2 U.S.C. 
     441a(a)(8)) is amended to read as follows:
       ``(8) For the purposes of this subsection:
       ``(A) Contributions made by a person, either directly or 
     indirectly, to or on behalf of a particular candidate, 
     including contributions that are in any way earmarked or 
     otherwise directed through an intermediary or conduit to a 
     candidate, shall be treated as contributions from the person 
     to the candidate.
       ``(B) Contributions made directly or indirectly by a person 
     to or on behalf of a particular candidate through an 
     intermediary or conduit, including contributions made or 
     arranged to be made by an intermediary or conduit, shall be 
     treated as contributions from the intermediary or conduit to 
     the candidate if--
       ``(i) the contributions made through the intermediary or 
     conduit are in the form of a check or other negotiable 
     instrument made payable to the intermediary or conduit rather 
     than the intended recipient; or
       ``(ii) the intermediary or conduit is--
       ``(I) a political committee;
       ``(II) an officer, employee, or agent of such a political 
     committee;
       ``(III) a political party;
       ``(IV) a partnership or sole proprietorship;
       ``(V) a lobbyist; or
       ``(VI) an organization prohibited from making contributions 
     under section 316, or an officer, employee, or agent of such 
     an organization acting on the organization's behalf.
       ``(C)(i) The term `intermediary or conduit' does not 
     include--
       ``(I) a candidate or representative of a candidate 
     receiving contributions to the candidate's principal campaign 
     committee or authorized committee;
     [[Page S361]]   ``(II) a professional fundraiser compensated 
     for fundraising services at the usual and customary rate;
       ``(III) a volunteer hosting a fundraising event at the 
     volunteer's home, in accordance with section 301(8)(B); or
       ``(IV) an individual who transmits a contribution from the 
     individual's spouse.
       ``(ii) The term `representative' means an individual who is 
     expressly authorized by the candidate to engage in 
     fundraising, and who occupies a significant position within 
     the candidate's campaign organization, provided that the 
     individual is not described in subparagraph (B)(ii).
       ``(iii) The term `contributions made or arranged to be 
     made' includes--
       ``(I) contributions delivered to a particular candidate or 
     the candidate's authorized committee or agent; and
       ``(II) contributions directly or indirectly arranged to be 
     made to a particular candidate or the candidate's authorized 
     committee or agent, in a manner that identifies directly or 
     indirectly to the candidate or authorized committee or agent 
     the person who arranged the making of the contributions or 
     the person on whose behalf such person was acting.
       ``(iv) The term `acting on the organization's behalf' 
     includes the following activities by an officer, employee or 
     agent of a person described in subparagraph (B)(ii)(IV):
       ``(I) Soliciting or directly or indirectly arranging the 
     making of a contribution to a particular candidate in the 
     name of, or by using the name of, such a person.
       ``(II) Soliciting or directly or indirectly arranging the 
     making of a contribution to a particular candidate using 
     other than incidental resources of such a person.
       ``(III) Soliciting contributions for a particular candidate 
     by substantially directing the solicitations to other 
     officers, employees, or agents of such a person.
       ``(D) Nothing in this paragraph shall prohibit--
       ``(i) bona fide joint fundraising efforts conducted solely 
     for the purpose of sponsorship of a fundraising reception, 
     dinner, or other similar event, in accordance with rules 
     prescribed by the Commission, by--
       ``(I) 2 or more candidates;
       ``(II) 2 or more national, State, or local committees of a 
     political party within the meaning of section 301(4) acting 
     on their own behalf; or
       ``(III) a special committee formed by 2 or more candidates, 
     or a candidate and a national, State, or local committee of a 
     political party acting on their own behalf; or
       ``(ii) fundraising efforts for the benefit of a candidate 
     that are conducted by another candidate.
       ``(iii) bona fide fundraising efforts conducted by and 
     solely on behalf of an individual for the purpose of 
     sponsorship of a fundraising reception, dinner, or other 
     similar event, but only if all contributions are made 
     directly to a candidate or a representative of a candidate.

     When a contribution is made to a candidate through an 
     intermediary or conduit, the intermediary or conduit shall 
     report the original source and the intended recipient of the 
     contribution to the Commission and to the intended 
     recipient.''.
       (b) Prohibition of Certain Contributions by Lobbyists.--
     Section 315 of FECA (2 U.S.C. 441a), as amended by section 
     313(b), is amended by adding at the end the following new 
     subsection:
       ``(m)(1) A lobbyist shall not make a contribution to or 
     solicit a contribution on behalf of a legislative branch 
     official before whom the lobbyist has appeared or with whom 
     the lobbyist has made a lobbying contact, in the lobbyist's 
     representational capacity, during the 12-month period 
     preceding the date on which the contribution is made or 
     solicited.
       ``(2) A lobbyist who makes a contribution to or solicits a 
     contribution on behalf of a legislative branch official shall 
     not appear before or make a lobbying contact with that 
     legislative branch official, in the lobbyist's 
     representational capacity, during the 12-month period after 
     the date on which the contribution is made or solicited.''.
       (c) Definitions.--Section 301(a) of FECA (2 U.S.C. 431(a)), 
     as amended by section 312(d), is amended by adding at the end 
     the following new paragraphs:
       ``(39) The term `lobbyist' means--
       ``(A) a person required to register under section 308 of 
     the Federal Regulation of Lobbying Act (2 U.S.C. 267) or the 
     Foreign Agents Registration Act of 1938 (22 U.S.C. 611 et 
     seq.);
       ``(B) a person required under any other law to register as 
     a lobbyist (as the term `lobbyist' may be defined in any such 
     law); and
       ``(C) any other person that receives compensation in return 
     for making a lobbying contact with Congress on any 
     legislative matter, including a member, officer, or employee 
     of any organization that receives such compensation.
       ``(40)(A) The term `lobbying contact'--
       ``(i) means an oral or written communication with a 
     legislative branch official made by a lobbyist on behalf of 
     another person with regard to--
       ``(I) the formulation, modification, or adoption of Federal 
     legislation (including a legislative proposal);
       ``(II) the formulation, modification, or adoption of a 
     Federal rule, regulation, Executive order, or any other 
     program, policy or position of the United States Government; 
     or
       ``(III) the administration or execution of a Federal 
     program or policy (including the negotiation, award, or 
     administration of a Federal contract, grant, loan, permit, or 
     license) but--
       ``(ii) does not include a communication that is--
       ``(I) made by a public official acting in an official 
     capacity;
       ``(II) made by a representative of a media organization who 
     is primarily engaged in gathering and disseminating news and 
     information to the public;
       ``(III) made in a speech, article, publication, or other 
     material that is widely distributed to the public or through 
     the media;
       ``(IV) a request for an appointment, a request for the 
     status of a Federal action, or another similar ministerial 
     contact, if there is no attempt to influence a legislative 
     branch official at the time of the contact;
       ``(V) made in the course of participation in an advisory 
     committee subject to the Federal Advisory Committee Act (5 
     U.S.C. App.);
       ``(VI) testimony given before a committee, subcommittee, or 
     office of Congress, or submitted for inclusion in the public 
     record of a hearing conducted by the committee, subcommittee, 
     or office;
       ``(VII) information provided in writing in response to a 
     specific written request from a legislative branch official;
       ``(VIII) required by subpoena, civil investigative demand, 
     or otherwise compelled by statute, regulation, or other 
     action of Congress or a Federal agency;
       ``(IX) made to an agency official with regard to a judicial 
     proceeding, criminal or civil law enforcement inquiry, 
     investigation, or proceeding, or filing required by law;
       ``(X) made in compliance with written agency procedures 
     regarding an adjudication conducted by the agency under 
     section 554 of title 5, United States Code, or substantially 
     similar provisions;
       ``(XI) a written comment filed in a public docket and other 
     communication that is made on the record in a public 
     proceeding;
       ``(XII) a formal petition for agency action, made in 
     writing pursuant to established agency procedures; or
       ``(XIII) made on behalf of a person with regard to the 
     person's benefits, employment, other personal matters 
     involving only that person, or disclosures pursuant to a 
     whistleblower statute.
       ``(39) The term `legislative branch official' means--
       ``(A) a member of Congress;
       ``(B) an elected officer of Congress;
       ``(C) an employee of a member of the House of 
     Representatives, of a committee of the House of 
     Representatives, or on the leadership staff of the House of 
     Representatives, other than a clerical or secretarial 
     employee;
       ``(D) an employee of a Senator, of a Senate committee, or 
     on the leadership staff of the Senate, other than a clerical 
     or secretarial employee; and
       ``(E) an employee of a joint committee of the Congress, 
     other than a clerical or secretarial employee.''.

     SEC. 403. CONTRIBUTIONS BY DEPENDENTS NOT OF VOTING AGE.

       (a) In General.--Section 315 of FECA (2 U.S.C. 441a), as 
     amended by section 402(b), is amended by adding at the end 
     the following new subsection:
       ``(n) For purposes of this section, any contribution by an 
     individual who--
       ``(1) is a dependent of another individual; and
       ``(2) has not, as of the time of such contribution, 
     attained the legal age for voting for elections to Federal 
     office in the State in which such individual resides,
     shall be treated as having been made by such other 
     individual. If such individual is the dependent of another 
     individual and such other individual's spouse, the 
     contribution shall be allocated among such individuals in the 
     manner determined by them.''.

     SEC. 404. CONTRIBUTIONS TO CANDIDATES FROM STATE AND LOCAL 
                   COMMITTEES OF POLITICAL PARTIES TO BE 
                   AGGREGATED.

       (a) In General.--Section 315(a) of FECA (2 U.S.C. 441a(a)) 
     is amended by adding at the end the following new paragraph:
       ``(9) A candidate for Federal office may not accept, with 
     respect to an election, any contribution from a State or 
     local committee of a political party (including any 
     subordinate committee of such committee), if such 
     contribution, when added to the total of contributions 
     previously accepted from all such committees of that 
     political party, exceeds a limitation on contributions to a 
     candidate under this section.''.
       (b) Conforming Amendment.--Section 315(a)(5) of FECA (2 
     U.S.C. 441a(a)(5)) is amended--
       (1) by adding ``and'' at the end of subparagraph (A);
       (2) by striking subparagraph (B); and
       (3) by redesignating subparagraph (C) as subparagraph (B).
     SEC. 405. LIMITED EXCLUSION OF ADVANCES BY CAMPAIGN WORKERS 
                   FROM THE DEFINITION OF THE TERM 
                   ``CONTRIBUTION''.

       Section 301(8)(B) of FECA (2 U.S.C. 431(8)(B)) is amended--
       (1) in clause (xiii), by striking ``and'' after the 
     semicolon at the end;
       (2) in clause (xiv), by striking the period at the end and 
     inserting: ``; and''; and
       (3) by adding at the end the following new clause:
       ``(xv) any advance voluntarily made on behalf of an 
     authorized committee of a candidate by an individual in the 
     normal course 
     [[Page S362]] of such individual's responsibilities as a 
     volunteer for, or employee of, the committee, if the advance 
     is reimbursed by the committee within 10 days after the date 
     on which the advance is made, and the aggregate value of 
     advances on behalf of a committee does not exceed $500 with 
     respect to an election.''.
                    TITLE V--REPORTING REQUIREMENTS

     SEC. 501. CHANGE IN CERTAIN REPORTING FROM A CALENDAR YEAR 
                   BASIS TO AN ELECTION CYCLE BASIS.

       Paragraphs (2) through (7) of section 304(b) of FECA (2 
     U.S.C. 434(b)(2)-(7)) are amended by inserting after 
     ``calendar year'' each place it appears the following: 
     ``(election cycle, in the case of an authorized committee of 
     a candidate for Federal office)''.

     SEC. 502. PERSONAL AND CONSULTING SERVICES.

       Section 304(b)(5)(A) of FECA (2 U.S.C. 434(b)(5)(A)) is 
     amended by adding before the semicolon at the end the 
     following: ``, except that if a person to whom an expenditure 
     is made is merely providing personal or consulting services 
     and is in turn making expenditures to other persons (not 
     including employees) who provide goods or services to the 
     candidate or his or her authorized committees, the name and 
     address of such other person, together with the date, amount 
     and purpose of such expenditure shall also be disclosed''.

     SEC. 503. REDUCTION IN THRESHOLD FOR REPORTING OF CERTAIN 
                   INFORMATION BY PERSONS OTHER THAN POLITICAL 
                   COMMITTEES.

       Section 304(b)(3)(A) of FECA (2 U.S.C. 434(b)(3)(A)) is 
     amended by striking ``$200'' and inserting ``$50''.

     SEC. 504. COMPUTERIZED INDICES OF CONTRIBUTIONS.

       Section 311(a) of FECA (2 U.S.C. 438(a)) is amended--
       (1) by striking ``and'' at the end of paragraph (9);
       (2) by striking the period at the end of paragraph (10) and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(11) maintain computerized indices of contributions of 
     $50 or more.''.
                     TITLE VI--PRESIDENTIAL DEBATES

     SEC. 601. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) American voters are increasingly frustrated with the 
     lack of significant political debate in presidential 
     elections in the United States, and voting participation in 
     the United States is lower than in any other advanced 
     industrialized country, due in part to such frustration;
       (2) the right of eligible citizens to participate in the 
     election process as informed voters, provided in and derived 
     from the first and fourteenth amendments to the Constitution, 
     has consistently been protected and promoted by the Federal 
     Government;
       (3) United States presidential debates sponsored by 
     nonpartisan organizations offer important fora for free, 
     open, and substantive exchanges of candidates' ideas, and 
     should include all significant candidates, including non-
     major and independent candidates; and
       (4) throughout United States history, significant minor 
     party and independent candidates have often been a source for 
     new ideas and new programs, offering American voters an 
     opportunity to engage in a diverse and open political 
     discourse on critical issues of the day.
       (b) Purposes.--The purposes of this title are to make 
     participation in presidential debates a requirement for 
     receipt of Federal general election campaign funds and to 
     allow all candidates who meet the criteria outlined in this 
     Act to participate in such debates.

     SEC. 602. PRESIDENTIAL AND VICE PRESIDENTIAL CANDIDATE 
                   DEBATES.

       Section 9003 of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following new subsection:
       ``(e) Presidential and Vice Presidential Candidate 
     Debates.--
       ``(1) Agreement to debate.--In addition to meeting the 
     requirements of subsection (a), (b), or (c), in order to be 
     eligible to receive any payments under section 9006, the 
     candidates for the office of President and Vice President in 
     a Presidential election shall agree in writing that--
       ``(A) the Presidential candidate, if eligible under 
     paragraph (3), will participate in not less than 3 
     Presidential candidate debates, which shall be held in the 
     September and October preceding a Presidential general 
     election at least 2 weeks before the election; and
       ``(B) the Vice Presidential candidate, if eligible under 
     paragraph (3), will participate in not less than 1 Vice 
     Presidential candidate debate, which shall be held prior to 
     the third Presidential candidate debate.
       ``(2) Debate requirements.--
       ``(A) In general.--Each debate under paragraph (1) shall--
       ``(i) be sponsored by a nonpartisan organization that has 
     no affiliation with any political party;
       ``(ii) include all candidates that meet the criteria stated 
     in paragraph (3) (except any such candidate who elects not to 
     receive payments under section 9006), who shall appear and 
     participate in a regulated exchange of questions and answers 
     on political, social, economic, and other issues; and
       ``(iii) be of at least 90 minutes' duration, of which not 
     less than 30 minutes are devoted to questions and answers or 
     discussion directly between the candidates, as determined by 
     the sponsor of the debate.
       ``(B) Announcement of time, location, and format.--The 
     sponsor of debates shall announce the time, location, and 
     format of the debate prior to the first Monday in September 
     before the Presidential election.
       ``(3) Criteria for participation in presidential candidate 
     debates.--A candidate is eligible to participate in a debate 
     under paragraph (1) if--
       ``(A) the candidate has qualified for the election ballot 
     as the candidate of a political party or as an independent 
     candidate to the office of President or Vice President in not 
     less than 40 States;
       ``(B) the candidate met the requirements of section 9033(b) 
     (3) and (4); or
       ``(C) the candidate raised not less than $500,000 on or 
     after January 1 of the calendar year immediately preceding 
     the calendar year of the Presidential election, as disclosed 
     in a report filed pursuant to section 304 of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 434).
       ``(4) Enforcement.--If the Commission, acting on its own or 
     at the complaint of any person, determines that a 
     Presidential or Vice Presidential candidate that has received 
     payments under section 9006 failed to participate in a debate 
     under paragraph (1) and was responsible at least in part for 
     that failure, the candidate shall pay to the Secretary an 
     amount equal to the amount of the payments made to the 
     candidate under section 9006.''.
                        TITLE VII--MISCELLANEOUS

     SEC. 701. PROHIBITION OF LEADERSHIP COMMITTEES.

       Section 302(e) of FECA (2 U.S.C. 432(e)) is amended--
       (1) by amending paragraph (3) to read as follows:
       ``(3)(A) No political committee that supports or has 
     supported more than one candidate may be designated as an 
     authorized committee, except that--
       ``(i) a candidate for the office of President nominated by 
     a political party may designate the national committee of 
     such political party as the candidate's principal campaign 
     committee, but only if that national committee maintains 
     separate books of account with respect to its functions as a 
     principal campaign committee; and
       ``(ii) a candidate may designate a political committee 
     established solely for the purpose of joint fundraising by 
     such candidates as an authorized committee.
       ``(B) As used in this paragraph, the term `support' does 
     not include a contribution by any authorized committee in 
     amounts of $1,000 or less to an authorized committee of any 
     other candidate.''; and
       (2) by adding at the end the following new paragraph:
       ``(6)(A) A candidate for Federal office or any individual 
     holding Federal office may not establish, maintain, or 
     control any political committee other than a principal 
     campaign committee of the candidate, authorized committee, 
     party committee, or other political committee designated in 
     accordance with paragraph (3). A candidate for more than one 
     Federal office may designate a separate principal campaign 
     committee for each Federal office.
       ``(B) For one year after the effective date of this 
     paragraph, any such political committee may continue to make 
     contributions. At the end of that period such political 
     committee shall disburse all funds by one or more of the 
     following means: making contributions to an entity qualified 
     under section 501(c)(3) of the Internal Revenue Code of 1986; 
     making a contribution to the treasury of the United States; 
     contributing to the national, State or local committees of a 
     political party; or making contributions not to exceed $250 
     to candidates for elective office.''.

     SEC. 702. POLLING DATA CONTRIBUTED TO CANDIDATES.

       Section 301(8) of FECA (2 U.S.C. 431(8)), as amended by 
     section 314(b), is amended by inserting at the end the 
     following new subparagraph:
       ``(D) A contribution of polling data to a candidate shall 
     be valued at the fair market value of the data on the date 
     the poll was completed, depreciated at a rate not more than 1 
     percent per day from such date to the date on which the 
     contribution was made.''.
              TITLE VIII--EFFECTIVE DATES; AUTHORIZATIONS

     SEC. 801. EFFECTIVE DATE.

       Except as otherwise provided in this Act, the amendments 
     made by, and the provisions of, this Act shall take effect on 
     the date of the enactment of this Act but shall not apply 
     with respect to activities in connection with any election 
     occurring before January 1, 1994.

     SEC. 802. SENSE OF THE SENATE REGARDING FUNDING OF SENATE 
                   ELECTION CAMPAIGN FUND.

       It is the sense of the Senate that--
       (1) the current Presidential checkoff should be increased 
     to $5.00, its designation changed to the ``Federal Election 
     Campaign Checkoff'', and individuals should be permitted to 
     contribute an additional $5.00 to the fund in additional 
     taxes if they so desire;
       (2) the Internal Revenue Service and the Federal Election 
     Commission should be required to develop and implement a plan 
     to publicize the fund and the checkoff to increase citizen 
     participation; and
       (3) funds to pay for the increase in the checkoff to $5.00 
     should come from the repeal of the tax deduction for business 
     lobbying activity.

     SEC. 803. SEVERABILITY.

       Except as provided in sections 101(c) and 121(b), if any 
     provision of this Act (including 
     [[Page S363]] any amendment made by this Act), or the 
     application of any such provision to any person or 
     circumstance, is held invalid, the validity of any other 
     provision of this Act, or the application of such provision 
     to other persons and circumstances, shall not be affected 
     thereby.

     SEC. 804. EXPEDITED REVIEW OF CONSTITUTIONAL ISSUES.

       (a) Direct Appeal to Supreme Court.--An appeal may be taken 
     directly to the Supreme Court of the United States from any 
     interlocutory order or final judgment, decree, or order 
     issued by any court ruling on the constitutionality of any 
     provision of this Act or amendment made by this Act.
       (b) Acceptance and Expedition.--The Supreme Court shall, if 
     it has not previously ruled on the question addressed in the 
     ruling below, accept jurisdiction over, advance on the 
     docket, and expedite the appeal to the greatest extent 
     possible.
                                                                    ____

     Summary of Senate Fair Elections and Grassroots Democracy Act


                          Contribution Limits

       Political Action committees--prohibited from making 
     contributions or expenditures to influence federal elections. 
     If ban declared unconstitutional: (1) lowers PAC contribution 
     limit to $250 per candidate, and (2) imposes aggregate PAC 
     receipts limit on Senate candidates.
       Individual contribution Limits--lowered to $100 for 
     donations to Senate candidates, per election cycle.


                 Voluntary Campaign Expenditure Limits

       General election period: Formula-based, from $775,000 
     (small states) to $4.5 million (large states).
       Primary election period: 67% of general election limit 
     ($2.5 million max.).
       Runoff election: 20% of general election limit.
       Candidate's personal funds limit: $25,000.
       Limits increased if opponent raises or spend more than 200% 
     of general election limit.


    Benefits for Candidates Abiding by Voluntary Expenditure Limits

       Public funding--Primary (and Runoff): match for individual 
     in-State donations of $100 or less, up to 50% of spending 
     limit.
       General: Major party candidates given subsidy equal to 
     spending limit.
       Minor party candidates: provided match for individual in-
     State donations of $100 or less, up to 50% of spending limit.
       Contingent funding: payments to particapating candidates to 
     compensate for and in amount of (1) opponents' expenditures 
     in excess of spending limit, and (2) independent expenditures 
     made against participant or for opponent.
       Free Broadcast Time--broadcasters must provide 90 min. of 
     prime access time to eligible candidates within broadcast 
     area, in segments of at least 1 min., with no more than 15 
     min. within a 24-hr. period and no more than 25% of a 
     broadcast consisting of other than candidate remarks.
       Reduced Postal Rate--1 mailing per eligible voter during 
     general election period, at lowest non-profit third-class 
     rate.
       Eligibility threshold for benefits--candidate must raise 5% 
     of general election limit in amounts of $100 or less (at 
     least 60% within-state).
       Funding source--appropriated funds, financed by increase in 
     dollar checkoff to $5 and elimination of tax deduction for 
     lobbying.


                               Soft Money

       Prohibits all ``soft'' money in federal elections; requires 
     that all federal election expenditures be from sources 
     allowed by federal law.
       Establishes Grassroots Federal Election Fund to be 
     maintained by state political parties for grassroots 
     political activities that benefit federal candidates 
     exclusively. Contributions to these funds must be raised and 
     disclosed under federal limits, and may not exceed $5,000.


                                Bundling

       Prohibits bundling by all PACs; parties; unions, 
     corporations, trade associations, and national banks; 
     partnerships or sole proprietorships; and lobbyists.
       Prohibits lobbyists from contributing funds to, or 
     soliciting funds for Members of Congress if they have lobbied 
     those Members or their staff within the last twelve months.


                        Independent Expenditures

       Tightens definition to ensure proper distance from 
     candidates; augments disclosure and disclaimer requirements.
  Conference Report on Gifts Portion of Lobbying Disclosure Bill (as 
                    Compared to Senate-passed Bill)

       The conference report on gifts to Members, officers and 
     employees of Congress is the same as the Senate-passed bill 
     on gifts, S. 1935, with a few exceptions as shown in italic. 
     As with the Senate-passed bill, gifts are prohibited except 
     as described below:


                             FROM LOBBYISTS

       Food/refreshments of nominal value not part of a meal.
       Campaign contributions/attendance at fundraising events 
     sponsored by political organizations.
       Informational materials like books, videotapes.
       Gifts from close personal friends and family members.
       Pension/other employment benefits earned while serving as 
     an employee of lobbying firm.


                           FROM NONLOBBYISTS

       Food/refreshments/entertainment in Member's home state. 
     They remain subject to current rules until and unless changed 
     by Rules Committee.
       Food/refreshments of minimal value (less than $20).
       Personal and family relationship. (Changed from personal 
     friendship to personal relationship to cover situations where 
     the gift is unrelated to Member's official position.)
       Campaign contribution/attendance at fundraising events 
     sponsored by political organizations.
       Attendance/food/refreshments/entertainment at widely 
     attended events where Member is either speaking or event is 
     related to Member's official duties or representational 
     function.
       Anything for which Member pays market value or doesn't use 
     and promptly returns.
       Contributions to a legal expense fund (pursuant to limits 
     already set by resolution).
       Gifts from other Members or employees of Senate/House.
       Anything of value resulting from outside business 
     activities not connected to duties of Member.
       Anything customarily given by a prospective employer.
       Pension and other benefits.
       Informational materials like books, videotapes.
       Awards/prizes given to the public.
       Honorary degrees (including associated travel) and other 
     bona fide nonmonetary awards presented in recognition of 
     public service.
       Homestate products of minimal value for display or 
     distribution.
       Items of little intrinsic value, such as baseball caps, 
     greeting cards.
       Training, if the training is in the interest of the Senate.
       Bequests, inheritances.
       Any item authorized by Foreign Gifts Act.
       Anything paid by state or local or federal government.
       Personal hospitality.
       Items available to all federal employees/comparable class 
     of individuals.
       Plaque/trophy of modest value.
       Anything for which, in unusual case, a waiver is granted by 
     Ethics Committee.
       As with current rule, gifts based on personal relationship 
     over $250 must be approved by Ethics Committee and must be 
     disclosed on financial disclosure form.


                                 TRAVEL

       Travel to a meeting, speaking engagement, factfinding trip 
     or similar event in connection with the duties of the Member 
     is permitted. Gifts of travel related to charity events or 
     which is substantially recreational is prohibited. Disclosure 
     of expenses for trips where reimbursement is permitted must 
     be filed with Secretary of Senate within 30 days of travel.


                                SPOUSES

       Current rules and Senate-passed bill apply to spouses and 
     dependents as well as Members. Conference report doesn't 
     restrict gifts to spouses and dependents unless the Member 
     has reason to believe gift was given because of the Members's 
     official position and where gift is given with the knowledge 
     and acquiescence of the Member. Such gifts are then treated 
     as gifts to the Member.
       Also conference report explicitly allows a spouse or 
     dependent to travel with a Member at the expense of the 
     private party if other spouses/dependents are expected to do 
     so or there is a representational purpose.
       Spouses/dependents are also allowed to accompany Members to 
     widely attended events.
                                                                    ____



                                                 Common Cause,

                                  Washington, DC, January 4, 1995.
       Dear Senator: Enclosed for your information is a copy of a 
     letter delivered today to House Speaker Newt Gingrich from 
     Common Cause.
       In a 1990 speech, Speaker Gingrich stated: ``The first duty 
     of our generation is to reestablish integrity and a bond of 
     honesty in the political process'' and called for the passage 
     of ``reform laws to clean up the election and lobbying 
     system''.
       ``We must insure that citizen politics defeats money 
     politics.'' Speaker Gingrich said.
       The Common Cause letter urges Speaker Gingrich to make good 
     on his words and lead an effort to reform the corrupt 
     influence money system in Congress.
           Sincerely,
                                                  Fred Wertheimer,
     President.
                                                                    ____

                                                 Common Cause,

                                  Washington, DC, January 4, 1995.
     House Speaker Newt Gingrich,
     U.S. Capitol H--230,
     Washington, DC,
       Dear Speaker Gingrich: On August 22, 1990, in a speech to 
     The Heritage Foundation, you said:

       ``The first duty of our generation is to reestablish 
     integrity and a bond of honesty in the political process. We 
     should punish wrongdoers in politics and government and pass 
     reform laws to clean up the election and lobbying systems. We 
     must insure that citizen politics defeats money politics. 
     This is the only way our system can regain its integrity. 
     Every action should be measured against that goal, and every 
     American 
     [[Page S364]] should be challenged to register and vote to 
     achieve that goal.''

       We agree,
       As you become Speaker of the House of Representatives 
     today, you have a unique moment in history in which to make 
     good on your words. You have a unique opportunity to lead an 
     effort to reform the corrupt system in Congress which you 
     have criticized throughout your House career.
       As you also stated in your speech before The Heritage 
     Foundation:

       ``Congress is a broken system. It is increasingly a system 
     of corruption in which money politics is defeating and 
     driving out citizen politics. * * * [H]onesty and integrity 
     are at the heart of a free society. Corruption, special 
     favors, dishonesty and deception corrode the very process of 
     freedom and alienate citizens from their country.''

       I am enclosing other examples of statements you have made 
     over the years about the importance of integrity in 
     government and the need for political reform.
       You and the newly elected Republicans in the House have 
     told the country that you are committed to changing the way 
     Washington works.
       But citizens throughout this nation clearly understand that 
     there is no way to change the way Washington works without 
     fundamental reform of the corrupt influence money system. 
     This requires effective campaign finance reform and a tough 
     gift ban for Members of Congress.
       In your words, ``The first duty of our generation is to 
     reestablish integrity and a bond of honesty in the political 
     process.''
       In your words, ``We should punish wrongdoers in politics 
     and government and pass reform laws to clean up the election 
     and lobbying systems.''
       In your words, ``We must insure that citizen politics 
     defeats money politics. This is the only way our system can 
     regain its integrity.''
       In your new position of leadership, you now face a clear 
     choice. You can make good on your words and lead the effort 
     to clean up Congress. Or you can ignore your words and become 
     the chief protector of the corrupt influence money system in 
     Washington.
       Common Cause strongly urges you to make good on your words 
     by supporting and scheduling early action on effective and 
     comprehensive campaign finance reform legislation, a strong 
     gift ban and lobby reform legislation.
           Sincerely,
                                                  Fred Wertheimer,
     President.
                                                                    ____

                                 S. 117

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

     SECTION 1. SENATE GIFT RULE.

       The text of rule XXXV of the Standing Rules of the Senate 
     is amended to read as follows:
       ``1. No member, officer, or employee of the Senate shall 
     accept a gift, knowing that such gift is provided by a 
     lobbyist, a lobbying firm, or an agent of a foreign principal 
     registered under the Foreign Agents Registration Act of 1938 
     (22 U.S.C. 611 et seq.) in violation of this rule.
       ``2. (a) In addition to the restriction on receiving gifts 
     from registered lobbyists, lobbying firms, and agents of 
     foreign principals provided by paragraph 1 and except as 
     provided in this rule, no member, officer, or employee of the 
     Senate shall knowingly accept a gift from any other person.
       ``(b)(1) For the purpose of this rule, the term `gift' 
     means any gratuity, favor, discount, entertainment, 
     hospitality, loan, forbearance, or other item having monetary 
     value. The term includes gifts of services, training, 
     transportation, lodging, and meals, whether provided in kind, 
     by purchase of a ticket, payment in advance, or reimbursement 
     after the expense has been incurred.
       ``(2) A gift to the spouse or dependent of a member, 
     officer, or employee (or a gift to any other individual based 
     on that individual's relationship with the member, officer, 
     or employee) shall be considered a gift to the member, 
     officer, or employee if it is given with the knowledge and 
     acquiescence of the member, officer, or employee and the 
     member, officer, or employee has reason to believe the gift 
     was given because of the official position of the member, 
     officer, or employee.
       ``(c) The restrictions in subparagraph (a) shall apply to 
     the following:
       ``(1) Anything provided by a lobbyist or a foreign agent 
     which is paid for, charged to, or reimbursed by a client or 
     firm of such lobbyist or foreign agent.
       ``(2) Anything provided by a lobbyist, a lobbying firm, or 
     a foreign agent to an entity that is maintained or controlled 
     by a member, officer, or employee of the Senate.
       ``(3) A charitable contribution (as defined in section 
     170(c) of the Internal Revenue Code of 1986) made by a 
     lobbyist, a lobbying firm, or a foreign agent on the basis of 
     a designation, recommendation, or other specification of a 
     member, officer, or employee of the Senate (not including a 
     mass mailing or other solicitation directed to a broad 
     category of persons or entities).
       ``(4) A contribution or other payment by a lobbyist, a 
     lobbying firm, or a foreign agent to a legal expense fund 
     established for the benefit of a member, officer, or employee 
     of the Senate.
       ``(5) A charitable contribution (as defined in section 
     170(c) of the Internal Revenue Code of 1986) made by a 
     lobbyist, a lobbying firm, or a foreign agent in lieu of an 
     honorarium to a member, officer, or employee of the Senate.
       ``(6) A financial contribution or expenditure made by a 
     lobbyist, a lobbying firm, or a foreign agent relating to a 
     conference, retreat, or similar event, sponsored by or 
     affiliated with an official congressional organization, for 
     or on behalf of members, officers, or employees of the 
     Senate.
       ``(d) The restrictions in subparagraph (a) shall not apply 
     to the following:
       ``(1) Anything for which the member, officer, or employee 
     pays the market value, or does not use and promptly returns 
     to the donor.
       ``(2) A contribution, as defined in the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 431 et seq.) that is lawfully 
     made under that Act, or attendance at a fundraising event 
     sponsored by a political organization described in section 
     527(e) of the Internal Revenue Code of 1986.
       ``(3) Anything provided by an individual on the basis of a 
     personal or family relationship unless the member, officer, 
     or employee has reason to believe that, under the 
     circumstances, the gift was provided because of the official 
     position of the member, officer, or employee and not because 
     of the personal or family relationship. The Select Committee 
     on Ethics shall provide guidance on the applicability of this 
     clause and examples of circumstances under which a gift may 
     be accepted under this exception.
       ``(4) A contribution or other payment to a legal expense 
     fund established for the benefit of a member, officer, or 
     employee, that is otherwise lawfully made, if the person 
     making the contribution or payment is identified for the 
     Select Committee on Ethics.
       ``(5) Any food or refreshments which the recipient 
     reasonably believes to have a value of less than $20.
       ``(6) Any gift from another member, officer, or employee of 
     the Senate or the House of Representatives.
       ``(7) Food, refreshments, lodging, and other benefits--
       ``(A) resulting from the outside business or employment 
     activities (or other outside activities that are not 
     connected to the duties of the member, officer, or employee 
     as an officeholder) of the member, officer, or employee, or 
     the spouse of the member, officer, or employee, if such 
     benefits have not been offered or enhanced because of the 
     official position of the member, officer, or employee and are 
     customarily provided to others in similar circumstances;
       ``(B) customarily provided by a prospective employer in 
     connection with bona fide employment discussions; or
       ``(C) provided by a political organization described in 
     section 527(e) of the Internal Revenue Code of 1986 in 
     connection with a fundraising or campaign event sponsored by 
     such an organization.
       ``(8) Pension and other benefits resulting from continued 
     participation in an employee welfare and benefits plan 
     maintained by a former employer.
       ``(9) Informational materials that are sent to the office 
     of the member, officer, or employee in the form of books, 
     articles, periodicals, other written materials, audio tapes, 
     videotapes, or other forms of communication.
       ``(10) Awards or prizes which are given to competitors in 
     contests or events open to the public, including random 
     drawings.
       ``(11) Honorary degrees (and associated travel, food, 
     refreshments, and entertainment) and other bona fide, 
     nonmonetary awards presented in recognition of public service 
     (and associated food, refreshments, and entertainment 
     provided in the presentation of such degrees and awards).
       ``(12) Donations of products from the State that the member 
     represents that are intended primarily for promotional 
     purposes, such as display or free distribution, and are of 
     minimal value to any individual recipient.
       ``(13) An item of little intrinsic value such as a greeting 
     card, baseball cap, or a T shirt.
       ``(14) Training (including food and refreshments furnished 
     to all attendees as an integral part of the training) 
     provided to a member, officer, or employee, if such training 
     is in the interest of the Senate.
       ``(15) Bequests, inheritances, and other transfers at 
     death.
       ``(16) Any item, the receipt of which is authorized by the 
     Foreign Gifts and Decorations Act, the Mutual Educational and 
     Cultural Exchange Act, or any other statute.
       ``(17) Anything which is paid for by the Federal 
     Government, by a State or local government, or secured by the 
     Government under a Government contract.
       ``(18) A gift of personal hospitality of an individual, as 
     defined in section 109(14) of the Ethics in Government Act.
       ``(19) Free attendance at a widely attended event permitted 
     pursuant to subparagraph (e).
       ``(20) Opportunities and benefits which are--
       ``(A) available to the public or to a class consisting of 
     all Federal employees, whether or not restricted on the basis 
     of geographic consideration;
       ``(B) offered to members of a group or class in which 
     membership is unrelated to congressional employment;
       ``(C) offered to members of an organization, such as an 
     employees' association or congressional credit union, in 
     which membership is related to congressional employment 
     [[Page S365]] and similar opportunities are available to 
     large segments of the public through organizations of similar 
     size;
       ``(D) offered to any group or class that is not defined in 
     a manner that specifically discriminates among Government 
     employees on the basis of branch of Government or type of 
     responsibility, or on a basis that favors those of higher 
     rank or rate of pay;
       ``(E) in the form of loans from banks and other financial 
     institutions on terms generally available to the public; or
       ``(F) in the form of reduced membership or other fees for 
     participation in organization activities offered to all 
     Government employees by professional organizations if the 
     only restrictions on membership relate to professional 
     qualifications.
       ``(21) A plaque, trophy, or other memento of modest value.
       ``(22) Anything for which, in an unusual case, a waiver is 
     granted by the Select Committee on Ethics.
       ``(e)(1) Except as prohibited by paragraph 1, a member, 
     officer, or employee may accept an offer of free attendance 
     at a widely attended convention, conference, symposium, 
     forum, panel discussion, dinner, viewing, reception, or 
     similar event, provided by the sponsor of the event, if--
       ``(A) the member, officer, or employee participates in the 
     event as a speaker or a panel participant, by presenting 
     information related to Congress or matters before Congress, 
     or by performing a ceremonial function appropriate to the 
     member's, officer's, or employee's official position; or
       ``(B) attendance at the event is appropriate to the 
     performance of the official duties or representative function 
     of the member, officer, or employee.
       ``(2) A member, officer, or employee who attends an event 
     described in clause (1) may accept a sponsor's unsolicited 
     offer of free attendance at the event for an accompanying 
     individual if others in attendance will generally be 
     similarly accompanied or if such attendance is appropriate to 
     assist in the representation of the Senate.
       ``(3) Except as prohibited by paragraph 1, a member, 
     officer, or employee, or the spouse or dependent thereof, may 
     accept a sponsor's unsolicited offer of free attendance at a 
     charity event, except that reimbursement for transportation 
     and lodging may not be accepted in connection with the event.
       ``(4) For purposes of this paragraph, the term `free 
     attendance' may include waiver of all or part of a conference 
     or other fee, the provision of local transportation, or the 
     provision of food, refreshments, entertainment, and 
     instructional materials furnished to all attendees as an 
     integral part of the event. The term does not include 
     entertainment collateral to the event, or food or 
     refreshments taken other than in a group setting with all or 
     substantially all other attendees.
       ``(f)(1) No member, officer, or employee may accept a gift 
     the value of which exceeds $250 on the basis of the personal 
     relationship exception in subparagraph (d)(3) or the close 
     personal friendship exception in clause (2) unless the Select 
     Committee on Ethics issues a written determination that one 
     of such exceptions applies.
       ``(2)(A) A gift given by an individual under circumstances 
     which make it clear that the gift is given for a nonbusiness 
     purpose and is motivated by a family relationship or close 
     personal friendship and not by the position of the member, 
     officer, or employee of the Senate shall not be subject to 
     the prohibition in clause (1).
       ``(B) A gift shall not be considered to be given for a 
     nonbusiness purpose if the individual giving the gift seeks--
       ``(i) to deduct the value of such gift as a business 
     expense on the individual's Federal income tax return, or
       ``(ii) direct or indirect reimbursement or any other 
     compensation for the value of the gift from a client or 
     employer of such lobbyist or foreign agent.
       ``(C) In determining if the giving of a gift is motivated 
     by a family relationship or close personal friendship, at 
     least the following factors shall be considered:
       ``(i) The history of the relationship between the 
     individual giving the gift and the recipient of the gift, 
     including whether or not gifts have previously been exchanged 
     by such individuals.
       ``(ii) Whether the gift was purchased by the individual who 
     gave the item.
       ``(iii) Whether the individual who gave the gift also at 
     the same time gave the same or similar gifts to other 
     members, officers, or employees of the Senate.
       ``(g)(1) The Committee on Rules and Administration is 
     authorized to adjust the dollar amount referred to in 
     subparagraph (d)(5) on a periodic basis, to the extent 
     necessary to adjust for inflation.
       ``(2) The Select Committee on Ethics shall provide guidance 
     setting forth reasonable steps that may be taken by members, 
     officers, and employees, with a minimum of paperwork and 
     time, to prevent the acceptance of prohibited gifts from 
     lobbyists.
       ``(3) When it is not practicable to return a tangible item 
     because it is perishable, the item may, at the discretion of 
     the recipient, be given to an appropriate charity or 
     destroyed.
       ``3. (a)(1) Except as prohibited by paragraph 1, a 
     reimbursement (including payment in kind) to a member, 
     officer, or employee for necessary transportation, lodging 
     and related expenses for travel to a meeting, speaking 
     engagement, factfinding trip or similar event in connection 
     with the duties of the member, officer, or employee as an 
     officeholder shall be deemed to be a reimbursement to the 
     Senate and not a gift prohibited by this rule, if the member, 
     officer, or employee--
       ``(A) in the case of an employee, receives advance 
     authorization, from the member or officer under whose direct 
     supervision the employee works, to accept reimbursement, and
       ``(B) discloses the expenses reimbursed or to be reimbursed 
     and the authorization to the Secretary of the Senate within 
     30 days after the travel is completed.
       ``(2) For purposes of clause (1), events, the activities of 
     which are substantially recreational in nature, shall not be 
     considered to be in connection with the duties of a member, 
     officer, or employee as an officeholder.
       ``(b) Each advance authorization to accept reimbursement 
     shall be signed by the member or officer under whose direct 
     supervision the employee works and shall include--
       ``(1) the name of the employee;
       ``(2) the name of the person who will make the 
     reimbursement;
       ``(3) the time, place, and purpose of the travel; and
       ``(4) a determination that the travel is in connection with 
     the duties of the employee as an officeholder and would not 
     create the appearance that the employee is using public 
     office for private gain.
       ``(c) Each disclosure made under subparagraph (a)(1) of 
     expenses reimbursed or to be reimbursed shall be signed by 
     the member or officer (in the case of travel by that Member 
     or officer) or by the member or officer under whose direct 
     supervision the employee works (in the case of travel by an 
     employee) and shall include--
       ``(1) a good faith estimate of total transportation 
     expenses reimbursed or to be reimbursed;
       ``(2) a good faith estimate of total lodging expenses 
     reimbursed or to be reimbursed;
       ``(3) a good faith estimate of total meal expenses 
     reimbursed or to be reimbursed;
       ``(4) a good faith estimate of the total of other expenses 
     reimbursed or to be reimbursed;
       ``(5) a determination that all such expenses are necessary 
     transportation, lodging, and related expenses as defined in 
     this paragraph; and
       ``(6) in the case of a reimbursement to a member or 
     officer, a determination that the travel was in connection 
     with the duties of the member or officer as an officeholder 
     and would not create the appearance that the member or 
     officer is using public office for private gain.
       ``(d) For the purposes of this paragraph, the term 
     `necessary transportation, lodging, and related expenses'--
       ``(1) includes reasonable expenses that are necessary for 
     travel for a period not exceeding 3 days exclusive of 
     traveltime within the United States or 7 days exclusive of 
     traveltime outside of the United States unless approved in 
     advance by the Select Committee on Ethics;
       ``(2) is limited to reasonable expenditures for 
     transportation, lodging, conference fees and materials, and 
     food and refreshments, including reimbursement for necessary 
     transportation, whether or not such transportation occurs 
     within the periods described in clause (1);
       ``(3) does not include expenditures for recreational 
     activities, or entertainment other than that provided to all 
     attendees as an integral part of the event; and
       ``(4) may include travel expenses incurred on behalf of 
     either the spouse or a child of the member, officer, or 
     employee, subject to a determination signed by the member or 
     officer (or in the case of an employee, the member or officer 
     under whose direct supervision the employee works) that the 
     attendance of the spouse or child is appropriate to assist in 
     the representation of the Senate.
       ``(e) The Secretary of the Senate shall make available to 
     the public all advance authorizations and disclosures of 
     reimbursement filed pursuant to subparagraph (a) as soon as 
     possible after they are received.
       ``4. In this rule:
       ``(a) The term `client' means any person or entity that 
     employs or retains another person for financial or other 
     compensation to conduct lobbying activities on behalf of that 
     person or entity. A person or entity whose employees act as 
     lobbyists on its own behalf is both a client and an employer 
     of such employees. In the case of a coalition or association 
     that employs or retains other persons to conduct lobbying 
     activities, the client is--
       ``(1) the coalition or association and not its individual 
     members when the lobbying activities are conducted on behalf 
     of its membership and financed by the coalition's or 
     association's dues and assessments; or
       ``(2) an individual member or members, when the lobbying 
     activities are conducted on behalf of, and financed 
     separately by, 1 or more individual members and not by the 
     coalition's or association's dues and assessments.
       ``(b) The term `lobbying firm'--
       ``(A) means a person or entity that has 1 or more employees 
     who are lobbyists on behalf of a client other than that 
     person or entity; and
       ``(B) includes a self-employed individual who is a 
     lobbyist.
       ``(c) The term `lobbyist' means a person registered under 
     section 308 of the Federal Regulation of Lobbying Act (2 
     U.S.C. 267) or 
     [[Page S366]] required to be registered under any successor 
     statute.
       ``(d) The term `State' means each of the several States, 
     the District of Columbia, and any commonwealth, territory, or 
     possession of the United States.''.

     SEC. 2. MISCELLANEOUS PROVISIONS.

       (a) Amendments to the Ethics in Government Act.--Section 
     102(a)(2)(B) of the Ethics in Government Act (5 U.S.C. 102, 
     App. 6) is amended by adding at the end thereof the 
     following: ``Reimbursements deemed accepted by the Senate 
     pursuant to Rule XXXV of the Standing Rules of the Senate 
     shall be reported as required by such rule and need not be 
     reported under this section.''.
       (b) Repeal of Obsolete Provision.--Section 901 of the 
     Ethics Reform Act of 1989 (2 U.S.C. 31-2) is repealed.
       (c) General Senate Provisions.--The Senate Committee on 
     Rules and Administration, on behalf of the Senate, may accept 
     gifts provided they do not involve any duty, burden, or 
     condition, or are not made dependent upon some future 
     performance by the United States. The Committee on Rules and 
     Administration is authorized to promulgate regulations to 
     carry out this section.

     SEC. 3. EXERCISE OF SENATE RULEMAKING POWERS.

       Sections 1 and 2(c) are enacted by the Senate--
       (1) as an exercise of the rulemaking power of the Senate 
     and pursuant to section 7353(b)(1) of title 5, United States 
     Code, and accordingly, they shall be considered as part of 
     the rules of the Senate, and such rules shall supersede other 
     rules only to the extent that they are inconsistent 
     therewith; and
       (2) with full recognition of the constitutional right of 
     the Senate to change such rules at any time and in the same 
     manner and to the same extent as in the case of any other 
     rule of the Senate.

     SEC. 4. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect on May 31, 1995.

  Mr. FEINGOLD. Mr. President, today I am pleased to join my 
colleagues, Senators Lautenberg and Wellstone, in once again 
introducing legislation that will fundamentally reform the way Congress 
deals with the thousands and thousands of gifts and other perks that 
are offered by Members each year from individuals, lobbyists and 
associations that seek special access and influence on Capitol Hill.
  Last year, this body approved a strong gift ban bill by a resounding 
vote of 95 to 4. The provisions of that bill, which would have strictly 
prohibited the acceptance of gifts from lobbyists and which provided 
only a few exceptions for nonlobbylists, were retained in a conference 
report that not only would have clamped down on this outrageous perk, 
but would have closed the gaping loopholes that riddle our current 
lobbying disclosure laws. That conference report failed to pass in the 
closing days of the 103d Congress, but we are introducing this bill 
today because we are unwilling to allow such an important and 
fundamental issue to be forgotten merely because we were unable to 
obtain final passage in the waning moments of the last Congress. This 
legislation is needed to help restore the lost faith of people in their 
Government, and to reverse the strong negative view of the American 
people harbor for this institutions. We have to recognize that the 
American people want their representatives to fundamentally change the 
way they do business, and passing meaningful gift ban legislation would 
represent an important first step towards extinguishing the firestorm 
of cynicism and distrust that has swept across the political landscape. 
It would send a strong message to our constituents that we are prepared 
to take foreceful steps to allay any perceived conflicts of interests 
between the acceptance of such gifts and our responsibilities as 
elected representatives.
  Let me illustrate this point by referring to a TIME/CNN poll taken 
late last year. Like many polls before it, this poll showed that public 
approval of the performance of Congress as an institution is 
embarrassingly low. This poll also found that 84 percent, 84 percent of 
the American people believe that officials in Washington are heavily 
influenced by special interests and out of touch with the average 
person. The issue here, is not whether Members of Congress are indeed 
for sale or susceptible to pressure from special interests. We know 
that this is largely invalid. But it is the perception of impropriety 
that must be changed. We must identify what has fueled this perception, 
and pass reforms that will regain the lost trust and faith the American 
people have in their Government.
  The number and types of gifts delivered to congressional offices each 
and every day is astonishing, and frankly, we should be
 thankful that most of our constituents are spared the imagery that has 
become a frequent sight on Capitol Hill of flatbed carts moving through 
the hallways of Congress, stacked with gifts. Though I have adopted a 
strict policy for myself and my staff that prohibits the acceptance of 
virtually anything of value, my office has received--and declined--
close to 800 gifts since I joined the U.S. Senate 2 years ago. I have 
had some unusual gifts come into my office, including, for the second 
consecutive year, a Christmas tree. It may strike some of our 
constituents as odd that there is a lobbying firm out there that is 
committed to leveling a small forest every year to provide Christmas 
trees to Members of Congress. But it is not only the gifts themselves 
that anger the American people, it is also the source of these gifts 
that sparks the greatest resentment among our constituents, and this is 
reflected in the same TIME/CNN poll I referred to earlier.

  In this poll, the following question was posed: ``Which one of these 
groups do you think have too much influence in government?''. A list of 
choices were provided, and which groups did respondents believe have 
too much influence in public policy decisions? The wealthy, large 
corporations, foreign governments and special interest groups. The 
gifts that we receive--and, again, that I personally decline--range 
from fruit baskets to artwork to fine wine--you name it. The sources of 
these gifts? The wealthy, large corporations, foreign governments and 
special interest groups. In other words, the exact same groups cited by 
a majority of poll respondents as having special influence and access 
with the Federal Government are the exact same groups that provide most 
of the free gifts and meals to Members of Congress. The connection is 
clear, and I am convinced that if we eliminate such unnecessary gifts 
we can convince the American people that we are not beholden to any 
special interests and we can begin to break down the walls of distrust 
between the American people and their Government.
  The bill we are introducing today will strictly prohibit the lobbying 
community from providing free meals, travel and entertainment to 
Members of Congress and their staffs. Most of these stringent rules 
will apply to non-lobbyists as well. The legislation also includes 
exceptions to these tight restrictions that will allow legislators and 
staff to carry out the day to day official responsibilities of a Member 
of Congress. For example, these exceptions do allow Members to be 
reimbursed for certain expenses incurred in the attendance of programs, 
seminars and conferences related to official business. Those exceptions 
aside, the gift ban provisions contained in this legislation will take 
a hard line against those offered items that are completely unrelated 
to official business and serve only to fuel the negative perceptions of 
Congress that have permeated our society.
  The current gift rules, which allow Members of Congress and their
   staff to accept gifts worth up to $250 from any one source during a 
year and does not include toward that limit any gifts under $100, are 
simply unacceptable. When the U.S. Senate first debated this issue last 
year, differing objections were raised to our effort to prohibit the 
acceptance of these gifts. Some argued that the gifts provided to 
Members and staff do not translate into special access for anyone, nor 
do they have any influence on the legislative process. Maybe, maybe 
not. But it is the mere appearance of impropriety that has so sharply 
turned the American people against this institution. For our 
constituents who may view a television news report of some special 
interest group picking up the tab for a lawmaker's trip to Florida, it 
appears to be a clear quid pro quo arrangement. But there was another 
interesting argument raised during last year's debate on this issue--
the argument that strict gift rules were unworkable and would hinder 
the work of Members and their staffs. I would ask my colleagues who 
genuinely believe this to look at the experience of my home State, 
Wisconsin.

  I served for 10 years in the Wisconsin State Legislature as a State 
senator. 
[[Page S367]] For over 20 years, the Wisconsin Legislature has lived 
under rules that prohibit the acceptance of anything of value, even a 
cup of coffee, from a lobbyist or a lobbying organization. These rules, 
which have had virtually no impact on that legislative body's ability 
to perform, have earned the State of Wisconsin a well-deserved 
reputation for clean government, a term that few people, unfortunately, 
would apply to the U.S. Congress. My experience in the Wisconsin 
Legislature led me 2 years ago to adopt a strict ethics policy for my 
U.S. Senate office that combines the most restrictive elements of the 
existing ethics policy for the U.S. Senate and the ethics rules of the 
Wisconsin State Legislature. Specifically, I and the individuals 
employed in my office cannot accept food, drink, lodging, 
transportation, or any item or service from a lobbyist or any item of 
more than a nominal value from any person offered because of public 
position.
  Like the Wisconsin rules, there are exceptions provided that allow me 
and my staff to fulfill our legislative responsibilities. For example, 
these restrictions do not apply to the offering of educational or 
information materials; lodging, food, or beverage offered 
coincidentally with the presentation of a talk or participation in a 
meeting, program, or conference related to official business. The 
restrictions also do not apply to functions sponsored by, or items 
provided by, Federal agencies or Federal officials or diplomatic 
functions sponsored by foreign governments where attendance at such 
events is part of the individual's official responsibilities.
  In short, the strict rules governing the acceptance of gifts that 
have been adopted by both my office and the Wisconsin Legislature have 
worked while allowing those abiding by them to fulfill their
 official obligations and responsibilities.

