[Congressional Record Volume 141, Number 4 (Monday, January 9, 1995)]
[Senate]
[Pages S653-S679]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. SHELBY:
  S. 175. A bill to amend title 4, United States Code, to declare 
English as the official language of the Government of the United 
States; to the Committee on Governmental Affairs.


     legislation to make english the official language of the u.s. 
                               government

 Mr. SHELBY. Mr. President, today I am introducing legislation 
to designate English as the official language of the U.S. Government.
  Last year, tax forms were printed in a language other than English 
for the first time in the 131 year history of the IRS. In addition, the 
Immigration and Naturalization Service is now conducting non-English 
language citizenship ceremonies. I find these policies very disturbing. 
The Government is sending a clear message that to live in the United 
States, one must not learn the English language.
  I believe such Government policies establish a dangerous and 
expensive precedent. The idea that the U.S. Government can accommodate 
better than 300 foreign languages now found in America, is absurd.
  In order to assimilate the various cultures and ethnic groups that 
comprise this great land, we must use English. Of all the different 
homelands and dialects introduced to the United States in the 18th 
century, the language the immigrants choose was English. They did not 
choose French, German, or Spanish.
  A common, established language allows individuals to engage in 
conversation, commerce and of course political discussion. A common 
language serves as a bridge unifying a community by opening the lines 
of communication. In this diverse land of ours, English is the common 
line of communication we share. English is what allows us to teach, 
learn about and appreciate one another. It is therefore important that 
the Federal Government formally recognize English as the language of 
Government and pursue efforts to help new citizens assimilate and learn 
the English language.
  The inability to communicate fosters frustration and resentment. By 
encouraging people to communicate in a common language, we actually 
help them progress in society. A common language allows individuals to 
take advantage of the social and economic opportunities America has to 
offer. The ability to maintain a law abiding citizenry is hindered and 
the ability to offer true representation is certainly hampered if 
individuals cannot communicate their opinions.
  There might be concerns that this legislation will deprive non-
English speaking individuals of certain rights or services. Let me 
assure you it will not. This legislation does not deny individuals 
their right to use native languages in their private lives nor does it 
deny critical services. This bill only affects the official functions 
of the U.S. Government. If anything, this legislation reflects the need 
to provide services that help non-English speaking people learn English 
and assimilate to America. Participatory democracy in this country 
simply requires people learn the English language.
  I strongly urge my colleagues to join in this effort to establish a 
national language policy for the U.S. Government by cosponsoring the 
Language of Government Act of 1995.
                                 ______

      By Mr. BUMPERS:
  S. 176. A bill to require the Secretary of the Interior to convey the 
Corning National Fish Hatchery to the State of Arkansas; to the 
Committee on Environment and Public Works.


       the corning national fish hatchery conveyance act of 1995

  Mr. BUMPERS. Mr. President, today, I am introducing legislation that 
would transfer the property rights in the Corning National Fish 
Hatchery from the Federal Government to the State of Arkansas. In 1983, 
the Fish and Wildlife Service closed this hatchery because of budget 
constraints. Because the State of Arkansas was interested in 
maintaining the Corning facility as part of its State hatchery system, 
the U.S. Fish and Wildlife Service signed a Memorandum of Understanding 
with the Arkansas Game and Fish Commission transferring the operation 
of the Corning Hatchery to the Arkansas Game and Fish Commission. The 
hatchery has even been renamed the William H. Donham State Fish 
Hatchery.
  Mr. President, it is time to give the State of Arkansas clear title 
to this property. The State has been operating and maintaining it for 
over 10 years [[Page S654]] without any Federal funding and it has 
become an important component of the State's fisheries program. The 
proposed transfer not only has the support of the Arkansas Game and 
Fish Commission but also the U.S. Fish and Wildlife Service.
  I urge my colleagues to join me in support of this legislation and 
look forward to its speedy passage.
  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. 176

       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 ``Corning National Fish 
     Hatchery Conveyance Act of 1995''.

     SEC. 2. CONVEYANCE OF THE CORNING NATIONAL FISH HATCHERY TO 
                   THE STATE OF ARKANSAS.

       (a) Conveyance Requirement.--The Secretary of the Interior 
     shall convey to the State of Arkansas, without reimbursement 
     and by no later than December 31, 1995, all right, title, and 
     interest of the United States in and to the property 
     described in subsection (b), for use by the Arkansas Game and 
     Fish Commission as part of the State of Arkansas fish culture 
     program.
       (b) Property Described.--The property refereed to in 
     subsection (a) is the property formally known as the Corning 
     National Fish Hatchery, (popularly known as the William H. 
     Donham State Fish Hatchery), located one mile west of 
     Corning, Arkansas, on Arkansas State Highway 67 in Clay 
     County, Arkansas, consisting of 137.34 acres, (more or less) 
     and all improvements and related personal property under the 
     control of the Secretary that is located on that property, 
     including buildings, structures, and equipment.
       (c) Reversionary Interest of United States.--All right, 
     title, and interest in property described in subsection (b) 
     shall revert to the United States if the property ceases to 
     be used as part of the State of Arkansas fish culture 
     program. The State of Arkansas shall ensure that the property 
     reverting to the United States is in substantially the same 
     or better condition as the time of the transfer.
                                 ______

      By Mr. McCAIN:
  S. 177. A bill to repeal the Ramspeck Act; to the Committee on 
Governmental Affairs.


                    the ramspeck repeal act of 1995

 Mr. McCAIN. Mr. President, I introduce the Ramspeck Repeal 
Act, which would terminate the Ramspeck Act after a 2-year period. I 
believe the Ramspeck Act is obsolete and unfair, and the time has come 
to do away with it.
  A description of the Ramspeck Act will quickly outline why I think it 
is unnecessary and unjustified. Signed into law in 1940, the Ramspeck 
Act provides exclusive privileges to former legislative and judicial 
branch employees to secure career civil service positions with the 
Federal Government. The Ramspeck Act makes a special exception to 
certain competitive requirements of civil service positions for 
individuals who have served 3 years in the legislative branch or 4 
years in the judicial branch.
  Under the Ramspeck Act, legislative branch employees are awarded 
status for direct appointment to a civil service position if they have 
been involuntarily separated from their job, and they are allowed 1 
year from their date of separation in which to exercise this privilege. 
Furthermore, the Ramspeck Act waives any competitive examination which 
ranks applicants for a job for individuals who are former legislative 
or judicial branch employees. Therefore, if a competitive exam is 
required to rank candidates for a civil service position, the Ramspeck 
Act enables a select group of individuals to skip that hurdle, while 
assuring them of being able to be selected for the job.
  Finally, individuals appointed under this act become career employees 
in the civil service without regard to the tenure of service 
requirements that exist for all other civil service employees. Most 
people who have successfully competed for a position with the civil 
service must then serve a 3-year probationary period before they 
achieve career status with their agency. Ramspeck appointees, however, 
are afforded career status immediately.
  It is not appropriate for former legislative employees to receive 
special reemployment privileges that allow them to jump ahead of their 
fellow citizens when seeking a civil service position. It is both 
reasonable and equitable to require former legislative or judicial 
branch employees to compete for civil service jobs under the same terms 
that other Americans have to. Leveling the playing field for qualified 
individuals from the private sector who are interested in entering the 
civil service is a worthy endeavor, Mr. President, and one of the 
primary objectives of this proposal. By offering this legislation, I am 
also continuing my efforts to make the Congress abide by the same rules 
that our constituents live by.
  Let me say that while I want to swiftly repeal the Ramspeck Act, I do 
not want to act in a manner that has a partisan or punitive impact. 
This proposal would have no impact on any former Senate or House 
employees who lost their jobs in the November 1994 election. I 
recognize that while the results of this November's election caused a 
large number of involuntary job losses among Democratic legislative 
employees, and many of them may currently be trying to utilize the 
Ramspeck Act to secure a civil service position. Clearly, Republican 
legislative branch employees have utilized their eligibility under the 
Ramspeck Act to seek civil service jobs after other elections, as well.
  I strongly believe that the Ramspeck Act affords unfair employment 
privileges for both Republicans and Democrats alike, to the detriment 
of their fellow citizens who may not have had the opportunity to work 
in the legislative branch. Therefore, the legislation I am introducing 
today would terminate this reemployment perk 2 years after the 
enactment of this measure.
  A repeal of the Rampseck Act is warranted because it is wrong for 
former legislative and judicial branch employees to be given special 
reemployment privileges that allow them to leap in front of equally 
qualified individuals--especially on the basis that they recently 
worked for a Senator or Congressmen who was recently defeated for 
reelection.
  In closing, Mr. President, this legislation is about fairness and 
equal opportunity. The Ramspeck Act is an unnecessary and unjustified 
relic from another era, and it's time we repealed it. I hope the Senate 
will pass this legislation and take a sound step toward reforming a 
part of Federal civil service law that is an affront to the principles 
of merit-based job selections and true competition. I ask my colleagues 
to join with me in reaffirming these principals by supporting the 
Ramspeck Repeal Act.
                                 ______

      By Mr. LUGAR (for himself and Mr. Leahy) (by request):
  S. 178. A bill to amend the Commodity Exchange Act to extend the 
authorization for the Commodity Futures Trading Commission, and for 
other purposes; to the Committee on Agriculture, Nutrition, and 
Forestry.


      the commodity futures trading commission reauthorization act

 Mr. LUGAR. Mr. President, I am pleased to introduce a bill to 
reauthorize the Commodity Futures Trading Commission [CFTC] to exercise 
its responsibilities to prevent manipulation, prohibit fraud, maintain 
financial integrity, and encourage innovation in the Nation's futures 
and commodity options markets through regulation and oversight. This 
legislation provides assurance to the national and international 
financial markets of the continuing authority of the CFTC, continues 
the CFTC's responsibilities under existing law, gives adequate time to 
complete implementation of the extensive amendments included in the 
Futures Trading Practices Act of 1992 [FTPA] and allows time for 
reviews of the effects of that implementation. The CFTC was established 
by the Commodity Futures Trading Commission Act of 1974 as a sunset 
agency, and its authority must be regularly extended by Congress. The 
FTPA authorized the agency for a period of only 2 years and the CFTC 
now operates under authority granted by Congress through the 
appropriations process, a deficiency this bill will correct.
  The CFTC's task of overseeing and regulating a rapidly expanding 
futures industry has been, is, and will be enormous. The volume of 
commodity futures and options contracts traded on the Nation's 
commodity exchanges, or designated contract markets, for 1994 exceeded 
half-a-billion transactions. [[Page S655]] These transactions directly 
or indirectly effect the financial well being of family farms, 
corporations, financial institutions, traders, and millions of 
individuals through pooled investments. All of this trading is carried 
out within a self-regulatory framework overseen and supplemented by the 
CFTC, an agency of less then 600 employees.
  The futures industry is an essential part of our Nation's financial 
markets and the CFTC is an essential player in the federal regulation 
of those markets. President Bush recognized the role of the CFTC in 
establishing the President's Working Group on Financial Markets, in the 
wake of the October 1987 stock market collapse, which included the 
Secretary of the Treasury, the Chairman of the Federal Reserve Board of 
Governors, the Chairman of the Securities and Exchange Commission, and 
the Chairman of the CFTC. Former Secretary of the Treasury Bentsen 
reactivated the Working Group and the Chairman of the CFTC remains an 
active and vital participant in its efforts. Reauthorization of the 
CFTC will express congressional intent that the agency continue its 
role as a member of this group.
  The volume of exchange traded futures and commodity options contracts 
and the increased importance of this trading to all sectors of the 
financial markets is not confined to the United States. New markets are 
developing in other nations around the world and governments of those 
countries are grappling with regulatory issues. The CFTC has taken a 
leading role in dealing with these governments on a variety of futures 
related matters. Reauthorization will assist the CFTC in its dealings 
with these governments. This is an area of increasing importance as our 
financial markets compete with overseas markets to attract and serve 
customers around the world.
  Along with increasing volume, connections with other financial 
industries, and internationalization, the increasing complexity of 
financial transactions is a challenge facing the CFTC. The financial 
industry is now able to construct a bewildering array of instruments to 
serve the investment, or risk management needs of their customers.
  Often these instruments are lumped together under the term 
``derivatives.'' Exchange traded futures contracts governed by the 
requirements of Federal law since 1922 and overseen by the CFTC since 
1974 are certainly one form of derivatives, since their value is 
derived from the value of an underlying commodity. Development of the 
over the counter instruments knows as derivatives led to the question 
whether they were the economic or legal equivalents of futures 
contracts. Since prior to FTPA, Federal law required all futures 
trading to occur on organized exchanges, this led to legal uncertainty 
in the now huge derivatives market. Using the broad exemptive authority 
granted by Congress in FTPA, the CFTC has been addressing this problem. 
Reauthorization will give these new markets the confidence that the 
process will go forward in a orderly way.
  While the markets overseen by the CFTC have grown immensely in 
volume, variety of products, and diversity of users, the importance of 
futures trading to agriculture cannot be overstated. The development of 
futures trading allowed farmers to mitigate the boom and bust cycle of 
prices for their crops through intelligent marketing. Today futures 
trading is an integral part of pricing and risk management for U.S. 
agriculture. The volume of exchange traded futures and commodity 
options contracts on U.S. commodity exchanges totalled over 58 million 
transactions in 1994. This trading affected not only the market 
participants, but ultimately all producers, processors, merchandisers 
and consumers of agricultural products with prices affected by exchange 
trading. As the Congress reviews the current Federal commodity programs 
through hearings, and debates on the 1995 farm bill, the pricing and 
risk shifting functions of the futures markets may take on even more 
importance as we reconsider the role of the Federal Government in 
stabilizing prices and assuming price risks in agriculture. As we take 
on this task, we need to assure ourselves that the futures markets are 
operated appropriately and are properly overseen.
  Finally, after 4 years of hearings, debate, and consideration the 
Congress passed FTPA. The law addressed not only the tremendous growth 
in volume, variety of products, internationalization, and complexity 
issues discussed above; but also concerns about the interrelationship 
of the futures and securities markets in the wake of the October 1987 
stock market collapse, fraudulent trading practices by numerous 
individuals on the Nation's exchanges as disclosed by FBI undercover 
operations and CFTC investigations, and the negative effect on soybean 
prices precipitated by an exchange emergency action that angered many 
producers. The Congress granted the CFTC new authorities to address 
these issues. Further, the Congress directed the agency to undertake 
numerous rulemakings and studies to implement the requirements of FTPA. 
That law amended the Commodity Exchange Act to:

