Congressional Record, Volume 141 Issue 1 (Wednesday, January 4, 1995)

[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.

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.

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

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

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

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.

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

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.'

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.

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.

SEC. 502. PERSONAL AND CONSULTING SERVICES.

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.

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.

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.

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

``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.''

____________________