  Acting on this legislation that will fundamentally reform the way 
Congress deals with the many gifts and other perks that are offered to 
Members each year would mark a significant change in the way 
Washington, DC, does business, as well as a strong first step toward 
restoring the voters' confidence in their elected representatives. But 
we need to do more than simply pass tough gift ban legislation. We need 
to strengthen our current lobbying disclosure laws that are riddled 
with gaping loopholes. We need to pass comprehensive campaign finance 
reform that will level the playing field between incumbents and 
challengers, and diminish the role of special interest money that has 
dominated our election system. It is my sincere hope that this body 
will begin this process of reform by acting on this measure at the 
earliest possibility. Once again, I thank my colleagues from Minnesota 
and New Jersey for their persistence on this issue, and I yield the 
floor.
                                 ______

      By Mr. MOYNIHAN.
  S. 118. A bill to amend chapter 44 of title 18, United States Code, 
to prohibit the manufacture, transfer, or importation of .25 caliber 
and .32 caliber and 9 millimeter ammunition; to the Committee on the 
Judiciary.
  S. 119. A bill to tax 9 millimeter, .25 caliber, and .32 caliber 
bullets; to the Committee on Finance.


  VIOLENT CRIME REDUCTION ACT AND REAL COST OF HANDGUN AMMUNITION ACT

 Mr. MOYNIHAN. Mr. President, I introduce two bills: the Violent Crime 
Reduction Act of 1995 and the Real Cost of Handgun Ammunition Act of 
1995. Their purposes are to ban or heavily tax .25 caliber, .32 
caliber, and 9 mm ammunition. These calibers of bullets are used 
disproportionately in crime. They are not sporting or hunting rounds, 
but instead are the bullets of choice for drug dealers and violent 
felons. Every year they contribute overwhelmingly to the pervasive loss 
of life caused by bullet wounds.
  Today marks the third time in as many Congresses that I have 
introduced legislation to ban or tax these pernicious bullets. As the 
terrible gunshot death toll in the United States continues unabated, so 
too does the need for these bills, which, by keeping these bullets out 
of the hands of criminals, would save a significant number of lives.
  The number of Americans killed or wounded each year by bullets 
demonstrates their true cost to American society. Just look at the 
data:
  In 1993, 16,189 people were murdered by gunshot. An even greater 
number lost their lives to bullets by shooting themselves, either 
purposefully or accidentally. And although no national statistics are 
kept on bullet-related injuries, studies suggest they occur 2 to 5 
times more frequently than do deaths. This adds up to 184,000 bullet-
related injuries per year.
  Homicide is the second leading cause of death in the 15 to 34-year-
old age bracket. It is the leading cause of death for black males aged 
15 to 34. The lifetime risk of death from homicide in U.S. males is 1 
in 164, about the same as the risk of death in battle faced by U.S. 
servicemen in the Vietnam War. For black males, the lifetime risk of 
death from homicide is 1 in 28, twice the risk of death in battle faced 
by Marines in Vietnam.
  As noted by Susan Baker and her colleagues in the book ``Epidemiology 
and Health Policy,'' edited by Sol Levine and Abraham Lilienfeld:

       There is a correlation between rates of private ownership 
     of guns and gun-related death rates; guns cause two-third of 
     family homicides; and small easily concealed weapons comprise 
     the majority of guns used for homicides, suicides and 
     unintentional death.

  Baker states that:

       . . . these facets of the epidemiology of firearm-related 
     deaths and injuries have important implications. Combined 
     with their lethality, the widespread availability of easily 
     concealed handguns for impetuous use by people who are angry, 
     drunk, or frightened appears to be a major determinant of the 
     high firearm death rate in the United States. Each 
     contributing factor has implications for prevention. 
     Unfortunately, issues related to gun control have evoked such 
     strong sentiments that epidemiologic data are rarely employed 
     to good advantage.

  Strongly held views on both sides of the gun control issue have made 
the subject difficult for epidemiologists. I would suggest that a good 
deal of energy is wasted in this never-ending debate, for gun control 
as we know it misses the point. We ought to focus on the bullets and 
not the guns.
  I would remind the Senate of our experience in controlling epidemics. 
Although the science of epidemiology traces its roots to antiquity--
Hippocrates stressed the importance of considering environmental 
influences on human diseases--the first modern epidemiological study 
was conducted by James Lind in 1747. His efforts led to the eventual 
control of scurvy. It wasn't until 1795 that the British Navy accepted 
his analysis and required limes in shipboard diets. Most solutions are 
not perfect. Disease is rarely eliminated. But might epidemiology be 
applied in the case of bullets to reduce suffering? I believe so.
  In 1854 John Snow and William Farr collected data that clearly showed 
cholera was caused by contaminated drinking water. Snow removed the 
handle of the Broad Street pump in London to prevent people from 
drawing water from this contaminated water source and the disease 
stopped in that population. His observations led to a legislative 
mandate that all London water companies filter their water by 1857. 
Cholera epidemics subsided. Now treatment of sewage prevents cholera 
from entering our rivers and lakes, and the disinfection of drinking 
water makes water distribution systems uninhabitable for cholera 
vibrio, identified by Robert Kock as the causative agent 26 years after 
Snow's study.
  In 1900, Walter Reed identified mosquitos as the carriers of yellow 
fever. Subsequent mosquito control efforts by another U.S. Army doctor, 
William Gorgas, enabled the United States to complete the Panama Canal. 
The French failed because their workers were too sick from yellow fever 
to work. Now that it is known that yellow fever is caused by a virus, 
vaccines are used to eliminate the spread of the disease.
  These pioneering epidemiology success stories showed the world that 
epidemics require an interaction between three things: The host (the 
person who becomes sick or, in the case of bullets, the shooting 
victim); the agent (the cause of sickness, or the bullet); and the 
environment (the setting in which the sickness occurs or, in the case 
of bullets, violent behavior). Interrupt this epidemiological triad and 
you reduce or eliminate disease and injury.
  How might this approach apply to the control of bullet-related injury 
and 
[[Page S368]] death? Again, we are contemplating something different 
from gun control. There is a precedent here. In the middle of this 
century it was recognized that epidemiology could be applied to 
automobile death and injury. From a governmental perspective, this 
hypothesis was first adopted in 1959, late in the administration of 
Gov. Averell Harriman of New York State. In the 1960 Presidential 
campaign, I drafted a statement on the subject which was released by 
Senator John F. Kennedy as part of a general response to enquiries from 
the American Automobile Association. Then Senator Kennedy stated:

       Traffic accidents constitute one of the greatest, perhaps 
     the greatest of the nation's public health problems. They 
     waste as much as 2 percent of our gross national product 
     every year and bring endless suffering. The new highways will 
     do much to control the rise of the traffic toll, but by 
     themselves they will not reduce it. A great deal more 
     investigation and research is needed. Some of this has 
     already begun in connection with the highway program. It 
     should be extended until highway safety research takes its 
     place as an equal of the many similar programs of health 
     research which the federal government supports.

  Experience in the 1950's and early 1960's, prior to passage of the 
Motor Vehicle Safety Act, showed that traffic safety enforcement 
campaigns designed to change human behavior did not improve traffic 
safety. In fact, the death and injury toll mounted. I was Assistant 
Secretary of Labor in the mid-1960's when Congress was developing the 
Motor Vehicle Safety Act, and I was called to testify.
  It was clear to me and others that motor vehicle injuries and deaths 
could not be limited by regulating driver behavior. Nonetheless, we had 
an epidemic on our hands and we needed to do something about it. My 
friend William Haddon, the first Adminstrator of the National Highway 
Traffic Safety Administration, recognized that automobile fatalities 
were caused not by the initial collision, when the automobile strikes 
some object, but by a second collision, in which energy from the first 
collision is transferred to the interior of the car, causing the driver 
and occupants to strike the steering wheel, dashboard, or other 
structures in the passenger compartment. The second collision is the 
agent of injury to the hosts (the car's occupants).
  Efforts to make automobiles crashworthy follow examples used
    to control infectious disease epidemics. Reduce or eliminate the 
agent of injury. Seat belts, padded dashboards, and air bags are all 
specifically designed to reduce, if not eliminate, injury caused by the 
agent of automobile injuries, energy transfer to the human body during 
the second collision. In fact, we've done nothing revolutionary. All of 
the technology use to date to make cars crashworthy, including air 
bags, was developed prior to 1970.

  Experience shows the approach worked. Of course it could have worked 
better, but it worked. Had we been able to totally eliminate the agent 
(the second collision) the cure would have been complete. Nonetheless, 
merely by focusing on simple, achievable remedies, we reduced the 
traffic death and injury epidemic by 30 percent. Motor vehicle deaths 
declined in absolute terms by 13 percent from 1980 to 1990, despite 
significant increases in the number of drivers, vehicles, and miles 
driven. Driver behavior is changing, too. National seat belt usage is 
up dramatically, 60 percent now compared to 14 percent in 1984. These 
efforts have resulted in some 15,000 lives saved and 100,000 injuries 
avoided each year.
  We can apply that experience to the epidemic of murder and injury 
from bullets. The environment in which these deaths and injuries occur 
is complex. Many factors likely contribute to the rise in bullet-
related injury. Here is an important similarity with the situation we 
faced 25 years ago regarding automobile safety. We found we could not 
easily alter the behavior of millions of drivers, but we could easily 
change the behavior of three or four automobile manufacturers. 
Likewise, we simply cannot do much to change the environment (violet 
behavior) in which gun-realted injury occurs, nor do we know how. We 
can, however, do something about the agent causing the injury: bullets. 
Ban them! At least the round used disproportionately to cause death and 
injury. That is, the .25 caliber, .32 caliber, and 9 millimeter 
bullets. These three rounds account for the ammunition used in about 13 
percent of licensed guns in New York City, yet they are involved in 
one-third of all homicides. They are not, as I have said, useful for 
sport or hunting. They are used for violence. If we fail to confront 
the fact that these rounds are used disproportionately in crimes, 
innocent people will continue to die.
  I have called on Congress during the past several sessions to ban or 
heavily tax these bullets. This would not be the first time that 
Congress has banned a particular round of ammunition. In 1986, it 
passed legislation written by the Senator from New York banning the so-
called cop-killer bullet. This round, jacketed with tungsten alloys, 
steel, brass, or any number of other metals, had been demonstrated to 
penetrate no fewer than four police flak jackets and an additional five 
Los Angeles County phone books at one time. In 1982, the New York 
Police Benevolent Association came to me and asked me to do something 
about the ready availability of these bullets. The result was the Law 
Enforcement Officers Protection Act, which we introduced
 in 1982, 1983, and for the last time during the 99th Congress. In the 
end, with the tacit support of of the National Rifle Association, the 
measure passed the Congress and was signed by the President as Public 
Law 99-408 on August 28, 1986. In the 1994 crime bill, we enacted my 
amendment to broaden the ban to include new thick steel-jacketed armor-
piercing rounds.

  There are some 200 million firearms in circulation in the United 
States today. They are, in essence, simple machines, and with minimal 
care, remain working for centuries. However, estimates suggest that we 
have only a 4-year supply of bullets. Some two billion cartridges are 
used each year. At any given time there are some 7.5 billion rounds in 
factory, commercial, or household inventory.
  In all cases, with the exception of pistol whipping, gun-related 
injuries are caused not by the gun, but by the agents involved in the 
second collision: the bullets. Eliminating the most dangerous rounds 
would not end the problem of handgun killings. But it would reduce it. 
A 30-percent reduction in bullet-related deaths, for instance, would 
save over 10,000 lives each year and prevent up to 50,000 wounds.
  Water treatment efforts to reduce typhoid fever in the United States 
took about 60 years. Slow sand filters were installed in certain cities 
in the 1880's, and water chlorination treatment began in the 1910's. 
The death rate from typhoid in Albany, NY, prior to 1889, when the 
municipal water supply was treated by sand filtration, was about 100 
fatalities per 100,000 people each year. The rate dropped to about 25 
typhoid deaths per year after 1889, and dropped again to about 10 
typhoid deaths per year after 1915, when chlorination was introduced. 
By 1950, the death rate from typhoid fever had dropped to zero. It will 
take longer than 60 years to eliminate bullet-related death and injury, 
but we need to start with achievable measures to break the deadly 
interactions between people, bullets, and violent behavior.
  The bills I introduce today would begin the process. They would begin 
to control the problem by banning or taxing those rounds used 
disproportionately in crime--the .25-caliber, .32-caliber, and 9-
millimeter rounds. The bills recognize the epidemic nature of the 
problem, building on findings contained in the June 10, 1992, issue of 
the Journal of the American Medical Association which was devoted 
entirely to the subject of violence, principally violence associated 
with firearms.
  Mr. President, it is time to confront the epidemic of bullet-related 
violence. I urge my colleagues to support these bills and ask 
unanimously consent that their texts be printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:
                                 S. 118

       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 ``Violent Crime Reduction Act of 
     1995''.
       Sec. 2. Section 922(a) of title 18, United States Code, is 
     amended by--
       (1) striking out ``and'' at the end of paragraph (7);
       (2) striking out the period at the end of paragraph (8) and 
     inserting in lieu thereof a semicolon; and
       (3) adding at the end thereof the following: 
     [[Page S369]]   ``(9) for any person to manufacture, 
     transfer, or import .25 or .32 caliber or 9 millimeter 
     ammunition, except that this paragraph shall not apply to--
       ``(A) the manufacture or importation of such ammunition for 
     the use of the United States or any department or agency 
     thereof or any State or any department, agency, or political 
     subdivision thereof; and
       ``(B) any manufacture or importation for testing or for 
     experimenting authorized by the Secretary; and
       ``(10) for any manufacturer or importer to sell or deliver 
     .25 or .32 caliber or 9 millimeter ammunition, except that 
     this paragraph shall not apply to--
       ``(A) the sale or delivery by a manufacturer or importer of 
     such ammunition for the use of the United States or any 
     department or agency thereof or any State or any department, 
     agency, or political subdivision thereof; and
       ``(B) the sale or delivery by a manufacturer or importer of 
     such ammunition for testing or for experimenting authorized 
     by the Secretary.''.
       Sec. 3. Section 923(a)(1)(A) of title 18, United States 
     Code, is amended to read as follows:
       ``(A) of destructive devices, ammunition for destructive 
     devices, armor piercing ammunition, or .25 or .32 caliber or 
     9 millimeter ammunition, a fee of $1,000 per year;''.
       Sec. 4. Section 923(a)(1)(C) of title 18, United States 
     Code, is amended to read as follows:
       ``(C) of ammunition for firearms other than destructive 
     devices, or armor piercing or .25 or .32 caliber or 9 
     millimeter ammunition for any firearm, a fee of $10 per 
     year.''.
       Sec. 5. Section 923(a)(2) of title 18, United States Code, 
     is amended to read as follows:
       ``(2) If the applicant is an importer--
       ``(A) of destructive devices, ammunition for destructive 
     devices, or armor piercing or .25 or .32 caliber or 9 
     millimeter ammunition for any firearm, a fee of $1,000 per 
     year; or
       ``(B) of firearms other than destructive devices or 
     ammunition for firearms other than destructive devices, or 
     ammunition other than armor piercing or .25 or .32 caliber or 
     9 millimeter ammunition for any firearm, a fee of $50 per 
     year.''.
       Sec. 6. Section 923 of title 18, United States Code, is 
     amended by adding at the end thereof the following:
       ``(l) Licensed importers and licensed manufacturers shall 
     mark all .25 and .32 caliber and 9 millimeter ammunition and 
     packages containing such ammunition for distribution, in the 
     manner prescribed by the Secretary by regulation.''.
       Sec. 7. Section 929(a)(1) of title 18, United States Code, 
     is amended by--
       (1) inserting ``, or with .25 or .32 caliber or 9 
     millimeter ammunition'' after ``possession of armor piercing 
     ammunition''; and
       (2) inserting ``, or .25 or .32 caliber or 9 millimeter 
     ammunition,'' after ``armor-piercing handgun ammunition''.
       Sec. 8. This Act and the amendments made by this Act shall 
     take effect on the first day of the first calendar month 
     which begins more than 90 days after the date of enactment of 
     this Act.
                                 S. 119

       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 ``Real Cost of Handgun Ammunition Act 
     of 1995.''

     SEC. 101. INCREASE IN TAX ON CERTAIN BULLETS.

       (a) In General.--Section 4181 of the Internal Revenue Code 
     of 1986 (relating to the imposition of tax on firearms, etc.) 
     is amended by adding at the end the following new flush 
     sentence:
     ``In the case of 9 millimeter, .25 caliber, or .32 caliber 
     ammunition, the rate of tax under this section shall be 1,000 
     percent.''.
       (b) Exemption for Law Enforcement Purposes.--Section 4182 
     of the Internal Revenue Code of 1986 (relating to exemptions) 
     is amended by adding at the end the following new subsection:
       ``(d) Law Enforcement.--The last sentence of section 4181 
     shall not apply to any sale (not otherwise exempted) to, or 
     for the use of, the United States (or any department, agency, 
     or instrumentality thereof) or a State or political 
     subdivision thereof (or any department, agency, or 
     instrumentality thereof).''
       (c) Effective Date.--The amendments made by this section 
     shall apply to sales after December 31, 1997.
                                 ______

      By Mr. MOYNIHAN:
  S. 120. A bill to provide for the collection and dissemination of 
information on injuries, death, and family dissolution due to bullet-
related violence, to require the keeping of records with respect to 
dispositions of ammunition, and to increase taxes on certain bullets; 
to the Committee on Finance.


                       violent crime control act

 Mr. MOYNIHAN. Mr. President, I introduce a bill that comprehensively 
seeks to control the epidemic proportions of violence in America. This 
legislation, the Violent Crime Control Act of 1995, combines most of 
the provisions of two other crime-related bills I am introducing today 
as well.
  By including two different crime-related provisions, my bill attacks 
the crime epidemic on more than just one front. If we are truly serious 
about confronting our Nation's crime problem, we must learn more about 
the nature of the epidemic of bullet-related violence and ways to 
control it. To do this, we must require records to be kept on the 
disposition of ammunition.
  In October 1992, the Senate Finance Committee received testimony that 
public health and safety experts have, independently, concluded that 
there is an epidemic of bullet-related violence. The figures are 
staggering.
  In 1992, 37,776 people lost their lives in the United States from 
bullets. Of these, 17,790 were murdered, 18,169 committed suicide, and 
1,409 accidentally shot themselves. By focusing on bullets, and not 
guns, we recognize that much like nuclear waste, guns remain active for 
centuries. With minimum care, they do not deteriorate. However, bullets 
are consumed. Estimates suggest we have only a 4-year supply of them.
  Not only am I proposing that we tax bullets used disproportionately 
in crimes, that is, 9 millimeter, .25 and .32 caliber bullets, I also 
believe we must set up a Bullet Death and Injury Control Program within 
the Centers for Disease Control's National Center for Injury Prevention 
and Control. This center will enhance our knowledge of the distribution 
and status of bullet-related death and injury and subsequently make 
recommendations about the extent and nature of bullet-related violence.
  So that the center would have substantive information to study and 
analyze, this bill also requires importers and manufacturers of 
ammunition to keep records and submit an annual report to the Bureau of 
Alcohol, Tobacco and Firearms [BATF] on the disposition of ammunition. 
Currently, importers and manufacturers of ammunition are not required 
to do so.
  Clearly, it will take intense effort on all of our parts to reduce 
violent crime in America. We must confront this epidemic from several 
different angles, recognizing that there is no simple solution.
  I ask unanimous consent that the text of this bill be printed in the 
Record at this time.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 120

       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 ``Violent Crime Control Act of 
     1995''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) there is no reliable information on the amount of 
     ammunition available;
       (2) importers and manufacturers of ammunition are not 
     required to keep records to report to the Federal Government 
     on ammunition imported, produced, or shipped;
       (3) the rate of bullet-related deaths in the United States 
     is unacceptably high and growing;
       (4) three calibers of bullets are used disproportionately 
     in crime: 9 millimeter, .25 caliber, and .32 caliber bullets;
       (5) injury and death are greatest in young males, and 
     particularly young black males;
       (6) epidemiology can be used to study bullet-related death 
     and injury to evaluate control options;
       (7) bullet-related death and injury has placed increased 
     stress on the American family resulting in increased welfare 
     expenditures under title IV of the Social Security Act;
       (8) bullet-related death and injury have contributed to the 
     increase in Medicaid expenditures under title XIX of the 
     Social Security Act;
       (9) bullet-related death and injury have contributed to 
     increased supplemental security income benefits under title 
     XVI of the Social Security Act;
       (10) a tax on the sale of bullets will help control bullet-
     related death and injury;
       (11) there is no central responsible agency for trauma, 
     there is relatively little funding available for the study of 
     bullet-related death and injury, and there are large gaps in 
     research programs to reduce injury;
       (12) current laws and programs relevant to the loss of life 
     and productivity from bullet-related trauma are inadequate to 
     protect the citizens of the United States; and
       (13) increased research in bullet-related violence is 
     needed to better understand the causes of such violence, to 
     develop options for controlling such violence, and to 
     identify and overcome barriers to implementing effective 
     controls.

     SEC. 3. PURPOSES.

       The purposes of this Act are--
       (1) to increase the tax on the sale of 9 millimeter, .25 
     caliber, and .32 caliber bullets 
     [[Page S370]] (except with respect to any sale to law 
     enforcement agencies) as a means of reducing the epidemic of 
     bullet-related death and injury;
       (2) to undertake a nationally coordinated effort to survey, 
     collect, inventory, synthesize, and disseminate adequate data 
     and information for--
       (A) understanding the full range of bullet-related death 
     and injury, including impacts on the family structure and 
     increased demands for benefit payments under provisions of 
     the Social Security Act;
       (B) assessing the rate and magnitude of change in bullet-
     related death and injury over time;
       (C) educating the public about the extent of bullet-related 
     death and injury; and
       (D) expanding the epidemiologic approach to evaluate 
     efforts to control bullet-related death and injury and other 
     forms of violence;
       (3) to develop options for controlling bullet-related death 
     and injury;
       (4) to build the capacity and encourage responsibility at 
     the individual, group, community, State and Federal levels 
     for control and elimination of bullet-related death and 
     injury;
       (5) to promote a better understanding of the utility of the 
     epidemiologic approach for evaluating options to control or 
     reduce death and injury from nonbullet-related violence.
            TITLE I--BULLET DEATH AND INJURY CONTROL PROGRAM

     SEC. 101. BULLET DEATH AND INJURY CONTROL PROGRAM.

       (a) Establishment.--There is established within the Centers 
     for Disease Control's National Center for Injury Prevention 
     and Control (referred to as the ``Center'') a Bullet Death 
     and Injury Control Program (referred to as the ``Program'').
       (b) Purpose.--The Center shall conduct research into and 
     provide leadership and coordination for--
       (1) the understanding and promotion of knowledge about the 
     epidemiologic basis for bullet-related death and injury 
     within the United States;
       (2) developing technically sound approaches for 
     controlling, and eliminating, bullet-related deaths and 
     injuries;
       (3) building the capacity for implementing the options, and 
     expanding the approaches to controlling death and disease 
     from bullet-related trauma; and
       (4) educating the public about the nature and extent of 
     bullet-related violence.
       (c) Functions.--The functions of the Program shall be--
       (1) to summarize and to enhance the knowledge of the 
     distribution, status, and characteristics of bullet-related 
     death and injury;
       (2) to conduct research and to prepare, with the assistance 
     of State public health departments--
       (A) statistics on bullet-related death and injury;
       (B) studies of the epidemic nature of bullet-related death 
     and injury; and
       (C) status of the factors, including legal, socioeconomic, 
     and other factors, that bear on the control of bullets and 
     the eradication of the bullet-related epidemic;
       (3) to publish information about bullet-related death and 
     injury and guides for the practical use of epidemiological 
     information, including publications that synthesize 
     information relevant to national goals of understanding the 
     bullet-related epidemic and methods for its control;
       (4) to identify socioeconomic groups, communities, and 
     geographic areas in need of study, develop a strategic plan 
     for research necessary to comprehend the extent and nature of 
     bullet-related death and injury, and determine what options 
     exist to reduce or eradicate such death and injury;
       (5) to provide for the conduct of epidemiologic research on 
     bullet-related death and injury through grants, contracts, 
     cooperative agreements, and other means, by Federal, State, 
     and private agencies, institutions, organizations, and 
     individuals;
       (6) to make recommendations to Congress, the Bureau of 
     Alcohol, Tobacco, and Firearms, and other Federal, State, and 
     local agencies on the technical management of data 
     collection, storage, and retrieval necessary to collect, 
     evaluate, analyze, and disseminate information about the 
     extent and nature of the bullet-related epidemic of death and 
     injury as well as options for its control;
       (7) to make recommendations to the Congress, the Bureau of 
     Alcohol, Tobacco, and Firearms, and other Federal, State and 
     local agencies, organizations, and individuals about options 
     for actions to eradicate or reduce the epidemic of bullet-
     related death and injury;
       (8) to provide training and technical assistance to the 
     Bureau of Alcohol, Tobacco, and Firearms and other Federal, 
     State, and local agencies regarding the collection and 
     interpretation of bullet-related data; and
       (9) to research and explore bullet-related death and injury 
     and options for its control.
       (d) Advisory Board.--
       (1) In general.--The Center shall have an independent 
     advisory board to assist in setting the policies for and 
     directing the Program.
       (2) Membership.--The advisory board shall consist of 13 
     members, including--
       (A) 1 representative from the Centers for Disease Control;
       (B) 1 representative from the Bureau of Alcohol, Tobacco 
     and Firearms;
       (C) 1 representative from the Department of Justice;
       (D) 1 member from the Drug Enforcement Agency;
       (E) 3 epidemiologists from universities or nonprofit 
     organizations;
       (F) 1 criminologist from a university or nonprofit 
     organization;
       (G) 1 behavioral scientist from a university or nonprofit 
     organization;
       (H) 1 physician from a university or nonprofit 
     organization;
       (I) 1 statistician from a university or nonprofit 
     organization;
       (J) 1 engineer from a university or nonprofit organization; 
     and
       (K) 1 public communications expert from a university or 
     nonprofit organization.
       (3) Terms.--Members of the advisory board shall serve for 
     terms of 5 years, and may serve more than 1 term.
       (4) Compensation of members.--Each member of the Commission 
     who is not an officer or employee of the Federal Government 
     shall be compensated at a rate equal to the daily equivalent 
     of the annual rate of basic pay prescribed for level IV of 
     the Executive Schedule under section 5315 of title 5, United 
     States Code, for each day (including travel time) during 
     which such member is engaged in the performance of the duties 
     of the Commission. All members of the Commission who are 
     officers or employees of the United States shall serve 
     without compensation in addition to that received for their 
     services as officers or employees of the United States.
       (5) Travel expenses.--A member of the advisory board that 
     is not otherwise in the Federal Government service shall, to 
     the extent provided for in advance in appropriations Acts, be 
     paid actual travel expenses and per diem in lieu of 
     subsistence expenses in accordance with section 5703 of title 
     5, United States Code, when the member is away from the 
     member's usual place of residence.
       (6) Chair.--The members of the advisory board shall select 
     1 member to serve as chair.
       (e) Consultation.--The Center shall conduct the Program 
     required under this section in consultation with the Bureau 
     of Alcohol, Tobacco, and Firearms and the Department of 
     Justice.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated $1,000,000 for fiscal year 1996, 
     $2,500,000 for fiscal year 1997, and $5,000,000 for each of 
     fiscal years 1998, 1999, and 2000 for the purpose of carrying 
     out this section.
       (g) Report.--The Center shall prepare an annual report to 
     Congress on the Program's findings, the status of 
     coordination with other agencies, its progress, and problems 
     encountered with options and recommendations for their 
     solution. The report for December 31, 1996, shall contain 
     options and recommendations for the Program's mission and 
     funding levels for the years 1996-2000, and beyond.
          TITLE II--INCREASE IN EXCISE TAX ON CERTAIN BULLETS

     SEC. 201. INCREASE IN TAX ON CERTAIN BULLETS.

       (a) In General.--Section 4181 of the Internal Revenue Code 
     of 1986 (relating to the imposition of tax on firearms, etc.) 
     is amended by adding at the end the following new flush 
     sentence:
     ``In the case of 9 millimeter, .25 caliber, or .32 caliber 
     ammunition, the rate of tax under this section shall be 1,000 
     percent.''.
       (b) Exemption for Law Enforcement Purposes.--Section 4182 
     of the Internal Revenue Code of 1986 (relating to exemptions) 
     is amended by adding at the end the following new subsection:
       ``(d) Law Enforcement.--The last sentence of section 4181 
     shall not apply to any sale (not otherwise exempted) to, or 
     for the use of, the United States (or any department, agency, 
     or instrumentality thereof) or a State or political 
     subdivision thereof (or any department, agency, or 
     instrumentality thereof).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to sales after December 31, 1995.
                      TITLE III--USE OF AMMUNITION

     SEC. 301. RECORDS OF DISPOSITION OF AMMUNITION.

       (a) Amendment of Title 18, United States Code.--Section 
     923(g) of title 18, United States Code, is amended--
       (1) in paragraph (1)(A) by inserting after the second 
     sentence ``Each licensed importer and manufacturer of 
     ammunition shall maintain such records of importation, 
     production, shipment, sale, or other disposition of 
     ammunition at the licensee's place of business for such 
     period and in such form as the Secretary, in consultation 
     with the Director of the National Center for Injury 
     Prevention and Control of the Centers for Disease Control 
     (for the purpose of ensuring that the information that is 
     collected is useful for the Bullet Death and Injury Control 
     Program), may by regulation prescribe. Such records shall 
     include the amount, caliber, and type of ammunition.''; and
       (2) by adding at the end thereof the following new 
     paragraph:
       ``(6) Each licensed importer or manufacturer of ammunition 
     shall annually prepare a summary report of imports, 
     production, shipments, sales, and other dispositions during 
     the preceding year. The report shall be prepared on a form 
     specified by the Secretary, in consultation with the Director 
     of the National Center for Injury Prevention 
     [[Page S371]] and Control of the Centers for Disease Control 
     (for the purpose of ensuring that the information that is 
     collected is useful for the Bullet Death and Injury Control 
     Program), shall include the amounts, calibers, and types of 
     ammunition that were disposed of, and shall be forwarded to 
     the office specified thereon not later than the close of 
     business on the date specified by the Secretary.''.
       (b) Study of Criminal Use and Regulation of Ammunition.--
     The Secretary of the Treasury shall request the Centers for 
     Disease Control to--
       (1) prepare, in consultation with the Secretary, a study of 
     the criminal use and regulation of ammunition; and
       (2) submit to Congress, not later than July 31, 1996, a 
     report with recommendations on the potential for preventing 
     crime by regulating or restricting the availability of 
     ammunition.
                                 ______

      By Mr. GRAMM:
  S. 121. A bill to guarantee individuals and families continued choice 
and control over their doctors and hospitals, to ensure that health 
coverage is permanent and portable, to provide equal tax treatment for 
all health insurance consumers, to control medical cost inflation 
through medical savings accounts, to reform medical liability 
litigation, to reduce paperwork, and for other purposes; to the 
Committee on Finance.


                  family health care preservation act

  Mr. GRAMM. Mr. President, I ask unanimous consent that an outline of 
S. 121 be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
           Outline of the Family Health Care Preservation Act

     I. ENHANCE SECURITY FOR THOSE PRESENTLY INSURED BY MAKING 
                   PRIVATE INSURANCE PORTABLE AND PERMANENT:

       Portability:
       To enhance the capacity of American workers to change jobs 
     without losing their health insurance coverage, existing law 
     under COBRA (which allows individuals temporarily to continue 
     their health insurance coverage after leaving their place of 
     employment by paying their premiums directly) would be 
     modified to allow individuals two additional lower-cost 
     options to keep their health insurance coverage during their 
     transition between jobs. Workers could:
       (A) Continue their current insurance coverage during the 18 
     months covered by COBRA by paying their insurance premiums 
     directly;
       (B) Continue their current insurance coverage during the 18 
     months covered by COBRA by paying their insurance premiums 
     directly, but with a lower premium reflecting a $1,000 
     deductible; or
       (C) Continue their current insurance coverage during the 18 
     months covered by COBRA by paying their insurance premiums 
     directly, but with a lower premium reflecting a $3,000 
     deductible.
       With these options, the typical monthly premium paid for a 
     family of four would drop by as much as 20 percent when 
     switching to a $1,000 deductible and as much as 52 percent 
     when switching to a $3,000 deductible. Also, premium payments 
     made by families would now be deducted from income in the 
     manner described in title II of this bill.
       In addition, individuals would be permitted to make 
     penalty-free withdrawals from their Individual Retirement 
     Accounts and 401(k)s to pay for health insurance coverage 
     during the transition period. The transition period of 
     coverage would end once a person is in a position to get 
     coverage from another employer.
       Permanence:
       Health insurance would be made permanent (belonging to the 
     family or individual by these three reforms:
       Those with Individual Coverage:
       (A) No existing health insurance policy can be canceled due 
     to the state of health of any person covered by the policy. 
     Insurance companies must offer each policy holder the option 
     to purchase a new policy under the conditions of part B of 
     this section with the terms to be negotiated between the 
     buyer and seller of the policy.
       (B) All individual health insurance policies written after 
     the enactment of this legislation must be guaranteed 
     renewable, and premiums cannot be increased based on the 
     occurrence of illness.
       Those with Group Coverage:
       (A) Existing group policies must provide each member of the 
     group the right to convert to an individual policy when 
     leaving the group. This individual policy will be rated based 
     on actuarial data, but cannot be canceled due to the state of 
     health of those covered by the policy. In addition, any group
      policy holder (ie. employer obtaining coverage on employees' 
     behalf) will have the right to purchase a new group policy 
     under the conditions stated under part B of this section 
     with the terms to be negotiated between the group's 
     benefactor or representative and the seller of the group 
     policy.
       (B) All group policies issued after enactment of this 
     legislation must be permanent, and premiums cannot be 
     increased based on the health of the members covered under 
     the group policy. In addition, similar to part A of this 
     section, new group policies must provide each member of the 
     group the right to convert to an individual policy when 
     leaving the group. However, the premium charges of the 
     individual leaving the new group plan cannot be based on the 
     individual's state of health and cannot be canceled except 
     for nonpayment of premiums.
       Those with Employer-provided Self-funded Coverage:
       (A) Companies currently operating self-funded plans must 
     make arrangements with one or more private insurers to offer 
     individuals leaving the self-funded plan individual coverage. 
     The individual policy will be rated based on actuarial data, 
     but cannot be canceled due to the state of health of those 
     covered by the policy.
       (B) All self-funded plans created after enactment of this 
     legislation must (like part A of this section) make 
     arrangements with one or more private insurers to offer 
     individuals leaving the self-funded plan individual coverage. 
     However, the premium charge of the individual leaving the 
     self-funded plan cannot be based on the individual's state of 
     health and cannot be canceled except for nonpayment of 
     premiums.

     II-A. PROVIDE EQUAL TAX TREATMENT FOR THE SELF-EMPLOYED AND 
                   UNINSURED:

       Self-employed workers and individuals without employer-
     provided health insurance coverage will now be allowed to 
     deduct from taxable income their medical insurance coverage 
     costs. The 25% deduction will be retroactively restored and 
     phased up to 100% over the next five years. The tax deduction 
     will apply to the individual purchase of conventional health 
     insurance, HMO coverage, Medical Savings Account 
     contributions, or any other prepaid medical plan.

     II-B. ESTABLISH MEDICAL SAVINGS ACCOUNTS TO PROMOTE 
                   COMPETITION AND CONTROL COSTS:

       In combination with the purchase of a $3,000 deductible 
     catastrophic insurance policy, contributions to the Medical 
     Savings Account of up to $3,000 per year by either the 
     employer or employee shall be tax deductible. The 
     catastrophic policy will cover expenses such as physician 
     services, hospital care, diagnostic tests, and other major 
     medical expenses once the policy holder meets the $3,000 
     annual deductible. Tax-free withdrawals from the Medical 
     Savings Account could be made to pay for qualifying out-of-
     pocket medical expenses which apply toward the insurance 
     policy's deductible. If the funds in the Medical Savings 
     Account are not spent so that as new deposits are made, the 
     sum grows beyond the $3,000 deductible, the individual can 
     invest excess tax-free in a long-term care package or 
     withdraw the excess and treat it as income.

     III. ENHANCE EFFICIENCY THROUGH PAPERWORK REDUCTION:

       (A) Medicaid, Medicare, and all other Federal entities 
     involved in the funding or delivery of health care shall 
     standardize their health care forms and must reduce their 
     total health care paperwork burden by 50 percent within two 
     years of enactment of this legislation. The paperwork burden 
     must be reduced
      by another 50 percent over the following three years, 
     achieving a total paperwork reduction of 75 percent over a 
     5-year period.
       (B) State agencies involved in the funding or delivery of 
     health care, like federal entities, shall standardize their 
     health care forms. Also like federal entities, within five 
     years of enactment, states must reduce their total health 
     care paperwork burden by 75 percent in order to remain 
     eligible for federal health assistance.

     IV. PROVIDE MEANINGFUL MEDICAL LIABILITY REFORM:

       (A) Any claim of negligence not ``substantially justified'' 
     or which has been improperly advanced will result in an 
     automatic judgment against the plaintiff rendering the 
     plaintiff liable for the legal fees incurred by the health 
     care provider, as well as any losses as a result of being 
     away from the practice.
       (B) The liability of any malpractice defendant will be 
     limited to the proportion of damages attributable to such 
     defendent's conduct.
       (C) A health care provider can negotiate limits on medical 
     liability with the buyer of health care in return for lower 
     fees.
       (D) Non-economic damages cannot exceed $250,000 adjusted 
     annually for inflation.
       (E) Lawyer's contingency fees will be capped at 25 percent.
       (F) Malpractice awards will be reduced for any collateral 
     source payments to which the claimant is entitled, and the 
     claimant will be required to accept periodic payment as 
     opposed to lump sum on awards in excess of $100,000 adjusted 
     annually for inflation.
       (G) No malpractice action can be initiated more than two 
     years from the date the alleged malpractice was discovered or 
     should have been discovered, and no more than four years 
     after the date of the occurrence.
       (H) No punitive damages will be awarded against 
     manufacturers of a drug or medical device if such drug or 
     medical device has been approved by the Food and Drug 
     Administration as safe and effective.
                                 ______

      By Mr. MOYNIHAN:
  S. 122. A bill to prohibit the use of certain ammunition, and for 
other purposes; to the Committee on the Judiciary.
  S. 124. A bill to amend the Internal Revenue Code of 1986 to increase 
the tax on handgun ammunition, to impose the special occupational tax 
and registration requirements on importers 
[[Page S372]] and manufacturers of handgun ammunition, and for other 
purposes; to the Committee on Finance.


             LEGISLATION TO CONTROL DESTRUCTIVE AMMUNITION

   Mr. MOYNIHAN. Mr. President, I introduced two measures to help fight 
the epidemic of bullet-related violence in America: the Real Cost of 
Destructive Ammunition Act and the Destructive Ammunition Prohibition 
Act of 1995. The purpose of these bills is to prevent from reaching the 
marketplace some of the most deadly rounds of ammunition ever produced.
  Some of my colleagues may remember the Black Talon. It is a hollow-
tipped bullet, singular among handgun ammunition in its capacity for 
destruction. Upon impact with human tissue, the bullet produces razor-
sharp radial petals that produce a devastating wound. It is the vary 
same bullet that a crazed gunman fired at unsuspecting passengers on a 
Long Island Rail Road train last winter. That same month, it was also 
used in the shooting of Officer Jason E. White of the District of 
Columbia Metropolitan Police Department, just fifteen blocks from the 
Capitol.
  I first learned of the Black Talon in a letter I received from Dr. 
E.J. Gallagher, Director of Emergency Medicine at Albert Einstein 
College of Medicine at the Municipal Hospital Trauma Center in the 
Bronx. Dr. Gallagher wrote that he has ``never seen a more lethal 
projectile.'' On November 3, 1993, I introduced a bill to tax the Black 
Talon at 10,000 percent. Nineteen days later, Olin Corporation, the 
manufacturer of the Black Talon, announced that it would withdraw sale 
of the bullet to the general public. Unfortunately, the 103d Congress 
came to a close without the bill having won passage.
  As a result, there is nothing in law to prevent the reintroduction of 
this pernicious bullet, nor is there any existing impediment to the 
sale of similar rounds that might be produced by another manufacturer. 
So today I reintroduce the bill to tax the Black Talon, and introduce 
for the first time a bill to prohibit the sale of the Black Talon to 
the public. Both bills would apply to any bullet with the same physical 
characteristics as the Black Talon. These bullets have no place in the 
armory of criminals.
  It has been estimated that the cost of hospital services for treating 
bullet-related injuries is $1 billion per year, with the total cost to 
the economy of such injuries approximately $14 billion. We can ill 
afford further increases in this number, but this would surely be the 
result if bullets with the destructive capacity of the Black Talon are 
allowed onto the streets.
  Mr. President, we are facing an unrivaled epidemic of violence in 
this country and it is disproportionately the result of deaths and 
injuries caused by bullet wounds. It is time we took meaningful steps 
to put an end to the massacres that occur daily as a result of 
gunshots. How better a beginning than to go after the most insidious 
culprits of this violence? I urge my colleagues to support these 
measures and to prevent these bullets from appearing on the market, and 
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. 122

         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 ``Destructive Ammunition 
     Prohibition Act of 1995''.

     SECTION 1. DEFINITION.

       Section 921(a)(17) of title 18, United States Code, is 
     amended by adding at the end the following new subparagraph:
       ``(D) The term `destructive ammunition' means--
       ``(1) any jacketed, hollow point projectile that may be 
     used in a handgun and the jacket of which is designed to 
     produce, upon impact, sharp-tipped, barb-like projections 
     that extend beyond the diameter of the unfired projectile.

     SEC. 2. PROHIBITION.

       Section 922(a) of title 18, United States Code, is 
     amended--
       (1) in paragraph (7), by inserting ``or destructive'' after 
     ``armor piercing''; and
       (2) in paragraph (8), by inserting ``or destructive'' after 
     ``armor piercing''.
                                                                    ____

                                 S. 124

         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 ``Real Cost of Destructive 
     Ammunition Act''.

     SEC. 2. INCREASE IN TAX ON HANDGUN AMMUNITION.

       (a) Increase in Manufacturers Tax.--
       (1) In general.--Section 4181 of the Internal Revenue Code 
     of 1986 (relating to imposition of tax on firearms) is 
     amended--
       (A) by striking ``Shells, and cartridges'' and inserting 
     ``Shells and cartridges not taxable at 10,000 percent.''
       ``Articles taxable at 10,000 percent.--
       ``Any jacketed, hollow point projectile which may be used 
     in a handgun and the jacket of which is designed to produce, 
     upon impact, evenly-spaced sharp or barb-like projections 
     that extend beyond the diameter of the unfired projectile.
       (2) Additional taxes added to the general fund.--Section 
     3(a) of the Act of September 2, 1937 (16 U.S.C. 669b(a)), 
     commonly referred to as the ``Pittman-Robertson Wildlife 
     Restoration Act'', is amended by adding at the end the 
     following new sentence: ``There shall not be covered into the 
     fund the portion of the tax imposed by such section 4181 that 
     is attributable to any increase in amounts received in the 
     Treasury under such section by reason of the amendments made 
     by section 2(a)(1) of the Real Cost of Handgun Ammunition 
     Act, as estimated by the Secretary.''.

     SEC. 3. SPECIAL TAX FOR IMPORTERS, MANUFACTURERS, AND DEALERS 
                   OF HANDGUN AMMUNITION.

       (a) In General.--
       (1) Imposition of tax.--Section 5801 of the Internal 
     Revenue Code of 1986 (relating to special occupational tax on 
     importers, manufacturers, and dealers of machine guns, 
     destructive devices, and certain other firearms) is amended 
     by adding at the end the following new subsection:
       ``(c) Special Rule for Handgun Ammunition.--
       ``(1) In general.--On first engaging in business and 
     thereafter on or before July 1 of each year, every importer 
     and manufacturer of handgun ammunition shall pay a special 
     (occupational) tax for each place of business at the rate of 
     $10,000 a year or fraction thereof.
       ``(2) Handgun ammunition defined.--For purposes of this 
     part, the term `handgun ammunition' shall mean any centerfire 
     cartridge which has a cartridge case of less than 1.3 inches 
     in length and any cartridge case which is less than 1.3 
     inches in length.''.
       (2) Registration of importers and manufacturers of handgun 
     ammunition.--Section 5802 of the Internal Revenue Code of 
     1986 (relating to registration of importers, manufacturers, 
     and dealers) is amended--
       (A) in the first sentence, by inserting ``, and each 
     importer and manufacturer of handgun ammunition,'' after 
     ``dealer in firearms'', and
       (B) in the third sentence, by inserting ``, and handgun 
     ammunition operations of an importer or manufacturer,'' after 
     ``dealer''.
       (b) Conforming Amendments.--
       (1) Chapter heading.--Chapter 53 of the Internal Revenue 
     Code of 1986 (relating to machine guns, destructive devices, 
     and certain other firearms) is amended in the chapter heading 
     by inserting ``HANDGUN AMMUNITION,'' after ``CHAPTER 53--''.
       (2) Table of chapters.--The heading for chapter 53 in the 
     table of chapters for subtitle E of such Code is amended to 
     read as follows:

``Chapter 53--Handgun ammunition, machine guns, destructive devices, 
              and certain other firearms.''

       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     take effect on July 1, 1995.
       (2) All taxpayers treated as commencing in business on july 
     1, 1995.--Any person engaged on July 1, 1995, in any trade or 
     business which is subject to an occupational tax by reason of 
     the amendment made by subsection (a)(1) shall be treated for 
     purposes of such tax as having first engaged in a trade of 
     business on such date.
                                 ______

      By Mr. MOYNIHAN (for himself and Mr. Lieberman):
  S. 123. A bill to require the Administrator of the Environmental 
Protection Agency to seek advice concerning environmental risks, and 
for other purposes; to the Committee on Environment and Public Works.


                   environmental risk evaluation act

 Mr. MOYNIHAN. Mr. President, Nearly 2 years ago today I addressed the 
Senate about the impending ``revolution'' over the Nation's approach to 
environmental protection. I noted that Federal environmental laws were 
being questioned and that State and local governments were signaling 
that their resources are finite and that compliance with additional 
environmental laws while still adequately maintaining roads and 
buildings and providing social services and education was fast becoming 
unaffordable. At least not without Federal support.
  I suggested that we might better use the results of risk assessments 
to help set environmental priorities and make decisions, and I quoted 
an editorial in the January 8, 1992, issue of Science 
[[Page S373]] alerting us to the ``growing questioning of the factual 
basis for Federal command and control actions'' largely due to concerns 
over regulatory costs. I concluded that ``The message is clear. State 
and local governments will hold the Congress and EPA more accountable 
in the future about obligating them to spend their resources on Federal 
requirements. They will want `proof' that there is a problem and 
confidence that the legislated `solutions' will solve it.'' And 
finally, I noted that ``the Science editorial suggests that we are 
seeing the `beginning of a revolt.'''
  How quickly times change. Less than 2 years later, the revolt is 
fully underway. Yet just 4 months before the Science editorial 
appeared, my colleagues from both sides of the aisle expressed 
incredulity when in September 1992 I held my first hearing as chairman 
of the Environment and Public Works Committee on S. 2132, the 
``Environmental Risk Reduction Act,'' a bill I introduced earlier in 
the 102d Congress. One of the witnesses was Dr. Edward Hayes of the 
Ohio State University who testified for the city of Columbus, OH. He 
noted that the mayor of Columbus and other city leaders had set out to 
analyze with as much precision as possible the impact of Federal 
environmental laws during recent years. They wanted to know what effect 
those changes would have on the city's budget. The findings were 
reported in ``Environmental Legislation: The Increasing Costs of 
Regulatory Compliance to the City of Columbus.'' It turned out that new 
environmental initiatives were estimated to cost the city of Columbus 
an additional $1.6 billion over the next decade--an extra $856 per year 
of increased local fees or taxes for every household in the city by the 
year 2000. A followup study, ``Ohio Metropolitan Area Cost Report for 
Environmental Compliance,'' showed a similar impact in eight other Ohio 
cities. As we have heard over the past 2 years, this pattern is being 
repeated in other places. The social change has matured, Congress has 
changed, and the new Congress will experiment to find a more workable 
way of protecting the environment.
  To help with this effort, I rise again, as I did in both the 102d and 
103d Congresses, to introduce the ``Environmental Risk Evaluation 
Act.'' The primary goal of this legislation is to place risk assessment 
in the proper perspective. Strange as it may seem, environmental 
legislation doesn't use science effectively precisely because it places 
too much emphasis on risk assessment. This perverse situation stems 
from the requirements in current environmental legislation, stated or 
implied, that the Environmental Protection Agency--EPA--must regulate 
environmental pollutants to ``safe levels of exposure'' and in so doing 
that EPA use science to determine what is ``safe.'' The problem is 
simple: the premise is false, science cannot define ``safety.'' 
Consider first the definition. Webster says ``safety'' is the feeling 
of absence of harm. Decisions about what is ``safe'' are based very 
much on personal or societal feelings, informed by science yes, but
 based on feelings. Next consider the nature of science. It is very 
much about uncertainty, because our knowledge is far from perfect and 
because new scientific findings often disprove that which we thought we 
knew.

  Thus, to the extent they force agencies to use science to determine 
``safe'' exposure levels, current environmental laws set EPA and other 
agencies up for failure. Risk managers have no incentive to take any 
action other than to err on the side of safety. This is not necessarily 
bad as a general policy, but in practice the belief is that it has led 
to layer upon layer of safety factors and excessive cost. This is 
because risk managers require the use of conservative assumptions in 
risk assessment models when the information needed to assess risk is 
missing or incomplete, as it invariably is, causing large costs to be 
incurred to meet the low exposure levels estimated to be ``safe.''
  This weakens citizens' faith in Government. There is a growing 
perception that many decisions are not based on common sense and that 
regulations cost too much. Risk assessments, which use scientific 
information, have become the outward and visible sign of the regulatory 
process. Those who question the philosophy underlying the current 
legislative and regulatory approach attack the risk assessment process, 
especially the assumptions used in place of knowledge about what we are 
exposed to and what are the resulting effects.
  Given the benefit of our experience with EPA and with environmental 
legislation over the past 24 years, it is clear that we are asking the 
wrong question. Marc Landy and his colleagues first noted this in their 
book EPA: Asking the Wrong Questions. A far better legislative question 
to ask EPA to address when setting environmental regulations is ``How 
much are we willing to pay to reduce risk by what amount, given all the 
uncertainties about risks, costs and benefits of control'' rather than 
``What is the Safe Level of Exposure.'' Far better because it reflects 
the strengths and limits of science to inform decision-making and to 
set technically sound regulations. Far better too because it can 
increase the capacity of Government to govern in the future by 
informing the citizenry. And far better if it reflects the will of the 
people as evidenced by continued support for Government policies over 
time.
  The Republican ``Contract With America'' seems to have a good deal of 
support from the citizenry, at least for now. Its call for transparency 
in the way regulations are set, including the methods and assumptions 
used in assessing risks and costs are in keeping with what I had in 
mind when I introduced my ``Environmental Risk Reduction Act'' in the 
last two Congresses. Let me note that the American public views the 
contract as being full of fresh new ideas and approaches to governing, 
something they believe the Democrats have lost the ability to generate 
in the recent past. But let us not make improvements to the way we 
encourage and regulate environmental protection a partisan issue. Good 
Government policies cut across party lines and live beyond any given 
administration. And, as I have noted above, improving the use of risk 
assessment and cost benefit analyses for environmental decisionmaking 
is something I have been pursuing for several Congresses. Rather, let 
us take a bipartisan approach.
  As a first step, let us freely acknowledge that environmental 
decisions can be informed by science, but that they cannot be made 
based on science alone. In fact, truth be known, such decisions are 
based more on policy, economic and social considerations than they are 
on science. This does not mean that science is not useful for 
environmental decisions or that we shouldn't vigorously pursue research 
to better understand what contaminants are released into the 
environment, what we are exposed to, what gets into our bodies, and 
what
 happens to it there. We spend upwards of $185 billion per year to 
comply with environmental regulations, and while this is not 
necessarily too much to spend on environmental protection, it is too 
much to spend unwisely. Better knowledge about whether effects actually 
occur at the very low levels encountered in the environment could help 
frame the debates on environmental protection more sharply.