       Improve the regulation of futures and options traded under 
     rules and regulations of the Commodity Futures Trading 
     Commission; to establish registration standards for all 
     exchange floor traders; to restrict practices that may lead 
     to the abuse of outside customers of the marketplace; to 
     reinforce development of exchange audit trails to better 
     enable the detection and prevention of such practices; to 
     establish higher standards for service on governing boards 
     and disciplinary committees of self-regulatory organizations; 
     to enhance the international regulation of futures trading; 
     to regularize the process of authorizing appropriations for 
     the Commodity Futures Trading Commission; and for other 
     purposes. . . .

  The committee intends to commence hearings in the near future to 
review the CFTC's progress in implementing FTPA. Enactment of this 
legislation will assure orderly implementation of FTPA and assure 
industry participants, commerce generally and the public of continued 
oversight of this vital sector of the American economy.
  Mr. President, I ask unanimous consent that the full text of the bill 
I am introducing today be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 178

       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 ``CFTC Reauthorization Act of 
     1995''.

     SEC. 2. AUTHORIZATION OF APPROPRIATIONS.

       Section 12(d) of the Commodity Exchange Act (7 U.S.C. 
     16(d)) is amended to read as follows:
       ``(d) There are authorized to be appropriated such sums as 
     are necessary to carry out this Act for each of fiscal years 
     1995 through 2000.''.
                                 ______

      By Mr. ROTH:
  S. 179. A bill to amend the Immigration and Nationality Act to 
facilitate the apprehension, detention, and deportation of criminal 
aliens, and for other purposes; to the Committee on the Judiciary.


                 the criminal alien control act of 1995

 Mr. ROTH. Mr. President, today I am introducing the Criminal 
Alien Control Act of 1995. This comprehensive legislation addresses a 
problem that has reached staggering proportions in this country: 
criminal aliens.
  Without question, there are many problems with our Nation's 
immigration system. I hope that this is the year we undertake 
comprehensive immigration reform, including changing the much-abused 
asylum process. But we cannot effectively reform our immigration system 
without addressing the problem of criminal aliens.
  The problem of criminal aliens occupies the dangerous intersection of 
crime and the control of our Nation's borders, two issues of great 
concern to the American people. I hope we can all agree that there is 
no place in this country for people who come here and commit serious 
crimes. Criminals are one commodity we do not need to import.
  Last Congress, as ranking minority member of the Permanent 
Subcommittee on Investigations, I conducted an investigation and held 2 
days of hearings on the problem of criminal aliens and the governmental 
response to that problem. Our investigation found that criminal aliens 
are a serious threat to our public safety that is costing our criminal 
justice system hundreds of millions of dollars. And the problem is 
getting worse by leaps and bounds. [[Page S656]] 
  Criminal aliens now account for an all-time high of 25 percent of the 
Federal prison population and are, by far, the fastest growing segment 
of the Federal prison population. Throughout our Nation's criminal 
justice system, there are an estimated 450,000 criminal aliens--a 
staggering number.
  Although our investigation found that the Immigration and 
Naturalization Service is not adequately responding to the criminal 
alien problem, the INS does not deserve all of the blame. In fact, when 
it comes to criminal aliens, there is plenty of blame to go around and 
we in Congress are not immune. Congress deserves blame because our 
Federal criminal alien deportation laws, created on a piecemeal and 
patchwork basis, set out an irrational, lengthy and overly complex 
process that prevents us from deporting criminals as rapidly as we 
should be.
  There are, however, many difficulties with the INS that have 
exacerbated this problem. For example, the INS is unable to even 
identify most of the criminal aliens who clog our State and local jails 
before these criminals are released onto our streets. Also, many 
criminal aliens, having been identified, are released on bond while the 
lengthy deportation process is pending. It should be a surprise to no 
one that many skip bond and never show up for their deportation 
hearings.

  One thing the IRS does is routinely provide criminal aliens with work 
permits legally allowing them to get jobs while their appeals are 
pending. One INS deportation officer told my staff that he spends only 
about 5 percent of his time looking for criminal aliens because he must 
spend most of his time processing their work permits.
  As for actual deportation, the final step in the process, criminal 
aliens often are not actually deported even when deportation orders 
have been issued for them. According to the INS, there are more than 
27,000 aliens, including many criminal aliens, who have been ordered 
deported yet remain at large. It is no wonder that one frustrated INS 
official told us that only the stupid and honest actually get deported.
  Perhaps the ultimate indictment of the current system is that even on 
those rare occasions when the system actually works and a criminal 
alien is deported, reentry into the United States is so easy that it 
makes the whole process appear to be a giant exercise in futility. The 
subcommittee obtained long lists of criminal aliens who have repeatedly 
been deported only to reenter the country illegally and commit more 
crimes.
  My legislation addresses the serious problem posed by criminal aliens 
by simplifying, streamlining and strengthening the deportation process 
for these aliens who have been convicted of committing crimes in this 
country.
  My legislation simplifies existing law by eliminating the confusing 
array of crimes for which criminal aliens are deportable. Under my 
legislation, any alien who commits any felony is deportable--period.
  My legislation streamlines the deportation process for criminal 
aliens by, among other things, requiring aliens who are not permanent 
residents and who wish to appeal deportation orders, to do so from 
their home countries, after they have been deported. My legislation 
further streamlines the process by allowing States and Federal judges 
to order the deportation of criminal aliens. Once an alien has been 
convicted beyond a reasonable doubt of having committed a felony, 
having had the benefit of all the due process that is required in our 
criminal justice system, there is no reason why the sentencing judge 
should not also be permitted to enter an order of deportation at the 
time of sentencing. My legislation also restricts the defense currently 
used by criminal aliens to delay or avoid deportation.
  Also, as many of us know, certain State and local governments have 
been highly critical of what they see as the Federal Government's 
inability to effectively police our Nation's borders. Yet, some of 
these same jurisdictions have passed laws and adopted official policies 
prohibiting their local police departments and other employees from 
cooperating with Federal immigration officials. I think that is 
hypocritical. I offered an amendment to the crime bill last year that 
was adopted 93-6 that would cut crime bill funding to local entities 
that adopt such policies of noncooperation, but my amendment was 
dropped in conference. A similar provision is included in this 
legislation.
  Through this comprehensive legislation, I believe we can begin to 
effectively address the growing serious problem of criminal aliens in 
this country. I believe this is an essential step on the road to 
meaningful reform of our Nation's immigration system and I urge my 
colleagues to support this important measure.
  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. 179

       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 ``Criminal Alien Control Act 
     of 1995''.

     SEC. 2. TABLE OF CONTENTS.

       The following is the table of contents for this Act:

Sec. 1. Short title.
Sec. 2. Table of contents.

                TITLE I--DEPORTATION OF CRIMINAL ALIENS

Sec. 101. Equal immigration treatment to all alien felons.
Sec. 102. Deportation procedures for certain criminal aliens.
Sec. 103. Judicial deportation.
Sec. 104. Uncontested deportations.
Sec. 105. Restricting defenses to deportation for certain criminal 
              aliens.
Sec. 106. Extraterritorial appeals by criminal aliens.
Sec. 107. Collateral attacks on underlying deportation order.
Sec. 108. Restriction on asylum for criminal aliens.
Sec. 109. Federal incarceration.
Sec. 110. Form of deportation hearings.
Sec. 111. Construction of expedited deportation requirements.

   TITLE II--LOCAL COOPERATION WITH FEDERAL OFFICIALS AND PROCEDURES

Sec. 201. Funding based on cooperation.
Sec. 202. Production of criminal records.

                        TITLE III--MISCELLANEOUS

Sec. 301. Detention of undocumented criminal aliens at military 
              installations to be closed.
Sec. 302. Authorizing registration of aliens on criminal probation or 
              criminal parole.
Sec. 303. Admissible evidence before a special inquiry officer.
                TITLE I--DEPORTATION OF CRIMINAL ALIENS

     SEC. 101. EQUAL IMMIGRATION TREATMENT TO ALL ALIEN FELONS.

       (a) Felonies.--(1) Sections 101(f) (8 U.S.C. 1101(f)); 
     106(a) (8 U.S.C. 1105a(a)); 208(d) (8 U.S.C. 1158(d)); 
     212(a)(6)(B) (8 U.S.C. 1182(a)(6)(B)); 236(e)(i) (8 U.S.C. 
     1226(e)(i)); 241(a)(2)(A) (8 U.S.C. 1251(a)(2)(A)); 242 (8 
     U.S.C. 1252(a)); 242A(d) (8 U.S.C. 1252a); 242B(c) (8 U.S.C. 
     1252b(c)); 243(h) (8 U.S.C. 1253(h)); 244(e) (8 U.S.C. 
     1254(e)); and 277 (8 U.S.C. 1327) are amended by striking 
     ``aggravated felony'', ``an aggravated felony'', and 
     ``aggravated felonies'' each place they appear and inserting 
     in lieu thereof ``felony'', ``a felony'', or ``felonies'', 
     respectively.
       (2) Section 101(a) of the Immigration and Nationality Act 
     (8 U.S.C. 1101(a)) is amended by adding at the end the 
     following new paragraph:
       ``(47) The term `felony' means any offense under Federal or 
     State law that is punishable by death or imprisonment for 
     more than 1 year.''.
       (b) Preclusion of Judicial Review.--Section 106(c) of the 
     Immigration and Nationality Act (8 U.S.C. 1105a(c)) is 
     amended--
       (1) by inserting ``(1)'' immediately after ``(c)''; and
       (2) by adding at the end the following:
       ``(2) An order of deportation or of exclusion shall not be 
     reviewed by any court of the United States if the grounds for 
     such order is the commission of a felony by the alien, except 
     that the Attorney General may defer deportation or exclusion 
     of the alien pending judicial review if the Attorney General 
     determines that to do otherwise would cause hardship to the 
     alien.''.

     SEC. 102. DEPORTATION PROCEDURES FOR CERTAIN CRIMINAL ALIENS.