  Don't forget that social concerns, public preference, basic fairness, 
and yes, even outrage, must be considered too. But, let us make clear 
that health effects don't have to occur for us to be outraged. For 
instance, if it were shown that habitation near a Superfund site did 
not pose a major health risk, as a country we may still decide to clean 
up the site because we find the contamination to be offensive. We may 
decide to compensate homeowners at the site for the fair value of their 
land so they can move away, even if there have been no site-related 
health problems. Consider that we may be concerned that the 
economically disadvantaged people who tend to live near such sites 
would be further disadvantaged by loss of equity in home or land 
values. Such actions are not possible under the current Superfund law. 
As it now stands, those who favor compensation to land holders at 
Superfund sites must act indirectly and press for findings of health 
effects from the chemicals found at those sites. The responsible 
parties who must pay to clean up the sites must also act indirectly and 
respond to findings of likely health problems by attacking the 
assumptions needed to assess risk and contend that effects are 
exaggerated or that there are no effects. No one addresses the problem 
realistically 
     [[Page S374]] because there is no direct way to address any 
     consideration but risk.
  Let us question whether the ``Emperor Has Clothes,'' at least when it 
comes to how assessments of risk are used. Let's put risk in its proper 
place as one tool of many in the decisionmaking toolbox and let us face 
the issue honestly by broadening the range of issues and tools that can 
be used in making environmental decisions. Let's make the debate over 
environmental protection more realistic and relevant to our citizens. 
Let's not pass any law that requires or implies that EPA should 
determine the ``safe'' level when setting regulations. Rather, let us 
ask how much are we willing to pay to reduce risk by what amount given 
all the uncertainties in estimating costs and benefits and let us 
identify factors other than risk that make sense to consider when 
making decisions.
  The bill I offer today addresses the risk assessment and cost/benefit 
assessment components of the decisionmaking process, focusing on its 
use for priority setting, something not addressed in the Republican 
``Contract With America.'' My bill recognizes that values, social 
concerns--who should bear the risk for whose benefit--and basic 
fairness must be considered in addition to risks and costs. It does not 
prescribe how to conduct risk and cost/benefit assessments because of 
the evolving nature of these fields of inquiry and because of my desire 
to avoid freezing technology.
  I am introducing ``The Environmental Risk Evaluation Act,'' to help 
us learn how best to practice the trades of environmental risk 
assessment and cost/benefit analyses. The bill will put into law the 
major findings of the 1990 ``Reducing Risk'' report by EPA's Science 
Advisory Board--SAB. I agree with former EPA Administrator William 
Reilly's belief that science can lend much needed coherence, order, and 
integrity to costly and controversial decisions.
  America's environmental laws are a large and diverse lot. We have 
only two decades of experience on this subject, and we are still 
learning, feeling our way. The relative risk ranking and cost/benefit 
analyses called for in this bill provide some common ground for looking 
at our environmental laws. The bill also provides the public and 
Congress with access to the findings. The ``Reducing Risk'' report 
states that ``relative risk data and risk assessment techniques should 
inform--the public--judgment as much as possible.'' Not dictate it, but 
inform it.
  All this will take time, decades perhaps. But let us take heart. 
Questions that seem difficult now can with a certain amount of effort 
yield to the scientific method. I urge my colleagues to support this 
bill and ask unanimous consent that it be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 123

       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 ``Environmental Risk 
     Evaluation Act of 1995''.

     SEC. 2. FINDINGS AND POLICY.

       (a) Definitions.--As used in this section:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Adverse effect on human health.--The term ``adverse 
     effect on human health'' includes any increase in the rate of 
     death or serious illness, including disease, cancer, birth 
     defects, reproductive dysfunction, developmental effects 
     (including effects on the endocrine and nervous systems), and 
     other impairments in bodily functions.
       (3) Risk.--The term ``risk'' means the likelihood of an 
     occurrence of an adverse effect on human health, the 
     environment, or public welfare.
       (4) Source of pollution.--The term ``source of pollution'' 
     means a category or class of facilities or activities that 
     alter the chemical, physical, or * * *.
       (b) Findings.--Congress finds that--
       (1) cost-benefit analysis and risk assessment are useful 
     but imperfect tools that serve to enhance the information 
     available in developing environmental regulations and 
     programs;
       (2) cost-benefit analysis and risk assessment can also 
     serve as useful tools in setting priorities and evaluating 
     the success of environmental protection programs;
       (3) cost and risk are not the only factors that need to be 
     considered in evaluating environmental programs as other 
     factors, including values and equity, must also be 
     considered.
       (4) current methods for valuing ecological resources and 
     assessing intergenerational effects of sources of pollution 
     need further development before integrated rankings of 
     sources of pollution based on the factors referred to in 
     paragraph (3) can be used with high levels of confidence;
       (5) methods to assess and describe the risks of adverse 
     human health effects, other than cancer, need further 
     development before integrated rankings of sources of 
     pollution based on the risk to human health can be used with 
     high levels of confidence;
       (6) periodic reports by the Administrator on the costs and 
     benefits of regulations promulgated under Federal 
     environmental laws, and other Federal actions with impacts on 
     human health, the environment, or public welfare, will 
     provide Congress and the general public with a better 
     understanding of--
       (A) national environmental priorities; and
       (B) expenditures being made to achieve reductions in risk 
     to human health, the environment, and public welfare; and
       (7) periodic reports by the Administrator on the costs and 
     benefits of environmental regulations will also--
       (A) provide Congress and the general public with a better 
     understanding of the strengths, weaknesses, and uncertainties 
     of cost-benefit analysis and risk assessment and the research 
     needed to reduce major uncertainties; and
       (B) assist Congress and the general public in evaluating 
     environmental protection regulations and programs, and other 
     Federal actions with impacts on human health, the 
     environment, or public welfare, to determine the extent to 
     which the regulations, programs, and actions adequately and 
     fairly protect affected segments of society.
       (c) Report on Environmental Priorities, Costs, and 
     Benefits.--
       (1) Ranking.--
       (A) In general.--The Administrator shall identify and, 
     taking into account available data, to the extent 
     practicable, rank sources of pollution with respect to the 
     relative degree of risk of adverse effects on human health, 
     the environment, and public welfare.
       (B) Method of Ranking.--In carrying out the rankings under 
     subparagraph (A), the Administrator shall--
       (i) rank the sources of pollution considering the extent 
     and duration of the risk; and
       (ii) take into account broad societal values, including the 
     role of natural resources in sustaining economic activity 
     into the future.
       (2) Evaluation of regulatory and other costs.--In addition 
     to carrying out the rankings under paragraph (1), the 
     Administrator shall evaluate--
       (A) the private and public costs associated with each 
     source of pollution and the costs and benefits of complying 
     with regulations designed to protect against risks associated 
     with the sources of pollution; and
       (B) the private and public costs and benefits associated 
     with other Federal actions with impacts on human health, the 
     environment, or public welfare, including direct development 
     projects, grant and loan programs to support infrastructure 
     construction and repair, and permits, licenses, and leases to 
     use natural resources or to release pollution to the 
     environment, and other similar actions.
       (3) Risk reduction opportunities.--In assessing risks, 
     costs, and benefits as provided in paragraphs (1) and (2), 
     the Administrator shall also identify reasonable 
     opportunities to achieve significant risk reduction through 
     modifications in environmental regulations and programs and 
     other Federal actions with impacts on human health, the 
     environment, or public welfare.
       (4) Uncertainties.--In evaluating the risks referred to in 
     paragraphs (1) and (2), the Administrator shall--
       (A) identify the major uncertainties associated with the 
     risks;
       (B) explain the meaning of the uncertainties in terms of 
     interpreting the ranking and evaluation; and
       (C) determine--
       (i) the type and nature of research that would likely 
     reduce the uncertainties; and
       (ii) the cost of conducting the research.
       (5) Consideration of benefits.--In carrying out this 
     section, the Administrator shall consider and, to the extent 
     practicable, estimate the monetary value, and such other 
     values as the Administrator determines to be appropriate, of 
     the benefits associated with reducing risk to human health 
     and the environment, including--
       (A) avoiding premature mortality;
       (B) avoiding cancer and noncancer diseases that reduce the 
     quality of life;
       (C) preserving biological diversity and the sustainability 
     of ecological resources;
       (D) maintaining an aesthetically pleasing environment;
       (E) valuing services performed by ecosystems (such as flood 
     mitigation, provision of food or material, or regulating the 
     chemistry of the air or water) that, if lost or degraded, 
     would have to be replaced by technology;
       (F) avoiding other risks identified by the Administrator; 
     and
       (G) considering the benefits even if it is not possible to 
     estimate the monetary value of the benefits in exact terms.
       (6) Reports.--
       (A) Preliminary report.--Not later than 1 year after the 
     date of enactment of this Act, the Administrator shall report 
     to Congress on the sources of pollution and other Federal 
     actions that the Administrator will address, 
     [[Page S375]] and the approaches and methodology the 
     Administrator will use, in carrying out the rankings and 
     evaluations under this section. The report shall also include 
     an evaluation by the Administrator of the need for the 
     development of methodologies to carry out the ranking.
       (B) Periodic report.--
       (i) In general.--On completion of the ranking and 
     evaluations conducted by the Administrator under this 
     section, but not later than 3 years after the date of 
     enactment of this Act, and every 3 years thereafter, the 
     Administrator shall report the findings of the rankings and 
     evaluations to Congress and make the report available to the 
     general public.
       (ii) Evaluation of risks.--Each periodic report prepared 
     pursuant to this subparagraph shall, to the extent 
     practicable, evaluate risk management decisions under Federal 
     environmental laws, including title XIV of the Public Health 
     Service Act (commonly known as the ``Safe Drinking Water 
     Act'') (42 U.S.C. 300f et seq.), that present inherent and 
     unavoidable choices between competing risks, including risks 
     of controlling microbial versus disinfection contaminants in 
     drinking water. Each periodic report shall address the policy 
     of the Administrator concerning the most appropriate methods 
     of weighing and analyzing the risks, and shall incorporate 
     information concerning--
       (I) the severity and certainty of any adverse effect on 
     human health, the environment, or public welfare;
       (II) whether the effect is immediate or delayed;
       (III) whether the burden associated with the adverse effect 
     is borne disproportionately by a segment of the general 
     population or spread evenly across the general population; 
     and
       (IV) whether a threatened adverse effect can be eliminated 
     or remedied by the use of an alternative technology or a 
     protection mechanism.
       (d) Implementation.--In carrying out this section, the 
     Administrator shall--
       (1) consult with the appropriate officials of other Federal 
     agencies and State and local governments, members of the 
     academic community, representatives of regulated businesses 
     and industry, representatives of citizen groups, and other 
     knowledgeable individuals to develop, evaluate, and interpret 
     scientific and economic information;
       (2) make available to the general public the information on 
     which rankings and evaluations under this section are based; 
     and
       (3) establish methods for determining costs and benefits of 
     environmental regulations and other Federal actions, 
     including the valuation of natural resources and 
     intergenerational costs and benefits, by rule after notice 
     and opportunity for public comment.
       (e) Review by the Science Advisory Board.--Before the 
     Administrator submits a report prepared under this section to 
     Congress, the Science Advisory Board, established by section 
     8 of the Environmental Research, Development, and 
     Demonstration Act of 1978 (42 U.S.C. 4365), shall conduct a 
     technical review of the report in a public session.
                                 ______

      By Mr. MOYNIHAN:
  S. 125. A bill to authorize the minting of coins to commemorate the 
50th anniversary of the founding of the United Nations in New York 
City, New York; to the Committee on Banking, Housing, and Urban 
Affairs.


   THE UNITED NATIONS 50th ANNIVERSARY COMMEMORATIVE COIN ACT OF 1995

  Mr. MOYNIHAN. Mr. President, I rise to introduce a bill to authorize 
the minting of gold and silver coins commemorating the 50th anniversary 
of the United Nations. It was October 23, 1945, that the United Nations 
Charter went into effect, as a majority of the 50 nations that had met 
at the San Francisco Conference earlier that year finally ratified the 
charter. the 51-member General Assembly first met the following January 
10 in London.
  The ratification of the charter was a mementous occasion, a milestone 
in international relations. The charter begins, ``We the Peoples of the 
United Nations.'' The reference is clearly to our Constitution and the 
still-revolutionary idea that a people is defined by belief, rather 
than blood. The charter provides authority to organize world trade, 
finance, and democratization. Under it the use of force assumes a 
collective aspect that seeks to deter aggression.
  Measured against the lofty ambitions of its drafters, the charter has 
in reality fallen short too often, but measured against the bloody and 
lawless conduct of sovereigns over the millennia its accomplishments 
are clear. The charter is recognized today as the cornerstone of 
international law. If it cannot solve every problem, when there is 
substantial agreement among the Security Council it does provide a 
framework for the legal use of force against aggressors, as was the 
recent case with Iraq.
  In observance of the 50th anniversary, I propose that Congress 
authorize the design and minting of gold and silver commemorative 
coins. No more than 100,000 gold coins would be minted, and no more 
than 500,000 $1 silver coins. This is a modest amount by current 
standards for commemorative coins, enough to satisfy numismatists and 
those around the world who support the United Nations and its ideals 
and would like to join in its commemoration. The number of coins is not 
so great as to overwhelm the market for them.
  The surcharges on these coins will benefit the United Nations 
Association of the United States, whose educational programs such as 
the Model United Nations for both high school and college students are 
most successful. The U.N. Association is a worthy beneficiary.
  Mr. President, the 50th anniversary of the United Nations deserves 
our observance. I ask my colleagues for their support, and I ask that 
the text of the bill be printed following my remarks.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 125

       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 ``United Nations 50th 
     Anniversary Commemorative Coin Act of 1995''.

     SEC. 2. COIN SPECIFICATIONS.

       (a) Denominations.--The Secretary of the Treasury 
     (hereafter in this Act referred to as the ``Secretary'') 
     shall mint and issue the following coins:
       (1) $5 gold coins.--Not more than 100,000 $5 coins, which 
     shall--
       (A) weigh 8.359 grams;
       (B) have a diameter of 0.850 inches; and
       (C) contain 90 percent gold and 10 percent alloy.
       (2) $1 silver coins.--Not more than 500,000 $1 coins, which 
     shall--
       (A) weigh 26.73 grams;
       (B) have a diameter of 1.500 inches; and
       (C) contain 90 percent silver and 10 percent copper.
       (b) Legal Tender.--The coins minted under this Act shall be 
     legal tender, as provided in section 5103 of title 31, United 
     States Code.
       (c) Numismatic Items.--For purposes of section 5134 of 
     title 31, United States Code, all coins minted under this Act 
     shall be considered to be numismatic items.

     SEC. 3. SOURCES OF BULLION.

       (a) Gold.--The Secretary shall obtain gold for minting 
     coins under this Act pursuant to the authority of the 
     Secretary under other provisions of law.
       (b) Silver.--The Secretary shall obtain silver for minting 
     coins under this Act only from stockpiles established under 
     the Strategic and Critical Materials Stock Piling Act.

     SEC. 4. DESIGN OF COINS.

       (a) Design Requirements.--
       (1) In general.--The design of the coins minted under this 
     Act shall--
       (A) be emblematic of the United Nations and the ideals for 
     which it stands; and
       (B) include the 3 opening words of the United Nations 
     Charter--``We the peoples''.
       (2) Designation and inscriptions.--On each coin minted 
     under this Act there shall be--
       (A) a designation of the value of the coin;
       (B) an inscription of the year; and
       (C) inscriptions of the words ``Liberty'', ``In God We 
     Trust'', ``United States of America'', and ``E Pluribus 
     Unum''.
       (b) Selection.--The design for the coins minted under this 
     Act shall be--
       (1) selected by the Secretary after consultation with the 
     United Nations Association of the United States of America 
     and the Commission of Fine Arts; and
       (2) reviewed by the Citizens Commemorative Coin Advisory 
     Committee.

     SEC. 5. ISSUANCE OF COINS.

       (a) Quality and Mint Facility.--The coins authorized under 
     this Act may be issued in uncirculated and proof qualities 
     and shall be struck at the United States Bullion Depository 
     at West Point.
       (b) Period for Issuance.--The Secretary may issue coins 
     minted under this Act only during the period beginning on 
     June 26, 1995, and ending on December 31, 2002.

     SEC. 6. SALE OF COINS.

       (a) Sale Price.--The coins issued under this Act shall be 
     sold by the Secretary at a price equal to the sum of--
       (1) the face value of the coins;
       (2) the surcharge provided in subsection (d) with respect 
     to such coins; and
       (3) the cost of designing and issuing the coins (including 
     labor, materials, dies, use of machinery, overhead expenses, 
     marketing, and shipping).
       (b) Bulk Sales.--The Secretary shall make bulk sales of the 
     coins issued under this Act at a reasonable discount.
     [[Page S376]]   (c) Prepaid Orders.--
       (1) In general.--The Secretary shall accept prepaid orders 
     for the coins minted under this Act before the issuance of 
     such coins.
       (2) Discount.--Sale prices with respect to prepaid orders 
     under paragraph (1) shall be at a reasonable discount.
       (d) Surcharges.--All sales shall include a surcharge of--
       (1) $25 per coin for the $5 coin; and
       (2) $5 per coin for the $1 coin.

     SEC. 7. GENERAL WAIVER OF PROCUREMENT REGULATIONS.

       (a) In General.--Except as provided in subsection (b), no 
     provision of law governing procurement or public contracts 
     shall be applicable to the procurement of goods and services 
     necessary for carrying out the provisions of this Act.
       (b) Equal Employment Opportunity.--Subsection (a) shall not 
     relieve any person entering into a contract under the 
     authority of this Act from complying with any law relating to 
     equal employment opportunity.

     SEC. 8. DISTRIBUTION OF SURCHARGES.

       (a) In General.--All surcharges received by the Secretary 
     from the sale of coins issued under this Act shall be 
     promptly paid by the Secretary to the United Nations 
     Association of the United States of America for the purpose 
     of assisting with educational activities, such as high school 
     and college Model United Nations programs and other 
     grassroots activities, that highlight the United Nations and 
     the United States' role in that world body.
       (b) Audits.--The Comptroller General of the United States 
     shall have the right to examine such books, records, 
     documents, and other data of United Nations Association of 
     the United States of America as may be related to the 
     expenditures of amounts paid under subsection (a).

     SEC. 9. FINANCIAL ASSURANCES.

       (a) No Net Cost to the Government.--The Secretary shall 
     take such actions as may be necessary to ensure that minting 
     and issuing coins under this Act will not result in any net 
     cost to the United States Government.
       (b) Payment for Coins.--A coin shall not be issued under 
     this Act unless the Secretary has received--
       (1) full payment for the coin;
       (2) security satisfactory to the Secretary to indemnify the 
     United States for full payment; or
       (3) a guarantee of full payment satisfactory to the 
     Secretary from a depository institution whose deposits are 
     insured by the Federal Deposit Insurance Corporation or the 
     National Credit Union Administration Board.
                                 ______

      By Mr. MOYNIHAN:
  S. 126. A bill to unify the formulation and execution of United 
States diplomacy; to the Select Committee on Intelligence.


         the central intelligence agency abolition act of 1995

  Mr. MOYNIHAN. Mr. President, it is no secret that a serious re-
examination of our intelligence needs is in order. Since 1991, when I 
introduced the End of the Cold War Act, I have endeavored to bring the 
shortcomings of the intelligence community to public light. Not to 
denigrate our intelligence efforts, but to improve them. Despite 
resistance to change, much of the End of the Cold War Act has been 
implemented. We have eliminated ``Lookout Lists,'' which excluded 
persons who merely expressed ``unacceptable'' opinions from entry into 
the United States. One aspect of the bill yet to be implemented brings 
me to the floor today: the transfer of the functions of the Central 
Intelligence Agency to the Department of State.
  The scrutiny that has now visited the intelligence community in the 
aftermath of the exposure of Aldrich Ames, the man whose treason caused 
the deaths of at least 10 American agents, increases the likelihood 
that some long needed reassessments will be made. I do not relish these 
circumstances, for to a great extent the Ames case merely distracts 
from some of the most fundamental defects of the CIA. While the Ames 
affair brings attention to the Directorate of Operations, it takes 
scrutiny away from the Directorate of Intelligence.
  What of operations? Speaking before the Boston Bar Association in 
1993, John le Carre, the man who provided us with a window into the 
world of a spy, questioned the contributions of spies to the winning of 
the cold war. In his remarks he stated:

       You see, it wasn't the spies who won the cold war. I don't 
     believe that in the end the spies mattered very much at all. 
     Their capsuled isolation and their remote theorizing actually 
     prevented them from seeing, as late as 1987 or 8, what 
     anybody in the streets could have told them:

       ``It's over. We've won. The Iron Curtain is crashing down! 
     The monolith we fought is a bag of bones! Come out of your 
     trenches and smile!''

       Even the victory, for them, was a cunning Bolshevik Trick.
       And anyway, what had they got to smile about? It was a 
     victory achieved by openness, not secrecy. By frankness, not 
     intrigue.
       The Soviet Empire did not fall apart because the spooks had 
     bugged the men's room in the Kremlin or put broken glass in 
     Mrs. Brezhnev's bath, but because running a huge closed 
     repressive society in the 1980s had become--economically, 
     socially and militarily, and technologically--impossible.

  The collapse of the Soviet Union was therefore the very denial of 
secrecy. Mr. le Carre is not alone. Recently William Pfaff in an 
article in the International Herald Tribune posed the question, ``what 
positive things do [spies] accomplish?'' He reached much the same 
conclusion as le Carre and added that ``the useful information today is 
that supplied by area specialists, historians and ethnologists, and 
through conventional diplomatic observation and journalism.''
  If covert operations failed to have an impact as suggested by le 
Carre and Pfaff, what of our intelligence analysis? How did that serve 
us in the cold war? I believe I have fully laid out to the Senate on 
previous occasions my assessment and those of numerous respected 
individuals on the performance of the CIA in this regard. The defining 
failure of the CIA was their inability to predict the collapse of the 
Soviet Union.
  In 1975, along with my daughter Maura, I visited China as a guest of 
George Bush, who was then Chief of our U.S. Liaison Office of Peking. 
By this time, I was persuaded the Soviet Union would break up along 
ethnic lines. In a ``Letter From Peking'' dated January 26, 1975, which 
I wrote and submitted to The New Yorker, the closing passage reads:

       While it is agreed that few Marxist-Leninist predictions 
     have come true in the twentieth century, it is perhaps not 
     sufficiently noticed that certain predictions about Marxist-
     Leninist regimes have proved durable enough. Lincoln Steffens 
     returned from Moscow in the early years, pronouncing that he 
     had seen the future, and it worked. Well, it was one future, 
     and it has worked for a half century, and may have 
     considerable time left before ethnicity breaks it up. Red 
     China works, too, and is likely to last even longer.

  I believe this is the first time in my writing that I stated the 
belief then forming that the Soviet Union would not conquer the world, 
but rather, would one day break up along
 ethnic lines. A no longer brief acquaintance with Central Asia and its 
history had about convinced me. I thought then, at mid-decade, that 
this might require considerable time. By the end of the decade, I had 
decided it would be upon us sooner. In 1979, in an issue of Newsweek 
devoted to predictions of what would happen in the eighties, I 
submitted it was likely that the Soviet Union would break up.

  Former Director of Central Intelligence, Adm. Stansfield Turner, 
writing in Foreign Affairs in 1991, confirms that such a possibility 
had not penetrated the intelligence community when he stated.

       Today we hear some revisionist rumblings that the CIA did 
     in fact see the Soviet collapse emerging after all. If some 
     individual CIA analyst were more prescient than the corporate 
     view, their ideas were filtered out in the bureaucratic 
     process; and it is the corporate view that counts because 
     that is what reaches the president and his advisers. On this 
     one, the corporate view missed by a mile.

  And there were others. Several months ago, the Deputy Director for 
Intelligence [DDI] at the Central Intelligence Agency, Douglas 
MacEachin, released a report entitled ``The Tradecraft of Analysis: 
Challenge and Change in the CIA.'' In this report he outlines what he 
regards as some of the major known failures of the intelligence 
community. He attributes these failures to analysis which rested on 
faulty assumptions--he called these assumptions ``linchpins.'' In the 
report he states:

       A review of the record of famous wrong forecasts nearly 
     always reveals at least one ``linchpin'' that did not hold 
     up: the Soviets will not invade Czechoslovakia because they 
     will not want to pay the political costs, especially after 
     having signed the Rejkavik Declaration the previous year; the 
     Soviets will not invade Afghanistan because they do not want 
     to sink SALT-II which at that moment is being debated by the 
     U.S. Senate; Saddam Hussein needs about two years to 
     refurbish his military forces after the debilitating war with 
     Iran and, therefore, will not, despite evidence of motives 
     for doing so, invade Kuwait in the foreseeable future.

  He concludes, ``In each case, the sin was less in the fact that the 
linchpins 
[[Page S377]] did not hold than in the failure of the intelligence 
products to highlight the extent to which they were assumptions.'' 
Surely intelligence products could benefit from highlighting 
assumptions. However, a more rigorous scrutiny provided by greater 
openness would give an opportunity for facts, assumptions, and 
conclusions to be challenged.
  Scientists have long understood that secrecy keeps mistakes secret. 
In the early 1960's, Jack Ruina, an MIT professor who had been head of 
the Defense Advance Research Projects Agency at the Department of 
Defense during the Kennedy administration, told me after visiting the 
Soviet Union that it was plain it just wasn't working. In particular he 
noticed something which someone without scientific training might not 
have. The Soviets did not know who their best people were. Promising 
young scientists in Russia were locked in a room and had no knowledge 
about the activities of their colleagues around the country. As anyone 
who has visited the fine research hospitals of New York can tell you, 
the free flow of ideas is vital to advancement. Openness of information 
is essential for great science.
  This is no secret. Indeed, in 1970 a Task Force organized by the 
Defense Science Board and headed by Dr. Frederick Seitz concluded that 
``more might be gained that lost if our nation were to adopt--
unilaterally, if necessary--a policy of complete openness in all areas 
of information.''
  Yet the secrecy system is still in place. The information Security 
Oversight Office keeps a tally of the number of secrets classified each 
year. They reported that in 1993 the United States created 6,408,688 
secrets. Absurd. While each agency has different procedures and 
criteria for classifying documents, all seem to operate under the 
assumption that classification is preferable to disclosure.
  Secrecy is a disease. It causes hardening of the arteries of the 
mind. It hinders true scholarship and hides mistakes. William Pfaff has 
suggested that we ought not rely on spies, but rather on journalists, 
historians, ethnologists; those who do not operate under the cloak of 
secrecy but publish their work for all to read and comment upon.
  After World War II, it was originally intended that intelligence 
would be coordinated by the Secretary of State. The maneuvering of some 
of the more powerful Assistant Secretaries in the State Department at 
the time prevented that from being implemented and the independent 
Central Intelligence Agency was soon formed. Dean Acheson, who was 
present at the creation, doubted the wisdom of such a move. ``I had the 
gravest forebodings about this organization and warned the President 
that as set up neither he, the National Security Council, nor anyone 
else would be in a position to know what it was doing or to control 
it.'' The State Department must function as the primary agency in 
formulating and conducting foreign policy. Any other arrangement 
invites confusion.
  In the last 4 years, this proposal has generated considerable 
debate--some positive, some negative. Reform of United States foreign 
policy institutions will continue to occupy the attentions of Congress, 
and if for nothing else, this proposal contributes to the debate. So I 
am today introducing the Abolition of the Central Intelligence Agency 
Act.
                                 ______

      By Mr. MOYNIHAN:
  S. 127. A bill to improve the administration of the Women's Rights 
National Historical Park in the State of New York, and for other 
purposes; to the Committee on Energy and Natural Resources.


                 THE NATIONAL HISTORIC PARK ACT OF 1995

  Mr. MOYNIHAN. Mr. President, I rise to introduce a bill that will add 
several important properties to the Women's Rights National Historic 
Park in Seneca Falls, NY. In 1980 I introduced legislation to 
commemorate an idea, that of equal rights for women. It is commemorated 
in Seneca Falls because that is where in 1848 the Declaration of 
Sentiments was signed, stating that ``all men and women are created 
equal'' and that women should have equal political rights with men. 
From this beginning sprang the 19th amendment and all that other 
advances for women this century and last.
  With the historic park authorized in 1980, we began the planning, 
held a design competition for the visitors center, and paid for the 
construction. The park is now in operation and a tremendous success. 
Visitorship increased 50 percent in fiscal year 1993 to 30,000. 
However, the park is not complete. As can be expected when starting 
such a venture from zero, not all the important properties could be 
acquired at the outset. Several remain in private hands or under the 
control of the Trust for Public Land, and this bill authorizes their 
addition to the park.
  These properties include the last remaining parcel of the original 
Elizabeth Cady Stanton property, necessary so that the Stanton House 
can be restored to its original condition, and the Young House in 
Waterloo, important for safety, resource preservation, and preserving 
the historic scene at the M'Clintock House. The other two are the 
Baldwin property, which would provide a visitor contact facility, 
restrooms, and boat docking facilities, and a maintenance facility now 
being rented by the Park Service.
  These additions to Women's Rights National Historic Park will add 
tremendously to the enjoyment and value of a visit. The National Park 
Service supports them, and in fact I understand that this legislation 
is the top priority for the North Atlantic Region. We must pass it 
promptly, for time is not a luxury; the Nies property is in the early 
stages of foreclosure. I urge my colleagues to support this bill, and 
to come to the Women's Rights Park themselves. It is a trip well worth 
making.
  I further ask 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. 127

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

     SECTION 1. COMPOSITION.

       The second sentence of section 1601(c) of Public Law 96-607 
     (16 U.S.C. 410ll) is amended--
       (1) by striking ``initially'';
       (2) by striking paragraph (7);
       (3) by redesignating paragraphs (8) and (9) as paragraphs 
     (7) and (8), respectively;
       (4) in paragraph (7) (as redesignated), by striking ``and'' 
     at the end;
       (5) in paragraph (8) (as redesignated), by striking the 
     period at the end and inserting a semicolon; and
       (6) by adding at the end the following:
       ``(9) not to exceed 1 acre, plus improvements, as 
     determined by the Secretary, in Seneca Falls for development 
     of a maintenance facility;
       ``(10) dwelling, 1 Seneca Street, Seneca Falls;
       ``(11) dwelling, 10 Seneca Street, Seneca Falls;
       ``(12) parcels adjacent to Wesleyan Chapel Block, including 
     Clinton Street, Fall Street, and Mynderse Street, Seneca 
     Falls; and
       ``(13) dwelling, 12 East Williams Street, Waterloo.''.

     SEC. 2. MISCELLANEOUS AMENDMENTS.

       Section 1601 of Public Law 96-607 (16 U.S.C. 410ll) is 
     amended--
       (1) in subsection (h)(5), by striking ``ten years'' and 
     inserting ``25 years''; and
       (2) in subsection (i)--
       (A) by inserting ``(1)'' after ``(i)'';
       (B) by striking ``$700,000'' and inserting ``$1,500,000'';
       (C) by striking ``$500,000'' and inserting ``$15,000,000''; 
     and
       (D) by adding at the end the following:
       ``(2) In addition to the sums appropriated before the date 
     of enactment of this paragraph for land acquisition and 
     development to carry out this section, there are authorized 
     to be appropriated for fiscal years beginning after September 
     30, 1994, $2,000,000.''.
                                 ______

      By Mr. MOYNIHAN:
  S. 128. A bill to establish the Thomas Cole National Historic Site in 
the State of New York, and for other purposes; to the Committee on 
Energy and Natural Resources.


           THE THOMAS COLE NATIONAL HISTORIC SITE ACT OF 1995

  Mr. MOYNIHAN. Mr. President, I rise to introduce a bill which would 
place the home and studio of Thomas Cole under the care of the National 
Park Service as a National Historic Site. Thomas Cole founded the 
American artistic tradition known as the Hudson River School. He 
painted landscapes of the American wilderness as it never had been 
depicted, untamed and majestic, the way Americans saw it in the 1830's 
and 1840's. His students and followers included Frederick Church, 
Alfred Bierstadt, Thomas Moran, and John Frederick Kennesett.
  No description of Cole's works would do them justice, but let me say 
that 
[[Page S378]] their moody, dramatic style and subject matter were in 
sharp contrast to the pastoral European landscapes that Americans had 
previously admired. The new country was just settled enough that some 
people had time and resources to devote to collecting art. Cole's new 
style coincided with this growing interest, to the benefit of both.
  Cole had begun his painting career in Manhattan, but one day took a 
steamboat up the Hudson for inspiration. It worked. The landscapes he 
saw set him on the artistic course that became his life's work. He 
eventually moved to a house up the river in Catskill, where he in turn 
boarded, owned, married, and raised his family. That house, known as 
Cedar Grove, remained in the Cole family until 1979, when it was put up 
for sale.
  Three art collectors saved Cedar Grove from developers, and now the 
Thomas Cole Foundation is offering to donate the house to the Park 
Service. This would be only the second site in the Park Service 
dedicated to interpreting the life and work of an American painter.
  Olana, Church's home, sits immediately across the Hudson, so we have 
the opportunity to provide visitors with two nearby destinations that 
show the inspiration for two of America's foremost nineteenth century 
painters. Visitors could walk, hike, or drive to the actual spots where 
masterpieces were painted and see the landscape much as it was then.
  Mr. President, the home of Thomas Cole is being offered as a 
donation. I believe we owe it to him, and to the many people who admire 
the Hudson River School and explore its origins, to accept this offer 
and designate it a National Historic Site.
  I regret that none of Thomas Cole's work hangs in the Capitol, 
although two works by Bierstadt can be found in the stairwell outside 
the Speaker's Lobby. Perhaps Cole's greatest work is the four-part 
Voyage of Life, an allegorical series that depicts man in the four 
stages of life. It can be found in the National Gallery, along with two 
other Cole paintings. Another work of Cole's that we would be advised 
to remember is The Course of Empire, which depicts the rise of a great 
civilization from the wilderness, and its return.
  Last year the first major Cole exhibition in decades was held at the 
National Museum of American Art. The exhibition was all the evidence 
needed of Cole's importance and the merit of adding his home to the 
list of National Historic Sites. I should add that this must happen 
soon. The house needs work, and will not endure many more winters in 
its present state.
  I ask that my colleagues support this legislation, and 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. 128

       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 ``Thomas Cole National 
     Historic Site Act of 1995''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) the Hudson River school of landscape painting was 
     inspired by Thomas Cole and was characterized by a group of 
     19th century landscape artists who recorded and celebrated 
     the landscape and wilderness of America, particularly in the 
     Hudson River Valley region in the State of New York;
       (2) Thomas Cole has been recognized as America's most 
     prominent landscape and allegorical painter in the mid-19th 
     century;
       (3) the Thomas Cole House in Greene County, New York is 
     listed on the National Register of Historic Places and has 
     been designated as a National Historic Landmark;
       (4) within a 15 mile radius of the Thomas Cole House, an 
     area that forms a key part of the rich cultural and natural 
     heritage of the Hudson River Valley region, significant 
     landscapes and scenes painted by Thomas Cole and other Hudson 
     River artists survive intact;
       (5) the State of New York has established the Hudson River 
     Valley Greenway to promote the preservation, public use, and 
     enjoyment of the natural and cultural resources of the Hudson 
     River Valley region; and
       (6) establishment of the Thomas Cole National Historic Site 
     will provide opportunities for the illustration and 
     interpretation of cultural themes of the heritage of the 
     United States and unique opportunities for education, public 
     use, and enjoyment.
       (b) Purposes.--The purposes of this Act are--
       (1) to preserve and interpret the home and studio of Thomas 
     Cole for the benefit, inspiration, and education of the 
     people of the United States;
       (2) to help maintain the integrity of the setting in the 
     Hudson River Valley region that inspired artistic expression;
       (3) to coordinate the interpretive, preservation, and 
     recreational efforts of Federal, State, and other entities in 
     the Hudson Valley region in order to enhance opportunities 
     for education, public use, and enjoyment; and
       (4) to broaden understanding of the Hudson River Valley 
     region and its role in American history and culture.

     SEC. 3. DEFINITIONS.

       As used in this Act:
       (1) Historic site.--The term ``historic site'' means the 
     Thomas Cole National Historic Site established by section 4.
       (2) Hudson River artists.--The term ``Hudson River 
     artists'' means artists who belonged to the Hudson River 
     school of landscape painting.
       (3) Plan.--The term ``plan'' means the general management 
     plan developed pursuant to section 6(d).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.

     SEC. 4. ESTABLISHMENT OF THOMAS COLE NATIONAL HISTORIC SITE.

       (a) In General.--There is established, as a unit of the 
     National Park System, the Thomas Cole National Historic Site, 
     in the State of New York.
       (b) Description.--The historic site shall consist of the 
     home and studio of Thomas Cole, comprising approximately 3.4 
     acres, located at 218 Spring Street, in the village of 
     Catskill, New York, as generally depicted on the boundary map 
     numbered TCH/80002, and dated March 1992.

     SEC. 5. ACQUISITION OF PROPERTY.

       (a) Real Property.--The Secretary is authorized to acquire 
     lands, and interests in lands, within the boundaries of the 
     historic site by donation, purchase with donated or 
     appropriated funds, or exchange.
       (b) Personal Property.--The Secretary may also acquire by 
     the same methods as provided in subsection (a), personal 
     property associated with, and appropriate for, the 
     interpretation of the historic site, Provided, That the 
     Secretary may acquire works of art associated with Thomas 
     Cole and other Hudson River artists only by donation or 
     purchase with donated funds.

     SEC. 6. ADMINISTRATION OF SITE.

       (a) In General.--The Secretary shall administer the 
     historic site in accordance with this Act and all laws 
     generally applicable to units of the National Park System, 
     including the Act entitled ``An Act To establish a National 
     Park Service, and for other purposes'', approved August 25, 
     1916 (16 U.S.C. 1, 2-4), and the Act entitled ``An Act to 
     provide for the preservation of historic American sites, 
     buildings, objects, and antiquities of national significance, 
     and for other purposes'', approved August 21, 1935 (16 U.S.C. 
     461 et seq.).
       (b) Cooperative Agreements.--
       (1) In general.--To further the purposes of this Act, the 
     Secretary may consult with and enter into cooperative 
     agreements with the State of New York, the Thomas Cole 
     Foundation, and other public and private entities to 
     facilitate public understanding and enjoyment of the lives 
     and works of the Hudson River artists through the 
     development, presentation, and funding of art exhibits, 
     resident artist programs, and other appropriate activities 
     related to the preservation, interpretation, and use of the 
     historic site.
       (2) Library and research center.--The Secretary may enter 
     into a cooperative agreement with the Greene County 
     Historical Society to provide for the establishment of a 
     library and research center at the historic site.
       (c) Exhibits.--The Secretary may display, and accept for 
     the purposes of display, works of art associated with Thomas 
     Cole and other Hudson River artists, as may be necessary for 
     the interpretation of the historic site.
       (d) General Management Plan.--
       (1) In general.--Not later than 2 complete fiscal years 
     after the date of enactment of this Act, the Secretary shall 
     develop a general management plan for the historic site.
       (2) Submission to congress.--On the completion of the plan, 
     the plan shall be submitted to the Committee on Energy and 
     Natural Resources of the Senate and the Committee on Public 
     Lands and Resources of the House of Representatives.
       (3) Regional wayside exhibits.--The plan shall include 
     recommendations for regional wayside exhibits, to be carried 
     out through cooperative agreements with the State of New York 
     and other public and private entities.
       (4) Preparation.--The plan shall be prepared in accordance 
     with section 12(b) of the Act entitled ``An Act to improve 
     the administration of the national park system by the 
     Secretary of the Interior, and to clarify the authorities 
     applicable to the system, and for other purposes'', approved 
     August 18, 1970 (16 U.S.C. 1a-1 through 1a-7).

     SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out this Act.

  By Mr. McCAIN (for himself and Mr. Feingold):
  S. 129. A bill to amend section 207 of title 18, United States Code, 
to tighten 
[[Page S379]] the restrictions on former executive and legislative 
branch officials and employees; to the Committee on Governmental 
Affairs.


              THE ETHICS IN GOVERNMENT REFORM ACT OF 1995

  Mr. McCAIN. 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. 129

       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 ``Ethics in Government Reform 
     Act of 1995''.

     SEC. 2. SPECIAL RULES FOR HIGHLY PAID EXECUTIVE APPOINTEES 
                   AND MEMBERS OF CONGRESS AND HIGHLY PAID 
                   CONGRESSIONAL EMPLOYEES.

       (a) In General.--
       (1) Appearances before agency.--(A) Section 207(d) of title 
     18, United States Code, is amended by adding at the end 
     thereof the following:
       ``(3) Restrictions on political appointees.--(A) In 
     addition to the restrictions set forth in subsections (a), 
     (b), and (c) and paragraph (1) of this subsection, any person 
     who--

       ``(i) serves in the position of Vice President of the 
     United States; or
       ``(ii) is a full-time, noncareer Presidential, Vice 
     Presidential, or agency head appointee in an executive agency 
     whose rate of basic pay is not less than $80,000 (adjusted 
     for any COLA after the date of enactment of the Ethics in 
     Government Reform Act of 1995) and is not an appointee of the 
     senior foreign service or solely an appointee as a uniformed 
     service commissioned officer,

     and who, after the termination of his or her service or 
     employment as such officer or employee, knowingly makes, with 
     the intent to influence, any communication to or appearance 
     before any officer or employee of a department or agency in 
     which such person served within 5 years before such 
     termination, during a period beginning on the termination of 
     service or employment as such officer or employee and ending 
     5 years after the termination of service in the department or 
     agency, on behalf of any other person (except the United 
     States), in connection with any matter on which such person 
     seeks official action by any officer or employee of such 
     department or agency, shall be punished as provided in 
     section 216 of this title.
       ``(B) In addition to the restrictions set forth in 
     subsections (a), (b), and (c) and paragraph (1) of this 
     subsection, any person who is listed in Schedule I under 
     section 5312 of title 5, United States Code, or is employed 
     in a position in the Executive Office of the President and is 
     a full-time, noncareer Presidential, Vice Presidential, or 
     agency head appointee in an executive agency whose rate of 
     basic pay is not less than $80,000 (adjusted for any COLA 
     after the date of enactment of the Ethics in Government 
     Reform Act of 1995) and is not an appointee of the senior 
     foreign service or solely an appointee as a uniformed service 
     commissioned officer, and who--

       ``(i) after the termination of his or her service or 
     employment as such employee, knowingly makes, with the intent 
     to influence, any communication to or appearance before any 
     officer or employee of a department or agency with respect to 
     which the person participated personally and substantially 
     within 5 years before such termination, during a period 
     beginning on the termination of service or employment as such 
     employee and ending 5 years after the termination of 
     substantial personal responsibility with respect to the 
     department or agency, on behalf of any other person (except 
     the United States), in connection with any matter on which 
     such person seeks official action by any officer or employee 
     of such department or agency; or
       ``(ii) within 2 years after the termination of his or her 
     service or employment as such employee, knowingly makes, with 
     the intent to influence, any communication to or appearance 
     before any person described in paragraph (2)(B) on behalf of 
     any other person (except the United States), in connection 
     with any matter on which such person seeks official action by 
     the person described in paragraph (2)(B),

     shall be punished as provided in section 216 of this 
     title.''.
       (B) The first sentence of section 207(h)(1) of title 18, 
     United States Code, is amended by inserting after 
     ``subsection (c)'' the following: ``and subsection (d)(3)''.
       (2) Foreign agents.--Section 207(f) of title 18, United 
     States Code, is amended by--
       (A) redesignating paragraph (2) as paragraph (4);
       (B) adding after paragraph (1) the following:
       ``(2) Special restrictions.--Any person who--
       ``(A)(i) serves in the position of Vice President of the 
     United States;
       ``(ii) is a full-time, noncareer Presidential, Vice 
     Presidential, or agency head appointee in an executive agency 
     whose rate of basic pay is not less than $80,000 (adjusted 
     for any COLA after the date of enactment of the Ethics in 
     Government Reform Act of 1995) and is not an appointee of the 
     senior foreign service or solely an appointee as a uniformed 
     service commissioned officer;
       ``(iii) is employed in a position in the Executive Office 
     of the President and is a full-time, noncareer Presidential, 
     Vice Presidential, or agency head appointee in an executive 
     agency whose rate of basic pay is not less than $80,000 
     (adjusted for any COLA after the date of enactment of the 
     Ethics in Government Reform Act of 1995) and is not an 
     appointee of the senior foreign service or solely an 
     appointee as a uniformed service commissioned officer; or
       ``(iv) is a Member of Congress or employed in a position by 
     the Congress at a rate of pay equal to or greater than 
     $80,000 (adjusted for any COLA after the date of enactment of 
     the Ethics in Government Reform Act of 1995); and
       ``(B) knowingly after such service or employment--
       ``(i) represents a foreign national (as defined in section 
     319(b) of the Federal Election Campaign Act of 1971 (2 U.S.C. 
     441e(b)) before any officer or employee of any department or 
     agency of the United States with the intent to influence a 
     decision of such officer or employee in carrying out his or 
     her official duties; or
       ``(ii) aids or advises a foreign national (as defined in 
     section 319(b) of the Federal Election Campaign Act of 1971) 
     with the intent to influence a decision of any officer or 
     employee of any department or agency of the United States, in 
     carrying out his or her official duties,

     shall be punished as provided in section 216 of this 
     title.''.
       ``(3) Gifts from a foreign government or foreign political 
     party.--Any person who--
       ``(A)(i) serves in the position of President or Vice 
     President of the United States;
       ``(ii) is a full-time, noncareer Presidential, Vice 
     Presidential, or agency head appointee in an executive agency 
     whose rate of basic pay is not less than $80,000 (adjusted 
     for any COLA after the date of enactment of the Ethics in 
     Government Reform Act of 1995) and is not an appointee of the 
     senior foreign service or solely an appointee as a uniformed 
     service commissioned officer;
       ``(iii) is employed in a full-time, noncareer position in 
     the Executive Office of the President whose rate of basic pay 
     is not less than $80,000 (adjusted for any COLA after the 
     date of enactment of the Ethics in Government Reform Act of 
     1995) and is not an appointee of the senior foreign service 
     or solely an appointee as a uniformed service commissioned 
     officer;
       ``(iv) is a Member of Congress; or
       ``(v) is employed in a position by the Congress at a rate 
     of pay equal to or greater than $80,000 (adjusted for any 
     COLA after the date of enactment of the Ethics in Government 
     Reform Act of 1995); and
       ``(B) after such service or employment terminates, receives 
     a gift from a foreign government or foreign political party;

     shall be punished as provided in section 216 of this title.
       ``(4) Definitions.--For purposes of this subsection--
       ``(A) the term `foreign national' means--
       ``(i) a government of a foreign country as defined in 
     section 1(e) of the Foreign Agents Registration Act of 1938, 
     as amended or a foreign political party as defined in section 
     1(f) of that Act;
       ``(ii) a person outside of the United States, unless such 
     person is an individual and a citizen of the United States, 
     or unless such person is not an individual and is organized 
     under or created by the laws of the United States or of any 
     state or other place subject to the jurisdiction of the 
     United States and has its principal place of business within 
     the United States;
       ``(iii) a partnership, association, corporation, 
     organization, or other combination of persons organized under 
     the laws of or having its principal place of business in a 
     foreign country; and
       ``(iv) a person any of whose activities are directly or 
     indirectly supervised, directed, controlled, financed, or 
     subsidized
      in whole or in major part by an entity described in clause 
     (i), (ii), or (iii); and
       ``(B) the term `gift'--
       ``(i) includes any gratuity, favor, discount, 
     entertainment, hospitality, loan, forbearance, or other item 
     having monetary value greater than $20; and
       ``(ii) does not include--
       ``(I) modest items of food and refreshments offered other 
     than as part of a meal;
       ``(II) greeting cards and items of little intrinsic value 
     which are intended solely for presentation;
       ``(III) loans from banks and other financial institutions 
     on terms generally available to the public;
       ``(IV) opportunities and benefits, including favorable 
     rates and commercial discounts, available to the public; or
       ``(V) travel, subsistence, and related expenses in 
     connection with the person's rendering of advice or aid to a 
     government of a foreign country or foreign political party, 
     if the Secretary of State certifies in advance that such 
     activity is in the best interests of the United States.''.
       (3) Trade negotiators.--Section 207(b)(1) of title 18, 
     United States Code, is amended by--
       (A) inserting ``(A)'' after ``In general.--''; and
       (B) adding at the end thereof the following:
       ``(B) For any person who--
       ``(i) is a full-time, noncareer Presidential, Vice 
     Presidential, or agency head appointee in an executive agency 
     whose rate of basic pay is not less than $80,000 (adjusted 
     for any 
     [[Page S380]] COLA after the date of enactment of the Ethics 
     in Government Reform Act of 1995) and is not an appointee of 
     the senior foreign service or solely an appointee as a 
     uniformed service commissioned officer;
       ``(ii) is employed in a position in the Executive Office of 
     the President, and is a full-time, noncareer Presidential, 
     Vice Presidential, or agency head appointee in an executive 
     agency whose rate of basic pay is not less than $80,000 
     (adjusted for any COLA after the date of enactment of the 
     Ethics in Government Reform Act of 1995) and is not an 
     appointee of the senior foreign service or solely an 
     appointee as a uniformed service commissioned officer; or
       ``(iii) is a Member of Congress or employed in a position 
     by the Congress at a rate of pay equal to or greater than 
     $80,000 (adjusted for any COLA after the date of enactment of 
     the Ethics in Government Reform Act of 1995).

     the restricted period after service referred to in 
     subparagraph (A) shall be permanent.''.
       (4) Congress.--Section 207(e) of title 18, United States 
     Code, is amended--
       (A) in paragraph (1)(A) by striking ``within 1 year'' and 
     inserting ``within 2 years'';
       (B) in paragraph (1) by adding at the end thereof the 
     following:
       ``(D) Any person who is a Member of Congress and who, 
     within 5 years after leaving the position, knowingly makes, 
     with intent to influence, any communication to or appearance 
     before any committee member or a staff member of any 
     committee over which the Member had jurisdiction, on behalf 
     of any other person (except the United States) in connection 
     with any matter on which such former Member seeks action by 
     the committee member or a staff member of the committee in 
     his or her official capacity, shall be punished as provided 
     in section 216 of this title.'';
       (C) by redesignating paragraphs (6) and (7) as paragraphs 
     (7) and (8), respectively; and
       (D) by inserting after paragraph (5) the following new 
     paragraph:
       ``(6) Highly paid staffers.--For any person described in 
     paragraph (2), (3), (4), or (5), employed in a position at a 
     rate of pay equal to or greater than $80,000 (adjusted for 
     any COLA after the date of enactment of the Ethics in 
     Government Reform Act of 1995)--
       ``(A) the restriction provided in paragraph (1)(A) shall 
     apply; and
       ``(B) the restricted period after termination in paragraph 
     (2), (3), (4), or (5), applicable to such person shall be 5 
     years.''.
       (b) Penalties.--
       (1) Future activities.--Section 216 of title 18, United 
     States Code, is amended by adding at the end thereof the 
     following:
       ``(d) In addition to the penalties provided in subsections 
     (a), (b), and (c), the punishment for violation of section 
     207 may include a prohibition on the person knowingly, with 
     the intent to influence, communicating to or appearing before 
     any employee of the executive or legislative branch, for a 
     period of not to exceed 5 years.''.
       (2) Use of profits.--Section 216(b) of title 18, United 
     States Code, is amended by inserting after the first sentence 
     the following: ``Any amount of compensation recovered 
     pursuant to the preceding sentence for a violation of section 
     207 shall be deposited in the general fund of the Treasury to 
     reduce the deficit.''
       (c) Exceptions.--Section 207(j) of title 18, United States 
     Code, is amended by adding at the end thereof the following:
       ``(7) Non-influential contracts.--Nothing in this section 
     shall prevent an individual from making requests for 
     appointments, requests for the status of Federal action, or 
     other similar ministerial contacts, if there is no attempt to 
     influence an officer or employee of the legislative or 
     executive branch.
       ``(8) Testimony to the Congress.--Nothing in this section 
     shall prevent an individual from testifying or submitting 
     testimony to any committee or instrumentality of the 
     Congress.
       ``(9) Comments.--Nothing in this section shall prevent an 
     individual from making communications in response to a notice 
     in the Federal Register, Commerce Business Daily, or other 
     similar publication soliciting communications form the public 
     and directed to the agency official specifically designated 
     in the notice to receive such communications.
       ``(10) Adjudication.--Nothing in this section shall prevent 
     an individual from making communications or appearances in 
     compliance with written agency procedures regarding an 
     adjudication conducted by the agency under section 554 of 
     title 5,
      United States Code or substantially similar provisions.
       ``(11) Comments for the record.--Nothing in this section 
     shall prevent an individual from submitting written comments 
     filed in a public docket and other communications that are 
     made on the record.''.

     SEC. 3. EFFECTIVE DATE.

       The restrictions contained in section 207 of title 18, 
     United States Code, as added by section 2 of this Act--
       (1) shall apply only to persons whose service as officers 
     or employees of the Government, or as Members of Congress 
     terminates on or after the date of the enactment of this Act; 
     and
       (2) in the case of officers, employees, and Members of 
     Congress described in section 207(b)(1)(B) of title 18, 
     United States Code (as added by section 2 of this Act), shall 
     apply only with respect to participation in trade 
     negotiations or treaty negotiations, and with respect to 
     access to information, occurring on or after such date of 
     enactment.

     SEC. 4. SEVERABILITY.

       If any provision of this Act, or the application thereof, 
     is held invalid, the validity of the remainder of this Act 
     and the application of such provision to other persons and 
     circumstances shall not be affected thereby.

  Mr. FEINGOLD. Mr. President, I am pleased to join with my colleague, 
Senator McCain, in introducing this legislation that will strengthen 
our current laws that restrict certain movements between public and 
private sector employment--the so-called revolving door. The Senator 
from Arizona has been a strong and consistent voice on efforts to 
reform our government and I know that his expertise on this issue in 
particular during the 103d Congress was critical to efforts to move 
forward in this area.
  The proposal that we are offering today is yet another attempt to 
improve the standing of Congress and the federal government with our 
constituents. We know, as reflected by the last two election cycles, 
that voters are fed up with a political system that seems to encourage 
personal gain and profit rather than what is in the best interests of 
the American people. The time has come for a bit of self-examination, 
and for us as representatives of the people to identify why the public 
has grown so disenchanted with their government.
  There was a time, Mr. President, when those in public service were 
looked upon with high admiration and esteem. Politics was once, as 
Robert Kennedy called it, an honorable profession. But the admiration 
and esteem has been replaced with perceptions of an institution that 
meets the concerns and demands of special interests to the exclusion of 
the interests of the American people. Mr. President, one can read many 
messages coming from the electorate during the 1992 and 1994 elections. 
Some might argue that those elections were calls for fiscal 
responsibility, or for ensuring that our communities are safer and our 
families healthier. We can have an endless discussion about those 
issues. But I do not think there could have been a clearer message from 
the last two elections than the message that the American people are 
not necessarily fed up with Republicans or Democrats, but that they are 
fed up with a system here in Washington that both parties are forced to 
operate within.
  The revolving door between public and private employment has 
generated much of this anger and cynicism. But by putting a lock on 
this door for meaningful periods of time, we can send a message that 
those entering government employment should view public service as an 
honor and a privilege--not as another rung on the ladder to personal 
gain and profit. Some may suggest that we are seeking to alleviate 
meritless concerns of an overreacting public. But the facts show that 
on this issue the public is right on target. For example, since 1974 
according to the Center for Public Integrity, 47 percent of all former 
senior U.S. trade officials have registered with the Justice Department 
as lobbyists for foreign agents. In other words, nearly half of our 
former high-ranking trade representatives, who played active roles in 
our trade negotiations and have direct knowledge of confidential 
information of U.S. trade and business interests,
 are now lobbying on behalf of foreign agents. In many cases, these 
individuals are representing these foreign interests at the negotiating 
table opposite of the United States. Whether you supported or opposed 
recent trade agreements such as the North American Free Trade Agreement 
and the General Agreement on Trade and Tariffs, one can only speculate 
as to how such revolving door practices influenced the outcome of those 
negotiations.

  And that is just our trade officials. Such revolving door problems 
are just as prevalent in the legislative branch. Former members of 
Congress who once chaired or served on committees with jurisdiction 
over particular industries or special interests, are now lobbying their 
former colleagues on behalf of those industries or special interests. 
Former committee staff directors are using their contacts and knowledge 
of their former committees to secure lucrative positions in lobbying 
firms and associations with interests related to those committees. How 
can we blame our constituents for looking upon this institution with 
cynicism and disdain when they hear about a former member 
[[Page S381]] of the House Foreign Affairs Committee registering as a 
lobbyist on behalf of a foreign country? How can we ensure that the 
trade agreements we enter into are indeed fair when individuals who 
have recently represented the United States are now on the other side 
of the bargaining table? Or how about the former chairman of the House 
subcommittee with jurisdiction over the Rural Electrification 
Administration retiring last year to head the National Rural Electric 
Cooperative Association. Are our constituents to believe that this 
former chairman has no special access or influence with his former 
committee that may benefit his new employer?
  It seems that since the election last November that the print media 
has been filled with announcements of government officials leaving the 
public sector to work for lobbying firms. One recent article announced 
that a staff assistant leaving her position on the House Subcommittee 
on Energy and Power will be working for the government relations, i.e. 
lobbying, department of the American Public Power Association. Another 
one announced that a recently retired former member of the House Ways 
and Means Subcommittee on Select Revenue Measures is joining a 
Washington lobbying firm. According to this announcement, he will 
specialize in tax policy. Mr. President, the problem of revolving door 
lobbying is quite clear, and in our review, so is the solution.
  The bill we are introducing today will strengthen the post-employment 
restrictions that are already in place. There is currently a one year 
ban on former members of Congress lobbying the entire Congress as well 
as senior congressional staff lobbying their former employing entity. 
Members and senior staff are also prohibited from lobbying on behalf of 
a foreign entity for one year. Our bill will prohibit members of 
Congress and
 senior staff from lobbying the entire Congress for two years, and 
their former committees and employing entities for five years. The one 
year ban on lobbying on behalf of a foreign entity will become a 
lifetime ban. In early 1993, President Clinton issued a strong 
executive order which bars senior executive branch officials from 
lobbying their former agencies for five years, and prohibits employees 
of the Executive Office of the President from lobbying on a matter they 
had substantial involvement in for five years. It also includes a 
lifetime ban on lobbying on behalf of a foreign entity. Our bill 
codifies these regulations for the executive branch, and also imposes a 
two year ban on political appointees and senior executive branch staff 
from lobbying other executive branch officials. Finally, our bill will 
impose a lifetime ban on our senior trade officials either lobbying on 
behalf of a foreign entity, or advising for compensation a foreign 
entity on how best to lobby the U.S. government.

  This bill is targeted in two ways: First, it only affects legislative 
and executive branch staff members who earn over 80,000 dollars a 
year--in other words, senior level employees who are most heavily 
recruited by Washington lobbying firms. Second, our bill has a longer 
ban on a former senior level official or staffer lobbying their former 
agency or employing entity. This five-year ban is necessary because as 
we all know, and exhibited by the examples I just cited, the Washington 
lobbying firms thrive on hiring former officials to lobby their former 
employer. That is exactly why a lobbying firm that specializes in taxes 
hires a former member of the Ways and Means Committee. And finally, the 
bill's toughest provisions focus on former U.S. trade officials who 
decide to switch sides and negotiate for our competitors, as well as on 
those who wish to lobby on behalf of foreign entities. These 
provisions, in my view, need no explanation.
  Now some might argue that we are inhibiting these talented 
individuals from pursuing careers in policy matters that they have 
become extremely proficient. These critics ask why a former high-level 
staffer on the Senate Subcommittee on Communications cannot accept 
employment with a telecommunications company? After all, they argue, 
this person has accumulated years of knowledge of our communication 
laws and technology. Why should this individual be prevented from 
accepting private sector employment in the communications field? But 
that is not what our amendment prevents. They can take the job with the 
telecommunications company, but what they cannot do is lobby their 
former subcommittee for five years, and they cannot lobby the rest of 
Congress for two years. We are only limiting an individual's employment 
opportunity if they are seeking to use their past employment with the 
federal government to gain special access or influence with the 
government in return for personal gain.
  Mr. President, we are not here to outlaw the profession of lobbying. 
Not only would that be unconstitutional, but I do not think it would be 
addressing the true flaws of our political system. Lobbying is merely 
an attempt to present the views and concerns of a particular group and 
there is nothing inherently wrong with that. In fact, lobbyists, 
whether they are representing Common Cause or Wall Street, can present 
important information to public representatives that may not otherwise 
be available. But there are important steps that we should take to 
ensure that lobbyists do not hold any special advantage or influence 
with the officials they are lobbying. We should improve our lobbying 
disclosure laws so that our constituents have accurate and available 
information as to who is lobbying us and who they represent. We should 
make sure that lobbyists are no longer able to buy Members of Congress 
expensive meals and all-expense paid vacation trips. We came close to 
passing strong gift ban legislation last year, and I hope that we can 
address that issue as soon as possible. But there is another very 
important step that this Congress needs to take if we are to recapture 
the trust of the American electorate and extinguish the firestorm of 
cynicism and skepticism with which the public views their government. 
We must clamp down on the widespread custom of entering public service 
and then trading knowledge and influence gained during that service for 
personal wealth and gain.
  Mr. President, there are those who will argue that our proposal will 
make it more difficult for the federal government to recruit and 
attract quality employees. These critics ask, why should a well-
educated and knowledgeable individual enter government service if that 
individual will have difficulty using that service to attain prosperous 
employment after they leave the federal government? And this question, 
Mr. President, brings us to the heart of this debate. I believe that 
this debate, more than anything else, is what we as individual Senators 
believe the meaning of public service should be.
  Quite frankly, I find this sort of suggestion, that we almost need to 
``bribe'' or ``lure'' people into public service, a telling example of 
why the American people have lost faith in us. It is also an insult to 
the thousands of government employees who are in public service for the 
right reasons. The principal reason why an individual would accept 
employment as a United States Senator, as an assistant secretary in the 
Commerce Department or as a negotiator in the Office of the U.S. Trade 
Representative, should not be to use that service as a stepping stone 
to personal wealth and gain. The principal reason should be a wish to 
represent the citizens of your state, or to improve our economic base 
or to pry open foreign markets for our domestic products. It is 
essential that we and those considering entering government service 
recognize that public service is a good within itself. Such service and 
participation is a cornerstone of our representative form of 
government, and the fact that our
 constituents so negatively perceive public service compels us to take 
forceful action to recapture the prestige that government service once 
carried.

  I am reminded of our former majority leader, Senator Mitchell, who 
characterized the meaning of government service at a reception that was 
given in his honor last fall. Senator Mitchell said: ``Public service 
gives work a value and a meaning greater than mere personal ambition 
and private goals. Public service must be, and is, its own reward. For 
it does not guarantee wealth, or popularity or respect. It's difficult 
and often frustrating. But when you do something that will 
[[Page S382]] change the lives of people for the better, then it is 
worth all of the difficulty and all of the frustration.''
  In conclusion, Mr. President, I would like to again commend Senator 
McCain for his leadership on this issue. I strongly believe that there 
is no more noble endeavor than to serve in government. But we need to 
take immediate action to restore the public's confidence in their 
government, and to rebuild the lost trust between members of Congress 
and the electorate. Passing this legislation and curbing the practice 
of revolving door lobbying is a forceful first step in this much-needed 
direction. We need to enact legislation that will finally reform the 
way we finance congressional campaigns and that will level the playing 
field between incumbents and challengers. We need to enact 
comprehensive lobbying reform legislation, so that our constituents 
know exactly whose interests are being represented. And long overdue, 
Mr. President, is the need to act on legislation that will reform the 
way Congress deals with the thousands and thousands of gifts and other 
perks that are offered to Members each year from individuals, lobbyists 
and associations that seek special access and influence on Capitol 
Hill.
  The notion of public service has been battered and tarnished in 
recent years. Serving in government is an honorable profession and it 
deserves to be perceived as such by the people we represent.
                                 ______

      By Mr. LIEBERMAN (for himself, Mr. Jeffords, Mr. Moynihan, and 
        Mr. Lautenberg):
  S. 130. A bill to amend title 13, United States Code, to require that 
any data relating to the incidence of poverty produced or published by 
the Secretary of Commerce for subnational areas is corrected for 
differences in the cost of living in those areas; to the Committee on 
Governmental Affairs.


                THE POVERTY DATA CORRECTION ACT OF 1995

  Mr. LIEBERMAN. Mr. President. I rise to introduce a bill which will 
improve the quality of our information on persons and families in 
poverty, and which will make more equitable the distribution of Federal 
funds. The Poverty Data Correction Act of 1995 is cosponsored by 
Senators Jeffords, Moynihan, and Lautenberg. This bill requires the 
Bureau of the Census to adjust for differences in the cost of living, 
on a State-by-State basis, when providing information on persons or 
families in poverty.
  The current method for defining the poverty population is woefully 
antiquated. The definition was developed in the late 1960's based on 
data collected in the late 1950's and early 1960's. The assumptions 
used then about what proportion of a family's income is spent on food 
is no longer valid. The data used to calculate what it costs to provide 
for the minimum nutritional needs, not to mention what minimum 
nutritional needs are, no longer applies. Nearly everyone agrees that 
it is time for a new look at what constitutes poverty. And, I am 
pleased to be able to report that the National Academy of Science, 
through its Committee on National Statistics, is studying this issue.
  But there is a more serious problem with out information on poverty 
than old data and outdated assumptions. In calculating the number of 
families in poverty, the Census Bureau has never taken into account the 
dramatic differences in the cost of living from state to state. Recent 
calculations from the academic community show that the difference can 
be as much as 50 percent.
  Let me give you an example. Let's say that the poverty level is 
$15,000 for a family of four. That is, it takes $15,000 to provide the 
basic necessities for the family. In some States, where the cost of 
living is high, it really takes $18,750 to provide those basics. In 
other States, where the cost of living is low, it takes only $11,250 to 
provide those necessities. But when the Census Bureau counts the number 
of poor families, they don't take those differences into account.
  But this is more than just an academic problem of definition. These 
Census numbers are used to distribute millions of Federal dollars. 
Chapter 1 of the elementary and Secondary Act allocates Federal dollars 
to school districts based on the number of children in poverty. States 
like Connecticut, where the cost of living is high, get fewer Federal 
dollars than they deserve because cost differences are ignored. Other 
States, where the cost of living is low, get more funds than they 
deserve.
  It is important that we act now to correct this inequity. This bill 
provides a mechanism for that correction. Thank you Mr. President, I 
ask unanimous consent that the full text of this bill be included in 
the record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 130

       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 ``Poverty Data Correction Act 
     of 1995''.
     SEC. 2. REQUIREMENT.

       (a) In General.--Chapter 5 of title 13, United States Code, 
     is amended by adding after subchapter V the following:

                     ``Subchapter VI--Poverty Data

     ``SEC. 197. CORRECTION OF SUBNATIONAL DATA RELATING TO 
                   POVERTY.

       ``(a) Any data relating to the incidence of poverty 
     produced or published by or for the Secretary for subnational 
     areas shall be corrected for differences in the cost of 
     living, and data produced for State and sub-State areas shall 
     be corrected for differences in the cost of living for at 
     least all States of the United States.
       ``(b) Data under this section shall be published in 1995 
     and at least every second year thereafter.

     ``SEC. 198. DEVELOPMENT OF STATE COST-OF-LIVING INDEX AND 
                   STATE POVERTY THRESHOLDS.

       ``(a) To correct any data relating to the incidence of 
     poverty for differences in the cost of living, the Secretary 
     shall--
       ``(1) develop or cause to be developed a State cost-of-
     living index which ranks and assigns an index value to each 
     State using data on wage, housing, and other costs relevant 
     to the cost of living; and
       ``(2) multiply the Federal Government's statistical poverty 
     thresholds by the index value for each State's cost of living 
     to produce State poverty thresholds for each State.
       ``(b) The State cost-of-living index and resulting State 
     poverty thresholds shall be published prior to September 30, 
     1996, for calendar year 1995 and shall be updated annually 
     for each subsequent calendar year.''.
       (b) Conforming Amendment.--The table of subchapters of 
     chapter 5 of title 13, United States Code, is amended by 
     adding at the end the following:
                     ``SUBCHAPTER VI--POVERTY DATA

``Sec. 197. Correction of subnational data relating to poverty.
``Sec. 198. Development of State cost-of-living index and State poverty 
              thresholds.''.
                                 ______

      By Mr. LIEBERMAN:
  S. 131. A bill to specifically exclude certain programs from 
provisions of the Electronic Funds Transfer Act; to the Committee on 
Banking, Housing, and Urban Affairs.


                   the electronic funds transfer act

  Mr. LIEBERMAN. Mr. President, I rise to introduce the Electronic 
Benefits Regulatory Relief Act of 1994. This bill is also cosponsored 
by Senators Breaux, Domenici, Feinstein, Pressler, and Hatfield. When 
passed, this bill will eliminate one of the major barriers to making 
the banking system more accessible to those receiving government 
benefits like Aid to Families with Dependent Children or Food Stamps. 
If this bill is not passed, we will have missed an opportunity to 
reduce the cost of government services, and an opportunity to make the 
delivery of government services, more efficient and humane.
  This legislation is necessary to reverse a regulation issued by the 
Federal Reserve Board. That ruling, issued last March, said that the 
Electronic Benefit Transfer [EBT] cards issued by States are subject to 
the same liability limits as ATM or credit cards. On the surface that 
seems reasonable--a card is a card and there seems little reason to 
differentiate between cards to withdraw government benefits from a bank 
and cards to withdraw earnings or savings from a bank. But, as is often 
the case with regulations, what appears on the surface isn't 
necessarily the whole story.
  With the simple extension of this regulation to EBT cards, the 
Federal Reserve has dramatically altered social benefits legislation, 
extended the Electronic Funds Transfer Act into a realm it was not 
intended to cover, and created for states a new liability of 
unpredictable size. This bill seeks to reestablish the legislative 
intent governing 
[[Page S383]] Food Stamps, the legislative intent of the Electronic 
Funds Transfer Act, and at the same time limit a State's exposure to 
liability if they choose EBT over checks and coupons.
  Electronic Benefit Transfer Cards are simply an extension of current 
technology into the delivery of government benefits. Instead of 
receiving checks or coupons, recipients receive an EBT card. With that 
card they can access the cash benefits whenever and wherever they 
choose. They can withdraw as little as five dollars, or as much as the 
system will allow in a single transaction. Recipients can use their 
card at the supermarket instead of food stamps the way millions of 
Americans now use credit or debit cards to pay for food.
  EBT cards offer recipients greater protection from theft than current 
methods of payment. Without the associated pin number, the EBT card is 
useless. Checks are easily stolen and forged. Food Stamp coupons, once 
stolen, can be used by anyone and can even be used to buy drugs on the 
black market.
  EBT cards provide recipients access to a banking system that is 
frequently criticized for shunning them. It is often the case that the 
only way a recipient can get his or her check cashed is by paying an 
exorbitant fee to some nonbanking facility. Several Senators have 
introduced or supported bills requiring banks to cash government 
checks. Their goal was to provide these individuals access to the same 
services most Americans enjoy. Those bills will be unnecessary when EBT 
cards replace checks. EBT cards can be used at a number of locations at 
any hour of the day or night and no fee is charged to the recipient for 
transactions.
  The action by the Federal Reserve will stop all of these benefits 
from happening. State and local governments have indicated that if 
Regulation E is enforced they will not go forward with EBT. John 
Michaelson, the director of social services in San Bernardino County, 
CA, points out that while San Bernardino County was selected as the 
pilot site for the California EBT development, that project will not go 
forward as long as Regulation E applies. Similarly, Governor Carlson of 
Minnesota recently wrote to me indicating that the plans to expand EBT 
statewide in Minnesota will be halted by the application of Regulation 
E. Letters of support for this legislation have come from Governor Pete 
Wilson of California, Governor David Walters of Oklahoma, Governor Mike 
Sullivan of Wyoming, Governor Edwin W. Edwards of Louisiana, Governor 
Arne H. Carlson of Minnesota, the National Association of State 
Auditors, Comptrollers and Treasurers, the American Public Welfare 
Association, the National Association of Counties the National 
Governors Association, and the Electronic Funds Transfer Association. I 
ask unanimous consent that these letters, along with the letter from 
Mr. Michaelson, be printed in the Record immediately following my 
statement.
  The dilemma that faces States is that simply switching from checks 
and coupons to EBT cards, because of Regulation E, creates a new 
liability. Stolen benefit checks and coupons are not replaced except in 
extreme circumstances. Regulation E requires that all but $50 of any 
benefits stolen through an EBT card must be replaced. The effect of the 
Federal Reserve's action is that the simple act of changing the method 
of delivery imposes on the States a liability of unknown magnitude.
  This action by the Federal Reserve is inconsistent with the 
legislative intent that created the benefit programs. The legislation 
for both Food Stamps and Aid to Families with Dependent Children--the 
two largest programs included in EBT--are quite clear in specifying 
that lost or stolen benefits will be replaced only in extreme 
circumstances. We should not allow that legislation to be changed 
through regulation.
  This action is also inconsistent with the legislative intent of the 
Electronic Funds Transfer Act. The EFTA is about the relationship 
between an individual and his or her bank. It is designed to protect 
the individual in that relationship because of the dramatic disparity 
in power between the individual and the bank. In EBT, any relationship 
between the bank and the individual is mediated by the State. The State 
sets up a single account which all recipients draw upon. If there is a 
mistake, either in the bank's favor or the recipient's, the bank goes 
to the State, and it is the State's responsibility to contact the 
individual. It is difficult to accept that the same disparity in 
bargaining power exists between the State and the bank.
  The differences between EBT and other electronic transfers were 
carefully documented in a letter from Dr. Alice Rivlin, deputy director 
of OMB, to the Board of Governors of the Federal Reserve. I ask 
unanimous consent that Dr. Rivlin's letter be included in the Record at 
this point.

         Executive Office of the President, Office of Management 
           and Budget,
                                     Washington, DC, May 21, 1993.
     Mr. William W. Wiles,
     Secretary, Board of Governors of the Federal Reserve System, 
         Washington, DC.
       Dear Mr. Wiles: This letter responds to the proposal, 
     published for comment on February 8, 1993, to revise 
     Regulation E to cover electronic benefit transfer (EBT) 
     programs. Please refer to Docket No. R-0796. This letter 
     contains our endorsement of the EBT Steering Committee 
     proposal for modifying Reg E, our views on the differences 
     between program beneficiaries and the consumers with bank 
     accounts, and our recommendations for your consideration.


                      ebt steering committee view

       We strongly support the recommendations of the Electronic 
     Benefit Steering Committee, which were submitted to the Board 
     on May 11, 1992. The EBT Steering Committee recommended that 
     EBT be treated differently from other electronic fund 
     transfers, that specific minimum standards be established for 
     EBT programs, and that agencies be allowed to implement 
     Regulation E fully on a voluntary basis, if appropriate. A 
     copy of the Steering Committee recommendation is enclosed.
       In an analysis that is being prepared for the Steering 
     Committee, preliminary data from a study for the Department 
     of the Treasury indicate that the additional cost to 
     government of compliance with Regulation E as proposed could 
     be between $120 million to $826 million annually, with the 
     most likely costs of $498 million. Such cost increases would 
     preclude State and Federal expansion of current EBT programs 
     an could cause termination of some, if not all, programs.
       We oppose implementation of Regulation E as proposed by the 
     Board on February 16, 1993 based on the recommendations of 
     the EBT Steering Committee which is composed of senior 
     Federal program policy officials who have given a great deal 
     of deliberation to the issue and who are accountable for the 
     management of federal programs. We believe that the 
     preliminary data shows that States and the Federal government 
     would be exposed to an expense that will seriously limit the 
     potential for EBT in the future. In addition we believe there 
     are significant differences between program beneficiaries and 
     a regular bank customer. OMB urges the Board to exercise its 
     authority under the Electronic Funds Transfer Act (EFTA) to 
     prescribe regulations that consider the economic impact on 
     beneficiaries, State and Federal governments, and other 
     participants.


         differences between beneficiaries and banked consumers

       The EFTA is intended to protect consumers when EFT services 
     are made available to them. The plastic EBT card gives the 
     beneficiary more choices on where and when to withdraw cash. 
     However, they are not ``shopping'' for benefits as a customer 
     would shop for a bank card. Benefits are only received from 
     one payment source. Furthermore, regular banking EFT services 
     are not necessarily being ``made available'' to them. In 
     fact, these beneficiaries may be required to access benefits 
     through EBT in the future. These differences make necessary 
     protections that are different from, and in many ways, 
     greater than, those afforded by Regulation E. The EFTA 
     assumes a contractual relationship between the consumer and 
     the bank, as evident in the provisions for disclosure of 
     terms and conditions of electronic funds transfers (15 USC 
     1693c(a)). Under EBT, beneficiaries do not enter into 
     contracts with either banks or agencies governing terms and 
     conditions of transfers.
       EBT offers great potential benefits to recipients--
     alleviating the stigma of welfare experienced in grocery 
     checkout lines when presenting food coupons, eliminating 
     check cashing fees, allowing beneficiaries to become 
     proficient with a technology useful in the working world, and 
     eliminating the hazard of carrying cash after cashing a 
     check. Surveys of beneficiaries show overwhelming preference 
     for EBT over checks. The desire to access benefits through 
     this technology is so strong that in at least one locality 
     individual beneficiaries and the private sector are working, 
     without government assistance, to implement EBT.
       Individual benefit programs also offer significant 
     protections to beneficiaries that are far greater than any 
     protections afforded by financial institutions to consumers:
       Access to funds by eligible beneficiary is a right 
     guaranteed by law and is not conditioned on any prior abuses. 
     Eligibility is based on need.
       [[Page S384]] Improper withdrawals can only be recouped in 
     a way that protects economic interest of beneficiary. For 
     example, reductions of future benefits are strictly limited 
     to 10 percent per month in AFDC.
       If beneficiary contests an adverse action, extensive 
     administrative apparatus supports the appeal at no cost to 
     the beneficiary.


                          omb recommendations

       The Federal Reserve Board has requested comment on whether 
     modifications to Regulation E for EBT beyond those proposed 
     should be considered. OMB specific recommendations are 
     enclosed.
       We recommend that the Board create some exceptions in 
     Regulation E for EBT programs. In summary, we believe the 
     Board has authority under the EFTA to prescribe regulations 
     that provide exceptions for any class of electronic funds 
     transfer that would effectuate the purposes of the EFTA. We 
     believe that the Steering Committee proposal, taken together 
     with existing protections in individual program requirements, 
     establish the rights, liabilities, and responsibilities of 
     participants in EBT programs and are primarily directed to 
     protecting and enhancing the rights of individual 
     beneficiaries.
       OMB joins with the Federal Reserve Board in its commitment 
     to protect the rights of individuals in this emerging 
     technology. We look forward to continued progress on this 
     governmentwide initiative.
           Sincerely,
                                                  Alice M. Rivlin,
                                                  Deputy Director.

  Opponents of this action argue that by exempting EBT cards from the 
electronic Funds Transfer Act discriminates against the poor. This 
argument misses two important differences between EBT and ATM cards. 
First, ATM access is a service that banks give with discretion, and can 
withdraw. States cannot deny recipients access to benefits. If there is 
abuse of the system, the State's only alternative is to operate dual 
systems, thus decreasing the efficiency gains of EBT. Second, EBT 
extends to recipients greater protection of their benefits than checks 
or coupons. If stolen, the card can't be used without the pin number. 
And, recipients are less likely to have all their cash stolen. With 
checks they must receive all the cash at once, and usually pay a fee 
for cashing the check. With EBT cards they can withdraw only what they 
need, and transaction costs are covered by the contract between the 
State and the bank.
  Others suggest that the concern with fraud if EBT is covered by 
Regulation E unfairly impugns the character of the recipients. That is 
not so. It only says that they are like everyone else--a small portion 
will participate in fraudulent activities to the expense of all the 
rest. One of the major criminal problems with ATM cards, according to 
the Secret Service, is fraud involving Regulation E protection. An 
individual can sell his or her ATM card, and as long as the price is 
greater than $50, everyone wins but the bank. The Secret Service knows 
this type of fraud occurs, but proving it is very difficult. States 
rightly fear that similar fraud will occur with EBT.
  Earlier this month the Vice President issued the first report from 
the EBT task force and called for nationwide implementation. Without 
passage of this legislation, that goal will never be reached. When the 
Federal Reserve was considering this issue, 40 governors wrote in 
opposition. The National Association of State Auditors, Comptrollers, 
and Treasurers; The American Public Welfare Association, the National 
Association of Counties, the National Conference of State Legislatures, 
and the National Governors' Association wrote jointly to Vice President 
Gore and to Chairman Greenspan opposing the application of Regulation E 
to EBT.
  The Federal Reserve has made a mistake. We in Congress now need to 
act to ensure that benefits cards can become a reality. I urge my 
colleagues to enact this bill promptly.
  I ask unanimous consent that a copy of the bill and letters be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 131

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

     SECTION 1. ELECTRONIC BENEFIT TRANSFERS.

       Section 904(d) of the Electronic Fund Transfer Act (15 
     U.S.C. 1693(d)) is amended--
       (1) by inserting ``(1)'' after ``(d)''; and
       (2) by adding at the end the following new paragraph:
       ``(2)(A) The disclosures, protections, responsibilities, 
     and remedies created by this title or any rules, regulations, 
     or orders issued by the Board in accordance with this title, 
     do not apply to an electronic benefit transfer program 
     established under State or local law, or administered by a 
     State or local government, unless payment under such program 
     is made directly into a consumer's account held by the 
     recipient.
       ``(B) Subparagraph (A) does not apply to employment related 
     payments, including salaries, pension, retirement, or 
     unemployment benefits established by Federal, State, or local 
     governments.
       ``(C) Nothing in subparagraph (A) alters the protections of 
     benefits established by any Federal, State, or local law, or 
     preempts the application of any State or local law.
       ``(D) For purposes of subparagraph (A), an electronic 
     benefit transfer program is a program under which a Federal, 
     State, or local government agency distributes needs-tested 
     benefits by establishing accounts to be accessed by 
     recipients electronically, such as through automated teller 
     machines, or point-of-sale terminals. A program established 
     for the purpose of enforcing the support obligations owed by 
     absent parents to their children and the custodial parents 
     with whom the children are living is not an electronic 
     benefit transfer program.''.
                                                                    ____

                                         Governor Pete Wilson,

                                               September 15, 1994.
     Hon. Joseph I. Lieberman,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Joe Lieberman: I am writing to give my support to your 
     proposed legislation to exempt Electronic Benefit Transfer 
     (EBT) programs from the Electronic Funds Transfer Act, 
     Specifically from the Federal Reserve's Regulation E.
       California cannot assume the unknown fiscal liability that 
     accompanies subjecting EBT programs to Regulation E, which 
     includes a requirement to replace lost or stolen benefits. 
     The State has begun development of a pilot EBT project, but 
     Regulation E greatly increases our potential liability, 
     jeopardizing our ability to meet federal cost neutrality 
     requirements and making EBT economically infeasible, thus, 
     thwarting further development within our state.
       I recognize EBT as a tool to help the states provide 
     efficient and effective social welfare programs, and am 
     committed to working with you to resolve the concerns raised 
     by the application of Regulation E to EBT programs.
           Sincerely,
     Pete Wilson.
                                                                    ____

                                                State of Oklahoma,


                                       Office of the Governor,

                                                    June 10, 1994.
     Hon. Joseph Liberman,
     Chairman, Governmental Affairs Subcommittee on Regulation and 
         Governmental Information, U.S. Senate, Hart Senate Office 
         Building, Washington, DC.
       Dear Senator Lieberman: I am writing in support of your 
     legislation to exempt electronic benefits transfer (EBT) from 
     the Electronic Funds Transfer Act (EFTA). The prompt passage 
     of this legislation is needed to ensure that EBT becomes a 
     reality in Oklahoma.
       Electronic benefits transfer is the future of government 
     benefit distribution. The advantages for recipients and 
     government entities have been studied and validated. The 
     pending implementation of Regulation E in March 1997, will be 
     an irresponsible act in light of the consequences anticipated 
     in liability costs to the states. If Regulation E is 
     implemented, the nationwide costs for replacing food stamps 
     is estimated in excess of $800 million a year. Estimates are 
     not available for the numerous money payments anticipated for 
     EBT distribution. Current federal regulations provide ample 
     protection to the consumer recipients, in addition to the 
     known advantages of receiving benefits electronically.
       Oklahoma is leading a multi-state southwest regional team 
     in procuring an EBT system to distribute food stamps and 
     money payments. This month, the Oklahoma Department of Human 
     Services will publish a Request for Information to be 
     distributed to potential bidders to inform them of our unique 
     approach to procurement, and to provide the opportunity to 
     comment on the proposed system design. We plan to publish a 
     Request for Bids in September 1994 to hire a vendor to 
     provide EBT services. Oklahoma has been working toward this 
     goal for five years. Our investment in EBT is an investment 
     in fiscal responsibility. Please feel free to call Dee Fones 
     (405) 521-3533 if you have any questions or if we can be of 
     further assistance in helping to pass this legislation.
           Sincerely,
     David Walters.
                                                                    ____

                                                 State of Wyoming,


                                       Office of the Governor,

                                                    June 21, 1994.
     Hon. Joseph Lieberman,
     Chairman, Government Affairs Subcommittee on Regulation and 
         Government Information, U.S. Senate, Hart Senate Office 
         Building, Washington, DC.
       Dear Senator Lieberman: We are writing to you to express 
     full support for your leadership in proceeding with 
     legislation to exempt electronic benefits transfer (EBT) from 
     the Electronic Funds Transfer Act (EFTA), including exception 
     from the Regulation E (Reg E) provision.
       Wyoming is developing an off-line smart card system 
     solution to deliver state and federal benefits. Wyoming's 
     first phase is to 
     [[Page S385]] conduct a federally approved combined Food 
     Stamp and WIC Supplemental Food Program Demonstration Pilot. 
     As this approach uses off-line distributive technology in 
     contrast to traditional on-line magnetic stripe banking 
     technology, we propose that smart card technology should be 
     exempt as benefits are in the hands of the client/user and 
     not controlled by a mainframe bank processor.
       The application of Reg E to EBT represents a major transfer 
     of liability that states are not prepared to embrace. One 
     estimate suggests that for Food Stamps alone, the liability 
     losses could be $800 million each year.
       Of greatest concern is the faulty premise of the Federal 
     Reserve Board. The assumption in applying EFTA to EBT is that 
     the bank/customer relationship in the private sector is 
     analogous to the government/recipient relationship in the 
     public sector. This assumption is false because public 
     assistance recipients are entitled to benefit and must be 
     served. Banks market their services for profits. They get to 
     choose the customers they serve.
       Second, customers of government benefit programs are given 
     a card to access and manage their benefits, but they do not 
     own the account and cannot deposit additional resources to 
     the account. Further, banks charge fees to cover the costs of 
     maintaining bank accounts, including complying with 
     Regulation E.
       Finally, Congress set up benefit programs like Food Stamps, 
     AFDC and WIC to achieve a public safety net to assure health 
     and welfare for all citizens. States will never be able to 
     apply Regulation E to these programs like banks apply the 
     Regulation because the goals of the relationship with the 
     client/user are fundamentally different.
       Once again, thank you for your leadership on this important 
     issue.
           Sincerely,
                                                    Mike Sullivan,
                                                         Governor.
     Dave Ferrari,
     State Auditor.
                                                                    ____

                                               State of Louisiana,


                                       Office of the Governor,

                                                    June 28, 1994.
     Hon. Joseph Lieberman,
     Chairman, Governmental Affairs Subcommittee on Regulation and 
         Government Information, U.S. Senate, Hart Senate Office 
         Building, Washington, DC.
       Dear Senator Lieberman: I am writing in support of your 
     legislation to exempt electronic benefits transfer (EBT) from 
     the Electronic Funds Transfer Act (EFTA). This legislation is 
     needed to ensure the future electronic delivery of 
     governmental entitlement benefits in Louisiana.
       Electronic benefits transfer as a method of distribution of 
     government benefits has proven to be viable and secure. 
     Although entitlement programs have been granted exemption 
     from Regulation E until 1997, this regulation threatens the 
     development and growth of EBT because of anticipated 
     liability to the states. Estimated losses to the states could 
     exceed $1.5 billion a year if Regulation E is implemented in 
     March 1997.
       Louisiana is participating in a joint venture with other 
     states in the southwest region in procuring an EBT system to 
     distribute AFDC and food stamp benefits. Proposals from 
     bidders will be solicited in September 1994. Implementation 
     of EBT is an investment that is responsible administratively 
     in addition to being beneficial to recipients. Your efforts 
     in securing the future of EBT are appreciated.
           Sincerely,
     Edwin W. Edwards.
                                                                    ____

                                               State of Minnesota,


                                            Washington Office,

                                    Washington, DC, June 29, 1994.
     Hon. Joseph I. Lieberman,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Lieberman: I am writing in support of 
     legislation you plan to introduce which would exempt welfare 
     benefit programs from provisions of the Electronic Funds 
     Transfer Act. Without such an exemption, plans to expand 
     Minnesota's statewide Electronic Benefits System (EBS) would 
     be halted.
       As you know, the Federal Reserve Board recently ruled that 
     welfare programs using electronic benefit issuance are 
     subject to the consumer protection provisions of Regulation E 
     under the Electronic Funds Act. Welfare programs have been 
     exempted from Regulation E since 1987. Under the new Federal 
     Reserve Board ruling, as of March, 1997, the regulation will 
     be applied.
       Minnesota cannot accept the unknown liability inherent in 
     applying Regulation E to benefit programs. The cost of 
     replacing benefits should a card become lost or stolen would 
     fall strictly on the state under this rule, even for the 
     share of the benefit which is federally funded.
       Your legislation, if enacted, would permit Minnesota and 
     other states to move forward with developing electronic 
     benefit transfer (EBT) systems which will help state and 
     federal government improve service delivery of welfare 
     benefits to the client.
           Warmest regards,
                                                  Arne H. Carlson,
     Governor.
                                                                    ____

         National Association of State Auditors, Comptrollers and 
           Treasurers,
                                                     May 20, 1994.
     Hon. Joseph I. Lieberman,
     Chairman, Subcommittee on Regulation and Government 
         Information, Committee on Governmental Affairs, U.S. 
         Senate, Hart Senate Office Building, Washington DC.
       Dear Senator Lieberman: I am writing in support of your 
     legislation to exclude Electronic Benefit Transfer (EBT) 
     programs from the Electronic Fund Transfer Act. The National 
     Association of State Auditors, Comptrollers and Treasurers 
     (NASACT) supports the establishment of EBT programs, but 
     opposes the decisions of the Board of Governors of the 
     Federal Reserve of March 1994 to apply the liability 
     provisions of Regulation E, which implements the Electronic 
     Fund Transfer Act, to these programs.
       Regulation E governs the relationship between a financial 
     institution and its customers. This is a decidedly different 
     relationship from that which exists between a government and 
     benefit recipients. Regulation E is a ``show stopper'' for 
     EBT. By requiring governments to replace all but $50 of a 
     benefit that a recipient claims has been lost or stolen, it 
     would change the current policy for benefit replacement and 
     make EBT too expensive to implement. While we support 
     consumer protection and training programs for recipients 
     participating in EBT programs, we believe that the 
     protections provided under Regulation E are inappropriate in 
     a government EBT environment.
       Simply stated, governments are not banks. Banks market 
     their services to specific customers whose business will 
     generate increased profits. Banks can choose not to serve 
     customers. Governments, on the other hand, must serve 
     recipients that are entitled to benefits. While banks charge 
     fees or surcharges to cover the cost of maintaining bank 
     accounts--including the cost of Regulation E--governments do 
     not charge recipients to participate in public assistance 
     programs. In addition, unlike banking customers, government 
     benefit recipients do not establish individual accounts, they 
     do not own the accounts, they cannot deposit funds into the 
     accounts and they cannot write checks against the accounts.
       I want to commend you for introducing legislation 
     addressing this important issue. Your legislation will help 
     assure that governments can improve service delivery without 
     experiencing undue liability. As the legislation progresses, 
     you may want to consider a technical amendment to clarify the 
     scope of the bill. For instance, it might be helpful to more 
     fully explain the meaning of the term ``general assistance.'' 
     NASACT will, of course, be happy to assist you and your staff 
     in any way possible.
           Sincerely,
                                                Douglas R. Norton,
     President.
                                                                    ____

                                                   American Public


                                          Welfare Association,

                                                     May 25, 1994.
     Hon. Joseph Lieberman,
     Chairman, Governmental Affairs Subcommittee on Regulation and 
         Government Information, U.S. Senate, Hart Senate Office 
         Building, Washington, DC.
       Dear Senator Lieberman: I am writing to give full support 
     to your legislation to exempt electronic benefits transfer 
     (EBT) from the Electronic Funds Transfer Act (EFTA), 
     including from its Regulation E (Reg E) provision.
       Across the country, human service agencies are moving 
     toward making EBT a reality for the people they serve. 
     Unfortunately, as you know, the Federal Reserve Board decided 
     on March 7, 1994 to apply Reg E to EBT starting in March, 
     1977, requiring the issuer of an electronic transfer card to 
     replace all but $50 of any benefits that are lost or stolen. 
     The Board's decision to apply banking law to EBT expands the 
     liability of government and taxpayers regarding benefit 
     replacement, creating a drastic change in current social 
     policy. Furthermore, making card issuers responsible for 
     benefit replacement shifts costs from the federal domain to 
     the states, creating a new unfunded mandate. Financial 
     estimates conclude that the costs to government and taxpayers 
     for replacing food stamps alone under this ruling could run 
     in excess of $800 million a year. This estimate does not 
     include the potential costs associated with replacing other 
     benefits that can be transferred electronically, such as 
     AFDC, child support, General Assistance, WIC, and SSI.
       Indeed, the Federal Reserve Board's decision effectively 
     will impede state EBT activity due to the prohibitive costs 
     associated with replacing lost or unauthorized transfers of 
     government benefits. Currently, the regulations of the Food 
     Stamp Program (a 100% federally-funded program) prohibit 
     replacing food coupons, unless coupons were not received in 
     the mail, were stolen from the mail, or were destroyed in a 
     ``household misfortune.'' Current AFDC regulations prohibit 
     replacing the federal portion of the amount of an AFDC 
     benefit check unless the initial check has been voided or, if 
     cashed, the federal portion has been refunded (AFDC is 
     jointly funded by federal and state governments). These 
     policies have provided adequate client protection in the 
     past, and when combined with the added safeguard of a 
     properly-used EBT card with a PIN number, would continue 
     offering adequate protections.
       In an era when government is striving--both due to 
     necessity and public demand--to deliver services that cut or 
     contain costs rather than provide opportunities for increased 
     costs, Regulation E not only 
     [[Page S386]] dampens but may thwart state efforts to benefit 
     from EBT. In fact, in a federal government attempt to have 
     states or localities currently operating EBT programs test 
     the costs associated with the regulation, no state has yet 
     come forward to volunteer for the pilot test due to the 
     financial and political risk.
       As the national representative of the 50 cabinet-level 
     state human service departments, hundreds of local public 
     welfare agencies, and thousands of individuals concerned 
     about achieving efficient and effective social welfare 
     policy, APWA is quite concerned about finding a solution that 
     will allow progress on EBT. Our members are the innovators 
     and visionaries bringing EBT to clients at the state and 
     local levels. They are the people who deliver the government 
     benefits such as food stamps, AFDC, child support, and 
     medicaid and are committed to working with you to find a 
     solution to the barrier Reg E presents.
       Sincere thanks to you for taking the critical steps needed 
     to mitigate the impact of the Board's decision. We look 
     forward to working with you to help pass this legislation 
     quickly. Please feel free to call either me or Kelly Thompson 
     at 202-682-0100.
           Sincerely,
                                            A. Sidney Johnson III,
     Executive Director.
                                                                    ____

                                              National Association


                                                  of Counties,

                                    Washington, DC, June 29, 1994.
     Hon. Joseph I. Lieberman,
     U.S. Senate,
     Washington, DC.
       Dear Senator Lieberman: The National Association of 
     Counties (NACo) strongly supports the draft legislation that 
     you have recently released exempting electronic funds and 
     benefits delivery system programs established by federal, 
     state or local government agencies from the provisions of 
     Regulation E of the Electronic Fund Transfer Act.
       EBT/EFT offers numerous advantages to both the issuing 
     agency and the recipient. Government agencies will save 
     substantial administrative and production costs, as well as 
     costs associated with fraud. Recipients will have the benefit 
     of a secure delivery system, and a more dignified method of 
     receiving public assistance. Also, retail establishments 
     would save the time and money involved in manually processing 
     Food Stamps and vouchers. In all, EBT/EFT benefits everyone, 
     especially the taxpayers.
       Presently, numerous counties in six states are operating 
     EBT/EFT programs in various stages of development. Many other 
     counties are considering EBT/EFT implementation, but are 
     reserving initiating a system until the issue of liability 
     under Regulation E of the EFTA is resolved. For many 
     counties, the application of Regulation E would effectively 
     make initiating an electronic delivery system economically 
     unfeasible through the violation of the cost neutrality 
     requirement.
       It is also the position of NACo that the consumer rights of 
     welfare and Food Stamp recipients, which appears to be the 
     major concern of the Federal Reserve Board of Governor's and 
     the driving force behind their push for Regulation E's 
     application, are protected under extensive federal rules in 
     the authorizing statutes and program regulations. Application 
     of Regulation E would be duplicative in some cases, and 
     costly in all cases.
       For these reasons, NACo supports your draft bill excluding 
     government EBT/EFT programs and looks forward to working with 
     you as this bill moves through the legislative process. 
     Please do not hesitate to contact Marilina Sanz, Associate 
     Legislative Director for Human Services and Education at NACo 
     on 202-942-4260 should you have any questions.
           Sincerely,
                                                   Larry E. Naake,
     Executive Director.
                                                                    ____

                              National Governors' Association,

                                                  October 4, 1994.
     Hon. Joseph I. Lieberman,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Lieberman: We are writing in strong support of 
     legislation that you are introducing to exempt certain 
     electronic benefit transfer programs from the Electronic 
     Funds Transfer Act.
       As you know, Governors have been leaders in using 
     technology to improve the delivery of services to the public 
     through such initiatives as distance learning, telemedicine, 
     and electronic benefit transfer (EBT). States and localities 
     have been exploring for over a decade the potential of EBT 
     for providing clients with more convenient and safer access 
     to benefits and for improving the ability of states to manage 
     programs and prevent fraud. More recently, Vice President 
     Albert Gore has promoted nationwide EBT for some federal 
     benefit programs in the near future as part of his 
     Reinventing Government initiative.
       Progress toward wider use of EBT has been slowed, however, 
     by the Federal Reserve Board's decision last March to apply 
     Regulation E of the Electronic Funds Transfer Act to EBT 
     programs. This Federal Reserve decision essentially changed 
     federal social policy by creating a new entitlement to 
     replacement of lost or stolen welfare benefits for EBT 
     clients--a new entitlement benefit that clients who receive 
     those same welfare benefits in cash or coupons do not have. 
     Estimates of the cost of this new benefit vary widely but 
     range as high as $800 million annually.
       While the Board's decision created this new entitlement 
     benefit, it did not address how this benefit would be 
     financed. To date the federal government has refused to 
     commit to reimburse states for the EBT benefit replacement 
     costs of even those welfare benefits that are entirely 
     federally financed, such as food stamps. This is true despite 
     the fact that most of the administrative savings from EBT 
     accrue to the federal government, not to the states.
       Governors are not opposed to consumer protections for EBT 
     clients. If the consumer protections of Regulation E are 
     applied to EBT programs, however, we believe that Congress 
     must recognize that this is a new entitlement benefit and act 
     accordingly to fund it. Otherwise it will become an unfunded 
     mandate on the states, and Governors will have little choice 
     but to halt their efforts toward creating EBT systems for 
     welfare clients.
       If Congress is not able to fund this new entitlement 
     benefit, then we believe that the only alternative is to make 
     it clear that clients who receive welfare benefits through 
     EBT are entitled to the same protections as clients who 
     receive benefits in cash or in coupons--no more, no less. 
     That is exactly what your legislation would do. We believe 
     your bill addresses the following problems created by the 
     Federal Reserve Board decision:
       Inequitable treatment of clients--The bill ensures that 
     clients have the same rights and responsibilities regardless 
     of whether their welfare benefits are delivered by check, by 
     coupon or electronically.
       Unfunded mandates on states and localities--The bill 
     eliminates the unfunded mandate for states and localities to 
     replace lost or stolen EBT benefits even when the original 
     benefit was entirely federally funded.
       Loss of EBT as a viable means of delivering welfare 
     benefits--The bill will remove the Regulation E roadblock to 
     nationwide EBT by making it financially possible for 
     Governors to proceed with EBT to the benefit of clients and 
     federal, state and local governments.
       We recognize that there may be other ways to address these 
     problems but all of these other means would necessarily 
     involve some unknown new cost because they would create some 
     level of new entitlement to benefit replacement. Until 
     Governors have a commitment from the federal government to 
     assume the costs of any new EBT entitlement benefits, your 
     bill's exemption approach is the only solution that we can 
     support.
           Sincerely,
     Gov. Mel Carnahan,
                                 Chair, Human Resources Committee.
     Gov. Arne H. Carlson,
     Vice Chair, Human Resources Committee.
                                                                    ____

                                                  Electronic Funds


                                         Transfer Association,

                                                  October 4, 1994.
     Hon. Joseph Lieberman,
     Chairman, Governmental Affairs Subcommittee on Regulation and 
         Government Information, U.S. Senate, Hart Senate Office 
         Building, Washington, DC.
       Dear Senator Lieberman: On behalf of the Board of Directors 
     of the Electronic Funds Transfer Association (EFTA), I wish 
     to express support for your legislation to exempt electronic 
     benefits transfer (EBT) from Regulation E (Reg E) of the 
     Electronic Funds Transfer Act (EFT Act).
       The Federal Reserve Board has declared its intention to 
     apply Reg E to EBT starting in March 1997. Under the 
     provisions of the regulation, the issuer of an EBT card will 
     be required to replace all but $50 of any benefits that are 
     lost or stolen. The replacement costs have delayed 
     indefinitely the implementation of EBT programs in several 
     states, including California. States cannot pass their fraud 
     costs to benefits recipients; they must be borne by 
     taxpayers, who are looking to EBT to cut delivery costs, not 
     increase them. Financial estimates conclude that costs to 
     government and taxpayers for replacing benefits may run as 
     high as $800 million per year. Currently, the state of 
     Maryland (and possibly others) is considering pursuing legal 
     action against the Federal Reserve Board for regulating a 
     matter that is not within its purview. EFTA agrees with this 
     assessment and believes the three year delay in 
     implementation provides the opportunity for Congress to 
     resolve this matter.
       On August 1, 1994, EFTA filed comments with the Federal 
     Reserve Board of Governors in response to the proposed 
     revisions of Reg E. We indicated that the imposition of Reg 
     E's liability and error resolution rules will terminate EBT 
     programs in may states and will substantially delay progress 
     of many other important EBT initiatives. As a fiscal and 
     political matter, states are unwilling to undertake 
     responsibility for liabilities of an undetermined value. If 
     EBT fails to develop, benefits recipients will be 
     substantially disadvantaged. They will not obtain the 
     advantages of convenience, security, speed and dignity that 
     EBT can offer.
       EFTA has become a strong advocate of EBT over the past 
     several years, advising the Office of Technology Assessment 
     (OTA) and the Federal EBT Task Force of the myriad benefits 
     associated with EBT. Like Vice President Gore, EFTA's goal is 
     to utilize the current ATM/POS infrastructure in order to 
     facilitate the electronic delivery of federal and state 
     benefits nationwide. However, as Dale Brown, Director of the 
     Maryland statewide EBT project indicated, applying the 
     regulation would be a ``show stopper.'' Ms. 
     [[Page S387]] Brown estimates that Maryland could inherit a 
     potential liability of several million dollars. EFTA members 
     include government agencies, EFT processors and networks, 
     card issuers and manufacturers, as well as financial 
     institutions. With a significant increase in costs due to 
     benefit replacement, EBT would no longer be a viable venture 
     for these stakeholders.
       EFTA would be pleased to work with you to help pass this 
     legislation. In addition, we offer our assistance in crafting 
     language that would further protect recipients whose benefits 
     have been lost or stolen, while minimizing the opportunities 
     for fraud that currently threaten fledgling EBT programs 
     across the country.
       We thank you for your thoughtful analysis and interest in 
     such a significant issue. If EFTA can be of any help in this 
     matter please do not hesitate to call at 703-435-9800.
           Sincerely,

                                               H. Kurt Helwig,

                                           Acting President & CEO,
     Director, Government Relations.
                                                                    ____

                                              Department of Public


                                              Social Services,

                                                   April 15, 1994.
     Mr. William Ludwig,
     Administrator, Food and Nutrition Service,
     Alexandria, VA.
       Dear Bill: For more than 4 years San Bernardino County has 
     attempted to bring Electronic Benefit Transfer (EBT), not 
     only to our County, but to the entire State of California. 
     Now, as we submit the attached Request for Proposal (RFP), 
     after overcoming many hurdles and after finally being named 
     as the EBT Pilot County for California, yet another mountain 
     stands in our way. That mountain is the Federal Reserve 
     Board's ruling that Regulation E does apply to EBT.
       The San Bernardino County Board of Supervisors and I have 
     made EBT a high priority. Besides being a cost-effective use 
     of new technology, it is the best of all worlds (an 
     occurrence not often seen in todays' world of government 
     bureaucracy). EBT holds the promise of being more cost 
     effective than our current Food Stamp distribution system, it 
     is also less costly for grocers and is generally viewed 
     favorably by recipients for a number of reasons, not the 
     least of which is having to access their benefits only as 
     they use them.


                          REGULATION E IMPACT

       First, I am not aware of any written definitive statement 
     of shares of cost of Regulation E by any federal agency, in 
     particular FNS or ACF. I have heard verbal statements from 
     FNS that our County Cost cap, which EBT can not exceed, may 
     dictate that all Regulation E costs above that cap must be 
     borne 100% by the state or local government--in our case San 
     Bernardino County.
       I cannot, in good conscience, recommend to my Board of 
     Supervisors, a contract which includes an unknown liability 
     for Regulation E. To do so is tantamount to asking them to 
     sign a blank check.
       Therefore, with the concurrence of the California Welfare 
     Director's Association, the County of San Diego and the 
     California Department of Social Service, I must put you on 
     notice that our EBT RFP will not be released until we receive 
     a written Federal commitment for relief from the unknown 
     liability of Regulation E, such as assurance that we will not 
     be responsible for any Regulation E costs above our cap.
       As you are aware, San Bernardino, a number of other 
     California counties and the State have been committed to 
     bringing EBT to California and, therefore, the above 
     statement was arrived at only after a great deal of debate 
     and discussion with all affected parties. However, an 
     immediate resolution to the Regulation E cost-sharing issue 
     could resolve this and allow us to move forward.
       As always, I and my staff will make ourselves available for 
     any discussion that you think will be helpful in our pursuit 
     of EBT for San Bernardino County and, therefore, California.
           Sincerely
                                               John F. Michaelson,
                                                         Director.
                                 ______

      By Mr. MOYNIHAN (for himself and Mr. Inouye):
  S. 132. A bill to require a separate, unclassified statement of the 
aggregate amount of budget outlays for intelligence activities; to the 
Committee on Governmental Affairs.


    THE DISCLOSURE OF THE AGGREGATE INTELLIGENCE BUDGET ACT OF 1995

  Mr. MOYNIHAN. Mr. President, Congress has never met its obligation 
under the ``Statement of Account Clause'' of the Constitution (Article 
I, Section 9, Clause 7) which states:

       No Money shall be drawn from the Treasury, but in 
     Consequence of Appropriations made by Law; and a regular 
     Statement and Account of the Receipts and Expenditures of all 
     public Money shall be published from time to time.

  I rise to point out that Congress has failed to provide the American 
public with any account of expenditures on intelligence activities. I 
stress that Congress has failed to satisfy this clause because, 
although the Executive may have an opinion as to the desirability of 
disclosing the aggregate amount spent on intelligence, the Supreme 
Court decided in United States v. Richardson, (418 U.S. 166, 178 n. 11) 
that ``it is clear that Congress has plenary power to exact any 
reporting and accounting it considers appropriate in the public 
interest.'' Thus it falls to us to provide a proper accounting of the 
disbursements of Government funds spent on intelligence activities.
  The Framers of the Constitution were no strangers to intelligence 
work and the importance of secrecy in carrying out certain functions of 
the State. During the Revolutionary War the Colonies formed Committees 
of Safety which were charged with security and counterintelligence, and 
separate Committees of Correspondence which were responsible for 
securing communication between the Colonies and our allies in Europe. 
At the end of the War, George Washington submitted a bill for 
reimbursement of $17,617 for intelligence expenses incurred during the 
war. No small sum at that time.
  The first part of the Statement and Account Clause, ``No Money shall 
be drawn from the Treasury, but in Consequence of Appropriations made 
by Law;'' was part of an early draft of the Constitution. The second 
part of the
 clause was proposed in the final week of the Constitutional Convention 
(September 14, 1787) by George Mason, who sought an annual account of 
expenditures. The debate focused on how often was practicable to 
require such an account, not whether full disclosure was desirable. 
James Madison argued that if the Constitution were to ``Require too 
much * * * the difficulty will beget a habit of doing nothing.'' He 
then proposed to substitute ``from time to time'' for ``annually'' 
which was then adopted. Thus we have ``and a regular Statement and 
Account of the Receipts and Expenditures of all Public Money shall be 
published from time to time.''