       (a) In General.--Section 242A(a) of the Immigration and 
     Nationality Act (8 U.S.C. 1252a(a)) is amended--
       (1) in paragraph (1), by inserting ``permanent resident'' 
     after ``correctional facilities for'';
       (2) in paragraph (2) by striking ``respect to an'' and 
     inserting ``respect to a permanent resident''; and
       (3) in paragraph 3, by inserting ``permanent resident'' 
     after ``in the case of any''.
       (b) Deportation of Aliens Who Are Not Permanent 
     Residents.--Section 242A(b)(1) of such Act is amended by 
     striking ``Attorney General may'' and inserting ``Attorney 
     General shall''.
       (c) Presumption of Deportability.--Section 242A of such Act 
     (8 U.S.C. 1252a) is [[Page S657]] amended by adding at the 
     end the following new subsection:
       ``(d) Presumption of Deportability.--An alien convicted of 
     an aggravated felony shall be conclusively presumed to be 
     deportable from the United States.''.
       (d) Limited Judicial Review.--Section 106(d) of the 
     Immigration and Nationality Act (8 U.S.C. 1105a) is amended 
     to read as follows:
       ``(d) Notwithstanding subsection (c), a petition for review 
     or for habeas corpus on behalf of an alien described in 
     section 242A(c) may only challenge whether the alien is in 
     fact an alien described in such section, and no court shall 
     have jurisdiction to review any other issue.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to all aliens against whom deportation 
     proceedings are initiated after the date of enactment of this 
     Act.

     SEC. 103. JUDICIAL DEPORTATION.

       (a) Judicial Deportation.--Section 242A of the Immigration 
     and Nationality Act (8 U.S.C. 1252a) is amended by adding at 
     the end the following new subsection:
       ``(c) Judicial Deportation.--
       ``(1) Authority.--Notwithstanding any other provision of 
     this Act, a United States district court or a State court 
     shall have jurisdiction to enter a judicial order of 
     deportation at the time of sentencing against an alien whose 
     criminal conviction causes such alien to be deportable under 
     section 241(a)(2)(A)(iii) (relating to conviction of a 
     felony).
       ``(2) Procedure.--(A) The United States Attorney or, in the 
     case of a proceeding before a State court, the State's 
     attorney general, shall provide notice of intent to request 
     judicial deportation promptly after the entry in the record 
     of an adjudication of guilt or guilty plea. Such notice shall 
     be provided to the court, to the alien, to the alien's 
     counsel of record, and to the Commissioner.
       ``(B) Notwithstanding section 242B--
       ``(i) in the case of a proceeding before a United States 
     court, the United States Attorney, with the concurrence of 
     the Commissioner, or
       ``(ii) in the case of a proceeding before a State court, 
     the State's attorney general,

     shall, at least 20 days before the date set for sentencing, 
     file a charge containing factual allegations regarding the 
     alienage of the defendant and satisfaction by the defendant 
     of the definition of felony.
       ``(C) If the court determines that the defendant has 
     presented substantial evidence to establish prima facie 
     eligibility for relief from deportation under section 212(c), 
     the court shall request the Attorney General to provide the 
     court with a recommendation and report regarding the alien's 
     eligibility for relief under such section. The court shall 
     either grant or deny the relief sought.
       ``(D)(i) The alien shall have a reasonable opportunity to 
     examine the evidence against him or her, to present evidence 
     on his or her own behalf, and to cross-examine witnesses 
     presented by the Government.
       ``(ii) The court, for the purposes of determining whether 
     to enter an order described in paragraph (1), shall only 
     consider evidence that would be admissible in proceedings 
     conducted pursuant to section 242(b).
       ``(3) Notice, appeal, and execution of judicial order of 
     deportation.--(A)(i) A judicial order of deportation or 
     denial of such order may be appealed by either party to the 
     court of appeals for the circuit in which the United States 
     district court is located or to the appropriate State court 
     of appeals, as the case may be.
       ``(ii) Except as provided in clause (iii), such appeal 
     shall be considered consistent with the requirements 
     described in section 106.
       ``(iii) Upon execution by the defendant of a valid waiver 
     of the right to appeal the conviction on which the order of 
     deportation is based, the expiration of the period described 
     in section 106(a)(1), or the final dismissal of an appeal 
     from such conviction, the order of deportation shall become 
     final and shall be executed at the end of the prison term in 
     accordance with the term of the order.
       ``(B) As soon as is practicable after entry of a judicial 
     order of deportation by a United States court, the Attorney 
     General shall provide the defendant with written notice of 
     the order of deportation, which shall designate the 
     defendant's country of choice for deportation and any 
     alternate country pursuant to section 243(a).
       ``(C) As soon as is practicable after entry of a judicial 
     order of deportation by a State court, the State court shall 
     notify the Attorney General of the order. Upon the 
     termination of imprisonment of the alien, the State shall 
     remand the alien to the custody of the Attorney General. The 
     Attorney General shall effect the deportation of the alien in 
     the manner prescribed in this Act with respect to final 
     orders of deportation.
       ``(4) Denial of judicial order.--Denial of a request for a 
     judicial order of deportation shall not preclude the Attorney 
     General from initiating deportation proceedings pursuant to 
     section 242 upon the same ground of deportability or upon any 
     other ground of deportability provided under section 241(a). 
     Any denial of a judicial order of deportation shall include a 
     statement in writing stating the reasons for the denial.
       ``(5) Definition.--For purposes of this subsection, the 
     term `State' refers to any of the several States and the 
     District of Columbia.''.
       (b) Technical and Conforming Changes.--The ninth sentence 
     of section 242(b) of the Immigration and Nationality Act (8 
     U.S.C. 1252(b)) is amended by striking out ``The'' and 
     inserting in lieu thereof ``Except as provided in section 
     242A(c), the''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to all aliens whose adjudication of guilt or 
     guilty plea is entered in the record after the date of 
     enactment of this Act.

     SEC. 104. UNCONTESTED DEPORTATIONS.

       Section 242B of the Immigration and Nationality Act (8 
     U.S.C. 1252b) is amended--
       (1) in subsection (a)(1), by adding at the end the 
     following new subparagraph:
       ``(G) The right of an alien deportable under section 
     241(a)(2) to execute a deportation affidavit pursuant to 
     subsection (f) in lieu of deportation proceedings.'';
       (2) by redesignating subsection (f) as subsection (g); and
       (3) by inserting after subsection (e) the following:
       ``(f) Deportation Affidavit.--In lieu of a determination of 
     deportability in a proceeding before a special inquiry 
     officer, an alien may elect to admit deportability under 
     section 241(a)(2) through the execution of an affidavit 
     witnessed by such an officer and a notary public. A special 
     inquiry officer shall make a determination of deportability 
     under this subsection based solely on the affidavit and, if 
     he finds the alien deportable, shall issue an order of 
     deportation with respect to that alien.''.

     SEC. 105. RESTRICTING DEFENSES TO DEPORTATION FOR CERTAIN 
                   CRIMINAL ALIENS.

       (a) Defenses Based on Seven Years of Permanent Residence.--
     Section 212(c) of the Immigration and Nationality Act (8 
     U.S.C. 1182(c)) is amended--
       (1) in the third sentence, by striking ``has served for 
     such felony or felonies'' and all that follows through the 
     period and inserting ``has been sentenced for such felony or 
     felonies to a term of imprisonment of at least 5 years, if 
     the time for appealing such conviction or sentence has 
     expired and the sentence has become final;''; and
       (2) by adding at the end the following new sentence: ``For 
     purposes of calculating the period of seven consecutive years 
     under this subsection, any period of imprisonment of the 
     alien by Federal, State, or local authorities shall be 
     excluded but shall not be considered to have broken the 
     continuity of the period.''.
       (b) Defenses Based on Withholding of Deportation.--Section 
     243(h)(2) of the Immigration and Nationality Act (8 U.S.C. 
     1253(h)(2)) is amended--
       (1) by striking ``or'' at the end of subparagraph (C);
       (2) by striking the period at the end of subparagraph (D) 
     and inserting ``; or''; and
       (3) by striking the final sentence and inserting the 
     following new subparagraph:
       ``(E) the alien has been convicted of a felony.''; and

     SEC. 106. EXTRATERRITORIAL APPEALS BY CRIMINAL ALIENS.

       Section 106 of the Immigration and Nationality Act (8 
     U.S.C. 1105a) is amended by adding at the end the following 
     new subsection:
       ``(e)(1) In the case of any alien found to be deportable 
     under section 242(a)(2), the Attorney General may not defer 
     deportation of the alien and shall, after issuance of the 
     deportation order, take the alien into custody until the 
     alien is deported.
       ``(2) Any court of the United States shall have 
     jurisdiction to review an order of deportation issued under 
     paragraph (1) in any case where the petitioner for review is 
     outside the United States. Any alien for whom an order of 
     deportation has been vacated under this paragraph shall be 
     issued a valid visa and admitted to the United States to the 
     status held by the alien before deportation.''.

     SEC. 107. COLLATERAL ATTACKS ON UNDERLYING DEPORTATION ORDER.

       Section 276 of the Immigration and Nationality Act (8 
     U.S.C. 1326) is amended by adding at the end the following 
     new subsection:
       ``(c) In any criminal proceeding under this section, no 
     alien may challenge the validity of the deportation order 
     described in subsection (a)(1) or subsection (b).''.

     SEC. 108. RESTRICTION ON ASYLUM FOR CRIMINAL ALIENS.

       (a) In General.--Section 208 of the Immigration and 
     Nationality Act (8 U.S.C. 1158) is amended by adding at the 
     end the following new subsections:
       ``(f) Notwithstanding subsection (a), an alien may only be 
     granted asylum under this section if the alien claims asylum 
     within 15 days of the alien's entry into the United States, 
     unless the alien establishes by clear and convincing evidence 
     that since the date of entry into the United States 
     circumstances have changed in the alien's country of 
     nationality (or, in the case of a person having no 
     nationality, the country in which such alien last habitually 
     resided) such that, if the alien returned to the country, it 
     is more likely than not that the alien would be arrested or 
     incarcerated or the alien's life would be threatened in such 
     country on account of race, religion, nationality, membership 
     in a particular social group, or political opinion.
       ``(g) An alien is not eligible for asylum under this 
     section if the Attorney General determines that--
       ``(1) the alien ordered, incited, assisted, or otherwise 
     participated in the persecution of [[Page S658]] any person 
     on account of race, religion, nationality, membership in a 
     particular social group, or political opinion;
       ``(2) the alien, having been convicted by a final judgment 
     of a particularly serious crime, constitutes a danger to the 
     community of the United States;
       ``(3) there are serious reasons for believing that the 
     alien has committed a serious nonpolitical crime outside the 
     United States prior to the arrival of the alien in the United 
     States;
       ``(4) there are reasonable grounds for regarding the alien 
     as a danger to the security of the United States; or
       ``(5) a country willing to accept the alien has been 
     identified (other than the country described in subsection 
     (f)) to which the alien can be deported or returned and the 
     alien does not establish that it is more likely than not that 
     the alien would be arrested or incarcerated or the alien's 
     life would be threatened in such country on account of race, 
     religion, nationality, membership in a particular social 
     group, or political opinion.

     For purposes of paragraph (2), an alien who has been 
     convicted of a felony shall be considered to have committed a 
     particularly serious crime. The Attorney General shall 
     prescribe regulations that specify additional crimes that 
     will be considered to be a crime described in paragraph (2) 
     or (3).''.
       (b) Conforming Amendment.--Section 208(a) of such Act (8 
     U.S.C. 1158(a)) is amended by inserting ``, except as 
     provided in subsection (g),'' after ``asylum, and''.

     SEC. 109. FEDERAL INCARCERATION.

       Section 242(j)(1)(B) of the Immigration and Nationality Act 
     (8 U.S.C. 1252(j)) is amended by inserting ``for a 
     determinate term of imprisonment'' after ``the alien''.

     SEC. 110. FORM OF DEPORTATION HEARINGS.

       Section 242(b) of the Immigration and Nationality Act (8 
     U.S.C. 1252(b)) is amended by inserting after the second 
     sentence the following new sentence: ``Nothing in the 
     preceding sentence precludes the Attorney General from 
     authorizing proceedings by electronic or telephonic media 
     (with or without the consent of the alien) or, where waived 
     or agreed to by the parties, in the absence of the alien.''.

     SEC. 111. CONSTRUCTION OF EXPEDITED DEPORTATION REQUIREMENTS.

       No amendment made by this Act may be construed to create 
     any substantive or procedural right or benefit that is 
     legally enforceable by any party against the United States, 
     its agencies or officers, or against any other person.
   TITLE II--LOCAL COOPERATION WITH FEDERAL OFFICIALS AND PROCEDURES

     SEC. 201. FUNDING BASED ON COOPERATION.