  Obviously such an ambiguous formulation of the clause gives Congress 
a good deal of flexibility. This was exercised from time to time to 
conceal military and intelligence activities when deemed necessary. 
Clearly it is vital that some discretion is in order. However, it is 
also clear that secrecy was not intended to be the norm. The clarity 
with which Madison understood this is expressed in a letter he wrote to 
Jefferson in 1793, ``Perhaps it is a universal truth that the loss of 
liberty at home is to be charged to provisions against danger, real or 
pretended, from abroad.''
  I do not think that Justice Douglas overstated the case in his 
dissenting opinion in United States v. Richardson where he stated 
``Secrecy was the evil at which Article I, Section 9, Clause 7 was 
aimed.'' Since World War II and throughout the cold war we have chosen 
not to publish the intelligence budget.
  We have won the cold war. The Soviet Union no longer exists. One then 
might ask, whom are we keeping the aggregate intelligence figure from? 
In fact, we are not keeping it from anyone and this bill will only 
codify what in fact has been public knowledge for several years now.
  Intelligence budget figures are regularly disclosed. Often the 
information is leaked to the press, or inferred by close scrutiny of 
budget figures, and in a few cases numbers will slip out accidentally. 
Tim Weiner, who reports such matters for the New York Times, called the 
intelligence budget figure the worst-kept secret in the capital. The 
latest episode occurred only 2 months ago when the House Appropriations 
Committee mistakenly published the President's fiscal year 95 
intelligence budget request. Not just the aggregate amount, mind, but a 
detailed account of the requested budgets for the CIA, National Foreign 
Intelligence Program (NFIP), and Tactical Intelligence and Related 
Activities (TIARA). This event underscores the point that if only if a 
smaller amount of truly sensitive information were classified, the 
information could be held more securely. The aggregate intelligence 
budget clearly is not in that category, for we now see that the figure 
has been released and we are still waiting for the barbarians to storm 
the gates.
  While we are waiting we might do well to consider how much like the 
barbarians we have become. James Q. Wilson, the eminent political 
scientist who has provided many insights into 
[[Page S388]] the study of bureaucracy and its various adversarial 
modes, holds that organizations come to resemble the organizations they 
are in conflict with. This is the Iron Law of Emulation. Not an 
encouraging situation considering our adversary was the Kremlin for so 
long. We now have an opportunity to reverse some of the emulation of 
the closed society that was the Soviet Union by shedding some light on 
our own vast secrecy system.
  This is vitally important given that the 104th Congress which 
convenes today will carefully consider and debate our budget 
priorities. We cannot afford to fund all we might want to. In fact Mr. 
President, we are broke. And so publishing the aggregate amount of 
intelligence expenditures becomes necessary for a truly informed public 
debate. We then could weigh the importance of Head Start Programs in 
Topeka and consider the need for agents in Tabriz. Such a debate is 
already difficult enough given the indications of a recent joint 
Kaiser/Harvard study which asked voters their impressions of the 
largest Federal expenses today. Apparently there is the idea that 
foreign aid is the second largest expense and consumes over a quarter 
of our budget. In fact the Congressional Budget Office tells us that 
foreign aid amounts to only two percent of the budget. Clearly there is 
enough disinformation going around. It is time for use to set the 
record straight when it comes to the intelligence budget. The 
Constitution demands it.
                                 ______

      By Mr. MOYNIHAN;
  S. 133. A bill to establish the Lower East Side Tenement Museum 
National Historic Site, and for other purposes; to the Committee on 
Energy and Natural Resources.


 THE LOWER EAST SIDE TENEMENT MUSEUM NATIONAL HISTORIC SITE ACT OF 1995

  Mr. MOYNIHAN. Mr. President, I rise to introduce a bill that will 
authorize a small but most significant addition to the National Park 
system. For 150 years New York City's Lower East Side has been the most 
vibrant, populous, and famous immigrant neighborhood in the Nation. 
From the first waves of Irish and German immigrants to Italians and 
Eastern European Jews to the Asian, Latin, and Caribbean immigrants 
arriving today, the Lower East Side has provided millions their first 
American home.
  For many of them that home was a brick tenement; six or so stories, 
no elevator, maybe no plumbing, maybe no windows, a business on the 
ground floor, and millions of our forbearers upstairs. The Nation has 
with great pride preserved log cabins, farm houses, and other symbols 
of our agrarian roots. We have recently reopened Ellis Island to 
commemorate and display the first stop for 12 million immigrants who 
arrived in New York City. Until now we have not preserved a sample of 
urban, working class life as part of the immigrant experience. For many 
of those who disembarked on Ellis Island the next stop was a tenement 
on the Lower East Side, such as the one at 97 Orchard Street. It is 
here that the lower East Side Tenement Museum will show us what that 
next stop was like.
  The tenement at 97 Orchard was built in the 1860s, during the first 
phase of tenement construction. It provided housing for 20 families on 
a plot of land planned for a single family residence. Each floor has 
four three--room apartments, each of which had two windows in one of 
the rooms and none in the others. The privies were out back, as was the 
spigot that provided water for everyone. The public bathhouse was down 
the street.
  In 1900 this block was the most crowded per acre on earth. Conditions 
improved after the passage of the New York Tenement House Act of 1901, 
though the crowding remained. Two toilets were installed on each floor. 
A skylight was installed over the stairway and interior windows were 
cut in the walls to allow some light throughout each apartment. For the 
first time the ground floor became commercial space. In 1918 
electricity was installed. Further improvements were mandated in 1935, 
but the owner chose to board the building up rather than follow the new 
regulations. It remained boarded up for 60 years until the idea of a 
museum took hold.
  The Tenement Museum will keep at least one apartment in the 
dilapidated condition in which it was found when reopened, to show 
visitors the process of urban archaeology. Others will be restored to 
show how real families lived at different periods in the building's 
history. At a nearby site there will be interpretive programs to better 
explain the larger experience of gaining a foothold on America in the 
Lower East Side of New York.
  There are also plans for programmatic ties with Ellis Island and its 
precursor, Castle Clinton. And the museum plans to play an active role 
in the immigrant community around it, further integrating the past and 
present immigrant experience on the Lower East Side.
  This bill designates the Tenement Museum a national historic site. It 
authorizes the Secretary of the Interior to acquire the site or to 
enter into cooperative agreements with the museum. Such agreements 
could include technical or financial assistance to help restore, 
operate, maintain, or interpret the site. Agreements can also be made 
with the Statute of Liberty/Ellis Island and Castle Clinton to help 
with the interpretation of life as an immigrant. It will be a 
productive partnership.
  Mr. President, I believe the Tenement Museum provides an outstanding 
opportunity to preserve and present an important stage of the immigrant 
experience and the move for social change in our cities at the turn of 
the century. I know of no better place than 97 Orchard Street to do so, 
and no other place in the National Park system doing so already. I look 
forward to the realization of this grand idea, and I ask my colleagues 
for their support.
  I ask 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. 133

       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 ``Lower East Side Tenement 
     Museum National Historic Site Act of 1995''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) the Lower East Side Tenement Museum at 97 Orchard 
     Street is an outstanding survivor of the vast number of 
     humble buildings that housed immigrants to New York City 
     during the greatest wave of immigration in American history;
       (2) the Museum is well suited to represent a profound 
     social movement involving great numbers of unexceptional but 
     courageous people;
       (3) no single identifiable neighborhood in the United 
     States absorbed a comparable number of immigrants;
       (4) the Lower East Side Tenement Museum is dedicated to 
     interpreting immigrant life on the Lower East Side and its 
     importance to United States history, within a neighborhood 
     long associated with the immigrant experience in America; and
       (5) the National Park Service found the Lower East Side 
     Tenement Museum to be nationally significant, suitable, and 
     feasible for inclusion in the National Park System.
       (b) Purposes.--The purposes of this Act are--
       (1) to ensure the preservation, maintenance, and 
     interpretation of this site and to interpret in the site and 
     in the surrounding neighborhood, the themes of early tenement 
     life, the housing reform movement, and tenement architecture 
     in the United States;
       (2) to ensure the continuation of the Museum at this site, 
     the preservation of which is necessary for the continued 
     interpretation of the nationally significant immigrant 
     phenomenon associated with the New York City's Lower East 
     Side, and its role in the history of immigration to the 
     United States; and
       (3) to enhance the interpretation of the Castle Clinton 
     National Historic Monument and Ellis Island National Historic 
     Monument through cooperation with the Museum.

     SEC. 3. DEFINITIONS.

       As used in this Act:
       (1) Historic site.--The term ``historic site'' means the 
     Lower East Side Tenement Museum designated as a national 
     historic site by section 4.
       (2) Museum.--The term ``Museum'' means the Lower East Side 
     Tenement Museum at 97 Orchard Street, New York City, in the 
     State of New York, and related facilities owned or operated 
     by the Museum.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.

     SEC. 4. ESTABLISHMENT OF HISTORIC SITE.

       To further the purposes of this Act and the Act entitled 
     ``An Act to provide for the preservation of historic American 
     sites, buildings, objects, and antiquities of national 
     significance, and for other purposes'', approved August 21, 
     1935 (16 U.S.C. 461 et seq.), the Lower East Side Tenement 
     Museum at 97 Orchard Street, in the city of New York, State 
     of New York, is designated as a national historic site.
     [[Page S389]] SEC. 5. ACQUISITION OR COOPERATIVE AGREEMENT.

       (a) In General.--The Secretary may--
       (1) acquire the historic site with donated or appropriated 
     funds; or
       (2) enter into a cooperative agreement with the Lower East 
     Side Tenement Museum to carry out this Act.
       (b) Technical and Financial Assistance.--The agreement may 
     include provisions by which the Secretary will provide--
       (1) technical assistance to mark, restore, interpret, 
     operate, and maintain the historic site; and
       (2) financial assistance to the Museum to acquire ownership 
     of and to maintain the historic site, or to mark, interpret, 
     and restore the historic site, including the making of 
     preservation-related capital improvements and repairs.
       (c) Additional Provisions.--The agreement may also contain 
     provisions that--
       (1) permit the Secretary, acting through the National Park 
     Service, to have a right of access at all reasonable times to 
     all public portions of the property covered by the agreement 
     for the purpose of conducting visitors through the properties 
     and interpreting the portions to the public; and
       (2) prohibit changes or alterations in the properties 
     except by mutual agreement between the Secretary and the 
     other parties to the agreement.

     SEC. 6. LAND ACQUISITION.

       The Secretary may acquire properties owned, occupied, or 
     used by the Museum, or assist the Museum in acquiring 
     properties that the Museum occupies or uses, through the use 
     of appropriated funds, donation, or purchase with donated 
     funds.

     SEC. 7. APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out this Act.
                                 ______

      By Mr. MOYNIHAN:
  S. 134. A bill to provide for the acquisition of certain lands 
formerly occupied by the Franklin D. Roosevelt family, and for other 
purposes; to the Committee on Energy and Natural Resources.


                       THE HYDE PARK ACT OF 1995

  Mr. MOYNIHAN Mr. President, I rise to introduce a bill which would 
authorize the Secretary of the Interior to purchase land that belonged 
to President Roosevelt and his family members at the time of his death. 
His estate at Hyde Park was declared a National Historic Site in 1944. 
At the time it included some 1,200 acres. Since then some parcels have 
been sold, and currently the site has only 480 acres.
  Hyde Park was the lifelong residence of President Roosevelt. It is 
inextricably linked with his place in history and his legacy. The list 
of prominent Americans and foreign leaders who visited there is 
enormous. That the National Park Service has been preserving and 
protecting Hyde Park for us is a great blessing. Now there is the 
opportunity to acquire 40 acres known as Roosevelt Cove, the land 
between the estate and the Hudson. It was the only view of the river 
and its bluffs from the estate, though years of inattention have 
allowed the view to be obscured, by trees.
  This bill would allow the Park Service to purchase the tract, to 
restore the integrity of the view towards the river for visitors to 
Hyde Park. This would be a significant addition to the site, a great 
improvement over the current situation. The parcel is now threatened 
with development, which would spoil the setting irrevocably. We need 
this authorization while the opportunity exists. Dutchess County is 
growing, and the pressure on such a river location will only increase.
  Mr. President, I ask that my fellow Senators support this bill in 
recognition of its importance to Hyde Park. Roosevelt Cove was an 
integral part of FDR's estate, and should be part of it once again. The 
Park Service is now authorized to acquire the land only through 
donation. This is not likely to happen. But the cost of the parcel is 
not great. Neither is our window of opportunity. I ask your support for 
the restoration of a crucial part of FDR's home for the thousands of 
visitors that come each year. We will have their thanks.
  I ask 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. 134

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

     SECTION 1. ACQUISITION OF ROOSEVELT FAMILY LANDS.

       (a) In General.--
       (1) General authority.--The Secretary of the Interior 
     (referred to in this section as the ``Secretary'') may 
     acquire, by purchase with donated or appropriated funds, 
     donation, or otherwise, lands and interests in land 
     (including development rights and easements) in the 
     properties located at Hyde Park, New York, that were owned by 
     Franklin D. Roosevelt or his family at the time of his death, 
     as depicted on the map entitled ``Roosevelt Family Estate'' 
     and dated November 19, 1993.
       (2) Limitations.--
       (A) Residential property.--The Secretary may only acquire 
     those residential properties on the lands and interests in 
     land depicted on the map referred to in subsection (a) that 
     were owned or occupied by Franklin D. Roosevelt or his 
     family, including his parents, siblings, wife, and children.
       (B) State lands.--Lands and interests in land depicted on 
     the map referred to in subsection (a) that are owned by the 
     State of New York, or a political subdivision of the State, 
     may only be acquired by donation.
       (3) Priority.--In acquiring lands and interests in land 
     pursuant to this section, the Secretary shall, to the extent 
     practicable, give priority to acquiring the tract of lands 
     commonly known as the ``Open Park Hodhome Tract'', as 
     generally depicted on the map referred to in subsection (a).
       (4) Costs.--The Secretary may pay the costs, including the 
     costs of title searches and surveys, associated with the 
     acquisition of lands and interests in land pursuant to this 
     section.
       (b) Administration.--Lands and interests in land acquired 
     by the Secretary pursuant to this section shall be added to, 
     and administered as part of, the Franklin Delano Roosevelt 
     National Historic Site or the Eleanor Roosevelt National 
     Historic Site, as appropriate.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this Act.
                                 ______

      By Mr. HATCH:
  S. 135. A bill to establish a uniform and more efficient Federal 
process for protecting property owners' rights guaranteed by the fifth 
amendment; to the Committee on the Judiciary.


           THE PROPERTY RIGHTS LITIGATION RELIEF ACT OF 1995

  Mr. HATCH. Mr. President, I am pleased today to introduce the 
``Property Rights Litigation Relief Act of 1995.'' This Act is designed 
to protect private property from Federal Government intrusion. The 
citizens of Utah understand that the right to own property is a 
precious fundamental right, one which is vulnerable to an overbearing 
Federal Government.
  This bill encompasses property rights litigation reform and 
establishes a distinct Federal fifth amendment ``takings'' claim 
against Federal agencies by aggrieved property owners, thus clarifying 
the sometimes incoherent and contradictory constitutional property 
rights case law. It also resolves the jurisdictional dispute between 
the Federal district courts and the Court of Federal Claims over fifth 
amendment ``takings'' cases. The bill is a refinement of a proposal I 
placed in the Congressional Record on October 7, 1994.


                     Importance of Private Property

  The private ownership of property is essential to a free society and 
is an integral part of our Judeo-Christian culture and the Western 
tradition of liberty and limited government. Private ownership of 
property and the sanctity of property rights reflects the distinction 
in our culture between a preexisting civil society and the State that 
is consequently established to promote order. Private property creates 
the social and economic organizations that counterbalance the power of 
the State by providing an alternative source of power and prestige to 
the State itself. It is therefore a necessary condition of liberty and 
prosperity.
  While government is properly understood to be instituted to protect 
liberty within an orderly society and such liberty is commonly 
understood to include the right of free speech, assembly, religious 
exercise and other rights such as those enumerated in the Bill of 
Rights, it is all too often forgotten that the right of private 
ownership of property is also a critical component of liberty. To the 
17th century English political philosopher, John Locke, who greatly 
influenced the Founders of our Republic, the very role of government is 
to protect property: ``The great and chief end therefore, on Men 
uniting into Commonwealths, and putting themselves under Government, is 
the preservation of their property.'' [J. Locke, Second Treatise ch. 9, 
Sec. 124, in J. Locke, Two Treatises of Government (1698)]. the Framers 
of our Constitution likewise viewed the function of government as one 
of fostering individual liberties through the protection of property 
interests. James Madison, termed the ``Father of the Constitution,'' 
unhesitantly endorsed this Lockean 
[[Page S390]] viewpoint when he wrote in The Federalist No. 54 that 
``[government] is instituted no less for the protection of property, 
than of the persons of individuals.'' Indeed, to Madison, the private 
possession of property was viewed as a natural and individual right 
both to be protected against government encroachment and to be 
protected by government against others.
  To be sure, the private ownership of property was not considered 
absolute. Property owners could not exercise their rights as a nuisance 
that harmed their neighbors, and government could use, what was termed 
in the 18th century, its ``despotic power'' of eminent domain to seize 
property for public use. Justice, it became to be believed, required 
compensation for the property taken by government. The earliest example 
of a compensation requirement is found in chapter 28 of the Magna Carta 
of 1215, which reads, ``No constable or other baliff of ours shall take 
corn or other provisions from anyone without immediately tendering 
money therefor unless he can have postponement thereof by permission of 
the seller.'' But the record of English and colonial compensation for 
taken property was spotty at best, although it has been argued by some 
historians and legal scholars that compensation for takings of property 
became recognized as customary practice during the American colonial 
period. [See W. Stoebuck, ``A General Theory of Eminent Domain,'' 47 
Wash. L. Rev. 53 (1972)].
  Nevertheless, by American independence the compensation requirement 
was considered a necessary restraint on arbitrary governmental seizures 
of property. The Vermont Constitution of 1777, the Massachusetts 
Constitution of 1780, and the Northwest Ordinance of 1787, recognized 
that compensation must be paid whenever property was taken for general 
public use or for public exigencies. And although accounts of the 1791 
congressional debate over the Bill of Rights provide no evidence over 
why a public use and just compensation requirement for takings of 
private property was eventually included in the fifth amendment, James 
Madison, the author of the fifth amendment, reflected the views of 
other supporters of the new Constitution who feared the example to the 
new Congress of uncompensated seizures of property for building of 
roads and forgiveness of debts by radical state legislatures. 
Consequently, the phrase ``[n]or shall private property be taken for 
public use, without just compensation'' was included within the fifth 
amendment to the Constitution.


                  THE MODERN THREAT TO PROPERTY RIGHTS

  Despite this historical pedigree and the constitutional requirement 
for the protection of property rights, the America of the mid and late 
20th century has witnessed an explosion of Federal regulation of 
society that has jeopardized the private
 ownership of property with the consequent loss of individual liberty. 
Indeed, the most recent estimate of the direct (that is, not counting 
indirect costs such as higher consumer prices) cost of Federal 
regulation was $857 billion for 1992. Today, the cost to the society 
probably is approaching $1 trillion. According to economist Paul Craig 
Roberts, the number of laws Americans are forced to endure has risen a 
staggering 3000 percent since the turn of the century. Every day the 
Federal Register grows by an incredible 200 pages, containing new rules 
and obligations imposed on the American people by supposedly their 
government.

  Furthermore, even the very concept of private property is under 
attack. Indeed, certain environmental activists have termed private 
property an ``outmoded concept'' which presents an ``impediment'' to 
the Federal Government's resolution of society's problems. It is this 
type of thinking that has led regulators, in the rush of governmental 
social engineering, to ignore individual rights. Here are just a few of 
the hundreds--if not thousands--of examples that occur nationwide:
  Ocie Mills, a Florida builder, and his son were sent to prison for 2 
years for violating the Clean Water Act for placing sand on a quarter-
acre lot he owned;
  Under this same Act, a small Oregon school district faced a Federal 
lawsuit for dumping clean fill to build a baseball-soccer field for its 
students and had to spend thousands of dollars to remove the fill;
  Ronald Angelocci was jailed for violating the Clean Water Act for 
dumping several truckloads of dirt in the backyard of his Michigan home 
to help a family member who had acute asthma and allergies aggravated 
by plants in the backyard; and
  A retired couple in the Poconos, after obtaining the necessary 
permits to build their home was informed by the Army Corps of 
Engineers--4 years later--that they built their home on wetlands and 
faced penalties of $50,000 a day if they did not restore most of the 
land to its natural state.
  [See B. Bovard, Lost Rights, 35 (1994); N. Marzulla, ``The 
Government's War on Property Rights,'' Defenders of Property Rights 
(1994)].


            current protection of property rights fall short

  Judicial protection of property rights against the regulatory state 
has been both inconsistent and ineffective. Physical invasions and 
government seizures of property have been fairly easy for courts to 
analyze as a species of eminent domain, not so the effect of 
regulations which either diminish the value of the property or 
appropriate a property interest. This key problem to the regulatory 
takings dilemma was recognized by Justice Oliver Wendell Holmes in 
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922). Just how do courts 
determine when regulation amounts to a taking? Holmes' answer, ``if 
regulation goes too far it will be recognized as a taking,'' 260 U.S. 
at 415, is nothing more than an ipse dixit. In the 73 years since 
Mahon, the Court has eschewed any set formula for determining how far 
is too far, preferring to engage in ad hoc factual inquiries, such as 
the three-part test made famous by Penn Central Transportation Co. v. 
City of New York, 438 U.S. 104 (1978), which balances the economic 
impact of the regulation on property and the character of the 
regulation against specific restrictions on investment-backed 
expectations of the property owner.
  Despite the valiant attempt by the Rehnquist Court to clarify 
regulatory takings analysis in Nollan v. California Coastal Comm'n, 483 
U.S. 825 (1987), Lucas v. South Carolina Coastal Council, 112 S.Ct. 
2886 (1992), and in its recent decision of Dolan v. City of Tigard, No. 
93-518 (June 24, 1994), takings analysis is basically incoherent and 
confusing and applied by lower courts haphazardly. The incremental, 
fact-specific approach that courts now must employ in the absence of 
adequate statutory language to vindicate property rights under the 
fifth amendment thus has been ineffective and costly. There is, 
accordingly, a need for Congress to clarify the law by providing 
``bright line'' standards and an effective remedy. As Chief Judge Loren 
A. Smith of the Court of Federal Claims, the court responsible for 
administering takings claims against the United States, opined in 
Bowles v. United States, 31 Fed. Cl. 37 (1994), ``[j]udicial decisions 
are far less sensitive to societal problems than the law and policy 
made by the political branches of our great constitutional system. At 
best courts sketch the outlines of individual rights, they cannot hope 
to fill in the portrait of wise and just social and economic policy.''
  This incoherence and confusion over the substance of takings claims 
is matched by the muddle over jurisdiction of property rights claims. 
The ``Tucker Act,'' which waives the sovereign immunity of the United 
States by granting the Court of Federal Claims jurisdiction to 
entertain monetary claims against the United States, actually 
complicates the ability of a property owner to vindicate the right to 
just compensation for a government action that has caused a taking. The 
law currently forces a property owner to elect between equitable relief 
in the Federal district and monetary relief in the Court of Federal 
Claims. Further difficulty arises when the law is used by the 
government to urge dismissal in the district court on the ground that 
the plaintiff should seek just compensation in the Court of Federal 
Claims, and is used to
 urge dismissal in the Court of Federal Claims on the ground that 
plaintiff should first seek equitable relief in the district court. 
This ``Tucker Act shuffle'' is aggravated by section 1500 of the Tucker 
Act, which denies the Court of Federal Claims jurisdiction to entertain 
a suit which is pending in another court and 
[[Page S391]] brought by the same plaintiff. Section 1500 is so poorly 
drafted and has brought so many hardships, that Justice Stevens, in 
Keene Corporation v. United States, 113 S.Ct. 2035, 2048 (1993), has 
called for its repeal or amendment.
  The Property Rights Litigation Relief Act addresses these problems. 
In terms of classifying the substance of takings claims, it first 
clearly defines property interests that are subject to the Act's 
takings analysis. In this way a ``floor'' definition of property is 
established by which the Federal Government may not eviscerate. This 
Act also establishes the elements of a takings claim by codifying and 
clarifying the holdings of the Nollan, Lucas, and Dolan cases. For 
instance, Dolan's ``rough proportionality'' test is interpreted to 
apply to all exaction situations whereby an owner's otherwise lawful 
right to use property is exacted as a condition for granting a Federal 
permit. And a distinction is drawn between a noncompensable mere 
diminution of value of property as a result of Federal regulation and a 
compensable ``partial'' taking, which is defined as any agency action 
that diminishes the fair market value of the affected property by the 
lesser of either 20 percent or more, or $10,000 or greater. The result 
of drawing these ``bright lines'' will not end fact specific 
litigation, which is endemic to all law suits, but it will ameliorate 
the ever increasing ad hoc and arbitrary nature of takings claims.
  The Act also resolves the jurisdictional confusion over takings 
claims. Because property owners should be able fully to recover for a 
taking in one court, the Tucker Act is amended giving both the district 
courts and the Court of Federal Claims concurrent jurisdiction to hear 
all claims relating to property rights. Furthermore, to resolve any 
further jurisdictional ambiguity, section 1500 of the Tucker Act is 
repealed.
  Finally, I want to respond to any suggestion that may arise that this 
Act will impede Government's ability to protect the environment or 
promote health and safety through regulation. This legislation does not 
emasculate the government's ability to prevent individuals or 
businesses from polluting. It is well established that the Constitution 
only protects a right to reasonable use of property. All property 
owners are subject to prior restraints on the use of their property, 
such as nuisance laws which prevents owners from using their property 
in a manner that interferes with others. The government has always been 
able to prevent harmful or noxious uses of property without being 
obligated to compensate the property owner, as long as the limitations 
on the use of property inhere in the title itself. In other words, the 
restrictions must be based on background principles of State property 
and nuisance law already extant. The Act codifies this principle in a 
nuisance exception to the requirement of the Government to pay 
compensation.
  Nor does the Act hinder the Government's ability to protect public 
health and safety. The Act simply does not obstruct the Government from 
acting to prevent imminent harm to the public safety or health or 
diminish what would be considered a public nuisance. Again, this is 
made clear in the provisions of the Act that exempts nuisance from 
compensation. What the Act does is force the Federal Government to pay 
compensation to those who are singled out to pay for regulation that 
benefits the entire public. In other words, it does not prevent 
regulation, but fulfills the promise of the fifth amendment, which the 
Supreme Court in Armstrong v. United States, 364 U.S. 40, 49 (1960), 
opined is ``to bar Government from forcing some people alone to bear 
public burdens, which in all fairness and justice, should be borne by 
the public as a whole.''
  I invite all Senators to join me in sponsoring this legislation.
                                 ______

      By Mr. THURMOND:
  S. 136. A bill to amend title 1 of the United States Code to clarify 
the effect and application of legislation; to the Committee on the 
Judiciary.


         the effect and application of legislation act of 1995

  Mr. THURMOND. Mr. President, I introduce S. 136 today and ask 
unanimous consent to have it printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 136

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

     SECTION 1. CLARIFICATION OF THE EFFECT AND APPLICATION OF 
                   LEGISLATION.

       (a) In General.--Chapter 1 of title 1 of the United States 
     Code is amended by adding at the end thereof the following;

     ``Sec. 7. Rules of application and effect of legislation

       ``Any Act of Congress enacted after the effective date of 
     this section--
       ``(1) shall be prospective in application only;
       ``(2) shall not create a private claim or cause of action; 
     and
       ``(3) shall not preempt the law of any State,
     unless a provision of the Act specifies otherwise by express 
     reference to the paragraph of this section intended to be 
     negated.''.
       (b) Chapter Analysis.--The chapter analysis for chapter 1 
     of title 1, United States Code, is amended by adding at the 
     end thereof the following:

``7. Rules for application and effect of legislation.''.

       (c) Effective Date.--The amendments made by this Act shall 
     take effect 180 days after the date of enactment of this Act.
  Mr. President, I rise today to introduce an act to clarify the 
application and effect of legislation in order to reduce uncertainty 
and confusion which is often caused by congressional enactments. This 
act would provide that unless future legislation specified otherwise, 
new enactments would be applied prospectively, would not create private 
rights of action, and would not preempt existing State law. This would 
significantly reduce unnecessary litigation and court costs, and would 
benefit both the public and the judicial system.
  The purpose of this legislation is quite simple. Many congressional 
enactments do not expressly state whether the legislation is to be 
applied retroactively, whether it creates private rights of action, or 
whether it preempts existing State law. The failure or inability of the 
Congress to address these issues in each piece of legislation results 
in unnecessary confusion and litigation and contributes to the high 
cost of litigation in this country.
  In the absence of action by the Congress on these critical threshold 
questions of retroactivity, private rights of action and preemption, 
the outcome is left up to the courts. The courts are frequently 
required to resolve these matters without any guidance from the 
legislation itself. Although these issues are generally raised early in 
the litigation, a decision that the litigation can proceed generally 
cannot be appealed until the end of the case. If the appellate court 
eventually rules that one of these issues should have prevented the 
trial, the litigants have been put to substantial burden and 
unnecessary expense which could have been avoided.
  Trial courts around the country often reach conflicting and 
inconsistent results on these issues, as do appellate courts when the 
issues are appealed. As a result, many of these cases are eventually 
resolved by the Supreme Court. This problem was dramatically 
illustrated after the passage of the Civil Rights Act of 1991. District 
courts and courts of appeal all over this Nation were required to 
resolve whether the 1991 Act should be applied retroactively, and the 
issue was ultimately considered by the United States Supreme Court. But 
by the time the Supreme Court resolved the issue in 1994, well over 100 
lower courts had ruled on this question, and their decisions were 
split. Countless litigants across the country expended substantial 
resources debating this threshold procedural issue.
  In the same way, the issues of whether new legislation creates a 
private right of action or preempts State law are frequently presented 
in courts around the country, yielding expensive litigation and 
conflicting results.
  The bill I am introducing today would eliminate this problem by 
providing a presumption that, unless future legislation specifies 
otherwise, new legislation is not to be applied retroactively, does not 
create a private right of action, and does not preempt State law. Of 
course, my bill does not in any way restrict the Congress on these 
important issues. The Congress may override this presumption by simply 
referring to this act when it wishes legislation to be retroactive, 
create 
[[Page S392]] new private rights of action or preempt existing State 
law.
  My act will eliminate uncertainty and provide rules which are 
applicable when the Congress fails to specify its position on these 
important issues in legislation it passes. Although it is difficult to 
obtain statistics on this issue, one United States District judge in my 
State informs me that he spends up to 10 to 15 percent of his time on 
these issues. Regardless of the precise figure, it is clear that this 
legislation would save litigants and our judicial system millions and 
millions of dollars by avoiding much uncertainty and litigation which 
currently exists over these issues.
  Mr. President, if we are truly concerned about reducing the costs of 
litigation and relieving the backlog of cases in our courts, we should 
help our judicial system to spend its limited resources, time and 
effort on resolving the merits of disputes, rather than deciding these 
preliminary matters.
  I sent the bill to the desk and ask unanimous consent that it be 
printed in the Record in its entirety immediately following my remarks.
                                 ______

      By Mr. BRADLEY (for himself, Mr. Campbell, Mr. Coats and Mr. 
        Robb):
  S. 137. A bill to create a legislative item veto by requiring 
separate enrollment of items in appropriations bills and tax 
expenditure provisions in revenue bills; to the Committee on Rules and 
Administration.


 the tax expenditure and legislative appropriations line-item veto act 
                                of 1995
  Mr. BRADLEY. Mr. President, we begin this Congress with two 
obligations: first, to change the way we do business, and, second, to 
cut government spending. Reforms that have been bottled up for years in 
partisan finger-pointing need to be released and must become our first 
priorities. Both the Congress and White House must learn to say no: no 
to unnecessary programs, no to those Members who would build monuments 
to themselves, and a firm no to those lobbyists who would work every 
angle to slip special provisions into the tax code that benefit a 
wealthy few and cost every other American millions. For decades, 
Presidents of both parties have insisted that the deficit would be 
lower if they had the power to say no, in the form of the line item 
veto.
  I rise to introduce the Tax Expenditure and Legislative 
Appropriations Line Item Veto Act of 1995, legislation that, if 
enacted, would grant the President the power to say no. In sponsoring 
this legislation, I urge our colleagues in both the Senate and House of 
Representatives to pass a line item veto that covers spending in both 
appropriations and tax bills. Any line item veto that fails to give the 
President the ability to prevent additional loopholes from entering the 
tax code only does half the job.
  Although I did not support the line item veto when I initially joined 
the Senate, I watched for twelve years as the deficit quintupled, 
shameless porkbarrel projects persisted in appropriations and tax 
bills, and our Presidents again and again denied responsibility for the 
decisions that led to these devastating trends. Therefore, in 1992, I 
decided that it was time to change the rules.
  Rather than simply joining one of the appropriations line item veto 
bills then in existence, I felt that we needed to be honest about the 
fact that for each example of unnecessary, special-interest pork-barrel 
spending through an appropriations bill, there are similar examples of 
such spending buried in tax bills. The tax code provides special 
exceptions from taxes that total over $400 billion a year, more than 
the entire federal deficit. For every $2.48 million, earmarked in an 
appropriations bill, to teach civilian marksmanship skills, there is a 
$300 million special provision allowing wealthy taxpayers to rent their 
homes for two weeks without having to report any income. For every 
$150,000 appropriated for acoustical pest control studies in Oxford, 
Mississippi, there is a $2.9 billion special tax exemption for ethanol 
fuel production. As a member of the Finance Committee, I have seen an 
almost endless stream of
 requests for preferential treatment through the tax code, including 
special depreciation schedules for rental tuxedos, an exemption from 
fuel excise taxes for crop-dusters, and tax credits for clean-fuel 
vehicles.

  In singling out these pork-barrel projects, I do not mean to pass 
judgment on their merits. However, because these provisions single out 
narrow subclasses for benefit, the rest of us must pay more in taxes. 
Therefore, I have developed an alternative that would authorize the 
President to veto wasteful spending not just in appropriations bills 
but also in the tax code.
  If the President had the power to excise special interest spending, 
but only in appropriations we would simply find the special interest 
lobbyists who work appropriations turning themselves into tax 
lobbyists, pushing for the same spending in the tax code. Spending is 
spending whether it comes in the form of a government check, or in the 
form of a special exception from the tax rates that apply to everyone 
else. Tax spending does not, as some pretend, simply allow people to 
keep more of what they have earned. It gives them a special exception 
from the rules that oblige everyone to share in the responsibility of 
our national defense and protecting the young, the aged, and the 
infirm. The only way to let everyone keep more of what they have earned 
is to minimize these tax expenditures along with appropriated spending 
and the burden of the national debt so that we can bring down tax rates 
fairly, for everyone. Therefore, Mr. President, I urge all of our 
colleagues, particularly those in leadership positions in the Senate 
and House of Representatives, to pass a line item veto bill that 
includes both appropriations and tax provisions.
  Although it is true that the line-item veto would give the President 
more power than our founders probably envisioned, there is also truth 
in the conclusion of the National Economic Commission in 1989 that the 
balance of power on budget issues has swung too far from the Executive 
toward the Legislative branch. There is no tool to precisely calibrate 
this balance of power, but if we have to swing a little too far in one 
direction or another, at this critical moment, we should lean toward 
giving the President the power that he, and other Presidents, have said 
they need to control wasteful spending. We have a right to expect that 
the President will use this power for the good of all.
  I also agree with the more recent economic commission chaired by my 
colleagues, Senators Domenici and Nunn, that a line-item veto is not in 
itself deficit reduction. But if the President is willing to use it, it 
is the appropriate tool to cut a certain kind of wasteful spending--the 
pork-barrel projects that tend to crop up in appropriations and tax 
bills. Presidential leadership can eliminate these projects when 
Congress, for institutional reasons, usually cannot. Individual 
Senators and Representatives, who must represent their own local 
interests, find it difficult to challenge their colleagues on behalf of 
the general interest.
  Pork-barrel spending on appropriations and taxes is only one of the 
types of spending that drive up the deficit, and is certainly not as 
large as the entitlements for broad categories of the population that 
we are starting to tackle. But until we control these expenditures for 
the few, we cannot ask for shared sacrifice from the many who benefit 
from entitlements, or the many who pay taxes.
  The particular legislation that I am introducing today is identical 
to a bill I introduced in the 103d Congress and is modeled on a bill my 
colleague Senator Hollings has introduced in several Congresses. I want 
to thank and commend Senator Hollings for working so hard to develop a 
workable line item veto strategy, one that goes beyond political 
demagoguery to the real question of how to limit spending. This bill 
will require that each line item in any appropriations bill and any 
bill affecting revenues be enrolled as a separate bill after it is 
passed by Congress, so that the President can sign the full bill or 
single out individual items to sign and veto. It differs from other 
bills in that it avoids obvious constitutional obstacles and in that it 
applies to spending through the tax code as well as
 appropriated spending.

  Although I acknowledge that separate enrollment, especially separate 
[[Page S393]] enrollment of appropriations provisions, may prove 
difficult at times, in the face of a debt rapidly approaching $5 
trillion, I do not believe that we have the luxury of shying away from 
making difficult decisions. If, because of our appropriations process, 
we are unable to easily disaggregate appropriations into individual 
spending items for the President's consideration, then, rather than 
throw out this line item veto proposal, I believe that we should 
reconsider how we appropriate the funds that are entrusted to us.
  The legislation that I am proposing would remain in effect for just 2 
years. That period should constitute a real test of the idea. First, it 
will provide enough time for the Federal courts to address any 
questions about whether this approach is constitutionally sound, or if 
a constitutional amendment is necessary. Only courts can answer this 
question, which is in dispute among legal scholars. Second, we should 
have formal process to determine whether the line item veto works as 
intended: Did it contribute to significant deficit reduction? Did the 
President use it judiciously to cut special-interest spending, or, as 
some worry, did he use it to blackmail members of Congress into 
supporting his own special interest expenditures? Did it alter the 
balance of power over spending, either restoring the balance or 
shifting it too far in the other direction?
  As the recent elections amply demonstrated, the American people have 
no more patience for finger-pointing or excuses. We can no longer 
tolerate a deficit that saps our economic strength while politicians in 
Washington insist that it's someone else who really has the power to 
spend or cut spending. This President or any other must have no excuses 
for failing to lead.
  I list Mr. Campbell, Mr. Coats, and Mr. Robb as original sponsors of 
this legislation.
                                 ______

      By Mrs. BOXER (for herself and Mrs. Feinstein):
  S. 138. A bill to amend the Act commonly referred to as the ``Johnson 
Act'' to limit the authority of States to regulate gambling devices on 
vessels; to the Committee on Commerce, Science, and Transportation.


   LEGISLATION AMENDING THE ``JOHNSON ACT'' RELATING TO CRUISE SHIPS

 Mrs. BOXER. Mr. President, today Senator Feinstein and I are 
introducing legislation to make a technical amendment to the law passed 
by the 102d Congress to allow gambling on U.S.-flag cruise ships and to 
allow States to permit or prohibit gambling on ships involved in 
intrastate cruises only.
  This bill is essential to restoring California's cruise ship industry 
which has lost more than $250 million in tourist revenue last year and 
hundreds of jobs. Many California cruise ship companies have bypassed 
second and third ports of call within California. Ships which used to 
call at Catalina and San Diego after departing Los Angeles en route to 
Mexico no longer make those interim stops. According to industry 
estimates, San Diego alone has lost more than 104 cruise ship port 
calls last year--66 percent of its cruise ship business. The State's 
share of the global cruise ship business has dropped from 10 percent to 
7 percent at the same time growth in the cruise ship business overall 
has climbed 10 percent a year.
  Historically, gambling has been prohibited aboard U.S.-flag cruise 
ships, putting them in a competitive disadvantage in the growing and 
lucrative cruise ship business where foreign-flagged vessels calling at 
U.S. ports have had no such restriction. In order to level the playing 
field, Congress in 1992 amended the Johnson Act, the 1951 law outlawing 
the transportation of gambling devices from State to State, to allow 
gambling on U.S.-flag cruise ships. At the same time, Congress provided 
that States could pass their own laws allowing or prohibiting gambling 
on intrastate cruises.
  The California Legislature, in an effort to prohibit gambling-only 
type cruises, subsequently passed legislation prohibiting ships with 
gambling devices from making multiple ports of call within the State. 
The legislature also was concerned that without such action to 
expressly prohibit gambling on intrastate cruises, the State could be 
required to permit certain gambling enterprises by Indian tribes under 
the Indian Gaming Act. Some Indian tribes contended that if the State 
permitted casino gambling on the high seas between State ports of call, 
then it should also permit full-fledged casino gambling within the 
State. California's efforts to prohibit gambling ``cruises to nowhere'' 
have had the effect of prohibiting gambling on cruise ships traveling 
between California ports, even if part of an interstate or 
international journey. In effect, a cruise ship traveling from Los 
Angeles to San Diego could no longer open its casinos, even in 
international waters. But if the ship bypassed San Diego and sailed 
directly to a foreign port, it could open its casinos as soon as it was 
in international waters.
  My legislation would resolve this problem by allowing a cruise ship 
with gambling devices to make multiple ports of call in one state and 
still be considered to be on an interstate or international voyage for 
purposes of the Johnson Act, if the ship reaches out-of-State or 
foreign port within 3 days. The legislation should alleviate 
California's concern regarding the Indian gaming law by removing such 
voyages from its jurisdiction and it should allow the California cruise 
ship industry to continue to make multiple ports of call in the State.
  Gambling operations still would only be permitted in international 
waters. The effect would expand only the nongambling aspects of cruise 
ship tourism by permitting more ports of call within the State. 
California is the only State affected by this bill because it is the 
only State which responded to the 1992 changes to the Johnson Act and 
enacted a State law to prohibit gambling.
  Specifically, my legislation adds a new subparagraph to the Johnson 
Act, providing that a state prohibition does not apply on a voyage or 
segment of a voyage that: first, begins and ends in the same State; 
second, is part of a voyage to another State or country; and third, 
reaches the other State or country within 3 days after leaving the 
State in which it begins. The legislation does not affect a voyage or 
segment of a voyage that occurs within the boundaries of the State of 
Hawaii.
  I urge my colleagues to support this legislation to overcome this 
serious impediment to California's tourism industry, the top industry 
of the State. I also urge prompt consideration of this bill in order to 
forestall further loss of jobs and revenue to California in the coming 
cruise ship season.
  Mr. President, I ask unaminous consent that the text of the bill be 
printed in the Record.

                                 S. 138

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

     SECTION 1. LIMITATION ON AUTHORITY OF STATES TO REGULATE 
                   GAMBLING DEVICES ON VESSELS.

       Subsection (b)(2) of section 5 of the Act of January 2, 
     1951 (commonly referred to as the ``Johnson Act'') (64 Stat. 
     1135, chapter 1194; 15 U.S.C. 1175), is amended by adding at 
     the end the following new subparagraph:
       ``(C) Exclusion of certain voyages and segments.--Except 
     for a voyage or segment of a voyage that occurs within the 
     boundaries of the State of Hawaii, a voyage or segment of a 
     voyage is not described in subparagraph (B) if such voyage or 
     segment includes or consists of a segment--
       ``(i) that begins and ends in the same State;
       ``(ii) that is part of a voyage to another State or to a 
     foreign country; and
       ``(iii) in which the vessel reaches the other State or 
     foreign country within 3 days after leaving the State in 
     which such segment begins.''.

 Mrs. FEINSTEIN. Mr. President, I am pleased to cosponsor Senator 
Boxer's legislation that is critical to the ports of California. Ports 
are a vital component of the infrastructure of those States located 
along the coasts of this country. Commercial cruises are an important 
contributor to the well-being of our ports, and are critical to the 
economies of a number of port cities in California.
  In 1993, the Johnson Act was amended to allowing gaming on U.S.-flag 
cruise ships with the provision that States could regulate gambling on 
intrastate cruises. Since that time, California has passed a law 
prohibiting gambling on intrastate cruises for reasons that were in 
fact unrelated to the cruise industry. Because of California's coast 
line is so long, cruise ships with onboard gaming are unable to make 
[[Page S394]] more than one port of call in the state without being 
subject to State regulation.
  Consequently, cruise ships bypass cities where they would otherwise 
stop, with a detrimental impact resulting to those ports that are 
passed over. The San Diego Port of Port Commissioners estimate that San 
Diego alone has lost 77 cruise line calls, and $30 million in tourism 
benefit. Smaller port cities such as Eureka are struggling to attract 
cruise vessels to bolster its economy, but will likely be bypassed by 
cruise lines if the lines are limited to one stop within the State.
  This legislation in no way promotes the proliferation of gaming 
cruises. It simply allows interstate cruises with onboard gaming, that 
would otherwise be allowed to make one stop within a State's borders, 
to make additional stops within that State as part of a longer voyage.
  What this legislation will do is provide an important economic boost 
to port cities in California, and we urge its quick consideration and 
passage.
                                 ______

      By Ms. SNOWE:
  S. 139. A bill to provide that no State or local government shall be 
obligated to take any action required by Federal law enacted after the 
date of the enactment of this Act unless the expenses of such 
government in taking such action are funded by the United States; to 
the Committee on Governmental Affairs.


                     UNFUNDED MANDATES LEGISLATION

 Ms. SNOWE. Mr. President, today marks a day of historic opportunity 
for all Americans. On November 8th, a message was delivered to Congress 
by the citizens of Bangor, ME and San Luis Obispo, CA--residents of 
International Falls, MN and Corpus Christi, TX. The message was simple: 
change the manner in which Congress does business and change the course 
our nation has taken.
  Ironically, many people thought this same message delivered in 1992--
but most Americans believe it fell on deaf ears once it reached the 
Beltway. Congress continued to pursue legislative efforts that were 
either out of sync with the American people or ran in direct opposition 
to their demands. I heard the message from the citizens of Maine loud 
and clear and recognize that my election is revocable trust. If we fail 
to respond to the message of the electorate now, the trust which has 
been placed in our hands will be taken away from us and placed in the 
hands of others. I intend to treat that trust with humility and 
respect.
  The legislation which I first introduced in 1991 and am introducing 
again today strikes at the heart of what it is Americans don't like 
about the way Congress does business and it is a necessary step toward 
regaining the trust of the American people. The people are tired of a 
Government that shows reckless disregard for responsibility and 
accountability--the people are tired of unfunded mandates.
  In recent years, Congress has approved measures that require State 
and local governments to provide certain services and meet certain 
standards. At the same time it has approved this legislation, Congress 
has neglected to provide adequate federal funds for States and 
localities to meet these mandates. We must, as a fundamental matter of 
responsibility, ensure that the costs of mandates are reasonably 
capable of being met by other levels of government. Assuming that the 
State and local governments have the funds to foot the bill is not 
responsible policy.
  The costs of existing mandates are staggering. In the State of Maine, 
the two most intrusive and expensive mandates are the Safe Drinking 
Water Act and Clean Water Act. It is estimated that the citizens of my 
state will be forced to pay $1.5 billion to comply with these two 
mandates alone. While the intentions of these laws are not malicious--
the effects of these unfunded mandates are devastating to local 
communities.
  The Combined Sewer Overflow (CSO) mandate contained in the Clean 
Water Act will cost the communities of Maine more that $960 million to 
correct. In the City of Lewiston, $35 million will buy a small 
improvement in water quality, while Auburn will spend $10 million for 
the same limited end. The CSO requirement in Augusta, Maine may cost as 
must as $100 million and would produce an average sewer bill of more 
than $1,500 annually for 30 years. Finally, the residents of Oakland, 
Maine will see their water rates increase by 174 percent in 1995--all 
as a result of the Act.
  My bill directly addresses the essence of the problem. It would 
prohibit the Government from imposing requirements on States and local 
governments that did not include funding to meet the costs. Quite 
simply, it would end unfunded mandates. This legislation represents a 
comprehensive and straight-forward effort on the part of the Federal 
Government to live up to its responsibility to provide resources for 
programs it requires States and municipalities to implement.
  Mr. President, the impression exists among many State and local 
officials that the Federal Government, no longer satisfied with simply 
bankrupting itself, is determined to bankrupt their governments. We 
know that is not our goal, and we can take a simple step to make that 
clear: end unfunded mandates. We have it within our prerogative to do 
so. And I hope that Congress will see fit now to end these unfair 
requirements.
  I urge my colleagues to join me in cosponsoring this vital 
legislation. The American people demand responsibility and 
accountability--now, we need to recommit ourselves to the task of 
accomplishing it.
                                 ______

      By Mrs. KASSEBAUM (for herself, Mr. Bennett and Mr. Brown):
  S. 140. A bill to shift financial responsibility for providing 
welfare assistance to the States and shift financial responsibility for 
providing medical assistance under title XIX of the Social Security Act 
to the Federal Government, and for other purposes; to the Committee on 
Finance.


      the welfare and medicaid responsibility exchange act of 1995

  Mrs. KASSEBAUM. Mr. President, I rise today to introduce the Welfare 
and Medicaid Responsibility Exchange Act of 1995 with Senator Bennett 
and Senator Brown. When I introduced this legislation last year, debate 
about welfare reform was just beginning. That debate has moved to the 
top of the charts in both congress and the media.
  The history of our repeated attempts to reform welfare demonstrates 
that good intentions never guarantee success. If we want to succeed 
this time, and I believe we must, then we must go beyond patchwork, 
piecemeal change and fundamentally rethink our approach to helping 
families with children.
  For me, the first basic question to be addressed is not how to reform 
welfare but who should do the reforming. I believe a critical flaw in 
the present system is not only a lack of personal responsibility--it is 
a lack of responsibility at every level of Government.
  Our largest welfare programs today are hybrids of State and Federal 
funding and management. The States do most of the administration, 
within a basic framework of Federal regulation, while the Federal 
Government provides most of the money. The result is a hodgepodge of 
State and Federal rules and regulations, conflicting eligibility and 
benefit standards, and constant push-and-pull between State and Federal 
bureaucracies.
  This may suit the needs of Government bureaucracy. It clearly is not 
meeting the needs of children in poverty.
  The first step toward real welfare reform, I believe, is to make a 
clear-cut decision about who will run the plan, who will have the power 
to make key decisions, and who will be held responsible for the 
outcome.
  The legislation we are introducing answers that question: It would 
give the States complete control and responsibility for Aid to Families 
with Dependent Children, the Food Stamp Program, and the Women, Infants 
and Children Nutrition Program. In order to free State funding to meet 
these needs, I would have the Federal Government assume a greater share 
of the Medicaid Program.
  This idea is fundamentally different from the block grant proposals 
which have been put forward. A block grant would continue to utilize 
Federal money with corresponding rules and regulations with which the 
States must comply--albeit fewer rules and more flexibility than the 
present system provides. But in the end it will 
[[Page S395]] still be Federal funds with Federal strings.
  With this legislation, the States will use their own money, and will 
carry the full responsibility for designing and operating a system 
which provides a safety net for low-income individuals and families. 
This draws a clear distinction between the role of the Federal 
Government and the States--a distinction which makes sense for two 
reasons:

       First, giving states both the power and the responsibility 
     for welfare--with their own money at stake--would create 
     powerful incentives for finding more effective ways to assist 
     families in need. Nearly half the states already are 
     experimenting with welfare reforms. This would give them 
     broad freedom to test new ideas.
       Second, I do not think Washington can reform welfare in any 
     meaningful, lasting way. The reality is that we cannot write 
     a single welfare plan that makes sense for five million 
     families in fifty different and very diverse states.

  Washington does not have a magic answer to the welfare problem. The 
Governors and State legislators have no magic solutions either, but 
they have the potentially critical advantage of being closer to the 
people involved, closer to the problems, and closer to the day-to-day 
realities of making welfare work.
  In this case, I believe proximity does matter, perhaps powerfully so. 
One of the most important factors in whether families succeed or fail 
is their connection to a community, to a network of support.
  For some families, this is found in relatives or friends. For others, 
it might be a caring caseworker, a teacher or principal, a local 
church, a city or county official. These human connections are not 
something we can legislate, and they are not something that money can 
buy.
  True welfare reform will require a renewal of local and state 
responsibilities for children and families in need. I believe that can 
only happen if the Federal Government steps aside and allows the States 
to get on with this work.
  At the same time, the Medicaid Program is badly in need of reform. 
Like the largest welfare programs, responsibility for both financing 
and administration of Medicaid is split between the State and Federal 
Governments.
  As a result, Medicaid is now a baffling maze of inconsistent 
standards and dramatic variations from State to State. The system 
sometimes leads to illogical, or even unfair, results. Some States will 
cover an infant up to 185 percent of poverty, while leaving his 
penniless father with no coverage at all. While most people believe 
that Medicaid provides a safety net for the poor, in reality it covers 
only half of those Americans living in poverty.
  Medicaid's design has also encouraged the Federal Government to heap 
costly benefit and eligibility mandates on the States. These mandates 
have added fuel to Medicaid costs that were already burning out of 
control. Medicaid costs doubled between 1989 and 1992, and have become 
the fastest-growing component of State budgets. The share of State 
revenue devoted to Medicaid has jumped from 9 percent in 1980 to nearly 
20 percent today, and is expected to double again by the end of the 
decade.
  In addition, Medicaid is virtually the only source of long-term care 
protection in a society that is now aging faster than at any time in 
its history. While elderly and disabled Americans make up only 27 
percent of Medicaid beneficiaries, they consume nearly 70 percent of 
all Medicaid costs. these 9 million Americans represent an 
irreducible--and rapidly growing--group of patients whose medical 
expenses are often too large, and of too long duration, for anyone 
other than the Government to pay the bill.
  The legislation I am introducing today will immediately begin 
addressing these problems. Later this year, I plan to introduce 
legislation to simplify the crazy-quilt of Medicaid eligibility 
standards, streamline the scope of benefits offered, and bring costs 
under control by transforming Medicaid into a more market-based system.
  Mr. President, I ask unanimous consent that the text of the bill 
appear in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 140

       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 ``Welfare and Medicaid 
     Responsibility Exchange Act of 1995''.

     SEC. 2. EXCHANGE OF FINANCIAL RESPONSIBILITIES FOR CERTAIN 
                   WELFARE PROGRAMS AND THE MEDICAID PROGRAM.