       (a) State and Local Cooperation.--Notwithstanding any law, 
     ordinance, or regulation of any State or subdivision thereof 
     to the contrary, officials of any State or local government 
     or agency, upon the request of any duly authorized official 
     of the Immigration and Naturalization Service, shall provide 
     information regarding the identification, location, arrest, 
     prosecution, detention, and deportation of an alien or aliens 
     who are not lawfully present in the United States.
       (b) Report.--Not later than 6 months after the date of 
     enactment of this Act, the Attorney General and the 
     Commissioner of Immigration and Naturalization shall jointly 
     report to the Congress and the President on the extent to 
     which State and local governments are not cooperating with 
     the Immigration and Naturalization Service. This report shall 
     identify any State or local governments that have adopted 
     laws, policies, or practices of noncooperation with the 
     Immigration and Naturalization Service, the specific nature 
     of those laws, policies or practices, and their impact on the 
     enforcement of the immigration laws.
       (c) Funding Based on Cooperation.--No State or local 
     government or agency which has been identified in the 
     Attorney General's report required by subsection (b), which 
     has a policy or practice of refusing to cooperate with the 
     Immigration and Naturalization Service regarding the 
     identification, location, arrest, prosecution, detention, or 
     deportation of aliens who are not lawfully present in the 
     United States, shall be eligible for any Federal funds from 
     appropriations made pursuant to a provision of the Violent 
     Crime Control and Law Enforcement Act of 1994 or of an 
     amendment made by authorizing appropriations, as long as such 
     policy or practice remains in effect.

     SEC. 202. PRODUCTION OF CRIMINAL RECORDS.

       Section 503(a)(11) of the Omnibus Crime Control and Safe 
     Streets Act of 1968 (42 U.S.C. 3753(a)) is amended by 
     inserting ``or any political subdivision thereof'' after 
     ``State'' the second, third, and fourth occurrence thereof.
                        TITLE III--MISCELLANEOUS

     SEC. 301. DETENTION OF UNDOCUMENTED CRIMINAL ALIENS AT 
                   MILITARY INSTALLATIONS TO BE CLOSED.

       (a) In General.--(1) Notwithstanding any other provision of 
     law, the Secretary of Defense shall make available to the 
     Attorney General for the purpose referred to in paragraph (2) 
     any military installation of the Department of Defense that--
       (A) is approved for closure under a base closure law; and
       (B) is jointly determined by the Secretary and the Attorney 
     General to be an appropriate facility for the detention of 
     undocumented aliens.
       (2) The Attorney General shall use facilities made 
     available to the Attorney General under this paragraph for 
     the detention of undocumented criminal aliens.
       (b) Definitions.--In this section:
       (1) The term ``approved for closure under a base closure 
     law'', in the case of a military installation, means any 
     installation whose closure under a base closure law is 
     recommended by the President and not disapproved by Congress 
     in accordance with the provisions of such law.
       (2) The term ``base closure law'' means the following:
       (A) The Defense Base Closure and Realignment Act of 1990 
     (part A of title XXIX of Public Law 102-510; 10 U.S.C. 2687 
     note).
       (B) Title II of the Defense Authorization Amendments and 
     Base Closure and Realignment Act (Public Law 100-526; 10 
     U.S.C. 2687 note).
       (3) The term ``undocumented criminal alien'' means an alien 
     who--
       (A) has been convicted of a felony and sentenced to a term 
     of imprisonment, and
       (B)(i) entered the United States without inspection or at 
     any time or place other than as designated by the Attorney 
     General, or
       (ii) was the subject of exclusion or deportation 
     proceedings at the time he or she was taken into custody by 
     the State.

     SEC. 302. AUTHORIZING REGISTRATION OF ALIENS ON CRIMINAL 
                   PROBATION OR CRIMINAL PAROLE.

       Section 263(a) of the Immigration and Nationality Act (8 
     U.S.C. 1303(a)) is amended by striking ``and (5)'' and 
     inserting ``(5) aliens who are or have been on criminal 
     probation or criminal parole within the United States, and 
     (6)''.

     SEC. 303. ADMISSIBLE EVIDENCE BEFORE A SPECIAL INQUIRY 
                   OFFICER.

       In any proceeding under the Immigration and Nationality Act 
     before a special inquiry officer, such documents and records 
     as are described in section 3.41 of title 8, Code of Federal 
     Regulations, as in effect on the date of enactment of this 
     Act, may be admissible as evidence of a criminal 
     conviction.
                                 ______

      By Mr. KENNEDY (for himself, Mr. Simon, and Mr. Dodd):
  S. 180. A bill to streamline and reform Federal job training programs 
to create a world-class work force development system for the 21st 
century, and for other purposes; to the Committee on Labor and Human 
Resources.


                     the workforce development act

  Mr. KENNEDY. Mr. President, today I am introducing the Workforce 
Development Act. This bill is a complement to S. 6, the Working 
Americans Opportunity Act, which was introduced on the first day of 
this Congress by Senator Daschle, Senator Breaux, other Senators, and 
myself.
  One of our top priorities for this session is to modernize the 
current confusing and overlapping array of job training programs. In 
today's rapidly changing economy, we must provide more effective 
opportunities for workers to upgrade their skills and improve their 
earning power over the course of their careers.
  Compared to other major industrial nations, the United States is 
still in the Dark Ages of enabling workers and firms to adjust to 
changes taking place in the economy. The policy foundations for our 
current job training system was established during the years of the New 
Deal, the New Frontier, and the Great Society.
  The primary challenge that most of our current programs were designed 
to address was to help various hard-to-serve groups to enter the labor 
force. Many of these programs--such as the Job Corps--have been very 
successful. Over the years millions of economically disadvantaged 
individuals have benefitted.
  As we move forward with new ideas to modernize our job training 
system we must not retreat from the commitment to provide the basic 
skills and support services which make it possible for large numbers of 
disadvantaged Americans to achieve self-sufficiency in the labor 
market.
  At the same time, we also need to respond to the new and powerful 
economic forces which are disrupting the existing labor markets for 
millions of working Americans and their families. As a result of 
increased international competition, rapid technological change, 
reductions in defense spending, and the re-engineering and down-sizing 
of corporations, many men and women already in the labor force must be 
retrained to improve their skills and enable them to continue to 
productive careers. In the evolving modern economy, this kind of 
retraining may be needed more than once, and often several times, over 
the course of people's careers.
  We also must respond to the concerns of the large numbers of two-
income families, and families with single heads [[Page S659]] of 
household who face the difficult challenge of balancing work and family 
responsibilities. We need a more flexible job training and employment 
system that can help the breadwinners in working families to move in 
and out of the labor force without losing their earning power.
  Over the past decade, many private businesses have taken steps to 
streamline their operations to deal with the profound changes taking 
place in our economy. It is clearly time for the Federal Government to 
act as well to consolidate and coordinate current job training programs 
in order to give workers a greater opportunity to succeed. It is time 
for a comprehensive overhaul of Federal job training policy. The 
Workforce Development Act I am introducing provides action to 
streamline and reform current policy. It encourages the States to 
experiment with new approaches to make their own job training programs 
more responsive to the real needs of working families.
  A key element of both the Workforce Development Act and S. 6, the 
Working Americans Opportunity Act introduced earlier this week, is the 
idea of making vouchers available to workers, so that they can purchase 
the training programs of their choice. President Clinton is right in 
proposing vouchers as a means to enable market forces to help transform 
the current excessively bureaucratic programs into a more effective 
system driven by the real needs of workers, job seekers, and firms in 
communities across the country.
  Last year Senator Kassebaum and I began to work together to devise a 
new strategy to create the type of work force development system the 
Nation needs. In June we issued a joint statement on the Senate floor 
which laid out a series of principles to guide this reform. Several 
other Senators joined us at that time, and we subsequently received 
support from many other Senators on both sides of the aisle. Over the 
course of the summer and into last fall we worked together to lay the 
groundwork for a bipartisan reform effort in the 104th Congress.
  The Senate has a good record of bipartisan accomplishment in the area 
of work force development policy. When the Republicans controlled this 
body in the 1980's, many of us worked closely with Senator Dan Quayle 
to pass the Job Training Partnership Act, which established the 
principle of a strong private sector role at the local level in 
designing training programs for disadvantaged and dislocated workers.
  Similarly, in the last session of Congress, a bipartisan coalition of 
Senators joined in passing the School-To-Work Act. Much of the 
foundation for this bill was laid by the landmark ``American choice'' 
report issued in 1990 by a distinguished bipartisan commission led by 
former Labor Secretaries Bill Brock and Ray Marshall. As a result of 
this groundwork, the School-To-Work Act earned broad support from 
business, labor, governors, mayors, and leaders in education. It is 
time to apply that same sense of shared purpose to making all our job 
training programs more responsive to the needs of job seekers and 
workers struggling to be competitive in our modern economy.
  The legislation I am introducing today grew out of discussions with 
Members of Congress on both sides of the aisle in the 103d Congress and 
with the Clinton administration. It also draws on the innovative steps 
being taken in Massachusetts to meet this challenge and to define the 
proper role of the private and public sectors and Federal, State, and 
local governments in work force policy.
  In addition to streamlining and reforming Federal job training 
programs, this legislation will repeal duplicative or outmoded 
programs, and encourage States and communities to rationalize many 
others.
  These efforts will give flexibility to the States to test ways that 
vouchers can best be implemented to help workers navigate or circumvent 
the excessive bureaucracy that now exists. One-stop career centers will 
be established to ensure that workers have an opportunity to make 
effective use of these vouchers. A new information system will produce 
reports on the effectiveness of training programs. All of the 
activities authorized by this act will be paid for by cost savings 
achieved in existing programs.
  The existing bureaucracy is unlikely to reform itself. The private 
sector, especially business, labor, and community leaders, will have a 
key role in advising the public sector on all aspects of these reforms.
  The Work Force Development Act also takes direct steps to assist 
current workers. Assistance will be available to business and labor to 
upgrade the skills of adult workers and establish portable industry-
based skill credentials to serve as a passport to succeed in the labor 
market.
  Finally, the bill establishes a timetable for further reform. By June 
1, 1999 a national board must submit recommendations to the President 
and Congress. To ensure that Congress acts on these recommendations, 20 
separate programs with more than $4 billion in funding will sunset 
September 30, 1999.
  I look forward to working closely with Senators on all aspects of 
these fundamental issues. We need practical, not partisan or 
ideological answers. Most of all, we need a job training policy that 
can be for workers. I am hopeful that we can make landmark progress 
toward that goal in this session of Congress.
  I ask unanimous consent that a summary of the bill and a copy of the 
bill be entered into the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 180

       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 ``Workforce 
     Development Act''.
       (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 purpose.
Sec. 3. Authorization of appropriations.
Sec. 4. Definitions.

                TITLE I--STREAMLINING AND CONSOLIDATION

Sec. 101. Purpose; findings; sense of the Congress.
Sec. 102. Elimination of certain programs.
Sec. 103. Streamlining and integration of adult training programs.
Sec. 104. Process for establishing 21st century workforce development 
              system.
Sec. 105. Centralized waivers.

                  TITLE II--MARKET BUILDING ACTIVITIES

                  Subtitle A--Federal Level Activities

Sec. 201. Purpose.
Sec. 202. National Workforce Development Board.
Sec. 203. Mechanisms for building high quality integrated workforce 
              development systems.
Sec. 204. Quality assurance system.

                   Subtitle B--State Level Activities

Sec. 211. State Workforce Development Councils.
Sec. 212. Membership.
Sec. 213. Chairperson.
Sec. 214. Duties and responsibilities.
Sec. 215. Development of quality assurance systems and consumer 
              reports.
Sec. 216. Administration.
Sec. 217. Establishment of unified service delivery areas.
Sec. 218. Financial and management information systems.
Sec. 219. Capacity building grants.
Sec. 220. Performance standards for unified service delivery areas.

                   Subtitle C--Local Level Activities

Sec. 231. Workforce development boards.
Sec. 232. Workforce development board policy blueprint.
Sec. 233. Report card.
Sec. 234. One-stop career centers.
Sec. 235. Capacity building.

    TITLE III--ENHANCING INDIVIDUAL CHOICE THROUGH TRAINING ACCOUNTS

Sec. 301. Purpose.
Sec. 302. Establishment.
Sec. 303. Participation of workforce development programs.
Sec. 304. Administration.
Sec. 305. Eligibility requirements for providers of education and 
              training services.
Sec. 306. Evaluation and recommendations.
Sec. 307. Report relating to income support.

                   TITLE IV--PRIVATE-PUBLIC LINKAGES

Sec. 401. Purpose.
Sec. 402. Incentives to encourage worker training.
Sec. 403. Labor Day report on private-public training practices.
Sec. 404. Matching grants to encourage incumbent worker training.

          TITLE V--INTEGRATED LABOR MARKET INFORMATION SYSTEM

Sec. 501. Integrated labor market information.
Sec. 502. Responsibilities of the National Board. [[Page S660]] 
Sec. 503. Responsibilities of the Secretary.
Sec. 504. Responsibilities of Governors.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) increasing international competition, technological 
     advances, and structural changes in the United States economy 
     present new challenges to private firms and public 
     policymakers in creating a skilled workforce with the ability 
     to adapt to change and technological progress;
       (2) the Federal Government should work with the private 
     sector to create a streamlined, high-performance workforce 
     development system that is driven by the needs of its 
     customers rather than bureaucratic requirements;
       (3) such a system should actively encourage collaboration 
     among private sector firms and publicly funded education and 
     training efforts in order to assist jobseekers and workers to 
     adjust to structural economic changes;
       (4) although it is necessary for the Federal Government to 
     consolidate or eliminate unnecessary programs, the primary 
     goal of Federal workforce development policy should be to 
     help facilitate transactions taking place between jobseekers, 
     workers, and business in local labor markets;
       (5) while the Federal Government must maintain its 
     commitment to provide economically and educationally 
     disadvantaged individuals with skills and support services 
     necessary to succeed in the labor market, Federal workforce 
     development policy must also begin to provide incentives to 
     assist firms to help upgrade the skills of their front-line 
     workers;
       (6) in order for labor markets to function more 
     effectively, there must be--
       (A) timely, accurate information about the supply, demand, 
     price, and quality of services available in the job training 
     marketplace; and
       (B) trained brokers available to assist customers to choose 
     the most suitable service;
       (7) accordingly, the United States needs a comprehensive 
     integrated labor market information system to ensure that 
     workforce development programs are related to the demand for 
     particular skills in local labor markets, and a mechanism for 
     providing brokerage services to ensure that information about 
     the employment and earnings of the local workforce, and the 
     performance of education and training institutions, will be 
     available to jobseekers, workers, and firms;
       (8) in order to bring more coherence to Federal workforce 
     development policy, there should be a single entity at the 
     Federal, State, and local level vested with the necessary 
     authority to strategically plan ways to transform the 
     separate training and employment programs into an integrated 
     and accountable workforce development system;
       (9) these Federal, State, and local strategic planning 
     bodies should be structured in such a way to give businesses 
     and workers a meaningful role in shaping policy and 
     overseeing the quality of workforce development programs;
       (10) in recent years, many States and communities have made 
     progress in developing new approaches to better integrate 
     Federal employment and training programs;
       (11) the Federal Government should take more systematic 
     measures to encourage experimentation and flexibility, and to 
     disseminate best practices in the design and implementation 
     of a comprehensive workforce development system throughout 
     the country; and
       (12) the Federal Government should address the findings of 
     this subsection through the implementation of immediate and 
     long-term improvements that result in the establishment of a 
     high-quality workforce development system needed for the 
     economy of the 21st century.
       (b) Purpose.--It is the purpose of this Act--
       (1) to take certain immediate actions, and to establish a 
     process for bringing about longer term improvements, that are 
     needed to begin the transformation of Federally funded 
     education and job training efforts from a collection of 
     fragmented programs into a coherent, integrated, accountable 
     workforce development system that--
       (A) is based on the needs of jobseekers, workers, and 
     employers, rather than bureaucratic requirements;
       (B) is accessible to any jobseeker, worker, or employer;
       (C) focuses on accountability, performance, and accurate 
     information;
       (D) provides flexibility and responsibility to the States, 
     and in turn to local communities, for design and 
     implementation of workforce development systems;
       (E) requires the active involvement of firms and workers in 
     the governance, design, and implementation of such system;
       (F) is linked directly to employment and training 
     opportunities in the private sector; and
       (G) adopts best practices of quality administration and 
     management that have been successful in the private sector; 
     and
       (2) to authorize appropriations under this Act for fiscal 
     year 1996 at the same level as appropriations are authorized 
     for fiscal year 1995 for the programs repealed under section 
     102(a).

     SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--Subject to subsection (b), there are 
     authorized to be appropriated to carry out titles II, III, 
     and IV--
       (1) $160,000,000 for fiscal year 1996; and
       (2) such sums as may be necessary for each of fiscal years 
     1997 through 1999.
       (b) Limitations.--
       (1) Fiscal year 1996.--Of the funds made available pursuant 
     to subsection (a) for fiscal year 1996--
       (A) not more than 5 percent shall be used for the 
     activities of the National Board;
       (B) not more than 10 percent shall be used for matching 
     grants pursuant to section 404;
       (C) not more than 15 percent shall be used for development 
     grants pursuant to section 203(a); and
       (D) not less than 70 percent shall be used for 
     implementation grants pursuant to section 203(b).
       (2) Fiscal years 1997 through 1999.--Of the funds made 
     available pursuant to subsection (a) for each of fiscal years 
     1997 through 1999--
       (A) not more than 5 percent shall be used for the 
     activities of the National Board;
       (B) not more than 10 percent shall be used for matching 
     grants pursuant to section 404; and
       (C) not less than 85 percent shall be used for 
     implementation grants pursuant to section 203(b).
       (c) Integrated Labor Market Information System.--To carry 
     out title V, there are authorized to be appropriated--
       (1) $90,000,000 for fiscal year 1996; and
       (2) such sums as may be necessary for each succeeding 
     fiscal year.

     SEC. 4. DEFINITIONS.

       As used in this Act--
       (1) Development grant.--The term ``development grant'' 
     means a grant provided to each State under section 203(a).
       (2) Implementation grant.--The term ``implementation 
     grant'' means a grant provided under section 203(b).
       (3) Leading edge state.--The term ``leading edge State'' 
     means a State that has been awarded an implementation grant 
     under section 203(b).
       (4) Workforce development program.--The term ``workforce 
     development program'' means any Federally-funded or State-
     funded program that provides job training assistance to 
     individuals or assists employers to identify or train 
     workers.
       (5) Integrated workforce development system; integrated 
     system.--The terms ``integrated workforce development 
     system'' and ``integrated system'' mean the system of 
     employment, training, and employment-related education 
     programs, including the programs described in section 103(a) 
     and any additional Federal or State programs designated by 
     the Governor of a State, comprising the system described in 
     section 203(b).
       (6) National board.--The term ``National Board'' means the 
     National Workforce Development Board established under 
     section 202(b).
       (7) National report card.--The term ``National Report 
     Card'' means the Nation's Workforce Development Report Card 
     prepared pursuant to section 202(c)(1).
       (8) State council.--The term ``State Council'' means a 
     State Workforce Development Council established pursuant to 
     section 211.
       (9) State blueprint.--The term ``State Blueprint'' means 
     the State Workforce Development Policy Blueprint prepared 
     pursuant to section 214(a);
       (10) State report card.--The term ``State Report Card'' 
     means the State Workforce Development Report Card issued 
     pursuant to section 214(b).
       (11) Workforce development board.--The term ``workforce 
     development board'' means a local board established pursuant 
     to section 202.
       (12) Unified service delivery area.--The term ``unified 
     service delivery area'' means the common geographic service 
     area boundaries established pursuant to section 217 and 
     overseen by a workforce development board.
       (13) One-stop career center.--The term ``one-stop career 
     center'' means an access point for intake, assessment, 
     referral, and placement services, including services provided 
     electronically, that is part of the network established 
     pursuant to section 234.
       (14) Hard-to-serve.--The term ``hard-to-serve'' means an 
     individual meeting the requirements of section 203(b) of the 
     Job Training Partnership Act (29 U.S.C. 1603(b)).
       (15) Secretary.--The term ``Secretary'' means the Secretary 
     of Labor, unless otherwise specified.
                TITLE I--STREAMLINING AND CONSOLIDATION

     SEC. 101. PURPOSE; FINDINGS; SENSE OF THE CONGRESS.

       (a) Purpose.--The purpose of this title is to streamline 
     the system of federally funded employment training services 
     available to jobseekers, workers, and businesses.
       (b) Findings.--The Congress finds that--
       (1) the process of streamlining the current collection of 
     federally funded employment training programs begins with 
     eliminating and consolidating separate employment training 
     programs; and
       (2) as such programs are eliminated, the funding for such 
     programs should be utilized to support the creation of a 
     market-driven workforce development system, as described in 
     section 2(b).
       (c) Sense of the Congress.--It is the sense of the Congress 
     that--
       (1) any budget savings realized as a result of the repeal 
     of programs pursuant to section 102 or through the 
     consolidation of programs pursuant to sections 103 and 104 
     should be reinvested in the Nation's job training system; and
       (2) as programs are eliminated and merged, it is imperative 
     that such elimination and merging be done without in any way 
     reducing the commitment or level of effort of the 
     [[Page S661]] Federal Government to improving the education, 
     employment, and earnings of all workers and jobseekers 
     particularly hard-to-serve individuals.

     SEC. 102. ELIMINATION OF CERTAIN PROGRAMS.

       (a) In General.--The following provisions are repealed:
       (1) Section 6(d)(4) of the Food Stamp Act of 1977 (7 U.S.C. 
     2015(d)(4)).
       (2) Section 211 of the Appalachian Regional Development Act 
     of 1965 (40 U.S.C. App. 211).
       (3) Section 204 of the Immigration Reform and Control Act 
     of 1986 (8 U.S.C. 1255a note).
       (4) Section 20 of the Federal Transit Act (49 U.S.C. App. 
     1616).
       (5) The Displaced Homemaker Self-Sufficiency Assistance Act 
     (29 U.S.C. 2301 et seq.).
       (6) Section 43 of the Airline Deregulation Act of 1978 (49 
     U.S.C. App. 1552).
       (7) Title II of Public Law 95-250 (92 Stat. 172).
       (8) Section 413 of the Carl D. Perkins Vocational and 
     Applied Technology Education Act (21 U.S.C. 2413).
       (9) Title V of the Job Training Partnership Act (29 U.S.C. 
     1791 et seq.).
       (10) Part J of title IV such Act (29 U.S.C. 1784 et seq.).
       (11) Section 325 of such Act (29 U.S.C. 1662d).
       (12) Section 325A of such Act (29 U.S.C. 1662d-1).
       (13) Section 326 of such Act (29 U.S.C. 1662e).
       (14) Sections 1141 through 1144 of title 10, United States 
     Code.
       (15) Subtitle C of title VII of the Stewart B. McKinney 
     Homeless Assistance Act (42 U.S.C. 11441 et seq.).
       (b) Repeals of Employment Training Programs.--The repeals 
     made by subsection (a) shall take effect on the date of 
     enactment of this Act.
       (c) Technical and conforming amendments.--The National 
     Board shall include in the draft joint resolution submitted 
     under section 104(b), technical and conforming amendments 
     regarding the provisions repealed under subsection (a). Such 
     proposed amendments should be consistent with the purposes of 
     this Act.

     SEC. 103. STREAMLINING AND INTEGRATION OF ADULT TRAINING 
                   PROGRAMS.

       (a) Requirements.--
       (1) In general.--A State that receives an implementation 
     grant to develop an integrated workforce development system--
       (A) shall include in such system the components of the 
     program and activities carried out on the date of enactment 
     of this Act under the provisions described in subsection 
     (b)(1); and
       (B) may include any other Federal or State workforce 
     development program identified by the Governor under 
     paragraph (2).
       (2) Additional programs.--Any other Federal or State 
     workforce development program identified by the Governor 
     pursuant to section 203(b), subject to a two-thirds vote of 
     the National Board, may be included in the integrated system 
     of a State described in paragraph (1).
       (b) Repeals of Job Training Programs.--
       (1) In general.--The following provisions are repealed:
       (A) Part A of title II of the Job Training Partnership Act 
     (29 U.S.C. 1601 et seq.).
       (B) Title III of such Act (29 U.S.C. 1651 et seq.).
       (C) Part C of title IV of such Act (29 U.S.C. 1721).
       (D) The Wagner-Peyser Act (29 U.S.C. 40 et seq.).
       (E) 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)(1) and(2)).
       (F) The Refugee Education Assistance Act of 1980 (8 U.S.C. 
     1522 note).
       (G) Title V of the Older Americans Act of 1965 (42 U.S.C. 
     3056 et seq.).
       (2) Effective date.--The repeals made by paragraph (1) 
     shall take effect on September 30, 1999.
       (3) Technical and conforming amendments.--The National 
     Board shall include in the draft joint resolution submitted 
     under section 104(b), technical and conforming amendments 
     regarding the provisions repealed under subsection (a). Such 
     proposed amendments should be consistent with the purposes of 
     this Act.