       (a) In General.--In exchange for the Federal funds received 
     by a State under section 3 for fiscal years 1997, 1998, 1999, 
     2000, and 2001 such State shall provide cash and non-cash 
     assistance to low income individuals in accordance with 
     subsection (b).
       (b) Requirement To Provide a Certain Level of Low Income 
     Assistance.--
       (1) In general.--The amount of cash and non-cash assistance 
     provided to low income individuals by a State for any quarter 
     during fiscal years 1997, 1998, 1999, 2000, and 2001 shall 
     not be less than the sum of--
       (A) the amount determined under paragraph (2); and
       (B) the amount determined under paragraph (3).
       (2) Maintenance of effort with respect to federal programs 
     terminated.--
       (A) Quarter beginning october 1, 1996.--The amount 
     determined under this paragraph for the quarter beginning 
     October 1, 1996, is an amount equal to the sum of--
       (i) one-quarter of the base expenditures determined under 
     subparagraph (C) for the State,
       (ii) the product of the amount determined under clause (i) 
     and the estimated increase in the consumer price index (for 
     all urban consumers, United States city average) for the 
     preceding quarter, and
       (iii) the amount that the Federal Government and the State 
     would have expended in the State in the quarter under the 
     programs terminated under section 4 solely by reason of the 
     increase in recipients which the Secretary of Health and 
     Human Services and the Secretary of Agriculture estimate 
     would have occurred if such programs had not been terminated.
       (B) Succeeding quarters.--The amount determined under this 
     paragraph for any quarter beginning on or after January 1, 
     1997, is an amount equal to the sum of--
       (i) the amount expended by the State under subsection (a) 
     in the preceding quarter,
       (ii) the product of the amount determined under clause (i) 
     and the estimated increase in the consumer price index (for 
     all urban consumers, United States city average) for the 
     preceding quarter, and
       (iii) the amount that the Federal Government and the State 
     would have expended in the State in the quarter under the 
     programs terminated under section 4 solely by reason of the 
     increase in recipients which the Secretary of Health and 
     Human Services and the Secretary of Agriculture estimate 
     would have occurred if such programs had not been terminated.
       (C) Determination of base amount.--The Secretary of Health 
     and Human Services, in cooperation with the Secretary of 
     Agriculture, shall calculate for each State an amount equal 
     to the total Federal and State expenditures for administering 
     and providing--
       (i) aid to families with dependent children under a State 
     plan under title IV of the Social Security Act (42 U.S.C. 601 
     et seq.),
       (ii) 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), and
       (iii) benefits under the special supplemental program for 
     women, infants, and children established under section 17 of 
     the Child Nutrition Act of 1966 (42 U.S.C. 1786),
     for the State during the 12-month period beginning on July 1, 
     1995.
       (3) Maintenance of effort with respect to state programs.--
     The amount determined under this paragraph for a quarter is 
     the amount of State expenditures for such quarter required to 
     maintain State programs providing cash and non-cash 
     assistance to low income individuals as such programs were in 
     effect during the 12-month period beginning on July 1, 1995.

     SEC. 3. PAYMENTS TO STATES.

       (a) In General.--The Secretary of Health and Human Services 
     shall make quarterly payments to each State during fiscal 
     years 1997, 1998, 1999, 2000, and 2001 in an amount equal to 
     one-quarter of the amount determined under subsection (b) for 
     the applicable fiscal year and such amount shall be used for 
     the purposes described in subsection (c).
       (b) Payment Equivalent to Federal Welfare Savings.--
       (1) In general.--The amount available to be paid to a State 
     for a fiscal year shall be an amount equal to the amount 
     calculated under paragraph (2) for the State.
       (2) Amounts available.--
       (A) Fiscal year 1997.--In fiscal year 1997, the amount 
     available under this subsection for a State is equal to the 
     sum of--
       (i) the base amount determined under paragraph (3) for the 
     State,
       (ii) the product of the amount determined under clause (i) 
     and the increase in the consumer price index (for all urban 
     consumers, United States city average) for the 12-month 
     period described in paragraph (3), and
       (iii) the amount that the Federal Government and the State 
     would have expended in 
     [[Page S396]] 
	 the State in fiscal year 1997 under the 
     programs terminated under section 4 solely by reason of the 
     increase in recipients which the Secretary of Health and 
     Human Services and the Secretary of Agriculture estimate 
     would have occurred if such programs had not been terminated.
       (B) Succeeding fiscal years.--In any succeeding fiscal 
     year, the amount available under this subsection for a State 
     is equal to the sum of--
       (i) the amount determined under this paragraph for the 
     State in the previous fiscal year,
       (ii) the product of the amount determined under clause (i) 
     and the estimated increase in the consumer price index (for 
     all urban consumers, United States city average) during the 
     previous fiscal year, and
       (iii) the amount that the Federal Government and the State 
     would have expended in the State in the fiscal year under the 
     programs terminated under section 4 solely by reason of the 
     increase in recipients which the Secretary of Health and 
     Human Services and the Secretary of Agriculture estimate 
     would have occurred if such programs had not been terminated.
       (3) Determination of base amount.--The Secretary of Health 
     and Human Services, in cooperation with the Secretary of 
     Agriculture, shall calculate the amount that the Federal 
     Government expended for administering and providing--
       (A) aid to families with dependent children under a State 
     plan under title IV of the Social Security Act (42 U.S.C. 601 
     et seq.),
       (B) 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), and
       (C) benefits under the special supplemental program for 
     women, infants, and children established under section 17 of 
     the Child Nutrition Act of 1966 (42 U.S.C. 1786),
     in each State during the 12-month period beginning on July 1, 
     1995.
       (c) Purposes for Which Amounts May Be Expended.--
       (1) Medicaid program.--
       (A) In general.--Notwithstanding any other provision of 
     law, during fiscal years 1997, 1998, 1999, 2000, and 2001 a 
     State shall--
       (i) except as provided in subparagraph (B), provide medical 
     assistance under title XIX of the Social Security Act in 
     accordance with the terms of the State's plan in effect on 
     January 1, 1995, and
       (ii) use the funds it receives under this section toward 
     the State's financial participation for expenditures made 
     under the plan.
       (B) Changes in eligibility.--A State may change State plan 
     requirements relating to eligibility for medical assistance 
     under title XIX of the Social Security Act if the aggregate 
     expenditures under such State plan for the fiscal year do not 
     exceed the amount that would have been spent if a State plan 
     described in subparagraph (A)(i) had been in effect during 
     such fiscal year.
       (C) Waiver of requirements.--The Secretary of Health and 
     Human Services may grant a waiver of the requirements under 
     subparagraphs (A)(i) and (B) if a State makes an adequate 
     showing of need in a waiver application submitted in such 
     manner as the Secretary determines appropriate.
       (2) Excess.--A State that receives funds under this section 
     that are in excess of the State's financial participation for 
     expenditures made under the State plan for medical assistance 
     under title XIX of the Social Security Act shall use such 
     excess funds to provide cash and non-cash assistance for low 
     income families.
       (d) Denial of Payments for Failure To Maintain Effort.--No 
     payment shall be made under subsection (a) for a quarter if a 
     State fails to comply with the requirements of section 2(b) 
     for the preceding quarter.
       (e) 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).

     SEC. 4. TERMINATION OF CERTAIN FEDERAL WELFARE PROGRAMS.

       (a) Termination.--
       (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, 1996.''.
       (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, 1996.''.
       (3) Special supplemental food program for women, infants, 
     and children (WIC).--Section 17 of the Child Nutrition Act of 
     1966 (42 U.S.C. 1786) is amended by adding at the end the 
     following new subsection:
       ``(q) The authority provided by this section shall 
     terminate on October 1, 1996.''.
       (4) Food stamp program.--The Food Stamp Act of 1977 (7 
     U.S.C. 2011 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 24. TERMINATION OF AUTHORITY.

       ``The authority provided by this Act shall terminate on 
     October 1, 1996.''.
       (b) 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. 5. FEDERALIZATION OF THE MEDICAID PROGRAM.

       Beginning on October 1, 2001--
       (1) each State with a State plan approved under title XIX 
     of the Social Security Act shall be relieved of financial 
     responsibility for the medicaid program under such title of 
     such Act,
       (2) the Secretary of Health and Human Services shall assume 
     such responsibilities and continue to conduct such program in 
     a State in any manner determined appropriate by the Secretary 
     that is in accordance with the provisions of title XIX of the 
     Social Security Act, and
       (3) all expenditures for the program as conducted by the 
     Secretary shall be paid by Federal funds.

     SEC. 6. SECRETARIAL SUBMISSION OF LEGISLATIVE PROPOSAL FOR 
                   TECHNICAL AND CONFORMING AMENDMENTS.

       The Secretary of Health and Human Services shall, within 90 
     days after the date of enactment of this Act, submit to the 
     appropriate committees of Congress, a legislative proposal 
     providing for such technical and conforming amendments in the 
     law as are required by the provisions of this Act.
     
                          ____________________



            WELFARE AND MEDICAID RESPONSIBILITY EXCHANGE ACT

  Mr. BROWN. Mr. President, today, the first day of the 104th Congress, 
Senators Kassebaum, Bennett and I are introducing our bill to reform 
our welfare system. This bill adheres to two fundamental principles: 
First, welfare programs designed and administered by Washington, D.C. 
do not meet the needs of our citizens, and second, Federal mandates on 
our States cost money, create huge bureaucracies and grow without 
solving the problems. This bill returns to the States the 
responsibility to design and administer welfare programs, but it does 
so without Federal strings.
  As Senator Kassebaum has described, our bill gives States complete 
control and responsibility for three of the largest welfare programs: 
Aid to Families with Dependent Children [AFDC], Food Stamps, and the 
Women, Infants and Children [WIC] Nutrition Program. Currently, States 
administer these programs under an impossibly complex, and often 
conflicting and contradictory, set of Federal and State rules.
  To free up State funds to assume full responsibility for these 
programs, this proposal has the Federal Government assume more of the 
cost of the Medicaid Program. In the past several years, Federal 
mandates in the Medicaid Program have created substantial draws on 
State treasuries and have created a true patchwork of eligibility, 
benefits and administration. This bill would have the Federal 
Government take back more of the funding and administration
 of the Medicaid Program.

  Under this bill, States can design their own programs to help low-
income people out of poverty and off of welfare. States can develop 
programs to stem rising illegitimacy and encourage parental 
responsibility. They can set eligibility criteria to meet the needs of 
their State and its citizens. They can strengthen work or education 
requirements in their welfare programs without having to come to 
Washington, DC for a waiver of Federal requirements. States want this 
flexibility, 22 states have already gotten waivers and 26 more waivers 
have been requested.
  My own State of Colorado has obtained one of the waivers, though it 
took a year for the bureaucracies here in Washington to grant it. 
Before Colorado came to Washington, a Republican state legislature and 
a Democrat governor developed the welfare reform program. The 
bipartisan Colorado program: limits welfare benefits for able-bodied 
adults after two years unless they are employed or participating in the 
Colorado's JOBS program; provides incentives for welfare recipients to 
get a high school diploma; requires AFDC parents to have their toddlers 
immunized against childhood diseases; and eliminates earned income and 
asset restrictions which have hampered AFDC recipients to become self 
sufficient.
  [[Page S397]] 
  The Kassebaum/Brown welfare reform bill lets States do 
just what Colorado did--reform their welfare system, but without the 
seemingly endless delays by the Washington bureaucracy before the 
reforms can be implemented. Under the Kassebaum/Brown bill, States like 
mine would no longer have to come begging to Washington for a welfare 
program waiver. With this bill, we can allow states to continue what 
they've already started--actually reforming welfare.
  This approach makes sense. States do not need Federal money with lots 
of strings attached, as is likely under a block grant approach. You've 
heard of the uncola--well, this is the unmandate. The Kassebaum/Brown 
bill takes seriously our commitment to end unfunded Federal mandates.
                                 ______

      By Mrs. KASSEBAUM (for herself, Mr. Jeffords, Mr. Chafee, Mr. 
        Coats, Mr. Gregg, Mr. Brown, Mr. Craig, Mr. Nickles, Mr. 
        Cochran, Mr. Domenici, Mr. Grassley, Mr. Simpson, Mr. Warner, 
        Mr. Pressler, and Mr. Grams):
  S. 141. A bill to repeal the Davis-Bacon Act of 1931 to provide new 
job opportunities, effect significant cost savings on Federal 
construction contracts, promote small business participation in Federal 
contracting, reduce unnecessary paperwork and reporting requirements, 
and for other purposes; to the Committee on Labor and Human Resources.


                       THE DAVIS-BACON REPEAL ACT

  Mrs. KASSEBAUM. Mr. President, today I am introducing a bill, along 
with my colleagues, Senators Jeffords, Chafee, Coats, Gregg, Brown, 
Craig, Nickles, Cochran, Domenici, Grassley, Simpson, Warner, Pressler, 
and Grams, to repeal the Davis-Bacon Act of 1931, an outmoded law that 
requires contractors performing Federal public works projects to meet 
prevailing wage conditions and work rules. This legislation is long 
overdue.
  Congress enacted the Davis-Bacon Act during the Depression amid 
concern that bidding for large Federal construction projects would lead 
to cut-throat competition from out-of-state contractors that would 
drive down local wage rates. That might have been a valid concern 
during the Depression, but it is no longer the case.
  Due to the Department of Labor's method of computing the 
``prevailing'' wage, Davis-Bacon often requires Federal contractors to 
pay their workers at a rate considerably higher than the market rate. 
In addition, Davis-Bacon requires contractors to follow work rules that 
prevail in the locality.
  The public is ill-served by these wage rate and work rule 
restrictions. We lose the benefit of workplace innovations that improve 
quality and productivity, and we raise the cost of completing 
construction projects. Numerous studies have shown that Davis-Bacon 
wage inflation and work rule requirements raise Federal construction 
costs by 5 to 25 percent. As a result, the Davis-Bacon Act exacerbates 
our budget deficit by increasing Federal contracting costs by $3 
billion over the 5-year budget cycle.
  Mr. President, construction is one of the last sectors of our economy 
where low-skill individuals can be trained on the job for a few months 
and then earn a decent living. Young men and women in the inner city, 
many of whom are minorities, eagerly seek this work.
  But Davis-Bacon's prevailing wage and work rule restrictions prevent 
contractors from hiring and training these young men and women, in 
direct contradiction to our national goal of expanding inner-city 
employment opportunities. This is one reason why the National League of 
Cities endorses Davis-Bacon repeal.
  Mr. President, Davis-Bacon decreases competition, raises construction 
costs, and diminishes employment opportunities. I urge my colleagues to 
support Davis-Bacon repeal, and ask unanimous consent that the text of 
the bill appear in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 141

       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 maybe cited as the ``Davis-Bacon Repeal Act''.

     SEC. 1. DAVIS-BACON ACT OF 1931 REPEALED.

       The Act of March 3, 1931, (commonly known as the Davis 
     Bacon Act) (40 U.S.C. 276a et seq.), is repealed.

     SEC. 3. REPORTING REQUIREMENTS.

       Section 2 of the Act of June 13, 1934 (42 U.S.C. 276c) 
     (commonly known as the Copeland Act) is repealed.

     SEC. 4. EFFECTIVE DATE.

       The provisions of this Act shall take effect 30 days after 
     the date of enactment of this Act but shall not affect any 
     contract in existence on that date or made pursuant to 
     invitations for bids outstanding on that date.
                                                                    ____

                                                         NSBA,

                                                  January 4, 1995.
     Hon. Nancy Landon Kassebaum,
     United States Senate,
     Washington, DC.
       Dear Senator Kassebaum: The National School Boards 
     Association (NSBA) supports repeal of the Davis-Bacon Act. 
     NSBA represents 95,000 locally elected school board members 
     in nearly 16,000 school districts nationwide. The Davis-Bacon 
     Act has resulted in enormous cost differentials from state to 
     state in the new construction and renovation of school 
     buildings. The Act has skewed local decision-making regarding 
     the school district's ability to accept federal funds to meet 
     their construction needs. NSBA understands between your own 
     state of Kansas and the neighboring state of Missouri, school 
     construction is 20 percent higher in Missouri because of the 
     state Davis-Bacon Act.
       The Davis-Bacon Act requires contractors of federally-
     funded construction projects to pay the ``prevailing local 
     wage,'' which is usually the union rate, often 10 to 25 
     percent higher wages than the non-union private sector pays. 
     This depression-era statute was intended to prevent big 
     construction companies from hiring low-wage, itinerant 
     workers and underbidding local companies for coveted 
     government contracts during the Depression. The Act has 
     outlived its usefulness.
       The National School Boards Association calls for the repeal 
     of the Davis-Bacon Act. We appreciate your interest in this 
     costly problem for many school districts.
           Sincerely,
     Boyd W. Boehlje,
                                                        President.
     Thomas A. Shannon,
                                               Executive Director.

  Mr. CHAFEE. Mr. President, I am pleased to join the distinguished 
Chair of the Labor and Human Resources Committee, Senator Nancy 
Kassebaum, in introducing the Davis-Bacon Repeal Act. I wish to commend 
the Senator from Kansas for her leadership in advancing this important 
initiative, which the Congressional Budget Office estimates would save 
$3.3 billion over 5 years. The Davis-Bacon Act requires that minimum 
wage rates paid on all federally-financed construction projects valued 
at more than $2,000 be based upon ``prevailing'' rates established by 
the Department of Labor.
  The time has come to do away with this antiquated Depression-era 
statute. The act significantly increases the cost of Federal 
construction, restricts competition, and discourages the hiring of 
women, minorities, dislocated workers, and job trainees.
  Through my tenure on the Environment and Public Works Committee, I 
have become all too familiar with the negative toll this statute exacts 
on our Federal highway program. Of the $3 billion per year in added 
federal construction costs resulting from the Davis-Bacon Act, $300 to 
$500 million comes from the Federal highway program. So-called 
``little'' Davis-Bacon laws, which exist in some 37 States and the 
District of Columbia, exact a further toll on Federal highway funds of 
approximately $60 million per year.
  The inflationary impact of Davis-Bacon means the funds we have 
dedicated to modernizing our critical highway infrastructure are 
building fewer roads, replacing fewer deficient bridges and reducing 
overall productivity. The Federal Highway Administration estimates that 
the act inflates highway construction wages by 8-10 percent, with 
increased administrative burdens on contractors and contracting 
agencies amounting to over $100 million annually.
  The motoring public, which pays into our Highway Trust Fund in the 
form of Federal fuel excise taxes, deserves competitive contracting to 
ensure the most prudent use of these critical resources. While there 
was a time when the David-Bacon Act helped to ensure fair wages, the 
sad truth today is that its primary purpose is to guarantee non-
competitive wages to union contractors.
  Though the act is intended to help smaller contractors, including 
minority-owned firms, the Federal paperwork requirements to comply with 
Davis-Bacon are so daunting most elect not to seek such business. 
Instead, 
[[Page S398]] large multistate union contractors remain the primary 
beneficiaries. Tragically, the restrictive requirements associated with 
the Davis-Bacon Act have had the effect of hurting women, minorities, 
trainees, and others who are most often hired by small and minority 
firms.
  For these reasons, I will press for the expeditious consideration and 
enactment of the Davis-Bacon Repeal Act over the coming months. Thank 
you.
                                 ______

      By Mrs. KASSEBAUM:
  S. 142. A bill to strengthen the capacity of State and local public 
health agencies to carry out core functions of public health, by 
eliminating administrative barriers and enhancing State flexibility, 
and for other purposes; to the Committee on Labor and Human Resources.


               the public health enhancement act of 1995

  Mrs. KASSEBAUM. Mr. President, I rise today to introduce legislation 
aimed at consolidating the numerous grant programs of the Centers for 
Disease Control and Prevention--CDC. A second goal is to examine the 
Federal role in disease prevention and control.
  The two central provisions of this proposal would strengthen our 
Nation's public health system by increasing Federal and State 
flexibility and reducing administrative costs. The primary provision 
would consolidate 12 different grant programs into a core functions of 
public health block grant. Core functions of public health are those 
activities which any public health department should undertake to 
protect and ensure the health of the public.
  The other key provision would combine 28 demonstration project 
funding streams into one flexible authority. Under this authority, CDC 
would address public health needs of regional and national significance 
through technical assistance to States and time-limited research and 
development projects.
  As many of my colleagues remember, the last legislative 
reorganization of the CDC grant programs occurred in 1981. At that 
time, the current preventive health and health services block grant was 
created through the combination of seven categorical grant programs. 
The CDC also retained its authority to conduct three categorical 
programs for immunizations, sexually transmitted diseases, and 
diabetes.
  Since then, Congress has acted eight different times to create 
narrowly defined grant programs. The risk of such narrow funding 
authorities is that States respond to federally legislated public 
health priorities rather than the actual needs of their own citizens.
  Fortunately, the CDC is considering how to simplify the grant making 
process and to consolidate many of its grant programs. Primarily, this 
is in response to State public health officers. They have voiced 
concerns about the administrative burdens and limited flexibility 
afforded by the 12 current funding streams. I am encouraged by the 
CDC's internal review of its own programs. However, I remain concerned 
that it will not go far enough in its attempt to consolidate these 
programs. As such, I offer this legislation today as one example of 
program consolidation which I would encourage the CDC to consider.
  Mr. President, to examine the Federal role in disease prevention and 
control, this legislation contains a provision which would have the CDC 
report to Congress on the benefits of its activities. Such a report 
would foster a review of the CDC programs. Given the changes created by 
this legislation, I believe this is important. Additionally, I believe 
such a review of CDC activities is in order given the broad mandate CDC 
has for both disease control and disease prevention.
  Historically, CDC has a role in disease prevention. This dates back 
to the administration of this agency by Dr. Foege. In the late 1970's 
he redirected CDC activities into disease prevention. This mission was 
again reconfirmed by the CDC under the leadership of Dr. Roper when it 
developed its vision statement in 1992: ``The vision of the CDC is 
healthy people in healthy world: through prevention.''
  However, I am concerned as it carriers out its vision that CDC risks 
losing sight of its historic charge to combat and prevent infectious 
diseases. This charge dates back to the establishment of the CDC 
originally as the Malaria Control in War Times Area Program during the 
World War II. My cause for concern lies in our problem of emerging 
infections. This is evidenced by the tuberculosis outbreak in many of 
our cities and the national HIV epidemic.
  Concerns have been raised about my approach which I would like to 
address. First, some suggest that States will not use their core 
functions of public health block grant to address their most pressing 
public health problems. For instance, those involved with the current 
CDC community-based HIV prevention initiative question if States would 
continue to carry out HIV prevention programs.
  My legislation ensures that States would address their most pressing 
public health problems including HIV prevention. Under it, each State 
would conduct a community-based needs assessment and develop a plan. 
Such an assessment and the plan would be tied to the goals of Healthy 
People 2000 and a set of core public health indicators. I believe such 
a process would assure both State flexibility and accountability.
  Others have expressed concern that the intention of this proposal is 
to reduce public health funding. Although I cannot guarantee the 
outcome of the appropriations process, this is not my intention. In 
fact, the authorization of $1.1 billion for the core functions of 
public health block grant is consistent with the current appropriation 
for each of the consolidated categorical programs.
  Mr. President, the introduction of this proposal today should serve 
as the staring point for a discussion on the issue of consolidating the 
CDC grant programs. I intend to develop this proposal further. This 
legislation represents one consolidation option, there are others. I 
welcome a vigorous debate about the merits and flaws of the Public 
Health Enhancement Act of 1995.
  As discussion of these issues develops, I would welcome any 
suggestions my colleagues or others may have for improving this 
legislation. I ask unanimous consent that my statement, a summary of 
this bill, and the text of the legislation be made a part of the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 142

       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 ``Public Health Enhancement 
     Act of 1995''.
   TITLE I--FORMULA GRANTS FOR STATE CORE FUNCTIONS OF PUBLIC HEALTH

     SEC. 101. PURPOSE.

       It is the purpose of this title to strengthen the capacity 
     of State and local public health agencies to carry out core 
     functions of public health, by eliminating administrative 
     barriers, and enhancing State flexibility.

     SEC. 102. FORMULA GRANTS TO STATES FOR CORE FUNCTIONS OF 
                   PUBLIC HEALTH.

       Part A of title XIX of the Public Health Service Act (42 
     U.S.C. 300w et seq.) is amended--
       (1) by striking the part heading and inserting the 
     following:

    ``PART A--FORMULA GRANTS TO STATES FOR CORE FUNCTIONS OF PUBLIC 
                               HEALTH'';

       (2) by repealing sections 1901 through 1907;
       (3) by inserting after the part heading the following new 
     sections:

     ``SEC. 1901. GRANTS.

       ``(a) In General.--The Secretary, acting through the 
     Director of the Centers for Disease Control and Prevention, 
     shall make grants to States in accordance with the formula 
     described in subsection (d) for the purpose of carrying out 
     the functions described in subsection (b).
       ``(b) Core Functions of Public Health Programs.--For 
     purposes of subsection (a) and subject to the funding 
     agreement described in subsection (c), the functions 
     described in this subsection are as follows:
       ``(1) Data collection and activities related to population 
     health measurement and outcomes monitoring (including gender 
     differences, ethnic identifiers, and health differences 
     between racial and ethnic groups), and analysis for planning 
     and needs assessment.
       ``(2) Activities to protect the environment and to assure 
     the safety of housing, workplaces, food and water, and the 
     public health of communities (including support for poison 
     control centers and preventive health services programs to 
     reduce the prevalence of chronic diseases and to prevent 
     intentional and unintentional injuries).
       ``(3) Investigation and control of adverse health 
     conditions.
      [[Page S399]]   
	  ``(4) Public information and education 
     programs to reduce risks to health.
       ``(5) Accountability and quality assurance activities, 
     including quality of personal health services and any 
     communities' overall access to health services.
       ``(6) Provision of public health laboratory services.
       ``(7) Training and education with special emphasis placed 
     on the training of public health professions and occupational 
     health professionals.
       ``(8) Leadership, policy development and administration 
     activities.
       ``(c) Restrictions on Use of Grant.--
       ``(1) In general.--A funding agreement for a grant under 
     subsection (a) for a State is that the grant will not be 
     expended--
       ``(A) to provide inpatient services;
       ``(B) to make cash payments to intended recipients of 
     health services;
       ``(C) to purchase or improve land, purchase, construct, or 
     permanently improve (other than minor remodeling) any 
     building or other facility, or purchase major medical 
     equipment; or
       ``(D) to satisfy any requirement for the expenditure of 
     non-Federal funds as a condition for the receipt of Federal 
     funds.
       ``(2) Limitation on administrative expenses.--A funding 
     agreement for a grant under subsection (a) is that the State 
     involved will not expend more than 10 percent of the grant 
     for administrative expenses with respect to the grant.
       ``(d) Formula.--
       ``(1) In general.--The Secretary, acting through the 
     Director of the Centers for Disease Control and Prevention, 
     shall develop and implement a formula to distribute funds, 
     which would have otherwise been distributed under the 
     provisions of law described in paragraph (2)(B) in effect on 
     January 1, 1995, to each State under this title. Such formula 
     shall incorporate measures of population, health status of 
     the population, and financial resources of the various 
     States. The Secretary shall submit the suggested formula and 
     an accompanying report describing the estimated funding 
     impact on States to the appropriate Congressional authorizing 
     committees not later than January 1, 1996.
       ``(2) Transition formula.--
       ``(A) In general.--With respect to each of the fiscal years 
     1997, 1998, and 1999, the Secretary shall ensure that a State 
     under this title receives an allotment that is equal to not 
     less than 90 percent of the amount of the allotments the 
     State received in fiscal year 1996 under the provisions of 
     law described in subparagraph (B). If the total allotment for 
     all States under this subparagraph is less than the total 
     allotment for all States for the previous year under such 
     provisions, the Secretary shall establish a formula for the 
     proportional reduction in each State's allotment.
       ``(B) Provisions of law.--The provisions of law referred to 
     in subparagraph (A) are the following:
       ``(i) Section 1902, preventive health and health services 
     block grant.
       ``(ii) Section 318(e), prevention and control of sexually 
     transmitted disease.
       ``(iii) Section 318A(q), infertility and sexually 
     transmitted diseases.
       ``(iv) Section 317(j), immunization grant program.
       ``(v) Section 317E(g), prevention health services regarding 
     tuberculosis.
       ``(vi) Section 399L(a), cancer registries.
       ``(vii) The authority for grants under section 317 for 
     preventive health services programs for diabetes.
       ``(viii) The authority for grants under section 317 for 
     preventive health services programs for tobacco use 
     prevention.
       ``(ix) The authority for grants under section 317 for 
     preventive health services programs for disabilities 
     prevention.
       ``(x) Section 317A(1), lead poisoning prevention.
       ``(xi) Section 1510(a), breast and cervical cancer.
       ``(xii) The authority for grants under section 317 for 
     preventive health services programs for human 
     immunodeficiency virus prevention.
       ``(3) Withholding.--
       ``(A) In general.--The Secretary shall, after adequate 
     notice and an opportunity for a hearing conducted within the 
     affected State, withhold funds from any State which does not 
     use its allotment in accordance with the requirements of this 
     section. The Secretary shall withhold such funds until the 
     Secretary finds that the reason for the withholding has been 
     removed and there is reasonable assurance that it will not 
     recur.
       ``(B) Proceedings.--The Secretary may not institute 
     proceedings to withhold funds under this paragraph unless the 
     Secretary has conducted an investigation concerning whether 
     the State has used its allotment in accordance with the 
     requirements of this section. Investigations required under 
     this subparagraph shall be conducted within the affected 
     State by qualified investigators.
       ``(C) Response to complaints.--The Secretary shall respond 
     in an expeditious manner to complaints of a substantial or 
     serious nature that a State has failed to use funds in 
     accordance with the requirements of this section.
       ``(D) Limitation.--The Secretary may not withhold funds 
     under this paragraph from a State for a minor failure to 
     comply with the requirements of this section.
       ``(4) Investigations.--
       ``(A) In general.--The Secretary shall conduct in several 
     States in each fiscal year investigations of the use of funds 
     received by the States under this section in order to 
     evaluate compliance with the requirements of this section.
       ``(B) Comptroller general.--The Comptroller General of the 
     United States may conduct investigations of the use of funds 
     received under this section by a State in order to insure 
     compliance with the requirements of this section.
       ``(5) Availability of books and records.--Each State, and 
     each entity which has received funds from an allotment made 
     to a State under this section, shall make appropriate books, 
     documents, papers, and records available to the Secretary or 
     the Comptroller General of the United States, or any of their 
     duly authorized representatives, for examination, copying, or 
     mechanical reproduction on or off the premises of the 
     appropriate entity upon a reasonable request therefore.
       ``(6) Request for information.--
       ``(A) In general.--In conducting any investigation in a 
     State under this subsection, the Secretary or the Comptroller 
     General of the United States may not make a request for any 
     information not readily available to such State or an entity 
     which has received funds from an allotment made to the State 
     under this section or make an unreasonable request for 
     information to be compiled, collected, or transmitted in any 
     form not readily available.
       ``(B) Limitation.--Subparagraph (A) shall not apply to the 
     collection, compilation, or transmittal of data in the course 
     of a judicial proceeding.
       ``(e) Indian Tribes or Tribal Organizations.--
       ``(1) In general.--If the Secretary--
       ``(A) receives a request from the governing body of an 
     Indian tribe or tribal organization within any State that 
     funds under this title be provided directly by the Secretary 
     to such tribe or organization; and
       ``(B) determines that the members of such tribe or tribal 
     organization would be better served by means of grants made 
     directly by the Secretary under this section,

     the Secretary shall reserve from amounts which would 
     otherwise be allotted to such State under the formula under 
     subsection (d) for the fiscal year the amount determined 
     under paragraph (2).
       ``(2) Reservation.--The Secretary shall reserve, for the 
     purposes of paragraph (1), from amounts that would otherwise 
     be allotted to such State under the formula under subsection 
     (d), an amount equal to the amount which bears the same ratio 
     to the State's allotment for the fiscal year involved as the 
     total amount provided or allotted for fiscal year 1996 by the 
     Secretary to such tribe or tribal organization under the 
     provisions of law referred to in subsection (d)(2)(B) bore to 
     the total amount provided or allotted for such fiscal year by 
     the Secretary to the State and entities (including Indian 
     tribes and tribal organizations) in the State under such 
     provisions of law.
       ``(3) Grants.--The amount reserved by the Secretary on the 
     basis of a determination under this subsection shall be 
     granted to the Indian tribe or tribal organization serving 
     the individuals for whom such a determination has been made.
       ``(4) Plan.--In order for an Indian tribe or tribal 
     organization to be eligible for a grant for a fiscal year 
     under this subsection, it shall submit to the Secretary a 
     plan for such fiscal year in accordance with section 1902.
       ``(5) Definitions.--As used in this subsection, the terms 
     `Indian tribe' and `tribal organization' have the same 
     meaning given such terms in section 4(b) and section 4(c) of 
     the Indian Self-Determination and Education Assistance Act.
       ``(6) Accountability.--The provisions of subsection (d)(3) 
     relating to accountability shall apply to this subsection.
       ``(f) Authorization of Appropriations.--
       ``(1) In general.--For the purpose of making grants under 
     this section, there are authorized to be appropriated, 
     $1,100,000,000 for fiscal year 1997, and such sums as may be 
     necessary for each of the fiscal years 1998 through 2000.
       ``(2) Administrative expenses.--The Secretary may use not 
     more than 5 percent of the amounts appropriated in any fiscal 
     year under paragraph (1) for expenses related to the 
     administration of this part.
       ``(3) Reduction in payments.--The Secretary, at the request 
     of a State or Indian Tribe, may reduce the amount of payments 
     under subsection (a) by--
       ``(A) the fair market value of any supplies or equipment 
     furnished the State; and
       ``(B) the amount of the pay, allowances, and travel 
     expenses of any officer, fellow, or employee of the Federal 
     Government when detailed to the State or Indian Tribe and the 
     amount of any other costs incurred in connection with the 
     detail of such officer, fellow, or employee;

     when the furnishing of supplies or equipment or the detail of 
     an officer, fellow, or employee is for the convenience of and 
     at the request of the State or Indian Tribe and for the 
     purpose of conducting activities described in this section. 
     The amount by which any payment may be reduced under this 
     paragraph shall be available for payment by the Secretary of 
     the costs incurred in furnishing the supplies or equipment or 
     in detailing the personnel, on which the reduction of the 
     payment is based, and the amount shall be deemed to be part 
     of the payment and shall be deemed to have been paid to the 
     State or Indian Tribe.
     [[Page S400]]  
	 ``(g) Maintenance of Effort.--
       ``(1) Current core functions of public health 
     expenditures.--A funding agreement for a grant under 
     subsection (a) is that the State involved will maintain 
     expenditures of non-Federal amounts for core health functions 
     at a level that is not less than the level of such 
     expenditures, adjusted for changes in the Consumer Price 
     Index, maintained by the State for the fiscal year preceding 
     the first fiscal year for which the State receives such a 
     grant. The Secretary, acting through the Director of the 
     Centers for Disease Control and Prevention, shall develop 
     uniform criteria to help States identify their public health 
     department expenditures that shall be used in calculating 
     core public health function expenditures.
       ``(2) Reductions.--The Secretary may reduce the amount of 
     any grant awarded to a State under this section by an amount 
     that equals the amount by which the Secretary determines that 
     the State has reduced State expenditures for core public 
     health functions.

     ``SEC. 1902. APPLICATION.

       ``(a) Development of Uniform Application.--The Secretary, 
     acting through the Director of the Centers for Disease 
     Control and Prevention, shall develop a uniform application 
     that States shall use to apply for grants under this part. In 
     developing such uniform application, the Secretary shall 
     require the provision of information consistent with data on 
     the interventions comprising and the outcomes attributable 
     to, core public health functions as such data is included in 
     the uniform reporting system in section 1903. Such a uniform 
     application shall be developed to take into account the 
     requirements in of subsection (b).
       ``(b) State Assurances.--An application submitted under 
     this part shall include the following:
       ``(1) A description of the existing deficiencies and 
     successes in the public health system of the State based upon 
     indicators included in the uniform application data set.
       ``(2) A plan to improve such deficiencies and to continue 
     successes. Such plan shall have been developed with the 
     broadest possible input from State and local health 
     departments and public and non-profit private entities 
     performing core functions of public health in that State. In 
     compiling such plan the State shall describe why funding for 
     a successful intervention continues to be needed, including a 
     description of the detriment that would occur if such funding 
     were not to occur using the indicators found in the uniform 
     application data set.
       ``(3) A description of the activities of the State for the 
     previous year, including the problems addressed and changes 
     made in the relevant health indicators included in the 
     uniform application data set.
       ``(4) Information concerning the maintenance of effort 
     requirements described in section 1901(h).

     ``SEC. 1903. UNIFORM CORE PUBLIC HEALTH FUNCTIONS REPORTING 
                   SYSTEM.

       ``(a) In General.--
       ``(1) Development.--The Secretary, acting through the 
     Director of the Centers for Disease Control and Prevention, 
     shall develop and implement a Uniform Core Public Health 
     Functions Reporting System to collect program and fiscal data 
     concerning the interventions comprising, and the outcomes 
     attributable to, core functions of public health.
       ``(2) Requirements.--The system developed under paragraph 
     (1) shall--
       ``(A) use outcomes consistent with the goals of Healthy 
     People 2000;
       ``(B) be designed so that information collected will be 
     relevant to the requirements of this part; and
       ``(C) be designed and implemented not later than 2 years 
     after the date of enactment of this section.
       ``(b) State Public Health Officers.--In developing the data 
     set to be used under the Uniform Core Public Health Functions 
     Reporting System the Secretary shall consult with State 
     public health officers.'';
       (4) in section 1908(b) (42 U.S.C. 300w-7(b)), by striking 
     ``1902'' and inserting ``1901''; and
       (5) in section 1910(a) (42 U.S.C. 300w-9(a)), by striking 
     ``1904(a)(1)(F)'' and inserting ``1901''.
    TITLE II--CENTERS FOR DISEASE CONTROL AND PREVENTION ACTIVITIES

     SEC. 201. REPORT OF DIRECTOR OF CENTERS FOR DISEASE CONTROL 
                   AND PREVENTION.

       (a)  In General.--The Secretary of Health and Human 
     Services, acting through the Director of the Centers for 
     Disease Control and Prevention, shall prepare and submit to 
     the President and to the appropriate committees of Congress a 
     report that shall contain--
       (1) a description of the activities carried out by and 
     through the Centers for Disease Control and Prevention and 
     the policies with respect to such programs and such 
     recommendations concerning such policies and proposals for 
     legislative changes in the Public Health Service Act as the 
     Secretary considers appropriate; and
       (2) a description of the activities undertaken to improve 
     and streamline grants and contracting accountability within 
     such Centers.
       (b) Time for Reporting.--Not later than July 1, 1996, the 
     Secretary shall submit the report required under subsection 
     (a). Such report shall relate to fiscal year 1995, to the 
     implementation of part A of title XIX of the Public Health 
     Service Act (as amended by section 101), and to the 
     implementation of a program of the type described in section 
     301(e) of such Act (as added by section 202).

     SEC. 202. PRIORITY PUBLIC HEALTH NEEDS OF REGIONAL AND 
                   NATIONAL SIGNIFICANCE.

       Section 301 of the Public Health Service Act (42 U.S.C. 
     241) is amended by adding at the end thereof the following 
     new subsection:
       ``(e)(1) The Secretary, acting through the Director of the 
     Centers for Disease Control and Prevention, shall address 
     priority public health needs of regional and national 
     significance through the provision of--
       ``(A) training and technical assistance to States, 
     political subdivisions of States, and public or private 
     nonprofit entities through direct assistance or grants or 
     contracts;
       ``(B) applied research into the prevention and control of 
     diseases and conditions; or
       ``(C) demonstration projects for the prevention and control 
     of diseases.

     In carrying out subparagraphs (B) and (C), the Secretary may 
     make grants to, or enter into cooperative agreements with, 
     States, political subdivisions of States, and public or 
     private nonprofit entities.
       ``(2) Priority public health needs of regional and national 
     significance may include, emerging infectious diseases, 
     environmental and occupational threats, chronic diseases, 
     injuries, and other priority diseases and conditions as 
     determined appropriate by the Secretary.
       ``(3)(A) Recipients of grants, cooperative agreements, and 
     contracts under this subsection shall comply with information 
     and application requirements determined appropriate by the 
     Secretary.
       ``(B) With respect to a grant, cooperative agreement, or 
     contract awarded under this subsection, the period during 
     which payments under such award are made to the recipient may 
     not exceed 5 years. The provision of such payments shall be 
     subject to annual approval by the Secretary and the 
     availability of appropriations for the fiscal year involved. 
     This subparagraph may not be construed as limiting the number 
     of awards under the program involved that may be made to an 
     entity.
       ``(C) The Secretary may require that an entity that applies 
     for a grant, contract, or cooperative agreement under this 
     subsection provide non-Federal matching funds, as determined 
     appropriate by the Secretary, to ensure the institutional 
     commitment of the entity to the projects funded under the 
     grant, contract, or cooperative agreement. Such non-Federal 
     matching funds made be provided directly or through donations 
     from public or private entities and may be in cash or in 
     kind, fairly evaluated, including plant, equipment, or 
     services.
       ``(D) With respect to activities for which a grant, 
     cooperative agreement, or contract is awarded under this 
     subsection, the recipient shall agree to maintain 
     expenditures of non-Federal amounts for such activities at a 
     level that is not less than the level of such expenditures 
     maintained by the entity for such fiscal year preceding the 
     fiscal year for which the entity receives such a grant, 
     contract, or cooperative agreement.
       ``(E)(i) An application for a grant, contract, or 
     cooperative agreement under this subsection shall ensure that 
     amounts received under such grant, contract, or agreement 
     will not be expended--
       ``(I) to provide inpatient services;
       ``(II) to make cash payments to intended recipients of 
     health services;
       ``(III) to purchase or improve land, purchase, construct, 
     or permanently improve (other than minor remodeling) any 
     building or other facility, or purchase major medical 
     equipment; or
       ``(IV) to satisfy any requirement for the expenditure of 
     non-Federal funds as a condition for the receipt of Federal 
     funds.
       ``(ii) A funding agreement for a grant, contract, or 
     cooperative agreement under this subsection is that the 
     entity involved will not expend more than 10 percent of the 
     grant, contract, or agreement for administrative expenses 
     with respect to the grant, contract, or agreement.
       ``(4) The Secretary, at the request of a State or a 
     political subdivision of a State, or a public or private 
     nonprofit entity, may reduce the amount of payments under 
     this subsection by--
       ``(A) the fair market value of any supplies or equipment 
     furnished the State, political subdivision of the State, or a 
     public of private nonprofit entity; and
       ``(B) the amount of the pay, allowances, and travel 
     expenses of any officer, fellow, or employee of the 
     Government when detailed to the State, a political 
     subdivision of the State, or a public or private non-profit 
     entity, and the amount of any other costs incurred in 
     connection with the detail of such officer, fellow, or 
     employee;

     when the furnishing of such officer, fellow, or employee is 
     for the convenience of and at the request of the State, 
     political subdivision of the State, or public or private non-
     profit entity and for the purpose of conducting activities 
     described in this subsection. The amount by which any payment 
     is so reduced shall be available for payment by the Secretary 
     of the costs incurred in furnishing the supplies or equipment 
     or in detailing the personnel, on which the reduction of the 
     payment is based, and the amount shall be deemed to have been 
     paid to the State, political subdivision of the State, or 
     public or private non-profit entity.''.
       ``(5)(A) The Director of the Centers for Disease Control 
     and Prevention shall establish 
     [[Page S401]] 
	 information and education programs to 
     disseminate the findings of the research, demonstration, and 
     training programs under this section to the general public 
     and to health professionals.
       ``(B) The Director shall take such action as may be 
     necessary to insure that all methods of dissemination and 
     exchange of scientific knowledge and public health 
     information are maintained between the Centers and the 
     public, and the Centers and other scientific organizations, 
     both nationally and internationally.
       ``(6) There are authorized to be appropriated to carry out 
     this subsection, $327,000,000 for fiscal year 1997, and such 
     sums as may be necessary for each of the fiscal years 1998 
     through 2000.''.
                           TITLE III--REPEALS

     SEC. 301. REPEALS.

       (a) In General.--The following provisions of the Public 
     Health Service Act are repealed:
       (1) Subparagraph (A) of section 317(j)(1) (42 U.S.C. 
     247b(j)(1)(A))
       (2) Section 317A (42 U.S.C. 247b-1).
       (3) Subsection (g) of section 317E (42 U.S.C. 247b-6(g)).
       (4) Subsection (e) of section 318 (42 U.S.C. 247c(e)).
       (5) Subsection (q) of section 318A (42 U.S.C. 247c-1(q)).
       (6) Section 1510 (42 U.S.C. 300n-5).
       (b) Conforming Amendment.--Subparagraph (B) of section 
     317(j)(1) (42 U.S.C. 247b(j)(1)(A)) is amended by striking 
     the subparagraph designation.
                                                                    ____

             Public Health Enhancement Act of 1995--Summary


              core functions of public health block grant

       1. Each state or tribal organization would perform eight 
     core functions of public health to address their unique 
     public health problems in order to receive funding through 
     the block grant. Each of these activities are recognized as 
     functions any public health department should undertake to 
     protect the health of the public. The eight core functions 
     are:
       Data collection and analysis for planning and needs 
     assessment;
       Activities to protect the environment and to assure the 
     safety of housing, work-places, food and water, and the 
     public health of communities;
       Investigation and control of adverse health conditions;
       Public information and education programs to reduce risks 
     to health;
       Accountability and quality assurance activities;
       Provision of public health laboratory services;
       Training and education of public health professionals; and
       Leadership, policy development, and administration 
     activities.
       2. The Secretary would develop and implement a formula, 
     which incorporates measures of population, health status of 
     the population, and financial resources, to distribute funds 
     to the states. Tribal organizations could also receive a 
     portion of the state grant directly from the Centers for 
     Disease Control and Prevention (CDC). Although the Secretary 
     would implement the formula, Congressional authorizing 
     committees could change it after receiving a required report 
     on the impact to states of the formula. States would receive 
     the block grant directly. In addition, tribal organizations 
     would have the option to receive a proportionate amount of 
     the state block grant directly from the CDC. This amount 
     would be no less than a proportionate amount each currently 
     receives from the CDC relative to all funds given to a state 
     by the CDC.
       3. Through its application, each state would show that it 
     is using its funds to address public health problems unique 
     to its population and would be held accountable by the 
     Secretary. Under this provision, each state would apply to 
     receive the block grant. In its application, it would show, 
     using public health indicators, what its most pressing 
     problems are. This needs assessment would be conducted with 
     wide community-based input. The public health indicators 
     would be based on Healthy People 2000 goals. If it is 
     determined that the state is not making a good faith effort 
     to address its leading public health problems, the Secretary 
     could reduce the grant award.
       4. The Core Functions of Public Health Block Grant program 
     would be authorized at $1.1 billion in 1997. The funds for 
     the block grant are those which otherwise would be 
     appropriated for the current twelve CDC grant programs. These 
     are:
       Preventive health and health services block grant 
     prevention and control of sexually transmitted disease;
       Infertility and sexually transmitted diseases immunization 
     grant program;
       Preventive health services regarding tuberculosis cancer 
     registries;
       Preventive health service programs for diabetes;
       Preventive health services programs for tobacco use 
     prevention;
       Preventive health services programs for disabilities 
     prevention;
       Lead poisoning prevention;
       Breast and cervical cancer detection; and
       Preventive health services programs for human 
     immunodeficiency virus.
       5. Each state would be required to maintain its current 
     funding for core functions of public health. To avoid an 
     unfunded mandate, states could reduce the amount they spend 
     on core public health functions, but would face a dollar for 
     dollar reduction in the amount they receive from the federal 
     government.


         Centers for Disease Control and Prevention Activities

       1. The CDC would report to the Congress on the benefits of 
     its activities by July of 1996. Such a report would foster a 
     review of the CDC programs given the changes created by this 
     legislation. The report would also include legislative 
     recommendations.
       2. An initiative to address priority public health needs of 
     regional and national significance is authorized at $327 
     million for fiscal year 1997. Through this authority, the CDC 
     could provide technical assistance, conduct applied research, 
     or conduct demonstration projects to address pressing public 
     health needs of regional and national significance. All 
     support for a specific problem would be time-limited to five 
     years. Once successful solutions are developed, the CDC would 
     work with states to incorporate these solutions through the 
     use of the State's block grant. The authorized amount is 
     transferred from a consolidation of the 28 different research 
     and development funding streams at the CDC.
       3. Authorize the Public Health Service to continue 
     developing a uniform core public health functions reporting 
     system which would measure outcomes attributable to the 
     performance of core public health functions. this system 
     would be used in the state application for the block grant. 
     It would also be used to hold states accountable for their 
     use of the block grant. The indicators would be tied to the 
     goals of Healthy People 2000.
                                 ______

      By Mrs. KASSEBAUM:
  S. 143. A bill to consolidate Federal employment training programs 
and create a new process and structure for funding the programs, and 
for other purposes; to the Committee on Labor and Human Resources.


               THE JOB TRAINING CONSOLIDATION ACT OF 1995

  Mrs. KASSEBAUM. Mr. President, today I am reintroducing legislation 
designed to revamp our current Federal job training programs. From the 
viewpoint of both the taxpayer and the trainee, there can be little 
doubt that a comprehensive overhaul is long overdue.
  Many Americans spoke clearly in the recent elections and said that 
they do not believe that the Federal Government is spending their money 
wisely. One of the most glaring examples of wasteful Government 
spending are Federal job training programs. According to the General 
Accounting Office, the Federal Government currently oversees 154 
separate job training programs, administered by 14 different agencies, 
at a total cost to the taxpayers of almost $25 billion a year. These 
programs are hamstrung by duplication, waste, and conflicting 
regulations that too often leave program trainees no better off than 
when they started.
  We simply cannot keep pumping Federal dollars into this confusing 
maze of programs. People across the country are fed up with spending 
money on Government programs that make promises and then do not 
deliver. With a few notable exceptions, the evidence on job training 
failures far exceeds the successes.
  Last year the GAO released a report indicating that fewer than half 
of the 62 job training programs selected for study even bothered to 
check to see if participants obtained jobs after training. During the 
past decade, only seven of those programs were evaluated to find out 
whether trainees would have achieved the same outcomes without Federal 
assistance.
  There is general acknowledgement in Congress that we must act now to 
reform these programs. The administration has also spoken to this need, 
as have many of my colleagues.
  Last year I introduced bipartisan legislation designed to overhaul 
completely job training programs by essentially wiping the slate clean 
and starting over. The bill I am reintroducing today incorporates one 
of the two basic pieces of that original bill. The Job Training 
Consolidation Act of 1995 would grant broad waivers immediately to 
allow States and localities maximum flexibility to coordinate the 
largest Federal job training programs at the local level.
  This would have the immediate effect of allowing States and 
localities the opportunity to combine resources and tailor programs to 
meet current needs. For example, resources could be combined to address 
high priority needs of unemployed persons in a State or local 
community. In addition, where there is overlap, some programs could be 
eliminated to increase funding in other 
[[Page S402]] 
areas and improve efficiencies in the delivery of 
services.
  What I am not proposing, which was the second piece of last year's 
bill, is to create a national commission to study and make 
recommendations to Congress on consolidating all existing programs. I 
no longer believe that it is necessary for Congress to wait another 2 
years before taking decisive action to reform these programs.
  Instead, the Senate Committee on Labor and Human Resources will hold 
hearings on January 10, 11, and 12 on the need to overhaul Federal job 
training programs. The hearings will outline the current state of the 
programs, provide state, local and private sector perspectives on job 
training, and elicit the opinions of a variety of experts on how to 
reform our scattershot array of training program into a system that 
will serve all individuals more effectively.
  As a result, I believe we will have the information necessary to make 
sendible determinations about the elimination or consolidation of 
specific programs. I intend to build upon this legislation in the next 
few months by introducing a comprehensive proposal to replace existing 
programs with a new employment and training strategy.
  However, I believe it is first necessary for the Committee to conduct 
a through review of existing programs, before a final proposal is made.
  The goal is a single, coherent approach to employment and training--
to assist all job-seekers in entering the workforce, gaining basic 
skills, or retraining for new jobs. We do not have that kind of a 
system today and our workers and our economy both pay the price. We 
need to start over, think boldly, and create a system that works for 
everyone.
  Mr. President, I ask unanimous consent that the text of the bill 
appear in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 143

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Job 
     Training Consolidation Act of 1995''.
       (b) Table of Contents.--The table of contents is as 
     follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.

 TITLE I--USE OF FEDERAL FUNDS FOR STATE EMPLOYMENT TRAINING ACTIVITIES

Sec. 101. Formula assistance.
Sec. 102. Discretionary assistance.
Sec. 103. Trade adjustment assistance services.
Sec. 104. Employment training activities.
Sec. 105. Reports.

        TITLE II--CONSOLIDATION OF EMPLOYMENT TRAINING PROGRAMS

Sec. 201. Repeals of employment training programs.
     SEC. 2. FINDINGS.

       Congress finds that--
       (1) according to the General Accounting Office--
       (A) there are currently 154 Federal employment training 
     programs; and
       (B) these programs cost nearly $25,000,000,000 annually and 
     are administered by 14 different Federal agencies;
       (2) these programs target individual populations such as 
     economically disadvantaged persons, dislocated workers, 
     youth, and persons with disabilities;
       (3) many of these programs provide similar services, such 
     as counseling, assessment, and literacy skills enhancement, 
     resulting in overlapping services, wasted funds, and 
     confusion on the part of local service providers and 
     individuals seeking assistance;
       (4) the Federal agencies administering these programs fail 
     to collect enough performance data to know whether the 
     programs are working effectively;
       (5) the additional cost of administering overlapping 
     employment training programs at the Federal, State, and local 
     levels diverts scarce resources that could be better used to 
     assist all persons in entering the work force, gaining basic 
     skills, or retraining for new jobs;
       (6) the conflicting eligibility requirements, and annual 
     budgeting or operating cycles, of employment training 
     programs create barriers to coordination of the programs that 
     may restrict access to services and result in inefficient use 
     of resources;
       (7) despite more than 30 years of federally funded 
     employment training programs, the Federal Government has no 
     single, coherent policy guiding its employment training 
     efforts;
       (8) the Federal Government has failed to adequately 
     maximize the effectiveness of the substantial public and 
     private sector resources of the United States for training 
     and work-related education; and
       (9) the Federal Government lacks a national labor market 
     information system, which is needed to provide current data 
     on jobs and skills in demand in different regions of the 
     country.