     SEC. 104. PROCESS FOR ESTABLISHING 21ST CENTURY WORKFORCE 
                   DEVELOPMENT SYSTEM.

       (a) Annual Recommendations.--Not later than 180 days after 
     the date of enactment of this Act, and each June 1 
     thereafter, the National Board shall make recommendations to 
     the President and Congress for the elimination of Federal 
     workforce development programs, or programs whose functions 
     should be subsumed under other Federal programs.
       (b) Report and Joint Resoluntion.--
       (1) Report.--Not later than June 1, 1999, the National 
     Board, based on such board's analysis of the experience of 
     leading edge States and the progress made toward establishing 
     an integrated, market-driven workforce development system, 
     shall prepare and submit to the Committee on Economic and 
     Educational Opportunities of the House of Representatives and 
     the Committee on Labor and Human Resources of the Senate a 
     report containing the findings of such board, and 
     recommendations for proposed reforms.
       (2) Joint resolution.--Not later than June 1, 1999, the 
     National Board shall submit to the Congress a draft of a 
     joint resolution containing provisions to develop a 
     streamlined, integrated, market-driven workforce development 
     system, from the programs described in section 103(b) and any 
     other Federal workforce development program determined by the 
     National Board as appropriate to be included that is 
     consistent with this Act, pursuant to section 2(b). The joint 
     resolution shall include recommendations for standard outcome 
     measures as described in section 204(a)(2) and shall describe 
     how the new system will maintain services to hard-to-serve 
     populations.

     SEC. 105. CENTRALIZED WAIVERS.

       (a) Expedited Process.--Not later than 180 days after the 
     date of enactment of this Act, the President shall establish 
     an expedited process to consider and act on waiver requests 
     submitted by the States under this section.
       (b) States Not Receiving Implementation Grants.--
       (1) In general.--Any State may apply, in accordance with 
     this section, for a waiver of statutory or regulatory 
     requirements under one or more of the programs described in 
     section 103(b)(1), for a period of 2 years to facilitate the 
     provision of assistance for workforce development.
       (2) Waiver authority.--A waiver may be granted under this 
     subsection only if--
       (A) the requirement sought to be waived impedes the ability 
     of the State, or a local entity in the States, to carry out 
     the State or local workforce development plan;
       (B) the State has waived, or agrees to waive, similar 
     requirements of State law; and
       (C) in the case of a statewide waiver, the State--
       (i) provides all State and local agencies and appropriate 
     organizations in the State, including labor organizations, 
     with notice and an opportunity to comment on the State's 
     proposal to seek a waiver; and
       (ii) submits the affected agency's comments with the waiver 
     application.
       (3) Application.--Each application submitted under this 
     subsection shall--
       (A) identify the statutory or regulatory requirements that 
     are requested to be waived and the goals that the State or 
     local agency intends to achieve;
       (B) describe the action that the State has undertaken to 
     remove State statutory or regulatory barriers identified in 
     the application;
       (C) describe the purpose of the waiver and the expected 
     programmatic outcomes if the request is granted;
       (D) describe the numbers and types of people to be affected 
     by such waiver;
       (E) describe a timetable for implementing the waiver;
       (F) describe the process the State will use to monitor, on 
     a biannual basis, the progress in implementing the waiver; 
     and
       (G) describe how the goals of the program or programs for 
     which a waiver is granted will continue to be met.
       (c) States Receiving Implementation Grants.--Subject to 
     subsection (d), each State receiving an implementation grant 
     under section 203(b) shall have the statutory or regulatory 
     requirement, described in its grant application or State 
     Blueprint of such State waived for the duration of the 
     implementation grant.
       (d) Limitations.--
       (1) In general.--A waiver shall not be granted under a 
     workforce development program if such waiver would alter--
       (A) the purposes or goals of such program;
       (B) the allocation of funds under such program;
       (C) any statutory or regulatory requirement under such 
     program relating to public health or safety, civil rights, 
     protections granted under title I and sections 503 and 504 of 
     the Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.), 
     occupational safety and health, environmental protection, 
     displacement of current employees, or fraud and abuse; or
       (D) eligibility requirements under such program, except 
     that a waiver may be granted with respect to an eligibility 
     requirement if such waiver would provide for increased 
     flexibility in developing common definitions for individuals 
     eligible for such program.
       (2) Circulars and related regulations.--The following 
     circulars promulgated by the Office of Management and Budget 
     shall be subject to the waiver authority of this subsection:
       (A) A-87, relating to cost principles for State and local 
     governments.
       (B) A-102, relating to grants and cooperative agreements 
     with State and local governments.
       (C) A-122, relating to nonprofit organizations.
       (D) A-110, relating to administrative requirements for 
     grants and cooperative agreements with nonprofit 
     organizations and institutions of higher education.
       (E) A-21, relating to cost principles for institutions of 
     higher education.
       (3) Effective date.--A waiver granted under this section 
     shall take effect on the date such waiver is granted.
       (4) Review of application.--Each application submitted by a 
     State pursuant to subsection (b)(3) shall be reviewed by the 
     Secretary or agency head who has jurisdiction over the 
     workforce development program or programs to which such 
     waiver request relates.
       (5) Approval or disapproval of application.--
       (A) Timing.--Each application submitted by a State in 
     accordance with subsection (b)(3) shall be reviewed promptly 
     upon receipt, and shall be approved or disapproved 
     [[Page S662]] not later than the end of the 60-day period 
     beginning on the date such application is received.
       (B) Approval.--A waiver or waivers proposed in an 
     application may be approved for the 2-year period beginning 
     on the date such application is approved, if the State 
     demonstrates in the application that such waiver or waivers 
     will achieve coordination, expansion, and improvement in the 
     quality of services under its workforce development system.
       (C) Disapproval and resubmission.--If an application is 
     incomplete or unsatisfactory, the appropriate Federal 
     official shall, before the end of the period referred to in 
     subparagraph (A)--
       (i) notify the State of the reasons for the failure to 
     approve the application;
       (ii) notify the State that the application may be 
     resubmitted during the period referred to in clause (iii); 
     and
       (iii) permit the State to resubmit a corrected or amended 
     application during the 60-day period beginning on the date of 
     notification under this subparagraph.
       (D) Review of resubmitted application.--Any application 
     resubmitted under subparagraph (C) shall be approved or 
     disapproved before the expiration of the 60-day period 
     beginning on the date of the resubmission.
       (6) Revocation of waiver.--If, after the approval of an 
     application under this subsection, the Secretary determines 
     that the waiver or waivers do not achieve coordination, 
     expansion, and improvement in the quality of services under 
     the workforce development programs to which such waiver or 
     waivers relate, the waiver or waivers may be revoked in whole 
     or in part.
                  TITLE II--MARKET BUILDING ACTIVITIES
                  Subtitle A--Federal Level Activities

     SEC. 201. PURPOSE.

       The purpose of this title is to establish a framework at 
     the Federal, state, and local levels for key stakeholders to 
     work cooperatively to build the infrastructure, brokerage, 
     and accountability systems needed to transform current 
     Federally funded job training programs into a market-driven 
     workforce development system.

     SEC. 202. NATIONAL WORKFORCE DEVELOPMENT BOARD.

       (a) Findings.--The Congress finds that a national workforce 
     development board is necessary to ensure--
       (1) the establishment and continuous improvement of the 
     national workforce development system;
       (2) that integrated strategic planning takes place among 
     the Federal agencies currently responsible for administering 
     job training programs;
       (3) incorporation of private sector expertise to the 
     governance of the national workforce development system; and
       (4) that unnecessary legislative and regulatory barriers to 
     service integration are removed as a market-driven workforce 
     development system is established.
       (b) Establishment.--
       (1) In general.--There is established the National 
     Workforce Development Board (referred to in this Act as the 
     ``National Board'').
       (2) Composition.--The National Board shall be comprised of 
     16 members, of whom--
       (A) one member shall be the Secretary of Labor;
       (B) one member shall be the Secretary of Education;
       (C) one member shall be the Secretary of Health and Human 
     Services;
       (D) one member shall be the Secretary of Commerce;
       (E) three members shall be representatives of business 
     (including representatives of small businesses and large 
     employers);
       (F) three members shall be representatives of organized 
     labor;
       (G) three members shall be State and local elected 
     officials of whom two shall be Governors of a State and one 
     shall be a local elected official; and
       (H)(i) one member shall be selected from representatives of 
     community-based organizations;
       (ii) one member shall be selected from representatives of 
     secondary schools or postsecondary educational institutions; 
     and
       (iii) one member shall be selected from representatives of 
     nongovernmental organizations that have a history of 
     successfully protecting the rights of individuals with 
     disabilities or older persons.
       (3) Additional requirements.--The members described in 
     subparagraphs (E) and (F) of paragraph (2) shall--
       (A) in the aggregate, represent a broad cross-section of 
     occupations and industries;
       (B) to the extent feasible, be geographically 
     representative of the United States, and reflect the racial, 
     ethnic, and gender diversity of the United States; and
       (C) shall include at least one member of the National Skill 
     Standards Board established pursuant to section 503 the 
     National Skill Standards Act of 1994.
       (4) Expertise.--The National Board and the staff shall have 
     sufficient expertise to effectively carry out the duties and 
     functions of the National Board.
       (5) Appointment.--The members described in subparagraphs 
     (E), (F), (G), and (H) of paragraph (2) shall be appointed by 
     the President, by and with the advice and consent of the 
     Senate.
       (6) Ex officio nonvoting members.--The Director of the 
     Office of Management and Budget and the chairpersons and 
     ranking minority members of the Committee on Labor and Human 
     Resources of the Senate and the Committee on Economic and 
     Educational Opportunities of the House of Representatives 
     shall be ex officio, nonvoting members of the National Board.
       (7) Terms.--Each member of the National Board appointed 
     under subparagraph (E), (F), (G), and (H) of paragraph (2) 
     shall be appointed for a term of 4 years, except that of the 
     initial members of the National Board appointed under such 
     subparagraphs--
       (A) four members shall be appointed for a term of 2 years;
       (B) four members shall be appointed for a term of 3 years; 
     and
       (C) four members shall be appointed for a term of 4 years.
       (8) Vacancies.--Any vacancy on the National Board shall not 
     affect the powers of the National Board, but shall be filled 
     in the same manner as the original appointments.
       (9) Chairpersons.--The President, by and with the advice 
     and consent of the Senate, shall select one cochairperson of 
     the National Board from among the members of the National 
     Board appointed under paragraph (2)(E) and one cochairperson 
     from among the members appointed pursuant to paragraph 
     (2)(F).
       (10) Compensation and expenses.--
       (A) Compensation.--Each member of the National Board who is 
     not a full-time employee or officer of the Federal Government 
     shall serve without compensation. Each member of the National 
     Board who is an officer or employee of the Federal Government 
     shall serve without compensation in addition to that received 
     for the services of such member as an officer or employee of 
     the Federal Government.
       (B) Expenses.--The members of the National Board 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 National 
     Board.
       (11) Executive director and staff.--
       (A) Executive director.--The cochairpersons of the National 
     Board shall appoint an Executive Director who shall be 
     compensated at a rate determined by the National Board, not 
     to exceed the rate payable for level V of the Executive 
     Schedule under section 5316 of title 5, United States Code.
       (B) Staff.--The Executive Director may--
       (i) appoint and compensate such additional staff as may be 
     necessary to enable the National Board to perform its duties; 
     and
       (ii) fix the compensation of the staff without regard to 
     the provisions of chapter 51 and subchapter III of chapter 53 
     of title 5, United States Code, relating to classifications 
     of positions and General Schedule pay rates, except that the 
     rate of pay for the staff may not exceed the rate payable for 
     level V of the Executive Schedule under section 5316 of such 
     title.
       (12) Agency support.--
       (A) Use of facilities.--The National Board may use the 
     research, equipment, services, and facilities of any agency 
     or instrumentality of the United States with the consent of 
     such agency or instrumentality.
       (B) Staff of federal agencies.--Upon the request of the 
     National Board, the head of any Federal agency may detail to 
     the National Board, on a reimbursable basis, any of the 
     personnel of such Federal agency to assist the National Board 
     in carrying out this Act. Such detail shall be without 
     interruption or loss of civil service status or privilege.
       (13) Procurement of temporary and intermittent services.--
     The co-chairpersons of the National Board may procure 
     temporary and intermittent services of experts and 
     consultants under section 3109(b) of title 5, United States 
     Code.
       (c) Duties.--
       (1) National report card.--
       (A) In general.--Not later than July 1, 1996, and each July 
     1 thereafter, the National Board shall prepare a report to be 
     known as the Nation's Workforce Development Report Card 
     (referred to in this Act as the ``National Report Card'').
       (B) Requirements.--The National Report Card shall assess 
     the performance of the workforce development system of the 
     United States, based on the earnings and employment gains and 
     other nonemployment-related outcomes of individuals assisted 
     by the programs comprising such system. The National Report 
     Card shall evaluate all workforce development programs that 
     receive Federal funding, and shall--
       (i) assess the performance of each program;
       (ii) assess performance based on the type of assistance 
     provided, including the categories of services identified in 
     section 204(b)(1)(C);
       (iii) assess year-to-year changes in performance;
       (iv) report on the extent to which hard-to-serve 
     populations are receiving services and the related outcomes 
     in relation to services received in the preceding three 
     years;
       (v) determine the annual Federal investment in workforce 
     development in each State;
       (vi) assess the lessons learned from the experience of 
     leading-edge States, and States that waive certain program 
     requirements to experiment with alternative workforce 
     development strategies; and
       (vii) assess the performance of the workforce development 
     system in each State. [[Page S663]] 
       (2) Congressional testimony.--The cochairpersons of the 
     National Board shall, at least annually, provide testimony, 
     during a joint hearing before the Committee on Labor and 
     Human Resources of the Senate and the Committee on Economic 
     and Educational Opportunities of the House of Representatives 
     on the progress being made in--
       (A) developing a more streamlined integrated and 
     accountable public and private workforce development system 
     in the United States; and
       (B) carrying out the purposes described in section 2(b).
       (3) Review of grant proposals.--The National Board shall 
     review the development grant proposals pursuant section 
     203(a), the implementation grant proposals pursuant to 
     section 203(b), and the matching grant proposals submitted 
     pursuant to section 404, and make recommendations to the 
     Secretary regarding such proposals.
       (4) Final recommendations.--Not later than June 1, 1999, 
     the National Board shall submit recommendations in the form 
     of a joint resolution to the President and Congress, pursuant 
     to section 104(b).
       (d) Termination.--The National Board shall terminate on the 
     date on which the National Board submits the joint resolution 
     to President and Congress under section 104(b).
       (e) National for employment policy.--
       (1) In general.--Part F of title IV of the Job Training 
     Partnership Act (29 U.S.C. 1771 et seq.) is repealed.
       (2) Conforming amendment.--Subsection (i) of section 106 of 
     such Act (29 U.S.C. 1516(i)) is amended by striking ``(i) 
     Functions of NCEP.--The National Commission for Employment 
     Policy'' and inserting ``(i) Functions of National Workforce 
     Development Board.--The National Workforce Development Board 
     established under section 202 of the Workforce Development 
     Act''.

     SEC. 203. MECHANISMS FOR BUILDING HIGH QUALITY INTEGRATED 
                   WORKFORCE DEVELOPMENT SYSTEMS.

       (a) State Development Grants.--
       (1) Purpose.--The purpose of this subsection is to assist 
     States and communities in strategic planning for integrated 
     workforce development systems, including the development of a 
     financial and management information system, a quality 
     assurance system, and an integrated labor market information 
     system.
       (2) Grants to states.--The Secretary may provide a 
     development grant to a State in such amount as the Secretary, 
     in consultation with the National Board, determines to be 
     necessary to enable such State to develop a strategic plan, 
     as described in paragraph (1), for the development of a 
     comprehensive statewide integrated workforce development 
     system.
       (3) Application.--To be eligible to receive a development 
     grant under this subsection, the Governor of a State, on 
     behalf of the State, shall submit to the National Board and 
     the Secretary an application, at such time, in such form, and 
     containing such information as the Secretary may require.
       (b) Implementation Grants to Leading-Edge States.--
       (1) Purpose.--The purpose of this subsection is to assist 
     States in implementing statewide high-quality integrated 
     workforce development systems that are accountable for 
     achieving results.
       (2) Grants to states.--The Secretary, in consultation with 
     the National Board, may provide an implementation grant to 
     the State in such amount as the Secretary determines to be 
     necessary to enable such State to implement an integrated 
     workforce development system.
       (3) Period of grant.--The provision of payments under a 
     grant under this subsection shall not exceed 4 fiscal years, 
     and shall be subject to the annual approval of the Secretary, 
     in consultation with the National Board, and the availability 
     of appropriations for the fiscal year involved.
       (4) Allocation requirements.--
       (A) First year.--For the first fiscal year for which a 
     State receives amounts from an implementation grant under 
     this subsection, the State shall use not less than 75 percent 
     of such amount to provide subgrants to local workforce 
     development boards.
       (B) Second year.--For the second fiscal year for which a 
     State receives amounts from an implementation grant under 
     this subsection, the State shall use not less than 80 percent 
     of such amount to provide subgrants to local workforce 
     development boards.
       (C) Third and succeeding years.--For the third, and each 
     succeeding, fiscal year for which a State receives amounts 
     from an implementation grant under this subsection, the State 
     shall use not less than 85 percent of such amount to provide 
     subgrants to local workforce development boards.
       (5) Limitation.--A State shall be eligible to receive not 
     more than 1 implementation grant under this subsection.
       (6) Application.--To be eligible to receive an 
     implementation grant under this subsection, the Governor of a 
     State, on behalf of the State, shall submit to the National 
     Board and the Secretary an application that shall include a 
     copy of the State Blueprint and such other information as the 
     Secretary, with the advice of the National Board, may 
     require.
       (c) Dissemination of Information on Best Practices.--The 
     Secretary, in consultation with the National Board, shall--
       (1) collect and disseminate information that will assist 
     State and local communities undertaking activities to 
     streamline and reform their job training systems, including 
     information on--
       (A) the successful experiences of States and localities 
     that--
       (i) have received development or implementation grants;
       (ii) have been granted waivers; or
       (iii) are experimenting with training account systems 
     established under title III of this Act; and
       (B) research concerning the restructuring of workforce 
     development systems; and
       (2) facilitate the exchange of information and ideas among 
     States and local entities that are building market-based 
     workforce development systems.
       (d) Workforce Development Impact Reports.--
       (1) Submission.--For each bill or resolution concerning 
     workforce development reported by any committee of the Senate 
     or the House of Representatives, the National Board shall 
     determine whether proposed Federal job training legislation 
     complies with the data reporting, common definitions, and 
     common funding cycles described in subsections (b) and (e) of 
     section 204. A determination of compliance by the National 
     Board under this subsection shall be included in the 
     committee report accompanying such legislation, if timely 
     submitted to such committee before such report is filed.
       (2) Procedure.--It shall not be in order in the Senate or 
     the House of Representatives to consider any bill or 
     resolution concerning workforce development that would not 
     comply with the national workforce development system, as 
     determined by the National Board under paragraph (1).
       (3) Waiver.--This subsection may be waived or suspended in 
     the Senate or the House of Representatives only by the 
     affirmative vote of three-fifths of the members of such 
     House.

     SEC. 204. QUALITY ASSURANCE SYSTEM.

       (a) Purpose.--The purpose of this section is to improve the 
     quality of all Federal programs directed at improving the 
     knowledge, skills, and abilities of members of the workforce 
     by strengthening accountability and encouraging the adoption 
     of quality improvement processes at all levels of the 
     workforce development system. In order to accomplish this 
     purpose, this Act--
       (1) directs the Secretaries of Labor, Education, and Health 
     and Human Services to jointly, in consultation with the 
     National Board--
       (A) develop common terms and definitions as described in 
     subsection (b);
       (B) develop a placement accountability system as described 
     in subsection (c); and
       (C) adjust existing program performance standards as 
     described in section 220(c); and
       (2) directs the National Board to recommend a system of 
     performance standards in its joint resolution submitted to 
     Congress pursuant to section 104(b) that includes standard 
     outcome measures relating to--
       (A) employment;
       (B) job retention;
       (C) earnings; and
       (D) nonemployment outcome measures, such as learning and 
     competency gains.
       (b) Common Terms and Definitions.--
       (1) In general.--Each workforce development program that 
     receives Federal funds shall collect and report to the 
     Governor and the State Council, if applicable, for each 
     participant to whom assistance is provided, the following 
     information:
       (A) The quarterly employment status and earnings for 1 year 
     after the participant no longer receives assistance under 
     such program.
       (B) Economic and demographic characteristics, including the 
     participant's--
       (i) social security number;
       (ii) date of birth;
       (iii) gender;
       (iv) race or ethnicity;
       (v) disability status;
       (vi) education (highest formal grade level achieved at 
     commencement of participation in program);
       (vii) academic degrees and credentials at time of entry 
     into the program; and
       (viii) employment status at the time of entry into the 
     program.
       (C) Services received, the extent, when appropriate, and 
     spending for such services, including--
       (i) assessments;
       (ii) testing;
       (iii) counseling;
       (iv) job development or job search assistance;
       (v) occupational skills training;
       (vi) work experience;
       (vii) job readiness training;
       (viii) basic skills education;
       (ix) postsecondary academic education (nonoccupational);
       (x) supportive and supplementary services; and
       (xi) on-the-job training.
       (D) Program outcomes, as specified by the State, such as--
       (i) advancement to higher level education or training;
       (ii) attainment of additional degrees or credentials 
     (including skill standards as such standards become 
     available);
       (iii) assessment of learning gain in basic skills programs;
       (iv) attainment and retention of subsidized or unsubsidized 
     employment;
       (v) quarterly earnings; and
       (vi) reduction in welfare dependency.
       (2) Replacement of existing requirements.--Program 
     monitoring under this section shall supplant existing 
     monitoring and [[Page S664]] reporting requirements for 
     program participants.
       (3) Adoption of common terms and definitions.--
       (A) Report.--Not later than 180 days after the date of 
     enactment of this Act, each Federal department and agency 
     with responsibility for a workforce development program shall 
     report to the National Board on its progress in adopting the 
     common terms and definitions for program participants, 
     service activities, and outcomes by program operators and 
     grant recipients.
       (B) Implementation.--Not later than 1 year after the date 
     of enactment of this Act, each workforce development program 
     receiving Federal funds shall use the common terms and 
     definitions.
       (C) Use.--Upon adoption by the appropriate Federal 
     agencies, the common definitions for terminology developed 
     and reported pursuant to section 455 of the Job Training 
     Partnership Act (29 U.S.C. 1735(b)) shall be utilized in 
     interpreting and compiling the core data elements. 
     Notwithstanding any other provision of Federal law, such 
     common definitions shall be utilized in lieu of existing 
     program definitions for similar data elements.
       (4) Recommendations.--Not later than 180 days after the 
     date all of the Members of the National Board are appointed, 
     the National Board shall make recommendations to the 
     Secretaries of Labor, Education, and Health and Human 
     Services, and the heads of other agencies operating workforce 
     development programs, on common definitions for other terms, 
     including terms relating to--
       (A) program status, including--
       (i) applicant;
       (ii) participant;
       (iii) terminee; and
       (iv) training-related placement;
       (B) program eligibility, including--
       (i) family income; and
       (ii) economically disadvantaged individuals; and
       (C) other terms considered appropriate by the National 
     Board, such as common cost categories.
       (5) Amendments.--If any of the proposed common definitions 
     require amendment to existing laws, the National Board shall 
     submit to Congress recommendations for legislative action not 
     later than 9 months after the date all of the members of the 
     National Board are appointed.
       (c) Placement Accountability.--
       (1) In general.--The purpose of this subsection is to 
     establish a placement accountability system using a cost-
     effective data source with information on job placement, 
     earnings, and job retention, to foster accountability by all 
     federally funded workforce development programs.
       (2) Performance monitoring.--Each workforce development 
     program that receives Federal funds shall--
       (A) engage in continuous performance self-monitoring by 
     measuring, at a minimum, the quarterly employment status and 
     earnings of each recipient of assistance under such program; 
     and
       (B) monitor each recipient of assistance for a period of 
     not less than 1 year, beginning on the date on which the 
     recipient no longer receives assistance under such program.
       (3) Information matching.--
       (A) Core data.--Each workforce development program that 
     receives Federal funds shall provide the information 
     described in subsection (b) regarding program participants to 
     the State agency responsible for labor market information 
     designated in title V.
       (B) Matching.--The State agency responsible for labor 
     market information designated in title V shall, in 
     conjunction with the Bureau of Labor Statistics, match the 
     information provided pursuant to subparagraph (A) with 
     quarterly employment and earnings records.
       (4) Reimbursement.--Requesting programs shall reimburse the 
     State agency responsible for wage record data for the cost of 
     matching such information. Notwithstanding any other 
     provision of Federal law, requesting programs may use Federal 
     funds for such reimbursement.
       (5) Confidentiality.--Requesting pro- grams--
       (A) shall protect the confidentiality of wage record data 
     through the use of recognized security procedures; and
       (B) may not retain such data for more than 10 years.
       (6) Submission to state council.--The State agency 
     responsible for labor market information shall submit the 
     results of the matching to the State Council, in accordance 
     with procedures and schedules specified by the National Board 
     and the Secretary.
       (7) Responsibility of governors.--The Governor of each 
     State shall ensure the submission of the matched data to the 
     State Council, the National Board, the Secretary, and other 
     Federal entities, as required by the National Board.
       (d) Dissemination of Quality Assurance.--The information 
     obtained under subsection (c) shall be made available to--
       (1) the State Council of the State in which the program is 
     located;
       (2) the local workforce development boards in the State in 
     which the program is located; and
       (3) consumers of labor market information to judge 
     individual program performance in an easily accessible 
     format.
       (e) Consistent Funding Cycles.--
       (1) In general.--All federally funded workforce development 
     training activities shall, to the extent practicable, be 
     funded on a consistent funding cycle basis.
       (2) Recommendations for funding cycle.--Not later than 180 
     days after the date on which all of the members of the 
     National Board are appointed, the National Board shall make 
     recommendations to Congress on the appropriate funding cycle 
     to be used for all workforce development programs and 
     activities.
                   Subtitle B--State Level Activities