     SEC. 3. DEFINITIONS.

       As used in this Act:
       (1) Covered act.--The term ``covered Act'' means an Act 
     described in paragraph (3).
       (2) Covered activity.--The term ``covered activity'' means 
     an activity authorized to be carried out under a covered 
     provision.
       (3) Covered provision.--The term ``covered provision'' 
     means a provision of--
       (A) the Job Training Partnership Act (29 U.S.C. 1501 et 
     seq.);
       (B) the Carl D. Perkins Vocational and Applied Technology 
     Education Act (20 U.S.C. 2301 et seq.);
       (C) part B of title III of the Adult Education Act (20 
     U.S.C. 1203 et seq.);
       (D) part F of title IV of the Social Security Act (42 
     U.S.C. 681 et seq.);
       (E) section 235 or 236, or paragraph (1) or (2) of section 
     250(d), of the Trade Act of 1974 (19 U.S.C. 2295, 2296, or 
     2331(d));
       (F) the Wagner-Peyser Act (29 U.S.C. 49 et seq.);
       (G) title I of the Rehabilitation Act of 1973 (29 U.S.C. 
     720 et seq.);
       (H) section 6(d)(4) of the Food Stamp Act of 1977 (7 U.S.C. 
     2015(d)(4));
       (I) the Refugee Education Assistance Act of 1980 (8 U.S.C. 
     1522 note);
       (J) section 204 of the Immigration Reform and Control Act 
     of 1986 (8 U.S.C. 1255a note);
       (K) title VII of the Stewart B. McKinney Homeless 
     Assistance Act (42 U.S.C. 11421 et seq.);
       (L) title V of the Older Americans Act of 1965 (42 U.S.C. 
     3056 et seq.); and
       (M) the School-to-Work Opportunities Act of 1994 (20 U.S.C. 
     6101 et seq.).
       (4) Local entity.--The term ``local entity'' includes 
     public and private entities.
 TITLE I--USE OF FEDERAL FUNDS FOR STATE EMPLOYMENT TRAINING ACTIVITIES

     SEC. 101. FORMULA ASSISTANCE.

       (a) Use of Funds.--Notwithstanding any other provision of 
     Federal law, a State that receives State formula assistance 
     for a covered activity for a fiscal year may use the 
     assistance to carry out activities as described in section 
     104 for the fiscal year. Notwithstanding any other provision 
     of Federal law, a local entity that receives local formula 
     assistance for a covered activity for a fiscal year may use 
     the assistance to carry out activities as described in 
     section 104 for the fiscal year.
       (b) Requirements.--
       (1) In general.--Except as otherwise provided in this 
     subsection, a State may use such State formula assistance, 
     and a local entity may use such local formula assistance, to 
     carry out activities as described in section 104, without 
     regard to the requirements of any covered Act.
       (2) Remaining program requirements.--
       (A) Allocation and enforcement.--Any head of a Federal 
     agency that allocates State formula assistance, and any State 
     that allocates local formula assistance, for a covered 
     activity--
       (i) shall allocate such assistance in accordance with 
     allocation requirements that are specified in the covered 
     Acts and that relate to the covered activity, including 
     provisions relating to minimum or maximum allocations; and
       (ii)(I) if the State or local entity uses such assistance 
     to carry out the covered activity, shall exercise the 
     enforcement and oversight authorities that are specified in 
     the covered Acts and that relate to the covered activity; and
       (II) if the State or local entity does not use such 
     assistance to carry out the covered activity, shall exercise 
     such authorities solely for the purpose of ensuring that the 
     assistance is used to carry out activities as described in 
     section 104, and in accordance with the applicable 
     requirements of this title.
       (B) Administrative expense limits.--Each State that 
     receives State formula assistance, and each local entity that 
     receives local formula assistance, for a covered activity--
       (i) shall comply with any limits on administrative expenses 
     that are specified in the covered Acts and that relate to the 
     covered activity; and
       (ii) for any fiscal year, may not use a greater percentage 
     of the State formula assistance or local formula assistance 
     to pay for the administrative expenses of activities carried 
     out under section 104 than the State or entity used to pay 
     for such administrative expenses relating to the covered 
     activity for fiscal year 1995.
       (C) Conditional benefits.--Any State that receives State 
     formula assistance to carry out a covered activity described 
     in a covered provision specified in subparagraph (D) or (H) 
     of section 3(3) and that uses the assistance to carry out 
     activities as described in section 104 shall carry out an 
     activity that is appropriate for persons who would otherwise 
     be eligible to participate in the covered activity. Any 
     person in the State who would otherwise be required to 
     participate in the covered activity in order to obtain 
     Federal assistance under a covered Act shall be eligible to 
     receive the assistance by participating in such appropriate 
     activity.
     [[Page S403]]   
	 (D) Availability of appropriations.--Nothing 
     in this section shall affect the period for which any 
     appropriation under a covered Act remains available.
       (c) Definitions.--As used in this section:
       (1) Local formula assistance.--The term ``local formula 
     assistance'' means assistance made available by a State to a 
     local entity under--
       (A)(i) subsections (a)(2) and (b) of section 202 of the Job 
     Training Partnership Act (29 U.S.C. 1602);
       (ii) section 252(b) of such Act (29 U.S.C. 1631(b)) in 
     accordance with subsections (a)(2) and (b) of section 262 of 
     such Act (29 U.S.C. 1642);
       (iii) subsections (a)(2) and (b) of section 262 of such Act 
     (29 U.S.C. 1642); or
       (iv) subsections (a)(1), (b), and (d) of section 302 of 
     such Act (29 U.S.C. 1652); or
       (B)(i) section 102(a)(1), and section 231(a) or 232 of the 
     Carl D. Perkins Vocational Education Act (20 U.S.C. 
     2312(a)(1), and 2341(a) or 2341a); or
       (ii) section 353(b) of such Act (20 U.S.C. 2395b(b)).
       (2) State formula assistance.--The term ``State formula 
     assistance'' means assistance made available by an agency of 
     the Federal Government to a State under--
       (A)(i) subsections (a)(2) and (c) of section 202 of the Job 
     Training Partnership Act (29 U.S.C. 1602);
       (ii) subsections (a)(2) and (c) of section 262 of such Act 
     (29 U.S.C. 1642);
       (iii) subsections (a)(1), (b), and (c)(1) of section 302 of 
     such Act (29 U.S.C. 1652); or
       (iv) sections 502(d) and 503 of such Act (29 U.S.C. 
     1791a(d));
       (B)(i) section 101(a)(2) of the Carl D. Perkins Vocational 
     Education Act (20 U.S.C. 2311(a)(2)) (other than assistance 
     made available under section 231(a) or 232 of such Act (20 
     U.S.C. 2341(a) or 2341a) to local educational agencies or 
     other local entities within the State);
       (ii) section 112(f) of such Act (20 U.S.C. 2322(f)); or
       (iii) section 343(b)(1) of such Act (20 U.S.C. 
     2394a(b)(1));
       (C) section 313(b) of the Adult Education Act (20 U.S.C. 
     1201b(b)) (other than assistance reserved to carry out part D 
     of title III of such Act (20 U.S.C. 1213 et seq.));
       (D) subsection (k) or (l) of section 403 of the Social 
     Security Act (42 U.S.C. 603);
       (E) section 6(b)(1) of the Wagner-Peyser Act (29 U.S.C. 
     49e(b)(1));
       (F)(i) subsection (a) or (b) of section 110 of the 
     Rehabilitation Act of 1973 (29 U.S.C. 730) (less any amount 
     reserved under subsection (d) of such section);
       (ii) section 112(e) of such Act (29 U.S.C. 732(e)); or
       (iii) section 124 of such Act (29 U.S.C. 744);
       (G) section 16(h)(1) of the Food Stamp Act of 1977 (7 
     U.S.C. 2025(h)(1)) (other than funds made available under 
     subparagraph (B) of such section);
       (H)(i) section 201(b) of the Refugee Education Assistance 
     Act of 1980 (8 U.S.C. 1522 note);
       (ii) section 301(b) of such Act (8 U.S.C. 1522 note); or
       (iii) section 401(b) of such Act (8 U.S.C. 1522 note);
       (I) section 204(b) of the Immigration Reform and Control 
     Act of 1986 (8 U.S.C. 1255a note);
       (J)(i) section 722(c) of the Stewart B. McKinney Homeless 
     Assistance Act; or
       (ii) section 752(a) of such Act (42 U.S.C. 11462(a)); or
       (K) section 506(a)(3) of the Older Americans Act of 1965 
     (42 U.S.C. 3056d(a)(3)).

     SEC. 102. DISCRETIONARY ASSISTANCE.

       (a) In General.--
       (1) Prior assistance.--Notwithstanding any other provision 
     of Federal law, a State or local entity that received, prior 
     to the date of enactment of this Act, discretionary 
     assistance for a covered activity for a fiscal year may use 
     the assistance to carry out activities as described in 
     section 104 for the fiscal year.
       (2) Future assistance.--Notwithstanding any other provision 
     of Federal law, a State or local entity that is eligible to 
     apply for discretionary assistance for a covered activity for 
     a fiscal year may apply, as described in subsection (c), for 
     the assistance to carry out activities as described in 
     section 104 for the fiscal year.
       (b) Use of Funds.--
       (1) In general.--Except as otherwise provided in this 
     subsection, a State or local entity that receives 
     discretionary assistance prior to the date of enactment of 
     this Act or on approval of an application submitted under 
     subsection (c) may use the discretionary assistance to carry 
     out activities as described in section 104, without regard to 
     the requirements of any covered Act.
       (2) Remaining program requirements.--A State or local 
     entity that uses discretionary assistance to carry out such 
     activities shall use the assistance in accordance with the 
     requirements of subparagraphs (A), (B), and (D) of section 
     101(b)(2), which shall apply to such assistance in the same 
     manner and to the same extent as the requirements apply to 
     State formula assistance or local formula assistance, as 
     appropriate, used under section 101.
       (c) Additional Information in Application.--A State or 
     local entity seeking to use discretionary assistance as 
     described in subsection (a)(2) shall include in the 
     application (under the covered provision involved) of the 
     State or local entity for the assistance (in lieu of any 
     information otherwise required to be submitted)--
       (1) a description of the funds the State or local entity 
     proposes to use to carry out activities as described in 
     section 104;
       (2) a description of the activities to be carried out with 
     such funds;
       (3) a description of the specific outcomes expected of 
     participants in the activities; and
       (4) such other information as the head of the agency with 
     responsibility for evaluating the application may require.
       (d) Evaluation of Application.--In evaluating an 
     application described in subsection (c), the agency with 
     responsibility for evaluating the application shall evaluate 
     the application by determining the likelihood that the State 
     or local entity submitting the application will be able to 
     carry out activities as described in section 104. In 
     evaluating applications for discretionary assistance, the 
     agency shall not give preference to applications proposing 
     covered activities over applications proposing activities 
     described in section 104.
       (e) Definition.--As used in this section, the term 
     ``discretionary assistance'' means assistance that--
       (1) is not State formula assistance or local formula 
     assistance, as defined in section 101(c);
       (2) is not Federal assistance available to provide services 
     described in section 235 or 236, or paragraph (1) or (2) of 
     section 250(d), of the Trade Act of 1974 (19 U.S.C. 2295, 
     2296, or 2331(d)); and
       (3) is made available by an agency of the Federal 
     Government, or by a State, to a State or local entity to 
     enable the State or local entity to carry out an activity 
     under a covered provision.

     SEC. 103. TRADE ADJUSTMENT ASSISTANCE SERVICES.

       (a) Use of Assistance.--
       (1) In general.--Notwithstanding any other provision of 
     Federal law, if the Secretary of Labor initiates efforts 
     under section 235 of the Trade Act of 1974 (19 U.S.C. 2295) 
     to secure services described in such section 235 (including 
     services that are provided under section 250(d)(1) of such 
     Act (19 U.S.C. 2331(d)(1))) for a worker, or if the Secretary 
     makes a determination under section 236(a) of the Trade Act 
     of 1974 (19 U.S.C. 2296(a)) that entitles a worker to 
     payments described in such section for services (including 
     services for which payment is provided under section 
     250(d)(2) of such Act), the Secretary shall notify the State 
     in which the worker is located.
       (2) Activities.--A State that receives such notification 
     may apply under subsection (c) for the Federal assistance 
     that would otherwise have been expended to provide services 
     described in paragraph (1) to the worker, to enable the State 
     to carry out activities as described in section 104 for the 
     fiscal year. If the State has received such assistance in 
     advance, the State may apply under subsection (c) to use such 
     assistance to enable the State to carry out activities as 
     described in section 104 for the fiscal year.
       (b) Requirements.--
       (1) In general.--Except as otherwise provided in this 
     subsection, a State that receives such Federal assistance and 
     receives approval of an application submitted under 
     subsection (c) may use the assistance to carry out activities 
     as described in section 104, without regard to the 
     requirements of any covered Act.
       (2) Remaining program requirements.--A State that uses such 
     Federal assistance to carry out such activities shall use the 
     assistance in accordance with the requirements of 
     subparagraphs (A)(ii), (B), and (D) of section 101(b)(2), 
     which shall apply to such assistance in the same manner and 
     to the same extent as the requirements apply to State formula 
     assistance or local formula assistance, as appropriate, used 
     under section 101.
       (3) Conditional benefits.--Any State that receives Federal 
     assistance that would otherwise have been expended to provide 
     services described in subsection (a)(1) to a worker, and that 
     uses the assistance to carry out activities as described in 
     section 104, shall carry out eligible alternative activities 
     that are appropriate for the worker. If the worker would 
     otherwise be required to receive such services in order to 
     obtain Federal funds under another provision of chapter 2 of 
     title II of the Trade Act of 1974 (19 U.S.C. 2291 et seq.), 
     the worker shall be eligible to receive the funds by 
     participating in such eligible alternative activities.
       (c) Additional Information in Application.--A State seeking 
     to use Federal assistance that would otherwise have been 
     expended to provide services described in subsection (a)(1) 
     to a worker shall submit an application to the Secretary of 
     Labor, at such time and in such manner as the Secretary may 
     require, that contains--
       (1) a description of the Federal assistance the State 
     proposes to use to carry out activities as described in 
     section 104;
       (2) a description of the activities to be carried out with 
     such assistance;
       (3) a description of the specific outcomes expected of 
     participants in the activities; and
       (4) such other information as the Secretary of Labor may 
     require.
       (d) Evaluation of Application.--In evaluating an 
     application described in subsection (c), the Secretary of 
     Labor shall evaluate the application by determining the 
     likelihood that the State submitting the application 
     [[Page S404]] will be able to carry out activities as 
     described in section 104. In evaluating applications for such 
     Federal assistance, the Secretary of Labor shall not give 
     preference to applications proposing covered activities over 
     applications proposing activities described in section 104.

     SEC. 104. EMPLOYMENT TRAINING ACTIVITIES.

       A State or local entity that receives State formula 
     assistance or local formula assistance as described in 
     section 101(a), receives discretionary assistance as 
     described in section 102(b), or receives Federal assistance 
     as described in section 103(b), may--
       (1) use the assistance to carry out activities to develop a 
     comprehensive statewide employment training system that--
       (A) is primarily designed and implemented by communities to 
     serve local labor markets in the State involved;
       (B) requires the participation and involvement of private 
     sector employers in all phases of the planning, development, 
     and implementation of the system, including--
       (i) determining the skills to be developed by each 
     employment training program carried out through the system; 
     and
       (ii) designing the training to be provided by each such 
     program;
       (C) assures that State and local training efforts are 
     linked to available employment opportunities;
       (D) includes standards for determining the effectiveness of 
     such programs; and
       (E) is an integrated system that assures that individuals 
     seeking employment in the State will receive information 
     about all available employment training services provided in 
     the State, regardless of where the individuals initially 
     enter the system; or
       (2) may use the assistance that would otherwise have been 
     used to carry out 2 or more covered activities--
       (A) to address the high priority needs of unemployed 
     persons in the State or community involved for employment 
     training services;
       (B) to improve efficiencies in the delivery of the covered 
     activities; or
       (C) in the case of overlapping or duplicative activities--
       (i) by combining the covered activities and funding the 
     combined activities; or
       (ii) by eliminating one of the covered activities and 
     increasing the funding to the remaining covered activity.

     SEC. 105. REPORTS.

       (a) State Reports.--
       (1) Preparation.--A State that receives State formula 
     assistance as described in section 101(a), receives 
     discretionary assistance as described in section 102(b), or 
     receives Federal assistance as described in section 103(b), 
     and that uses the assistance to carry out activities as 
     described in section 104 shall annually prepare a report 
     containing--
       (A) information on the amount and origin of such 
     assistance;
       (B) information on the activities carried out with such 
     assistance;
       (C) information regarding the populations to be served with 
     such assistance, such as economically disadvantaged persons, 
     dislocated workers, youth, and individuals with disabilities;
       (D) a summary of the reports received by the State under 
     subsection (b); and
       (E) such other information as the committees described in 
     paragraph (2) may require.
       (2) Submission.--The State shall submit the report 
     described in paragraph (1) to the Committee on Education and 
     Labor of the House of Representatives, and the Committee on 
     Labor and Human Resources of the Senate, not later than 60 
     days after the end of each year.
       (b) Local Entity Reports.--
       (1) Preparation.--A local entity that receives local 
     formula assistance as described in section 101(a), or that 
     receives discretionary assistance as described in section 
     102(b), and uses the assistance to carry out activities as 
     described in section 104 shall annually prepare a report 
     containing--
       (A) information on the amount and origin of such 
     assistance;
       (B) information on the activities carried out with such 
     assistance;
       (C) information regarding the populations to be served with 
     such assistance, such as economically disadvantaged persons, 
     dislocated workers, youth, and individuals with disabilities; 
     and
       (D) such other information as the State that allocated the 
     assistance may require.
       (2) Submission.--The local entity shall submit the report 
     described in paragraph (1) to the State not later than 30 
     days after the end of each year.
        TITLE II--CONSOLIDATION OF EMPLOYMENT TRAINING PROGRAMS

     SEC. 201. REPEALS OF EMPLOYMENT TRAINING PROGRAMS.

       (a) In General.--The following provisions are repealed:
       (1) The Job Training Partnership Act (29 U.S.C. 1501 et 
     seq.).
       (2) The Carl D. Perkins Vocational and Applied Technology 
     Education Act (20 U.S.C. 2301 et seq.).
       (3) Part B of title III of the Adult Education Act (20 
     U.S.C. 1203 et seq.).
       (4) Part F of title IV of the Social Security Act (42 
     U.S.C. 681 et seq.).
       (5) Sections 235 and 236 of the Trade Act of 1974 (19 
     U.S.C. 2295 and 2296), and paragraphs (1) and (2) of section 
     250(d) of such Act (19 U.S.C. 2331(d)).
       (6) The Wagner-Peyser Act (29 U.S.C. 49 et seq.).
       (7) Title I of the Rehabilitation Act of 1973 (29 U.S.C. 
     720 et seq.).
       (8) Section 6(d)(4) of the Food Stamp Act of 1977 (7 U.S.C. 
     2015(d)(4)).
       (9) The Refugee Education Assistance Act of 1980 (8 U.S.C. 
     1522 note).
       (10) Section 204 of the Immigration Reform and Control Act 
     of 1986 (8 U.S.C. 1255a note).
       (11) Title VII of the Stewart B. McKinney Homeless 
     Assistance Act (42 U.S.C. 11421 et seq.).
       (12) Title V of the Older Americans Act of 1965 (42 U.S.C. 
     3056 et seq.).
       (13) The School-to-Work Opportunities Act of 1994 (20 
     U.S.C. 6101 et seq.).
       (b) Technical and Conforming Amendments.--Section 250(d) of 
     the Trade Act of 1974 (as amended by subsection (a)(5)) is 
     amended by redesignating paragraphs (3), (4), and (5) as 
     paragraphs (1), (2), and (3), respectively.
       (c) Effective Date.--The repeals made by subsection (a), 
     and the amendments made by subsection (b), shall take effect 
     24 months after the date of enactment of this Act.
                                 ______

      By Mr. LOTT (for Mr. Hatch):
  S. 144. A bill to amend section 526 of title 28, United States Code, 
to authorize awards of attorney's fees; read the first time.


                 the attorney's fees equity act of 1995

  Mr. HATCH. Mr. President, I rise today to introduce what some might 
consider a minor bill, but one that is nonetheless the right and 
compelling thing to do for Department of Justice employees and Federal 
public defenders who serve their government diligently.
  Most of my colleagues, I believe, are familiar with this legislation, 
which we have been working on for several years. The same, or a similar 
bill, has in recent years twice passed the Senate and once been added 
to a crime bill conference report. Nonetheless, for reasons unrelated 
to this bill, it has never been signed into law. I sincerely hope that 
by moving this bill separately this year we can get it done.
  This legislation provides that current or former attorneys or agents 
employed by the Department of Justice or by a Federal public defender 
subjected to criminal or disciplinary investigations arising out of 
their employment duties shall be entitled to reasonable attorney's fees 
if such investigations do not result in adverse action.
  In reality, this bill is simply a matter of fundamental fairness. The 
Independent Counsel Reauthorization Act has for some time provided for 
full reimbursement of counsel's fees incurred by high level Federal 
officials subject to investigation for possible violations of Federal 
criminal law.
  Providing legal fees to high-ranking government officials subject to 
investigation for violation of criminal law, but not to working level 
employees such as Assistant U.S. Attorneys is simply unfair. High 
ranking officials obviously receive larger government salaries than 
their working level colleagues, and not infrequently have opportunities 
to earn lucrative salaries once they leave. Moreover, they are often 
less vulnerable to the chilling effect misconduct or criminal 
investigations can have on employees on the front line of prosecution.
  The reimbursement provisions of the Independent Counsel Act 
demonstrate that the public interest in assisting government officials 
with the staggering cost and devastating impact of investigations can 
outweigh any real or perceived conflict of interest, which I understand 
is the principal rationale for not providing such assistance to lower 
level employees.
  The Independent Counsel Act, however, correctly provides 
reimbursement for attorney's fees only if the person under 
investigation is vindicated. By limiting government assistance only to 
such circumstances--which my bill does as well--the public interest is 
clearly served. Any conflict attributable to the government arguing 
with the government is rendered void.
 By providing reimbursement only for a successful defense, any 
incentive to defending private counsel to go easy with the Government 
because it will reimburse his or her fees is removed. Also, by 
providing the means for an adequate defense for its employees, the U.S. 
Government ensures that frivolous or vindictive investigations are 
terminated quickly. At the same time, there is no incentive under such 
an arrangement for the Government to prosecute less zealously; indeed, 
a successful prosecution saves costs since there then would be no 
obligation to pay legal fees.
  [[Page S405]] 
  If no reimbursement is available, however, the 
possibility of serious conflicts is great. If an Assistant U.S. 
Attorney must retain private defense counsel, it is likely that the 
defense counsel would have to provide the U.S. Attorney with a fee 
discount or pro bono representation. This situation obviously might 
create at least the appearance of, if not a real conflict of interest 
in the future.
  The limited legislation I am introducing, which provides for 
reimbursement of private attorneys fees to certain Department of 
Justice and Federal public defender employees under specified 
circumstances, can be fully justified. Covered employees, because of 
their duties, are far more often subject to allegations of misconduct, 
usually by defendants and less often by courts. In either event, the 
reality is that these employees--both lawyers and agents--are in a 
position of constant adversity. In order to prevent the need for self-
defense from becoming a disincentive to government service or to force 
Assistant U.S. Attorneys to roam the defense bar looking for handouts 
in the form of free, legal service--a disagreeable situation to say the 
least--some legislative relief is appropriate. I believe that the 
legislation I am introducing today provides a limited and rational 
solution to this problem, and I hope the Senate will move swiftly to 
pass it.
                                 ______

      By Mr. GRAMM (for himself, Mr. Lott, Mr. Burns, Mrs. Hutchison, 
        Mr. Craig Thomas, and Mr. Inhofe):
  S. 145. A bill to provide appropriate protection for the 
Constitutional guarantee of private property rights, and for other 
purposes; to the Committee on Governmental Affairs.


              THE PRIVATE PROPERTY RIGHTS RESTORATION ACT

 Mr. GRAMM. Mr. President, we see no reason why the takings clause of 
the Fifth Amendment, as much a part of the Bill of Rights as the First 
Amendment or Fourth Amendment, should be relegated to the status of a 
poor relation. With these words in the recent landmark Supreme Court 
decision Dolan versus City of Tigard, Chief Justice Rehnquist correctly 
points out the evisceration of one of the most fundamental rights 
protected by our Constitution. Sadly, with all the talk about rights in 
America today, the fundamental freedom to acquire, use, and dispose of 
private property has become a poor relation. In fact, it has very 
nearly been drummed out of the family because of the Federal 
Government's relentless assault on private property.
  The Founding Fathers were keenly aware of the need to protect private 
property rights, so much so that they provided in the Bill of Rights 
that private property--shall not--be taken for public use without just 
compensation. Indeed, the courts have been very clear that if the 
Government builds a highway across your property, then the 5th 
amendment's just compensation provision applies. However, one form of 
taking which has become more common than outright condemnation is the 
regulatory taking. This occurs when the Government imposes such 
stringent controls on the use of private property that its value is 
eroded or destroyed.
  Currently, farmers, small businesses, and homeowners are in the path 
of
 an avalanche of Federal regulations and restrictions affecting their 
property. During President Clinton's first year in office, the Federal 
Register, which is the daily depository of all proposed and final 
Federal regulations, totalled 69,684 pages--the highest count since 
Jimmy Carter's record level. Moreover, the Unified Agenda of Federal 
Regulations reveals an enormous increase of regulatory activity, with a 
22 percent growth since 1992 in the number of regulations under 
consideration or recently completed by the 60 Federal departments and 
agencies within the Clinton bureaucracy.
  Two examples of Federal regulatory takings involve wetlands and 
endangered species. In Texas, the U.S. Fish and Wildlife Service 
[USFWS] has listed 65 species as threatened or endangered. Nationwide, 
853 species are already listed as endangered, and approximately 3,900 
are candidates for inclusion on the list. The mere presence, however 
fleeting, of a listed species on a parcel of land has profound 
ramifications for small, individual landowners whose property holdings 
are often their most significant source of income. In the Woods of East 
Texas, if a red-cockaded woodpecker landed in your tree, you could 
suddenly be threatened with a government taking that barred you from 
cutting your own timber. Without the income generated by such economic 
activity, how are those whose jobs are put at risk expected to provide 
for themselves and their families?
  All over the country under wetlands provisions, entire counties or 
significant portions of coastal land in States such as Texas and 
Maryland have found that the ability of people to use their property 
has been restricted dramatically because a Government bureaucrat 
redefined what would qualify as a wetland. The destructive impact of 
these regulatory actions on jobs. the economy, family well-being, and 
individual freedom has been enormous.
  To help revive this important freedom, I have reintroduced The 
Private Property Rights Restoration Act, which will restore the 
Constitutional mandate that just compensation be paid when government 
action reduce private property value. This bill will safeguard the 
rights of individuals whose land is taken by Government regulations or 
policies which reduce or destroy the value of the property. The 
legislation or policies which reduce or destroy the value of the 
property. The legislation requires compensation to be paid when such an 
action has reduced property value by at least 25 percent or $10,000. 
However, such protection will not be extended to uses of property which 
are deemed to be a public nuisance. The payment of compensation to, and 
legal fees for, property owners who successfully plead their case in 
court must be paid with funds from the budget of the agency issuing the 
regulation.
  Mr. President, I will work toward passage of this legislation to help 
every American whose constitutionally guaranteed property rights are 
being ignored or threatened by the Federal Government. I hope we can 
work together to protect private property rights and to bring the Fifth 
Amendment back into the family of the Bill of Rights on behalf of the 
people who own property, till the soil, and produce the goods and 
services in our country.
  I ask unanimous consent that a one page description of the 
legislation and the bill itself be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 145

       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 ``Private Property Rights 
     Restoration Act''.

     SEC. 2. PRIVATE PROPERTY RIGHTS RESTORATION.

       (a) Cause of Action.--(1) The owner of any real property 
     shall have a cause of action against the United States if--
       (A) the application of a statute, regulation, rule, 
     guideline, or policy of the United States restricts, limits, 
     or otherwise takes a right to real property that would 
     otherwise exist in the absence of such application; and
       (B) such application described under subparagraph (A) would 
     result in a discrete and nonnegligible reduction in the fair 
     market value of the affection portion of real property.
       (2) Notwithstanding paragraph (1)(B), a prima facie case 
     against the United States shall be established if the 
     Government action described under paragraph (1)(A) results in 
     a temporary or permanent diminution of fair market value of 
     the affected portion of real property of the lesser of--
       (A) 25 percent or more; or
       (B) $10,000 or more.
       (b) Jurisdiction.--An action under this Act shall be filed 
     in the United States Court of Federal Claims which shall have 
     exclusive jurisdiction.
       (c) Recovery.--In any action filed under this Act, the 
     owner may elect to recover--
       (1) a sum equal to the diminution in the fair market value 
     of the portion of the property affected by the application of 
     a statute, regulation, rule, guideline, or policy described 
     under subsection (a)(1)(A) and retain title; or
       (2) the fair market value of the affected portion of the 
     regulated property prior to the Government action and 
     relinquish title to the portion of property regulated.
       (d) Public Nuisance Exception.--(1) No compensation shall 
     be required by virtue of this Act if the owner's use or 
     proposed use of the property amounts to a public nuisance as 
     commonly understood and defined by background principles of 
     nuisance and property law, as understood under the law of the 
     State within which the property is situated.
       (2) To bar an award of damages under this Act, the United 
     States shall have the burden 
     [[Page S406]] 
	 of proof to establish that the use or proposed 
     use of the property is a public nuisance as defined under 
     paragraph (1) of this subsection.

     SEC. 3. APPLICATION; STATUTE OF LIMITATIONS.

       (a) Application.--This Act shall apply to the application 
     of any statute, regulation, rule, guideline, or policy to 
     real property, if such application occurred or occurs on or 
     after January 1, 1994.
       (b) Statute of Limitations.--The statute of limitations for 
     actions brought under this Act shall be six
      years from the application of any statute, regulation, rule, 
     guideline, or policy of the United States to any affected 
     parcel of property under this Act.

     SEC. 4. AWARD OF COSTS; LITIGATION COSTS.

       (a) In General.--The court, in issuing any final order in 
     any action brought under this Act, shall award costs of 
     litigation (including reasonable attorney and expert witness) 
     to any prevailing plaintiff.
       (b) Payment.--all awards or judgments for plaintiff, 
     including recovery for damages and costs of litigation, shall 
     be paid out of funds of the agency or agencies responsible 
     for issuing the statute, regulation, rule, guideline or 
     policy affecting the reduction in the fair market value of 
     the affected portion of property. Payments shall not be made 
     from a judgment fund.

     SEC. 5. CONSTITUTIONAL OR STATUTORY RIGHTS NOT RESTRICTED.

       Nothing in this Act shall restrict any remedy or any right 
     which any person (or class of persons) may have under any 
     provision of the United States Constitution or any other law.
                                                                    ____


                Private Property Rights Restoration Act

     SECTION 1. SHORT TITLE.--``PRIVATE PROPERTY RIGHTS 
                   RESTORATION ACT''.

     SEC. 2. PRIVATE PROPERTY RIGHTS RESTORATION.

       (a) Cause of Action.--
       (1) The owner of any real property (land) may sue the U.S. 
     government if
       (A) any governmental action identified in the Act takes a 
     persons right to their property; and (B) that taking 
     significantly reduces the fair market value of the affected 
     portion of property.
       (2) A property owner may sue the U.S. government if the 
     government action causes a temporary or permanent diminution 
     of fair market value of the affected portion of real property 
     of at least 25 percent or $10,000.
       (b) Jurisdiction.--The U.S. Court of Federal Claims is 
     established as the court of jurisdiction for claims brought 
     forth under this Act.
       (c) Recovery.--Property owners may choose among two options 
     to seek reimbursement for government actions which result in 
     takings:
       (d) Public Nuisance Exception.--ensures that no 
     compensation is awarded if the use to which the property 
     owner puts the property is judged to be a public nuisance.

     SEC. 3. APPLICATION; STATUTE OF LIMITATIONS.

       (a) Application.--The bill applies to real property 
     affected by governmental actions which occur on or after 
     January 1, 1994.
       (b) Statute of Limitations.--The statute of limitations for 
     actions brought forth under this legislation is limited to 6 
     years after application of the regulatory action to the 
     affected property.

     SEC. 4. AWARD OF COSTS; LITIGATION COSTS

       (a) Includes litigation costs in court award.
       (b) Requires payment for court awards from agency budgets 
     of the agency responsible for the government action, rather 
     than a judgement fund.

     SEC. 5. CONSTITUTIONALITY OR STATUTORY RIGHTS NOT RESTRICTED.

       Ensures that the bill does not preclude any other remedy 
     property owners may seek.
                                 ______

      By Mr. GRAMM:
  S. 146. A bill to authorize negotiation of free trade agreements with 
the countries of the Americas, and for other purposes; to the Committee 
on Finance.


                      THE AMERICAS FREE TRADE ACT

  Mr. GRAMM. Mr. President, on February 4, 1993, I introduced 
legislation to authorize the negotiation of free agreements between the 
United States and the countries in North and South America. This was a 
step toward the realization of my hopes for a free trade area 
stretching from the Elizabeth Islands of Canada to Tierra del Fuego in 
South America. The subsequent approval of the North American Free Trade 
Agreement [NAFTA], is the most significant accomplishment to date on 
the road toward the achievement of free trade throughout our 
hemisphere.
  On January 25, 1994, I introduced the American Free Trade Act. This 
legislation was similar to the bill that I introduced the preceding 
year, with the addition of special provisions regarding free trade with 
a post-Castro, post communist Cuba. Those provisions defined the 
standards by which we would be able to identify the return of freedom 
to Cuba and would give priority to the negotiation of a free trade 
agreement with a free Cuba.
  The Index of Economic Freedom, recently published by the Heritage 
Foundation, listed Cuba, together with North Korea, as the most 
repressive nation on the earth with regard to economic rights and 
freedoms. Cuba and North Korea remain the last bastions of unrepentant 
Marxism. While such a repressive regime remains in power in Cuba, free 
trade would be meaningless and free trade negotiations would be a waste 
of time. On the other hand, in a post-Castro environment, free trade 
can play a crucial role in promoting and reestablishing economic and 
political freedoms.
  The bill contains five standards for measuring the return of freedom 
in Cuba. These standards are:
  1. The establishment of constitutionally-guaranteed democratic 
government with leaders freely and fairly elected;
  2. The restoration, effective protection, and broad exercise of 
private property rights;
  3. The achievement of a convertible currency;
  4. The release of political prisoners; and
  5. The effective guarantee of free speech and freedom of the press.
  These, of course, are minimum conditions upon which free trade 
relations can be established and which free trade can strengthen. In 
fact, free trade will serve to expand the economic and political 
freedoms of the people of Cuba.
  Mr. President, the bill sets forth an additional requirement that 
necessarily must be met for our Nation to enter into a broad free trade 
arrangement with Cuba, and that is that the claims of U.S. citizens for 
compensation for expropriated property are appropriately addressed.
  This last December, the leaders of all of the nations of the Western 
Hemisphere, except for Fidel Castro, met in Miami and agreed to the 
goal of achieving free trade throughout the Americas early in the next 
century. I have long supported that goal. I hope that this bill that I 
am reintroducing today can be speedily enacted to give the President 
the authority to begin negotiations right away.
  Mr. President, the time is not at all premature. Several countries 
have already expressed a desire to enter into a free trade arrangement 
with the United States. Among those are Chile, Panama, Argentina, and 
others. Several of these and other countries in the hemisphere have 
entered into, or are negotiating, free trade arrangements among 
themselves. While NAFTA is the largest free trade area in the 
hemisphere, Brazil, Argentina, Uruguay and Paraguay, are scheduled this 
year to initiate the second largest free trade area, called Mercosul/
sur, a free trade area with nearly $650 billion in combined gross 
domestic product.
  Four other trade arrangements are or soon will be in place in the 
Americas and the Caribbean. These trade arrangements are the building 
blocks of an eventual free trade area embracing all of the Americas. 
The Americas Free Trade Act would encourage the President to conduct 
negotiations with such groups of nations, in order to build upon the 
progress that they are achieving in lowering the barriers to trade 
among themselves.
  Mr. President, the last 15 years have witnessed victories for freedom 
in the governments and economies of the Americas. Their rejection of 
authoritarianism has accelerated, and the United States has been the 
model for this development. After almost two centuries of forsaking the 
example of freedom that made us the greatest, most prosperous nation on 
the planet, the nations of this hemisphere are more willing than ever 
to emulate our formula for success. Now is the time for us to encourage 
and embrace our neighbors as we lay the foundation for a new century of 
prosperity and opportunity for all of the people of the New World.
  Mr. President, I ask that the summary and text of the bill be 
included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 146

       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 ``Americas Free Trade Act''.
     [[Page S407]] 
	 SEC. 2. FINDINGS.

       The Congress makes the following findings:
       (1) The countries of the Western Hemisphere have enjoyed 
     more success in the twentieth century in the peaceful conduct 
     of their relations among themselves than have the countries 
     in the rest of the world.
       (2) The economic prosperity of the United States and its 
     trading partners in the Western Hemisphere is increased by 
     the reduction of trade barriers.
       (3) Trade protection endangers economic prosperity in the 
     United States and throughout the Western Hemisphere and 
     undermines civil liberty and constitutionally limited 
     government.
       (4) The successful establishment of a North American Free 
     Trade Area sets the pattern for the reduction of trade 
     barriers throughout the Western Hemisphere, enhancing 
     prosperity in place of the cycle of increasing trade barriers 
     and deepening poverty that results from a resort to 
     protectionism and trade retaliation.
       (5) The reduction of government interference in the foreign 
     and domestic sectors of a nation's economy and the 
     concomitant promotion of economic opportunity and freedoms 
     promote civil liberty and constitutionally limited 
     government.
       (6) Countries that observe a consistent policy of free 
     trade, the promotion of free enterprise and other economic 
     freedoms (including effective protection of private property 
     rights), the removal of barriers to foreign direct 
     investment, in the context of constitutionally limited 
     government and minimal interference in the economy, will 
     follow the surest and most effective prescription to 
     alleviate poverty and provide for economic, social, and 
     political development.

     SEC. 3. FREE TRADE AREA FOR THE WESTERN HEMISPHERE.

       (a) In General.--The President shall take action to 
     initiate negotiations to obtain trade agreements with the 
     sovereign countries located in the Western Hemisphere, the 
     terms of which provide for the reduction and ultimate 
     elimination of tariffs and other nontariff barriers to trade, 
     for the purpose of promoting the eventual establishment of a 
     free trade area for the entire Western Hemisphere.
       (b) Reciprocal Basis.--An agreement entered into under 
     subsection (a) shall be reciprocal and provide mutual 
     reductions in trade barriers to promote trade, economic 
     growth, and employment.
       (c) Bilateral or Multilateral Basis.--Agreements may be 
     entered into under subsection (a) on a bilateral basis with 
     any foreign country described in that subsection or on a 
     multilateral basis with all of such countries or any group of 
     such countries.

     SEC. 4. FREE TRADE WITH FREE CUBA.

       (a) Restrictions Prior to Restoration of Freedom in Cuba.--
     The provisions of this Act shall not apply to Cuba unless the 
     President certifies (1) that freedom has been restored in 
     Cuba, and (2) that the claims of United States citizens for 
     compensation for expropriated property have been 
     appropriately addressed.
       (b) Standards for the Restoration of Freedom in Cuba.--The 
     President shall not make the certification that freedom has 
     been restored in Cuba, as described in subsection (a), unless 
     he determines that--
       (1) a constitutionally guaranteed democratic government has 
     been established in Cuba, with leaders chosen through free 
     and fair elections;
       (2) the rights of individuals to private property have been 
     restored and are effectively protected and broadly exercised 
     in Cuba;
       (3) Cuba has a currency that is fully convertible 
     domestically and internationally;
       (4) all political prisoners have been released in Cuba; and
       (5) the rights of free speech and freedom of the press in 
     Cuba are effectively guaranteed.
       (c) Priority for Free Trade With Free Cuba.--Upon making 
     the certification described in subsection (a) the President 
     shall give priority to the negotiation of a free trade 
     agreement with Cuba.

     SEC. 5. PERMANENT APPLICATION OF FAST TRACK PROCEDURES.

       The provisions of section 151 of the Trade Act of 1974 (19 
     U.S.C. 2191) apply to implementing bills submitted with 
     respect to trade agreements entered into pursuant to the 
     provisions of this Act.
                                                                    ____


                  The Americas Free Trade Act--Summary

       I. The President is directed to undertake negotiations to 
     establish free trade agreements between the United States and 
     countries of the Western Hemisphere. Agreements may be 
     bilateral or multilateral.
       II. The President, before seeking a free trade agreement 
     with Cuba under the Act, would have to certify (1) that 
     freedom has been restored in Cuba, and (2) that the claims of 
     U.S. citizens for compensation for expropriated property have 
     been appropriately addressed. The President could make the 
     certification that freedom has been restored to Cuba only if 
     he determines that--
       A. constitutionally guaranteed democratic government has 
     been established in Cuba, with leaders freely and fairly 
     elected;
       B. private property rights have been restored and are 
     effectively protected and broadly exercised;
       C. Cuba has a convertible currency;
       D. all political prisoners have been released; and
       E. free speech and freedom of the press are effectively 
     guaranteed.
       If the President certifies that freedom has been restored 
     to Cuba, priority will be given to the negotiation of a free 
     trade agreement with Cuba.
       III. Congressional fast track procedures for consideration 
     of any such agreement (i.e., expedited consideration, no 
     amendments) are extended permanently.
                                 ______

      By Mr. GRAMM:
  S. 147. A bill to amend the Internal Revenue Code of 1986 to increase 
the personal exemption for dependents to $5,000, and for other 
purposes; to the Committee on Finance.


    the cut government budget to increase family budget act of 1995

  Mr. GRAMM. Mr. President, for the last 40 years, government has spent 
an increasing share of the income of American families and because 
government has spent the family's income less wisely than the family 
would have spent it, the well-being of American families and America 
has diminished. This proposal will cut government spending and allow 
families to spend their own money on their own children for their own 
future.
  To give families their freedom and their money back, every family 
with children will get an immediate tax cut so that families can invest 
in the needs of their own children.
  The current $2,500 exemption allowed per child will be doubled to 
$5,000. The total exemptions for a family of four now shield from 
Federal income taxes just $10,000 or about 20 percent of the average 
income of such a family. With this change, the amount of family income 
protected for its own use would rise to $15,000 or about 33 percent of 
average family income. While this is an important step toward allowing 
families to spend their own money again, the amount of average family 
income shielded from the tax collector will still be only about half of 
the level which existed in 1950.

------------------------------------------------------------------------
       Tax cut--$124 billion              Spending cut--$124 billion    
------------------------------------------------------------------------
Double the dependent exemption for   Cut the discretionary budgets of   
 all children from $2,500 to          the Departments of Education,     
 $5,000, thus allowing families to    Energy, Labor, Health and Human   
 spend more of their own money on     Services, Housing and Urban       
 their own children.                  Development, and Transportation   
                                      (non-trust fund) by 16% over 5    
                                      years.                            
------------------------------------------------------------------------

  Facts on the parent and child exemptions:
  In 1950, exemptions alone shielded 65 percent of the income of an 
average family of four from any Federal income taxes.
  By the end of the 1970's, the protection of family income provided by 
the exemption had dropped to just 16 percent of the income of an 
average family of four.
  In the 1980's, Republicans stopped the erosion of the exemption by 
indexing it for inflation, and then restored part of that lost 
protection so that by 1992, 21 percent of the income of an average 
family of four was protected from Federal income taxes.
  This increase in the dependent exemption would further protect the 
family budget from Federal taxation by increasing the exemption to 33 
percent of the average income of a family of four.
  It will reduce by $1,400 the Federal income tax on an average income 
family of four earning $45,000..
  We will force the government to tighten its budget so families can 
loosen theirs, reversing a 40-year trend.
  This transfer of spending power from government to families is a down 
payment on restoring the American Dream.
                                 ______

      By Mr. GRAMM:
  S. 148. A bill to promote the integrity of investment advisers; to 
the Committee on Banking, Housing, and Urban Affairs.


                 THE INVESTMENT ADVISERS INTEGRITY ACT

  Mr. GRAMM. Mr. President, today I am introducing legislation that 
will aid the Securities and Exchange Commission [SEC] in targeting 
resources to enforce the Investment Advisers Act of 1940. Increasingly, 
American families are investing in mutual funds, individual retirement 
accounts, municipal bonds, a variety of insurance products, and many 
other financial instruments.
  Often, American families rely upon investment advisers to assist them 
in making investment decisions and in managing their assets. Millions 
of people have benefited from the services provided by these investment 
advisers.
  For several years, the Securities and Exchange Commission has 
expressed in testimony before Congress the need to 
[[Page S408]] 
improve supervision of investment advisers. While not 
lacking for resources, given the dramatic increase in the SEC's budget 
over the last several years, the SEC has had difficulty targeting 
funding to this area of responsibility. The bill that I am introducing 
will take two important steps toward focusing the SEC's efforts.
  First, the bill would highlight the importance of enforcing the 
Investment Advisers Act of 1940 by identifying specific amounts from 
the SEC's budget to be devoted to that purpose.
 The bill authorizes $10 million for fiscal year 1996, and $12 million 
in 1997, recognizing that organizing and training for this purpose is 
unlikely to be completed in the first year. The SEC could devote more 
of its budget to this enforcement effort if the Commission chose to do 
so, but these amounts will at least ensure increased priority.

  Mr. President, I proposed to direct those efforts where the problems 
are likely to occur. Frankly, the fraud is going to be where the money 
is, and that is where we should direct the SEC's attention. For 
example, as few as 5 percent of registered investment advisers manage 
more than $500 million each of client assets, and yet this group has 70 
percent of all assets under management. The SEC should not have its 
attention diverted from these advisers by inspection of advisers 
managing little or none of their clients' assets. In fact, Mr. 
President, about half of all investment advisers do not manage any 
client assets at all.
  This bill would exempt from SEC registration all investment advisers 
managing less than $5 million in assets, with one important condition. 
That condition is that adviser is registered with his or her State 
securities regulator, who would then have responsibility for 
supervision. Should a State not wish to take on responsibility for 
supervision of such investment advisers, then that State need not 
register them, and the investment adviser would continue to require to 
register with the SEC and be subject to SEC supervision.
  If the SEC determines, however, that there is a need, and that the 
SEC has sufficient
 resources, the Commission may limit this exemption to investment 
advisers managing no more than $1 million in assets. The SEC would in 
such event supervise investment advisers who manage 99 percent of all 
assets under management. This would target the SEC's efforts less 
sharply, but it would still reduce the SEC's inspection load by as much 
as two-thirds.

  The legislation would preserve full authority for the SEC to 
investigate aggressively any investment adviser where allegations of 
fraud are raised. Moreover, the SEC could disqualify from registration 
as an investment adviser any individual who in the previous 10 years 
had been convicted of a felony.
  This bill avoids the approach of earlier proposals, which would have 
imposed a new tax on all investment advisers, and thereby on all of 
their clients. In my view, such a tax is unconscionable, especially 
while existing SEC fees impose a tax on investment, raising enough 
revenues to fund the SEC two or three times over. Moreover, the most 
harmful stage of the economic cycle on which to levy a tax is 
investment. Every investment dollar lost to pay for government is not 
just a loss of one dollar, but it is the loss of the many more dollars 
that this investment would have generated in economic activity.
  Mr. President, allow me to emphasize again, that the SEC has not been 
starved for resources. The budget of the SEC has tripled since 1986, up 
by 60 percent since 1990. The challenge to the SEC has not been 
obtaining resources, but rather assigning those resources to what the 
SEC has testified is a priority area of concern. This legislation will 
aid the SEC in that effort.
  Mr. President, I ask that a summary and the text of the bill by 
included in the Record.
                                 S. 148

       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 ``Investment Advisers 
     Integrity Act''.

     SEC. 2. ENHANCED ENFORCEMENT PRIORITY.

       Of the amounts appropriated to the Securities and Exchange 
     Commission, there are authorized to be appropriated--
       (1) not to exceed $10,000,000 in fiscal year 1996; and
       (2) not to exceed $12,000,000 for fiscal year 1997; for the 
     enforcement of the provisions of the Investment advisers Act 
     of 1940, particularly with respect to advisers managing more 
     than $5,000,000 in assets.

     SEC. 3. EXEMPTION FOR STATE REGISTRATION.

       Section 203(b) of the Investment Advisers Act of 1940 (15 
     U.S.C. 80b-3(b)) is amended--
       (1) by striking ``or'' at the end of clause (2);
       (2) by striking the period at the end of clause (3) and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(4) any investment adviser who, during the course of the 
     preceding 12 months, had no more than $5,000,000 in assets 
     under management, if the investment adviser is registered 
     with the appropriate State securities regulator, except that 
     the Commission may, by rule, also require registrations by 
     investment advisers who, during the preceding 12 months, had 
     more than $1,000,000 but less than $5,000,000 in assets under 
     management if the Commission determines such action to be 
     necessary to achieve the purposes of the Act. As used in this 
     section, the term `assets under management' means the client 
     assets with respect to which an investment adviser
      provides continuous and regular supervisory or management 
     services.''.

     SEC. 4. INVESTIGATION OF FRAUD.

       Section 209 of the Investment Advisers Act of 1940 (15 
     U.S.C. 80b-9) is amended by adding at the end the following:
       ``(f) The Commission is authorized to conduct 
     investigations of any investment adviser, notwithstanding any 
     exception from registration under section 203(b)(4), in any 
     case where the appropriate State securities regulator or one 
     or more clients or former clients of the investment adviser 
     have alleged fraud on the part of the investment adviser.''.

     SEC. 5. DISQUALIFICATION OF CONVICTED FELONS.

       (a) Amendment.--Section 203(e) of the Investment Advisers 
     Act of 1940 (15 U.S.C. 80b-3(e)) is amended--
       (1) by redesignating paragraphs (3) through (7) as 
     paragraphs (4) through (8), respectively; and
       (2) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) has been convicted within 10 years preceding the 
     filing of any application for registration or at any time 
     thereafter of any crime that is punishable by imprisonment 
     for one or more years and that is not described in paragraph 
     (2) of this subsection or a substantially equivalent crime by 
     a foreign court of competent jurisdiction.''.
       (b) Conforming Amendments.--Section 203 of such Act is 
     further amended--
       (1) in subsection (e)(6) (as redesignated by subsection (a) 
     of this section), by striking ``this paragraph (5)'' and 
     inserting ``this paragraph (6)'';
       (2) in subsection (f)--
       (A) by striking ``paragraph (1), (4), (5), or (7)'' and 
     inserting ``(1), (5), (6), or (8)''; and
       (B) by striking ``paragraph (3)'' and inserting ``paragraph 
     (4)''; and
       (3) in subsection (i)(1)(D), by striking ``section 
     203(e)(5) of this title'' and inserting ``subsection (e)(6) 
     of this section''.
                                                                    ____

             The Investment Advisers Integrity Act--Summary

       I. For fiscal year 1996 $10 million are authorized, and for 
     fiscal year 1997 $12 million are authorized, for enforcement 
     of the Investment Advisers Act of 1940, with a particular 
     focus on supervision of investment advisers managing more 
     than $5 million in assets.
       II. Investment advisers who, during the previous year, did 
     not have more than $5 million in assets under management are 
     exempt from registering with the SEC, provided that they have 
     registered with their appropriate state securities regulator.
       III. The SEC may, by rule, require registration with the 
     SEC of investment advisers who, during the previous year, had 
     more than $1 million but less than $5 million in assets under 
     management, if the Commission determines such action to be 
     necessary to achieve the purposes of the Investment Advisers 
     Act of 1940.
       IV. The SEC would retain authority to conduct 
     investigations of any investment advisers, whether registered 
     with the SEC or with state regulators, in the case of 
     allegations of fraud raised either by clients or by state 
     securities regulators.
       V. An individual with a felony conviction during the 
     previous ten years can be disqualified by the SEC from 
     registration as an investment adviser.
                                 ______

      By Mr. GRAMM:
  S. 149. A bill to require a balanced Federal budget by fiscal year 
2002 and each year thereafter, to protect Social Security, to provide 
for zero-based budgeting and decennial sunsetting, to impose spending 
caps on the growth of entitlements during fiscal years 1996 through 
2002, and to enforce those requirements through a budget process 
involving the President and Congress and sequestration; to the 
Committee on the Judiciary.


                 the balanced budget implementation act

 Mr. GRAMM. Mr. President, I ask unanimous consent that additional 
material be printed in the Record.
  [[Page S409]] 
  There being no objection, the material was ordered to 
be printed in the Record, as follows:
               Balanced Budget Implementation Act Outline

       A bill to require and implement a balanced budget by the 
     year 2002.

     TITLE 1. REQUIRE A JOINT BUDGET RESOLUTION TO FORCE JOINT 
                   ACTION BETWEEN CONGRESS AND THE PRESIDENT:

       (A) Joint Resolution on the Budget: To remedy the lack of 
     cooperation and coordination between the President and 
     Congress resulting from the Congressional Budget and 
     Impoundment Control Act of 1974 which created two budgets--
     one Executive and one Congressional--the Balanced Budget 
     Implementation Act converts the present concurrent resolution 
     on the budget into a joint resolution on the budget which 
     must be signed by the President, ensuring joint Congressional 
     and Executive branch consensus on and commitment to each 
     annual budget.

     TITLE 2. ZERO-BASED BUDGETING & DECENNIAL SUNSETTING:

       (A) For FY 1996 and FY 1997, Congress must re-authorize all 
     discretionary programs and all unearned entitlements: The 
     Balanced Budget Implementation Act adopts President Carter's 
     zero-based budgeting concept, mandating that before FY 1996 
     begins, the spending authority for all unearned entitlements, 
     and the spending authority for the most expensive one-third 
     of discretionary programs will expire. Entitlements earned by 
     service or paid for in total or in part by assessments or 
     contributions shall be deemed as earned, and their 
     authorization shall not expire. Entitlements not sunsetted 
     include Social Security, veterans benefits, retirement 
     programs, Medicare and others. Before FY 1997, the spending 
     authority of the remaining discretionary programs will 
     expire.
       Specifics: By the beginning of FY 1997, all unearned 
     entitlements and discretionary programs will be subject to 
     re-authorization. If a specific unearned entitlement or 
     discretionary program is not re-authorized in a non-
     appropriations bill, it cannot be funded and will be 
     terminated.
       (B) Unauthorized programs cannot receive appropriations: 
     The Balanced Budget Implementation Act creates a point of 
     order in both Houses against any bill or provision thereof 
     that appropriates funds to a program for which no 
     authorization exists.
       Specifices: Such point of order can be waived only by the 
     affirmative vote of 3/5ths of the whole membership of each 
     House. Appeals of the ruling of the chair on such points of 
     order also require a 3/5ths affirmative vote of the whole 
     membership of each House.
       A 3/5ths point of order shall lie against any authorization 
     that is contained in an appropriation bill.
       (C) All discretionary programs and unearned entitlements 
     must be reauthorized every ten years: In the first session of 
     the congress which follows the decennial Census 
     reapportionment, the spending authority for all unearned 
     entitlements and the most expensive one-third of all 
     discretionary programs will expire for the fiscal year that 
     begins in that session. In the second session of that 
     Congress, the spending authority for the remaining 
     discretionary programs will expire for the fiscal year that 
     begins in that session. This provision will be enforced by 
     the points of order contained in Section (B) above.

     TITLE 3. LIMIT THE GROWTH OF ENTITLEMENTS TO THE GROWTH RATE 
                   OF SOCIAL SECURITY:

       (A) the Balanced Budget Implementation Act adopts President 
     Bush's proposal to limit the aggregate growth of all 
     entitlements other than social Security to the growth rate 
     formula of Social Security for the period FY 1996 to FY 2002: 
     the aggregate growth of all entitlements other than Social 
     Security is limited to the growth rate formula of Social 
     Security, which is the consumer price index and the growth in 
     eligible population.
       (B) the Balanced Budget Implementation Act provides 
     flexibility in the growth rate of entitlement programs: An 
     individual entitlement program can grow faster than the 
     overall entitlement cap as long as the aggregate growth in 
     all entitlements (other than Social Security) does not exceed 
     the entitlement cap.
       (C) From FY 1996 to FY 2002, the aggregate spending growth 
     cap on entitlements will be enforced by an entitlement 
     sequester: The Balanced Budget Implementation Act provides 
     that if aggregate spending growth in entitlements exceeds the 
     total growth in consumer prices and eligible population, an 
     across-the-board sequester to eliminate excess spending 
     growth will occur on all entitlements other than Social 
     Security. A 3/5ths vote point of order lies against any 
     effort to exclude any entitlement from this sequester. This 
     sequester would be in effect until Congress passes 
     legislation which brings the entitlement program back within 
     the cap, and the President signs the bill.
     TITLE 4. ESTABLISH FIXED DEFICIT TARGETS, RESTORE AND 
                   STRENGTHEN GRAMM-RUDMAN, AND REQUIRE A BALANCED 
                   BUDGET BY 2002:

       (A) Restores the fixed deficit targets of Gramm-Rudman (GR) 
     enacted by President Reagan: The Balanced Budget 
     Implementation Act modifies the existing GR maximum deficit 
     amounts and extends the GR sequester mechanism to balance the 
     budget by FY 2002 and annually thereafter.
       The fixed deficit targets established for the next seven 
     fiscal years will result in a balanced budget by the fiscal 
     year 2002: FY 1996, $145 billion; FY 1997, $120 billion; FY 
     1998, $97 billion; FY 1999, $72 billion; FY 2000, $48 
     billion; FY 2001, $24 billion; FY 2002, $0 billion.
       The new maximum deficit amounts will be enforced by the 
     existing GR deficit sequester. After reaching a balanced 
     budget, the GR sequester mechanism will become permanent to 
     ensure the budget stays in balance.
       (B) Strengthen the GR points of order: The Balanced Budget 
     Implementation Act requires the strengthening of the existing 
     GR budget points of order.
       Specifies: A point of order will lie against all actions 
     that (1) increase the deficit or (2) increase the limit on 
     national debt held by the public beyond the deficit levels 
     required in Section A & B (above). This point of order will 
     lie in both Houses, and may be waived only by a 3/5ths vote 
     of the whole membership of each House. An appeal of the point 
     of order can only be waived by a 3/5ths vote. No rule in 
     either House can permit waiver of such a point of order by 
     less than 3/5ths affirmative vote of the whole membership of 
     such House, nor can such point of order be waived for more 
     than one bill per vote on such point of order.
       Once the budget is balanced, all points of order will 
     become permanent to ensure the budget stays in balance.
       (C) Protect Social Security: Social Security will be 
     protected fully by (1) preserving the existing points of 
     order to protect the Social Security trust fund; and (2) 
     providing expedited procedures in 2002 for consideration of 
     additional legislation to balance the budget excluding the 
     Social Security Trust Fund.
       (D) Extend the Discretionary Spending Caps: President 
     Clinton proposed extending the existing caps on total 
     discretionary budget authority and outlays to cover the 
     fiscal years 1999 and 2000. That cap will be extended to also 
     apply to the fiscal years 2001 and 2002, at the same level of 
     President Clinton's proposed extension.
       Year, outlays; FY 1998, $542.4 billion; FY 1999, $542.4 
     billion; FY 2000, $542.4 billion; FY 2001, $542.4 billion; FY 
     2002, $542.4 billion.
       (E) Look Back Sequester: In the last quarter of every 
     fiscal year, a ``look back'' sequestration is required to 
     eliminate any excess deficit for the current year. This look 
     back sequester will guarantee that the actual deficit target 
     set for that year is achieved.
       Specifics: On July 1 of every fiscal year, the Office of 
     Management and Budget (OMB) will order an initial look back 
     sequester based on the most recent OMB deficit estimates. On 
     July 15, the OMB Mid-Session Review will update and finalize 
     the sequester order. The final order will stay in effect 
     unless offset by appropriate legislation to bring the deficit 
     into compliance with that year's target.
                                 ______

      By Mr. DOLE (for himself, Mr. Hatch, Mr. Simon, Mr. Thurmond, Mr. 
        Heflin, Mr. Craig, Ms. Moseley-Braun, Mr. Brown, Mr. Kohl, Mr. 
        Simpson, Mr. Grassley, Mr. Specter, Mr. Kyl, Mrs. Feinstein, 
        Mr. Nickles, Mr. Murkowski, Mr. Bryan, Mrs. Hutchison, Mr. 
        Exon, Mr. Shelby, Mr. Campbell, Mr. Smith, Mr. Cohen, Mr. 
        Pressler, Mr. Gregg, Mr. Gorton, Mr. Ashcroft, Mr. Burns, Mr. 
        McConnell, Mr. Inhofe, Mr. Gramm, Mr. Lott, Mr. DeWine, Ms. 
        Snowe, Mr. Thompson, Mr. Roth, Mr. Lugar, Mr. Bond, Mr. Craig 
        Thomas, Mr. Coverdell, Mr. Santorum, Mr. Grams, and Mr. Mack):
  S.J. Res. 1. A joint resolution proposing an amendment to the 
Constitution of the United States to require a balanced budget; to the 
Committee on the Judiciary.


              the balanced budget constitutional amendment

  Mr. DOLE. Mr. President, 1969 was a year of firsts and lasts. It was 
the year that a man--American astronaut Neil Armstrong--first walked on 
the Moon. And, it was the last year that Congress balanced the budget. 
That was 35 years ago.
  In 1969, we spent $16.6 billion or roughly 9 percent of the Federal 
budget to pay interest on the national--pocket change by today's 
standards. According to President Clinton's most recent budget, 
interest payments on the national debt will surpass the $300 billion 
mark for the first time this year. This year, roughly 20 percent of all 
Federal spending will go to pay interest on the national debt.
  Beginning in 1974, Congress has tried to control Federal spending 
with a series of legislative remedies--Gramm-Rudman-Hollings, spending 
caps, pay-as-you-go--but, every time those remedies started to bite, 
the special interests began to squawk. The decisions got too tough, and 
Congress blinked.
  [[Page S410]] 
  Mr. President the deficit situation has improved since 
President Clinton took office, but only slightly. Even under the 
rosiest of scenarios which assume 10 straight years of steady growth 
with low inflation, the deficit is expected to fall for another year or 
two and then start moving right back up again.
  Mr. President, on November 8, the American people sent a message to 
Washington. They want us to get Federal spending under control.
  Nine more ``messengers,'' fresh from the campaign trail, took the 
oath of office today. The American people and every one of the 11 new 
Senators who were elected last November, understand that the time has 
come for a fundamental change in the way we do business in Washington.
  It is time to give constitutional protection to the generations of 
Americans whose dreams of a better future are being crushed under a 
mountain of debt passed on by a spendthrift Congress for the past 35 
years. It is time to give constitutional protection to future 
generations of Americans--our children and grandchildren--who are not 
now eligible to vote and are inadequately represented in Congress 
today.
  The American people want a smaller, less intrusive Government. Ronald 
Reagan tried to cut taxes, grow the economy, and force Congress to 
either cut spending or run up record deficits. He wagered that given 
that choice, Congress would do the right thing and cut spending. But, 
not even record deficits could curb Congress' spending addiction.
  There will be some who argue that voting for the balanced budget 
amendment is taking the easy way out. They are wrong. Adoption of the 
balanced budget amendment is only the first step. Once it is approved, 
Congress must begin to take action now that will enable us to balance 
the budget by the time the proposed amendment could go into effect.
  The American people want the 104th Congress to make some tough 
choices. They understand that we cannot magically balance the budget 
overnight, but, they also expect to see progress, real progress.
  We intend to deliver. Senator Domenici and Congressman Kasich are 
hard at work with other House and Senate Republicans developing a 
budget blueprint that will put the Federal budget on a path toward 
balance by 2002--without touching Social Security and without raising 
taxes.
  Mr. President, I want to commend the distinguished chairman of the 
Judiciary Committee, Senator Hatch, the distinguished senior Senator 
from Illinois, Senator Simon, the distinguished senior Senator from 
Idaho, Senator Craig, and the distinguished President pro tempore, 
Senator Thurmond, for the work they have done to develop a balanced 
budget constitutional amendment that has strong bipartisan support.
  I understand from Chairman Hatch that the Senate Judiciary Committee 
will hold a hearing on Senate Joint Resolution 1 tomorrow, and that he 
intends to work with the members of the committee to try to get this 
amendment to the Senate floor for a full debate later this month. I 
look forward to that debate, and I am confident that with the help and 
support of the American people, the 104th Congress will be able to 
break the gridlock for real change. Change that demonstrates that we 
got the message--loud and clear, change that can help restore 
confidence in our democratic system of Government, change that can help 
revive the American dream for future generations of Americans.
  Mr. President, I ask unanimous consent that the text of the joint 
resolution be printed in the Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:
                              S. J. Res. 1

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, (two-thirds 
     of each House concurring therein), That the following article 
     is proposed as an amendment to the Constitution, which shall 
     be valid to all intents and purposes as part of the 
     Constitution when ratified by the legislatures of three-
     fourths of the several States within seven years after the 
     date of its submission to the States for ratification:

                              ``Article--

       ``Section 1. Total outlays for any fiscal year shall not 
     exceed total receipts for that fiscal year, unless three-
     fifths of the whole number of each House of Congress shall 
     provide by law for a specific excess of outlays over receipts 
     by a rollcall vote.
       ``Section 2. The limit on the debt of the United States 
     held by the public shall not be increased, unless three-
     fifths of the whole number of each House shall provide by law 
     for such an increase by a rollcall vote.
       ``Section 3. Prior to each fiscal year, the President shall 
     transmit to the Congress a proposed budget for the United 
     States Government for that fiscal year, in which total 
     outlays do not exceed total receipts.
       ``Section 4. No bill to increase revenue shall become law 
     unless approved by a majority of the whole number of each 
     House by a rollcall vote.
       ``Section 5. The Congress may waive the provisions of this 
     article for any fiscal year in which a declaration of war is 
     in effect. The provisions of this article may be waived for 
     any fiscal year in which the United States is engaged in 
     military conflict which causes an imminent and serious 
     military threat to national security and is so declared by a 
     joint resolution, adopted by a majority of the whole number 
     of each House, which becomes law.
       ``Section 6. The Congress shall enforce and implement this 
     article by appropriate legislation, which may rely on 
     estimates of outlays and receipts.
       ``Section 7. Total receipts shall include all receipts of 
     the United States Government except those derived from 
     borrowing. Total outlays shall include all outlays of the 
     United States Government except for those for repayment of 
     debt principal.
       ``Section 8. This article shall take effect beginning with 
     fiscal year 2002 or with the second fiscal year beginning 
     after its ratification, whichever is later.''.

  Mr. HATCH. Mr. President, I am pleased to be joining the majority 
leader this morning in introducing, along with Senator Simon, Senator 
Thurmond, Senator Craig, and others, a balanced budget amendment to the 
Constitution. This is the consensus amendment developed through decades 
of study, work, hearing, debates, and discussions.
  It is appropriate that it hold a place of honor as Senate Joint 
Resolution 1 in this new Congress. Its debate and adoption will be a 
major step in the work of this Congress to reform itself and its 
relationship with the American people. The people's frustration with 
the Washington ways of a profligate Congress and an unresponsive and 
irresponsible Federal bureaucracy is not new, but it has been growing. 
That fact should be no surprise.
  The national debt is fast approaching $4.8 trillion. This means every 
man, woman, and child in the state of Utah and all other States has a 
debt burden of $18,500.
  The human implications of our mammoth debt are that our children are 
being shackled with an insurmountable burden as a result of our 
largess. Perhaps the most significant effect of today's unrestrained 
borrowing, however, will be a reduction in the political choices 
available to future governments of this Nation. Next year, some 
estimates suggest, interest will consume almost 24 percent of all 
Federal revenues--at $296 billion, that is more than total Federal 
revenues in 1975. Imagine that.
 What we now pay in interest was more than the Government took in in 
total just 20 years ago.

  When the people of my home State think of leaving a legacy to their 
children and grandchildren, this is not what they think of. They don't 
expect to make their children and grandchildren pay their credit card 
bills, but this is the inheritance their government is creating for 
them. Together with that debt comes a weakened economy, a weakened 
trading posture, and--worst of all--a less sound, less responsive, and 
less responsible government. Most parents and grandparents want to 
leave a brighter, not a darker, future for their loved ones.
  The promise of strong, responsible government the founding generation 
left embodied in the Constitution has not been kept by those who 
recently have stood in their place. The national Government has grown 
increasingly profligate over recent decades. We have a duty to do 
better.
  The American people understand this. I regularly receive mail from 
Utahns asking why the Federal Government cannot balance its budget in 
the same way that families and businesses must.
  There is concern about the way the Federal Government soaks up 
capital to make interest payments which could 
[[Page S411]] 
be used for private investment or Government health, 
housing, or education programs. They all echo the concern that an 
integral part of constitutional responsibility has been lost in recent 
decades, that of fiscal discipline, the simple notion that government 
should live within its means and not bind future generations to pay for 
current consumption without real return. That is why over 85 percent of 
Americans favor a balanced budget amendment.
  Congress has proven itself wholly incapable of controlling its 
deficit addiction without the strong therapy of a clear constitutional 
mandate to make it get clean and sober. A balanced budget 
constitutional amendment is necessary to force Congress to keep faith 
with voters who expect them to end the fiscal folly. Only the 
constitutional discipline of a balanced budget amendment can return 
sanity to an out-of-control budgetary process.
  The proposed amendment is wholly consistent with the Constitution in 
scope and purpose. It provides another of what Madison called 
``auxiliary precautions'' to help ensure that a government of human 
beings would--to the greatest extent possible--be governed by the 
better angels of our human nature. In short, the amendment assures the 
blessings of limited government and liberty promised by the Framers of 
the Constitution.
  The amendment, in restoring limited government, preserves a rule of 
fiscal responsibility that, for much of our history, literally went 
without saying. It addresses a serious spending bias in the present 
fiscal process arising from the fact that Members of Congress do not 
have to approve new taxes in order to pay for new spending programs. 
Rather than having to cast such politically disadvantageous votes, 
Congress has been able to resort to increased levels of deficit 
spending.
  The balanced budget amendment proposes to overcome this spending bias 
by restoring the linkage between Federal spending and taxing decisions. 
It does not propose to read any specific level of spending or taxing 
forever into the Constitution, and it does not propose to intrude the 
Constitution into the day-to-day spending and taxing decisions of the 
representative branch of the Government. It merely proposes to create a 
fiscal environment in which the competition between the tax-spenders 
and the taxpayers is a more equal one--one in which spending decisions 
will once more be constrained by available revenues.
  Nor will passage and ratification of the balanced budget amendment 
lead to intrusive Federal court interference in the budgeting process. 
The well-recognized doctrines of article III standing and 
justiciability, as well as the political question doctrine, act as a 
deterrent to unnecessary judicial activism. Furthermore, Congress' 
ability to define the jurisdiction of the Federal courts, pursuant to 
article III of the Constitution and section 6 of the balanced budget 
amendment, allows Congress to prevent judicial activism should it 
arise, through implementing legislation.
  Statutory efforts to control spending are inadequate--pure and 
simple. They are short term. Any balanced budget statute can be 
repealed, in whole or in part, by the simple expedient of adopting a 
new statute. The spending bias in Congress, however, is a permanent 
problem. It demands a permanent constitutional solution. The virtue of 
a constitutional amendment is that it can invoke a stronger rule to 
overcome the spending bias.
  This amendment is not a panacea for the economic problems of the 
Nation. The amendment is, however, a necessary step toward securing an 
environment more conducive to honest and accountable fiscal 
decisionmaking. It moves us toward the kind of debate about priorities 
and the role of the Federal Government that are the essence of 
responsible government--the kind of responsible government the founders 
left us and the kind the voters require of us in this Congress.
  I am extremely pleased to stand side-by-side with my colleagues from 
both sides of the aisle as we unveil today an amendment that will 
establish constitutional limitations on federal spending and deficit 
practices. I want to pay special tribute to my colleague Senator Simon, 
who has been a critical force in this effort over the years, and to 
Senator Thurmond, who has been a leader in this effort virtually every 
year that he has been in the U.S. Congress. We look forward to his 
continued participation.
  I sincerely hope that this will be the year we approve this amendment 
and send it to the States for ratification to save future generations 
of Americans from this heavy and debilitating economic burden.
  Mr. CRAIG. Mr. President, this afternoon, let me join with Senator 
Glenn in echoing his praise of Senator Kempthorne of Idaho and the 
effort they both have pursued in bringing S. 1 to the floor for its 
early consideration. I know of no other piece of legislation, except my 
balanced budget amendment, that I think is more critical to bring up in 
the 104th Congress. I say that, confident in telling the Governors and 
the mayors and those who direct local and State government that as we 
work to pass a balanced budget amendment and then bring the budget into 
balance, we will not pass on to them Federal responsibilities of taxing 
or governing. And that is why S. 1, or the unfunded Federal mandates 
legislation, is so important and that it go before us, to convince the 
American people and those local and State units of government that we 
are going to be responsible in our work with them, in our recognition 
of their priority and their place in the Constitution, that we do not 
keep shoving through to them the types of legislation or Federal 
regulation or mandates that is merely a way for us to pass through or 
force upon them the obligation of funding Federal programs when we did 
not have the willingness to fund them ourselves.
  Mr. President, what I come to the floor this afternoon to speak to is 
not S. 1, but I am a primary cosponsor of it and a strong supporter of 
it. I am here to speak about Senate Joint Resolution 1. That, of 
course, is the balanced budget amendment that Senator Dole has 
introduced before the 104th Congress and this Senate just a few hours 
ago.
  But in talking about that issue and my 12 years of championing that 
cause, both here in the Senate and the House, I would be remiss if I 
did not speak about the distinguished President pro tempore of the 
Senate, Senator Strom Thurmond, because you see it was Senator Thurmond 
more than 35 years ago who saw the wisdom of forcing this Government to 
balance its budget through a constitutional requirement, a 
constitutional amendment. So at my age and at my tenure here in the 
Senate, I am but a child in the support of this issue compared to those 
of seniority and especially those like Senator Strom Thurmond. So I 
honor him this afternoon for his allegiance and his farsightedness in 
dealing with this issue.
  It is also important that I recognize Senator Paul Simon of Illinois. 
And I recognize him in the true bipartisan spirit in which we must deal 
with a constitutional amendment to require a balanced Federal budget. 
It is not a partisan issue. It takes two-thirds of the Senate present 
and voting or it takes 67 here in the Senate to pass a constitutional 
amendment and that means that both sides of the aisle, both Democrat 
and Republican, must agree, both in what we present in its image and in 
its wisdom to assure the passage of such a Senate joint resolution 
before it can go before the States for ratification.
  So I recognize both Senator Thurmond and certainly Senator Simon; 
also, now chairman of the Judiciary Committee, Senator Orrin Hatch of 
the State of Utah; Senator Howell Heflin, Senator Carol Moseley-Braun, 
and Senator Hank Brown, the chairman of the Constitution Subcommittee, 
all of them very active in the Judiciary Committee. Those will be the 
Senators holding the hearing tomorrow before which I will testify on a 
version of that amendment of the kind that I have worked on now for 
over 12 years to assure that there would come a day--and I believe that 
day will occur within the month--when this Senate will pass a balanced 
budget amendment to our Constitution, as I believe the House will pass, 
then to send it forth to the States for their consideration and their 
ratification.
  I also want to note our new Senate colleagues who have shown 
leadership and enthusiasm on this legislation when they were in the 
other body, including the Senators from Arizona [Mr. 
[[Page S412]] 
Kyl], from Oklahoma [Mr. Inhofe], and from Maine [Ms. 
Snowe].
  Why is this amendment so important? Well, in brief, it becomes 
obvious when you look at the number of years that our Government and 
this Senate has operated in deficit--34 deficits in the last 35 years, 
and 57 deficits in the last 65 years.
  Yes, this Government and this Congress is clearly out of the habit of 
even being able to deal with the concept of balancing the Federal 
budget on an annual basis and being fiscally responsible instead of 
mounting up the billions and billions of dollars of debt on which it 
now costs over $200 billion a year just to finance the net interest 
alone.
  The longer we wait to mandate a balanced budget, the more difficult 
it becomes. We cannot postpone this amendment any longer.
  That is why in the Contract With America with the new Members of 
Congress that were just put in place in the House, those who campaigned 
on it, the balanced budget amendment became the No. 1 issue. The 
American people understand. They understand the wisdom of balancing 
their own budgets, whether it is the budget of their family or the 
budget of their business. They know it is only good fiscal sense and 
now they demand it of their Government and I think this Congress can 
and will deliver.
  And so it is a proud moment when I will be able to stand on the floor 
with these other Senators and debate it and offer up
 an amendment that we think will be ratified by the States in very 
short order. And we will begin the very important march, the very 
important process, of then crafting a budget and a procedure that will 
bring us to a balanced budget that will demonstrate the kind of fiscal 
responsibility that our people have asked for for so long.

  Some folks tell us, ``If Congress would just do its job, you wouldn't 
need a constitutional amendment.'' But that's the point--too many 
Members of Congress--and too many Presidents--have not thought 
balancing the budget was in their job description. That's why we need 
to add balancing the budget to that part of our job description that 
can't be repealed, delayed, suspended, or ignored at will--the 
Constitution.
  When we pass this amendment, it will go to every State Capitol, and 
we will begin one of the great debates of our age. That's what this 
vote is really about, engaging the American people in the most sweeping 
public debate about the appropriate size, scope, and role of the 
Federal Government since the original Bill of Rights was sent to the 
States by the First Congress.
  The question is clear: Do we trust the people with that debate? This 
Senator does. That's why we have this process of amending the 
Constitution, because the Constitution is the people's law, not the 
Government's law, and because the people have a right to take part in 
such a momentous debate.
  A constitution is a document that enumerates and limits the powers of 
the Government to protect the basic rights of the people. Within that 
framework, it sets forth just enough procedures to safeguard its 
essential operations. It deals with the most fundamental 
responsibilities of the Government and the broadest principles of 
governance.
  Our balanced budget amendment, Senate Joint Resolution 1, fits 
squarely within that constitutional tradition.
  The case for the balanced budget amendment can be summed up as 
follows: The ability of the Federal Government to borrow money from 
future generations involves decisions of such magnitude that they 
should not be left to the judgments of transient majorities.
  The right at stake is the right of the people--today and in future 
generations--to be protected from the burdens and harms created when a 
profligate government amasses an intolerable debt.
  The Framers of the Constitution recognized that fundamental right. I 
return once more to the words of Thomas Jefferson, who explicitly 
elevated balanced budgets to this level of morality and fundamental 
rights when he said:

       The question whether one generation has the right to bind 
     another by the deficit it imposes is a question of such 
     consequence as to place it among the fundamental principles 
     of government. We should consider ourselves unauthorized to 
     saddle posterity with our debts, and morally bound to pay 
     them ourselves.

  Actually, deficit spending is a form of taxation without 
representation. Americans are told that deficits are Uncle Sam's way of 
giving them a free lunch, providing $1.15 worth of Government for just 
$1 in taxes. In reality, interest on the gross debt adds another 20 
cents in spending above and beyond every $1 the Government spends on 
benefits, goods, services, and overhead.
  Deficits are really the cruellest tax of all, since they never
   stop taking the taxpayers' money. Americans are paying now, with a 
sluggish economy, for the Government's past addiction to debt. Unless 
things change, the next generation will pay even more dearly.

  The President's own 1995 budget, in its ``Analytical Perspectives'' 
volume, projected that future generations will pay as much as 82 
percent of their lifetime incomes in taxes, under the current policies 
of borrow-and-spend.
  Federal budget deficits are the single biggest threat to our economic 
security. The Federal debt now totals $4.7 trillion, or about $18,000 
for every man, woman, and child in America, and is growing.
  As deficits grow, as the national debt mounts, so do the interest 
payments made to service that debt. Besides crowding out other fiscal 
priorities, these amount to a highly regressive transfer of wealth.
  In fact, interest payments to wealthy foreigners make up the largest 
foreign aid program in history. According to the President's budget, in 
1993, the U.S. Government sent $41 billion overseas in interest 
payments. That's almost exactly twice as much as all spending on actual 
international programs, including foreign aid and operating our 
embassies abroad, which totaled less than $21 billion.
  Annual gross interest on the debt now runs about $300 billion, making 
it now the second largest item of Federal spending, and equal to about 
half of all personal income taxes.
  There are many issues relating to this amendment, which will be aired 
fully and fairly when the Senate considers Senate Joint Resolution 1 
later this month. At that time, we will again recall our almost 4,000 
pages of legislative history over the last 15 years. Every question has 
been answered, every objection has been dealt with.
  Senate Joint Resolution 1 has a history; it has a pedigree. It is the 
bipartisan, bicameral, consensus that has been looked at by 
constitutional scholars, economists, public interest groups, and 
members of both bodies. This amendment has been scrubbed and fine-
tuned. It passes constitutional muster.
  It's often said that Congress underestimates the wisdom of the 
people. Well, the people have spoken once again, and it's time for 
Senators to realize that, today, as is usually the case, good policy is 
good politics. The American people understand the balanced budget 
amendment, they want Congress to pass it, and they are right.
                                 ______

      By Mr. THURMOND (for himself, Mr. Dole, and Mr. Simpson):
  S.J. Res. 2. A joint resolution proposing an amendment to the 
Constitution of the United States to allow the President to veto items 
of appropriation; to the Committee on the Judiciary.


                       line-item veto legislation

  Mr. THURMOND. Mr. President, I rise today with the distinguished 
Majority Leader, Senator Dole, to introduce a proposed constitutional 
amendment which would give authority to the President to disapprove 
specific items of appropriation on any Act or joint resolution 
submitted to him. This authority is commonly referred to as line item 
veto.
  The Congress must address runaway spending if we are truly going to 
establish a sound fiscal policy for this Nation.
  As of November 16, 1994, the Federal debt stood at $4.6 trillion and 
payment of interest on the debt is the second largest item in the 
budget. The budget deficit for fiscal year 1993 was over $250 billion.
  Recently, Majority Leader Dole and Speaker Gingrich met with 
President Clinton concerning legislative priorities in the 104th 
Congress. I am pleased to note that granting Presidential authority for 
line item was favorably discussed. Also, the Chairman 
[[Page S413]] 
of the Senate Judiciary Committee, Senator Hatch, who 
once opposed a constitutional amendment on line item veto authority, 
now has come to appreciate the merit of this worthy proposal.
  I believe the Judiciary Committee should quickly act on this 
important measure and send it to the Senate. In April, 1990, the 
Judiciary Committee favorably reported my proposed constitutional 
amendment on line item veto authority which was the same legislation 
that I am introducing today. Before that vote in 1990, the Judiciary 
Committee last approved a proposed constitutional amendment to grant 
the President line item veto authority in 1884.
  The Congress regularly enacts appropriations measures, totaling 
billions and billions of dollars. Too often there are items tucked away 
in these bills that represent millions of dollars that would have very 
little chance of passing on their own merit. Yet, the President has no 
discretion to weed out these unnecessary expenditures and must approve 
or disapprove the bill in its entirety.
  Presidential authority for line item veto is a badly needed fiscal 
tool which would provide valuable means to reduce and restrain 
excessive appropriations. It should be emphasized that my proposal 
grants the President power to approve or disapprove individual items of 
appropriation and does not grant power to simply reduce the dollar 
amount legislated by the Congress.
  Forty-three governors currently have, in one form or another, the 
power to reduce or eliminate items or provisions in appropriation 
measures. Surely, the President should have a form of discretionary 
authority that 43 governors now have to check unbridled spending.
  It is my hope that this Congress will swiftly approve line item veto 
and send a clear message to the American people that we are making a 
serious effort to get our Nation's fiscal house in order.
  I urge my colleagues to support this proposal and our efforts to make 
it part of our Constitution.
  Mr. President, I ask unanimous consent that this proposal be printed 
in the Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:

                              S.J. Res. 2

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, (two-thirds 
     of each House concurring therein), That the following article 
     is proposed as an amendment to the Constitution, which shall 
     be valid to all intents and purposes as part of the 
     Constitution when ratified by the legislatures of three-
     fourths of the several States within seven years after the 
     date of its submission to the States for ratification:

                              ``Article --

       ``The President may disapprove any item of appropriation in 
     any Act or joint resolution. If an Act or joint resolution is 
     approved by the President, any item of appropriation 
     contained therein which is not disapproved shall become law. 
     The President shall return with his objections any item of 
     appropriation disapproved to the House in which the Act or 
     joint resolution containing such item originated. The 
     Congress may, in the manner prescribed under section 7 of 
     article I for Acts disapproved by the President, reconsider 
     any item of appropriation disapproved under this article.''.
                                 ______

      By Mr. KYL:
  S.J. Res. 3. A joint resolution proposing an amendment to the 
Constitution of the United States to provide that expenditures for a 
fiscal year shall neither exceed revenues for such fiscal year nor 19 
per centum of the Nation's Gross National Product for the last calendar 
year ending before the beginning of such fiscal year; to the Committee 
on the Judicairy.


                balanced budget spending limitation act

 Mr. KYL. Mr. President, I introduce the Balanced Budget/Spending 
Limitation Amendment [BBSLA], an initiative which is designed to end 
Congress' addiction to overspending and give the Nation a chance at a 
healthy economic future.
  It is an initiative which has been endorsed in the past by such 
taxpayer groups as Citizens Against Government Waste, Citizens for Tax 
Reform, and the National Tax Limitation Committee, not to mention the 
Institute for Research on the Economics of Taxation among others.
  Like other balanced budget amendments which will be considered, the 
BBSLA requires a balanced Federal budget. It is unique, however, in two 
other respects--both substantively and in its objectives.
  Substantively, it includes a Federal spending limitation. It limits 
spending to 19 percent of Gross National Product, which is roughly the 
level of tax revenues the Federal Government has collected annually for 
the last generation.
  With respect to objectives, the BBSLA is designed to promote both 
fiscal responsibility and economic growth.
  Just before Congress considered balanced budget amendments in 1992, 
the General Accounting Office released a report predicting that, based 
on then-current trends, Federal spending could grow to 42.4 percent of 
GNP by the year 2020. That would be up from about 23 percent of GNP 
today. Slower economic growth would result, and combined with a growing 
debt burden, the next generation could expect no improvement in its 
standard of living.
  A report released the year before by Stephen Moore of the Institute 
for Policy Innovation came to similar conclusions about the proportion 
of GNP that the Government would command if current trends continue. 
The report concluded that:

       Meaningful, constitutional limits on the growth of spending 
     are needed to bring the size of government down to 
     economically sustainable levels. One way to achieve this end 
     would be to limit the percentage of GNP which the government 
     can command from the private sector.

  The idea of spending limits is not new. Nineteen States across the 
country have some form of spending limitations, in statute or in their 
constitutions. California, for example, adopted a constitutional limit 
in 1979, limiting yearly growth in appropriations to the percentage 
increase in population and inflation.
  Tennessee adopted its constitutional limit in 1978, limiting the 
growth in appropriations to the growth in State personal income. Texas, 
also in 1978, adopted a constitutional limit, tying the growth in 
biennial appropriations to the rate of growth of personal State income.
  The BBSLA is modeled after Arizona's spending limitation, which I 
helped draft in 1974 with then-State Senate Majority Leader Sandra Day 
O'Connor, now Associate Justice of the U.S. Supreme Court; State 
Senator Ray Rottas, who went on to become
 State Treasurer of Arizona; Clarence Duncan, a prominent Arizona 
attorney; and a handful of others. The spending limit, set at 7 percent 
of State personal income, was approved by an overwhelming 78 percent of 
the State's voters.

  Combining a balanced budget requirement with a spending limitation 
achieves two things: first, it treats the cause of big deficits--
excessive government spending--and not just the symptoms of that 
problem--high taxes and excessive borrowing. Our problem is not that 
Congress doesn't tax enough; it is that Congress spends too much.
  Moreover, this approach recognizes that the only way Congress really 
can balance the budget is by limiting Federal spending to the level of 
revenues that the economy has been willing to bear.
  Over the last 40 years--in good economic times and bad, despite tax 
increases and tax cuts, and under presidents of both political 
parties--revenues to the Treasury have remained relatively constant at 
about 19 percent of GNP.
  That is because changes in the tax code change people's behavior. Low 
taxes stimulate the economy, resulting in more taxable income and 
transactions, and more revenue to the Treasury. Higher taxes discourage 
work, production, investment and savings, so revenues are always less 
than projected. Although tax cuts and tax rate increases may create 
temporary declines and surges in revenue, revenues always adjust at 
roughly the same percentage of GNP as people adjust their behavior to 
the new tax laws. So you cannot reduce the deficit and balance the 
budget by raising taxes.
  The point is, if revenue as a share of GNP remains relatively steady 
no matter what Congress does, the only way to really raise revenues is 
to grow the economy first. In other words, 19 percent of a larger GNP 
represents more revenue to the Treasury than 19 percent of a smaller 
GNP.
  [[Page S414]] 
  The BBSLA thus attacks the cause of deficits head on--
it limits spending. And, by linking spending to the size of the 
economy--as measured by GNP--it not only recognizes the reality that a 
growing economy produces more revenue, but also gives Congress an 
incentive to support policies that ensure that economy is indeed 
healthy and growing. Only a growing economy--as measured by GNP--would 
increase the dollar amount that Congress is allowed to spend. So, if 
Congress wants to spend more money, it would have to support policies 
that promote economic growth first.
  Mr. President, it appears that a balanced budget amendment will pass 
this year. It is now time to ask which balanced budget amendment best 
meets the Nation's long-term needs; which amendment best addresses the 
root causes of the Nation's budget problems.
  Mr. President, I ask unanimous consent that the text of the joint 
resolution be printed in the Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:

                              S.J. Res. 3

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled (two-thirds of 
     each House concurring therein), That the following article is 
     proposed as an amendment to the Constitution of the United 
     States, which shall be valid to all intents and purposes as 
     part of the Constitution when ratified by the legislatures of 
     three-fourths of the several States within seven years after 
     the date of its submission for ratification:

                              ``Article --

       ``Section 1. Except as provided in this article, outlays of 
     the United States Government for any fiscal year may not 
     exceed its receipts for that fiscal year.
       ``Section 2. Expect as provided in this article, the 
     outlays of the United States Government for a fiscal year may 
     not exceed 19 per centum of the Nation's gross national 
     product for that fiscal year.
       ``Section 3. The Congress may, by law, provide for 
     suspension of the effect of sections 1 or 2 of this article 
     for any fiscal year for which three-fifths of the whole 
     number of each House shall provide, by a roll call vote, for 
     a specific excess of outlays over receipts or over 19 per 
     centum of the Nation's gross national product.
       ``Section 4. Total receipts shall include all receipts of 
     the United States except those derived from borrowing and 
     total outlays shall include all outlays of the United States 
     except those for the repayment of debt principal.
       ``Section 5. This article shall apply to the second fiscal 
     year beginning after its ratification and to subsequent 
     fiscal years, but not to fiscal years beginning before 
     October 1, 2001.''.
                                 ______

      By Mr. THURMOND:
  S.J. Res. 4. A joint resolution proposing an amendment to the 
Constitution relating to a Federal balanced budget; to the Committee on 
the Judiciary.


                BALANCED BUDGET CONSTITUTIONAL AMENDMENT

  Mr. THURMOND. Mr. President, I rise today to introduce legislation to 
amend the U.S. Constitution to require the Federal Government to 
achieve and maintain a balanced budget.
  This legislation is essentially the same as Senate Joint Resolution 8 
which I introduced in the 103d Congress and is similar to an earlier 
bill in March of 1986 which received 66 of 67 votes needed for Senate 
approval. Also, the Senate passed a balanced budget amendment in 1982 
but was defeated in the House of Representatives. Simply stated, this 
legislation calls for a constitutional amendment requiring that outlays 
not exceed receipts during any fiscal year. Also, Congress would be 
allowed by three-fifths vote to adopt a specific level of deficit 
spending. Further, the Congress could waive the amendment during time 
of war. Finally, the amendment would also require that any bill to 
increase taxes be approved by a majority of the whole number of both 
Houses.
  It is clear that the budget deficit is a top priority with the 
American people. Additionally, this legislation would be a key step to 
reduce and ultimately eliminate the Federal deficit. The interest and 
attention which this problem has attracted speaks volumes as to the 
need for solutions to our Nation's runaway fiscal policy.
  Our Constitution has been amended only 27 times in over 200 years. 
Amendment to the supreme law of our land is a serious endeavor which 
should only be reserved to protect the fundamental rights of our 
citizens or to ensure the survival of our system of government.
  Mr. President, I believe that the very survival of our system of 
government is presently being jeopardized by an irrational and 
irresponsible pattern of spending which has become firmly entrenched in 
Federal fiscal policy over the last half-century. As a result, this 
fiscal policy has gone a long way toward seriously threatening the 
liberties and opportunities of our present and future citizens.
  As of November 16, 1994, the Federal debt is over $4.6 trillion. Per 
capita, the Federal debt is over $16,000. This means that it would cost 
every man, woman and child in America $16,000 each to pay off the 
public debt. The Federal deficit for fiscal year 1993 was $255 billion. 
In order to solve the deficit problem, congressional spending must be 
addressed.
  I have believed for many years that the way to reverse the misguided 
direction of the fiscal government is by amending the Constitution to 
mandate, except in extraordinary circumstances, balanced Federal 
budgets. I know many other Members of Congress join me in wanting to 
establish balanced budgets as a fiscal norm, rather than a fiscal 
anomaly.
  Those who oppose a balanced budget constitutional amendment and opt 
instead for self-imposed congressional restraint must face the fact 
that this restraint has not been forthcoming. Importantly, the Congress 
has only balanced the Federal budget one time in the last 32 years. 
Meanwhile, the level of annual budget deficits has grown enormously 
over this period of time. Continued deficit spending by the Federal 
Government will undoubtedly lead the Nation into more periods of 
economic stagnation and decline. The tax burdens which today's deficits 
will place on future generations of American workers is staggering. We 
must reverse the fiscal course of the Federal Government and a 
constitutional amendment is the only effective way to accomplish it. It 
is time for Congress to understand the simple fact that a government 
cannot survive by continuing to spend more money than it takes in.
  Mr. President, the balanced budget amendment proposal has the support 
of many of our colleagues in the Congress, a Congress which holds 
diverse views on many issues. Supporters of a balanced budget amendment 
share an unyielding commitment to restoring sanity to a spending 
process which is out of control and hurling our Nation headlong toward 
economic disaster.
  I urge my colleagues to support this proposal so we may submit this 
important constitutional amendment to the States for ratification.
                                 ______

      By Mr. THURMOND:
  S.J. Res. 5. A joint resolution proposing an amendment to the 
Constitution of the United States; to the Committee on the Judiciary.


   forfeit of office by government officials and judges convicted of 
                                felonies

  Mr. THURMOND. Mr. President, today I am introducing a proposed 
amendment to the Constitution which would require Federal judges and 
certain other officers of the United States to forfeit their offices 
upon conviction of a felony.
  I believe that the citizens of the United States will agree that 
those who have been convicted of felonies should not be allowed to 
continue to occupy positions of trust and responsibility in our 
Government. Nevertheless, under current constitutional law it is 
possible for certain officers of the United States to continue to 
receive a salary even after being convicted of a felony. If they are 
unwilling to resign, the only method which may be used to remove them 
from the Federal payroll is impeachment, a process which can occupy a 
great deal of valuable time and resources of the Congress.
  Currently, the Congress has the power to impeach officers of the 
Government who have committed treason, bribery, or other high crimes 
and misdemeanors. However, when a court has found an official guilty of 
a serious crime, it should not be necessary for Congress to then 
essentially re-try the official before he or she can be removed from 
the Federal payroll.
  The constitutional amendment which I am introducing will provide that 
any officer of the United States who is appointed by the President and 
confirmed 
[[Page S415]] 
by the Senate, upon conviction of a felony and exhaustion 
of all direct appeals, shall be removed from office and shall lose all 
salary and benefits arising from service in such office.
  Mr. President, I urge my colleagues to carefully consider this 
proposal and ask unanimous consent that it be printed in the Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:

                              S.J. Res. 5

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, (two-thirds 
     of each House concurring therein), That the following article 
     is proposed as an amendment to the Constitution of the United 
     States, which shall be valid to all intents and purposes as 
     part of the constitution if ratified by the legislatures of 
     three-fourths of the several States within seven years after 
     its submission to the State for ratification:

                              ``Article--

       ``Any officer of the United States appointed by the 
     President with the advice and consent of the Senate, upon 
     conviction of a felony, shall forfeit office and all 
     prerogatives, benefits, or compensation thereof.''.
                                 ______

      By Mr. THURMOND (for himself, Mr. Faircloth, Mr. Lott, and Mr. 
        Shelby):
  S.J. Res. 6. A joint resolution proposing an amendment to the 
Constitution of the United States relating to voluntary school prayer; 
to the Committee on the Judiciary.


                   voluntary school prayer amendment

  Mr. THURMOND. Mr. President, today, I am introducing, along with 
Senators Faircloth, Lott and Shelby, the voluntary school prayer 
constitutional amendment. This bill is identical to S.J. Res. 73 which 
I introduced in the 98th Congress at the request of the President and 
reintroduced in the 99th, 100th, 101st, 102d, and 103d Congress.
  This proposal has received strong support from our colleagues on both 
sides of the aisle and is of vital importance to our Nation. It would 
restore the right to pray voluntarily in public schools--a right which 
was freely exercised under our Constitution until the 1960's, when the 
Supreme Court ruled to the contrary.
  Also, in 1985, the Supreme Court ruled an Alabama statute 
unconstitutional which authorized teachers in public schools to provide 
a period of silence, for meditation or voluntary prayer at the 
beginning of each school day. As I stated when that opinion was issued 
and repeat again--the Supreme Court has too broadly interpreted the 
establishment clause of the first amendment and, in doing so, has 
incorrectly infringed on the rights of those children--and their 
parents--who wish to observe a moment of silence for religious or other 
purposes.
  Until the Supreme Court ruled in the Engel and Abington School 
District decisions, the establishment clause of the first amendment was 
generally understood to prohibit the Federal Government from officially 
approving, or holding in special favor, any particular religious faith 
or denomination. In crafting that clause, our Founding Fathers sought 
to prevent what has originally caused many colonial Americans to 
emigrate to this country--an official, State religion. At the same 
time, they sought, through the free exercise clause, to guarantee to 
all Americans the freedom to worship God without government 
interference or restraint. In their wisdom, they recognized that true 
religious liberty precludes the Government from both forcing and 
preventing worship.
  As Supreme Court Justice William Douglas once stated: ``We are a 
religious people whose institutions presuppose a Supreme Being.'' 
Nearly every President since George Washington has proclaimed a day of 
public prayer. Moreover, we, as a Nation, continue to recognize the 
Deity in our Pledge of Allegiance by affirming that we are a Nation 
``under God.'' Our currency is inscribed with the motto, ``In God We 
Trust''. In this body, we open the Senate and begin our workday with 
the comfort and stimulus of voluntary group prayers--such a practice 
has been recently upheld as constitutional by the Supreme Court. It is 
unreasonable that the opportunity for the same beneficial experience is 
denied to the boys and girls who attend public schools. This situation 
simply does not comport with the intentions of the framers of the 
Constitution and is, in fact, antithetical to the rights of our 
youngest citizens to freely exercise their respective religions. It 
should be changed, without further delay.
  The Congress should swiftly pass this resolution and send it to the 
States for ratification. This amendment to the Constitution would 
clarify that it does not prohibit vocal, voluntary prayer in the public 
school and other public institutions. It emphatically states that no 
person may be required to participate in any prayer. The Government 
would be precluded from drafting school prayers. This well-crafted 
amendment enjoys the support of an overwhelming number of Americans. 
During the 98th Congress, we were only 11 votes short of the 67 
necessary for approval in the Senate.
  I strongly urge my colleagues to support prompt consideration and 
approval of this joint resolution during this Congress and ask 
unanimous consent that it be printed in the Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:

                              S.J. Res. 6

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, (two-thirds 
     of each House concurring therein), That the following article 
     is hereby proposed as an amendment to the Constitution of the 
     United States, which shall be valid to all intents and 
     purposes as part of the Constitution if ratified by the 
     legislatures of three-fourths of the several States within 
     seven years from the date of its submission to the States by 
     the Congress:

                              ``Article --

       ``Nothing in this Constitution shall be construed to 
     prohibit individual or group prayer in public schools or 
     other public institutions. No person shall be required by the 
     United States or by any State to participate in prayer. 
     Neither the United States nor any State shall compose the 
     words of any prayer to be said in public schools.''.
                                 ______

      By Mr. HATCH (for himself, Mr. Brown, Mr. Abraham, Mr. Lott, Mr. 
        Kempthorne, Mr. Shelby, Mr. Smith and Mr. Craig Thomas):
  S.J. Res. 9. A joint resolution proposing an amendment to the 
Constitution of the United States barring Federal unfunded mandates to 
the States; to the Committee on the Judiciary.


           unfunded federal mandates constitutional amendment

  Mr. HATCH. Mr. President, I am today introducing in the Senate a 
joint resolution proposing a constitutional amendment that would grant 
States and localities relief from any further unfunded Federal 
mandates.
  This amendment would restore the balance between Federal and State 
power that the Constitution was meant to preserve, but that decades of 
Federal heavyhandedness have upset. Under this amendment--which would 
apply to statutes enacted after its ratification--unfunded mandates 
would not be enforceable against States and localities unless Congress 
so specified through a separate supermajority vote.
  This is not a conservative or a liberal issue. It is an issue of 
effective, efficient government. Freeing States and localities of the 
burden of unfunded mandates will enable our State and local 
representatives to carry out the agenda--whether liberal or 
conservative--that their people have elected them to carry out.
  Let me emphasize that this joint resolution is not intended as an 
alternative to the unfunded mandates legislation that Senator 
Kempthorne is offering as S. 1. I fully support Senator Kempthorne's 
bill, and I am pleased to have Senator Kempthorne's support for this 
joint resolution. Senator Kempthorne's bill will be a major first step 
in providing real relief from unfunded mandates. This amendment will 
provide the next big step.
  No matter is more basic to our constitutional structure than the 
relation between the Federal and State governments. We should not 
tinker with the Constitution. But we should also not accept, much less 
acquiesce in, the fundamental damage that has been inflicted on our 
constitutional structure. It is time to restore this structure.
  Attached is a section-by-section analysis of this unfunded mandates 
amendment.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
  [[Page S416]] 
  Senator Hatch's Constitutional Amendment on Unfunded 
                  Mandates Section-by-Section Analysis

       This amendment would impose dramatic new limits on the 
     federal government's power to subject States and localities 
     to unfunded mandates. The amendment would bar direct unfunded 
     mandates, except where Congress by a \2/3\ vote has specified 
     that States and localities should be subject to those 
     mandates. It would also bar conditional mandates on the 
     receipt of federal assistance by States and localities--e.g., 
     in spending programs--unless the condition is directly and 
     substantially related to the specific subject matter of the 
     federal assistance (and again subject to a \2/3\ override). 
     The amendment would also codify the Supreme Court's 1992 
     ruling in New York v. United States, 112 S. Ct. 2408 (1992). 
     The amendment would apply only prospectively--that is, only 
     to statutes that become effective after it has been ratified.
       Here is a section-by-section analysis:
       Section 1. Section 1 has two parts. First, it provides that 
     federal statutes cannot impose or authorize direct unfunded 
     mandates on States and localities. Were this the only 
     provision, Congress would then simply condition all of its 
     mandates on assistance that States could not afford to 
     reject. Accordingly, it is also necessary to limit Congress' 
     power to impose conditional mandates (e.g., as part of a 
     spending program). This is done through the second part of 
     section 1. The requirement that a condition be ``directly and 
     substantially related to the specific subject matter of the 
     assistance'' is a significant improvement over existing 
     constitutional case law, which requires only that conditions 
     be ``reasonably related'' to the ``purpose'' of the 
     assistance.
       Section 2. Section 2 provides an exception to section 1: 
     where Congress so specifies by a \2/3\ vote, unfunded 
     obligations or loosely related conditions may be imposed on 
     States and localities. This provision ensures that in those 
     cases in which mandates are truly warranted, they can be 
     adopted.
       Section 3. Section 3 codifies the Supreme Court's ruling in 
     New York v. U.S., 112 S. Ct. 2408, 2435 (1992), that under 
     the Tenth Amendment the ``Federal Government may not compel 
     the States to enact or administer a federal regulatory 
     program.''
       Section 4. Section 4 provides that the term ``State'' 
     applies to State agencies and to cities and counties.
       Section 5. Section 5 makes clear that the amendment would 
     apply only prospectively.
       Section 6. Section 6 is designed to make clear that courts 
     could not order federal funding as a remedy for a violation 
     of section 1. Instead, the consequence of a violation is that 
     the obligation is not enforceable against the State or 
     locality.
       Section 7. Section 7 protects against the amendment somehow 
     being misconstrued to expand federal power.
                                 ______

      By Mrs. FEINSTEIN:
  S.J. Res. 10. A joint resolution to designate the visitors center at 
the Channel Islands National Park, California, as the ``Robert J. 
Lagomarsino Visitors Center''; to the Committee on Energy and Natural 
Resources.


         the robert J. lagomarsino visitors center act of 1995
  Mrs. FEINSTEIN. Mr. President, today I am introducing a resolution to 
designate the visitors center at the Channel Islands National Park, 
California, as the ``Robert J. Lagomarsino Visitors Center.'' I am 
pleased to say Congressman Elton Gallegly is introducing the measure in 
the House of Representatives.
  The legislation is identical to S.J. Res. 152 and H.J. Res. 67 which 
we sponsored in the 103d Congress. The House of Representatives passed 
the measure in 1993 as part of H.R. 3252, the West Virginia 
Conservation Act. The Senate Energy and Natural Resources Committee 
also approved the measure last year, but the full Senate was unable to 
act before the 103d Congress adjourned.
  As some of my colleagues will remember, Robert Lagomarsino served in 
the House of Representatives for 18 years, from 1974 to 1992, 
representing the nineteenth district of California which then included 
Santa Barbara County and part of Ventura County. A member of the House 
Interior and Insular Affairs Committee and the Subcommittee on National 
Parks and Public Lands, Bob Lagomarsino was active on a
 wide range of natural resource issues, including the Alaska National 
Interest Lands Act, the Strip Mine Control Act, the California 
Wilderness Act, the Sespe Condor Rivers and Range Act, and hundreds of 
other bills.

  But perhaps Bob Lagomarsino is most closely associated with 
protection of the Santa Barbara Channel and the establishment of the 
Channel Islands National Park. Even before his election to the House of 
Representatives, Bob Lagomarsino worked to protect the fragile Channel 
Islands and their remarkable scenery and wildlife. As a Member of the 
California State Senate, Bob Lagomarsino authored the bill creating a 
state sanctuary around the Channel Islands. As a Member of the House, 
Bob Lagomarsino sponsored the legislation which expanded the existing 
Channel Islands National Monument and redesignated the area as a 
National Park. He then worked hard to secure the funding necessary to 
complete the park. Additionally, as a Member of the House, he fought to 
protect the Channel Islands National Park from potential oil spills, 
successfully persuading oil companies not to ship Alaskan oil through 
the Santa Barbara Channel and opposing new federal oil leases in the 
area.
  Given Bob Lagomarsino's long association with protection of the 
Channel Islands, I believe it is most fitting for us to designate the 
visitors center at the Channel Islands National Park as the ``Robert J. 
Lagomarsino Visitors Center''. I hope my colleagues in the 104th 
Congress will join me in recognizing the contributions of this 
distinguished Californian and enact this measure promptly.
  Mr. President, I ask unanimous consent that the text of the joint 
resolution be printed at this point in the Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:

                              S.J. Res. 10

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled,

     SECTION 1. DESIGNATION.

       The visitors center at the Channel Islands National Park, 
     California, is designated as the ``Robert J. Lagomarsino 
     Visitors Center''.

     SEC. 2. LEGAL REFERENCE.

       Any reference in any law, regulation, document, record, 
     map, or other paper of the United States to the visitors 
     center referred to in section 1 is deemed to be a reference 
     to the ``Robert J. Lagomarsino Visitors Center.''
     

                          ____________________