     SEC. 211. STATE WORKFORCE DEVELOPMENT COUNCILS.

       (a) Establishment.--Each State desiring to participate in 
     the development of an integrated and accountable workforce 
     development system under the procedures specified in section 
     203(b) shall establish a State Workforce Development Council 
     (referred to in this Act as a ``State Council'') or have 
     located within such State an existing entity that is similar 
     to a State Council and that includes members who are 
     representatives of employers and workers.
       (b) Purpose.--Each State Council shall serve as the 
     principal advisory board for the Governor of such State for 
     all programs included in the integrated workforce development 
     system of such State.
       (c) Functions.--Each State Council shall assume the 
     functions and responsibilities of councils and commissions 
     required under Federal law that are part of the integrated 
     workforce development system of such State.

     SEC. 212. MEMBERSHIP.

       (a) In General.--
       (1) Representatives of business and industry and organized 
     labor.--Each State Council shall be comprised of individuals 
     who are appointed by the Governor for a term of not less than 
     2 years from among--
       (A) representatives of business and industry, who shall 
     constitute not less than 33 percent of the membership of the 
     State Council, including individuals who are members of local 
     workforce development boards;
       (B) representatives of organized labor who shall constitute 
     not less than 25 percent of the membership of the State 
     Council and shall be selected from among individuals 
     nominated by recognized State labor federations; and
       (C) representatives of secondary and postsecondary academic 
     or vocational education institutions.
       (2) Additional members.--Each State Council may include one 
     or more qualified members who are appointed by the Governor 
     from among representatives of the following:
       (A) Community-based organizations.
       (B) Nongovernmental organizations that have a history of 
     successfully protecting the rights of individuals with 
     disabilities or older persons.
       (C) Units of general local government or consortia of such 
     units.
       (D) State officials responsible for administering programs 
     described in sections 103 and 104 and included in the 
     integrated system.
       (E) The State legislature.
       (F) Any local program that receives Federal funding from 
     any program included in the integrated workforce development 
     system of the State.
       (b) Ex Officio.--
       (1) Nonvoting members.--The Governor may appoint ex officio 
     additional nonvoting members to the State Council.
       (2) Expertise.--The Governor of the State shall ensure that 
     the State Council and the staff of the State Council have 
     sufficient expertise to effectively carry out the duties and 
     functions of the State Council described under the laws 
     relating to the applicable program.

     SEC. 213. CHAIRPERSON.

       The Governor of the State shall appoint a chairperson of 
     the State Council who shall be a representative of the 
     business community.

     SEC. 214. DUTIES AND RESPONSIBILITIES.

       (a) State Workforce Development Policy Blueprint.--The 
     State Council shall assist the Governor to prepare and submit 
     to the National Board a biennial report to be known as the 
     State Workforce Development Policy Blueprint (referred to in 
     this Act as the ``State Blueprint''). The State Blueprint 
     shall--
       (1) serve as a strategic plan for integrating federally 
     funded workforce development programs included in an 
     integrated system of the State, established pursuant to 
     section 203(b), with State-funded job training, employment, 
     employment-related education, and economic development 
     activities;
       (2) summarize and analyze information about training needs 
     of critical industries in the State contained in the local 
     workforce development policy blueprints developed by the 
     workforce development boards;
       (3) establish State goals for the integrated workforce 
     development system and a common core set of performance 
     measures and standards for programs included in the system, 
     to be used in lieu of existing performance measures and 
     standards for each of the included programs;
       (4) analyze how the businesses and labor organizations of 
     the State are--
       (A) progressing in the restructuring of the work place to 
     provide continuous learning;
       (B) improving the skills and abilities of front-line 
     workers of such businesses; and
       (C) participating in State and local efforts to transform 
     federally funded education and job training programs into a 
     coherent and accountable workforce development system;
     [[Page S665]]
     
       (5) utilize information available from the State Report 
     Card and other sources to analyze the relative effectiveness 
     of individual workforce development programs within the State 
     and of the State's workforce development system as a whole;
       (6) evaluate the progress being made within the State in 
     streamlining, consolidating, and reforming the workforce 
     development system of the State in accordance with the 
     purposes contained in section 2(b) and the framework for 
     State implementation contained in the implementation grant 
     proposal of the State;
       (7) describe how service to special hard-to-serve 
     populations is to be maintained;
       (8) identify how any funds that a State may be receiving 
     under section 203(b) are to be utilized in conjunction with 
     existing resources to continuously improve the effectiveness 
     of the workforce development system of the State;
       (9) describe the method to be used to allocate funds 
     received under section 203(b) in a fair and equitable manner 
     among unified service delivery areas;
       (10) specify the additional elements, if any, to be 
     included in operating agreements between local workforce 
     development boards and one-stop career centers;
       (11) specify additional criteria, if any, for selection of 
     one-stop career centers;
       (12) specify the nonemployment-related outcome measures 
     that will be used for the workforce development system;
       (13) specify the nature and scope of the budget authority 
     for local workforce development boards in the State; and
       (14) supplant federally required planning reports for 
     programs under the integrated workforce development system of 
     the State.
       (b) State Workforce Development Report Card.--The State 
     Council shall assist the Governor of the State to issue an 
     annual report to be known as the State Workforce Development 
     Report Card (referred to in this Act as the ``State Report 
     Card''). The State Report Card shall describe the performance 
     of all workforce development programs operating in the State 
     that receive Federal funding and any additional State-funded 
     programs that the Governor may choose to include. The State 
     Report Card shall--
       (1) include an integrated budget that documents the annual 
     spending, number of clients served, and types of services 
     provided for workforce development programs for the State as 
     a whole and for each unified service delivery area within the 
     State;
       (2) assess the level of services to hard-to-serve 
     populations in relation to the number served and outcomes for 
     those populations during the preceding 3 years;
       (3) utilize information available from the quality 
     assurance system established under section 204 to assess--
       (A) employment and earnings experiences of individuals who 
     have received assistance from each workforce development 
     program operated in the State; and
       (B) relative employment and earnings experiences of 
     participants receiving services from each one-stop career 
     center in the State;
       (4) include an analysis of other nonemployment-related 
     results for each workforce development program operating 
     within the State; and
       (5) include a report of annual employment trends and 
     earnings (by industry and occupation) in the State and each 
     unified service delivery area, to assist State and local 
     policymakers, training providers, and users of the system to 
     link the training provided to the skill and labor force needs 
     of local employers.
       (c) Workforce Development Board Certification and 
     Effectiveness Criteria.--Each State Council shall--
       (1) assist the Governor to certify each local workforce 
     development board; and
       (2) make recommendations to the Governor for criteria that 
     will be used to judge the effectiveness of each of the 
     workforce development boards of the State.

     SEC. 215. DEVELOPMENT OF QUALITY ASSURANCE SYSTEMS AND 
                   CONSUMER REPORTS.

       (a) In General.--The State Council shall develop a quality 
     assurance system to complement and expand upon the quality 
     assurance system established in section 204 in order to 
     provide customers of job training services with consumer 
     reports on the supply, demand, price, and quality of job 
     training services in each unified service delivery area in 
     the State.
       (b) Selection of Tools and Measures.--Each State shall 
     select the tools and measures that are appropriate to the 
     needs of such State, including--
       (1) collecting and organizing service provider performance 
     data in accordance with information generated from the State 
     Report Card under section 214(b), the financial and 
     management information system designed pursuant to section 
     218, and the labor market information system of the State 
     described in section 501; and
       (2) conducting surveys as appropriate to ascertain customer 
     satisfaction.
       (c) Collection and Dissemination.--The State Council shall, 
     in conjunction with the local workforce development boards, 
     establish mechanisms for collecting and disseminating the 
     quality assurance information on a regular basis to--
       (1) individuals seeking employment;
       (2) employers;
       (3) policymakers at the Federal, State, and local levels; 
     and
       (4) training and education providers.
       (d) Assurances.--Each public and private education, 
     training, and career development service provider receiving 
     Federal funds under a program in an integrated system of the 
     State pursuant to section 203(b) shall collect and provide 
     the quality assurance information required under this 
     section.

     SEC. 216. ADMINISTRATION.

       (a) Authorities.--Each State Council shall be independent 
     of other State workforce development agencies and have the 
     authority to--
       (1) employ staff; and
       (2) receive and disburse funds.
       (b) Special Projects.--Each State Council may fund and 
     operate special pilot or demonstration projects for purposes 
     of research or continuous improvement of system performance.
       (c) Limitation on Use of Funds.--Not more than 5 percent of 
     the funds received by the State from an implementation grant 
     under section 203(b) shall be used for the administration of 
     the State Council.

     SEC. 217. ESTABLISHMENT OF UNIFIED SERVICE DELIVERY AREAS.

       (a) Recommendations.--Each State Council shall make 
     recommendations to the Governor of such State for the 
     establishment of unified service delivery areas that may be 
     used as intrastate geographic boundaries, to the extent 
     practicable, for all workforce development programs in an 
     integrated system of the State pursuant to section 203(b).
       (b) Establishment.--Each State receiving an implementation 
     grant under section 203(b) shall, based upon the 
     recommendations of the State Council, and in consultation and 
     cooperation with local communities, establish unified service 
     delivery areas throughout the State for the purpose of 
     providing community-wide workforce development assistance in 
     one-stop career centers under section 234.
       (c) Responsibilities.--In establishing unified service 
     delivery areas, the Governor, in consultation with the State 
     Council and local communities--
       (1) shall take into consideration existing--
       (A) labor market areas;
       (B) units of general local government;
       (C) service delivery areas established under section 101 of 
     the Job Training Partnership Act (29 U.S.C. 1511); and
       (D) the distance traveled by individuals to receive 
     services;
       (2) may merge existing service delivery areas; and
       (3) may not approve a total number of unified service 
     delivery areas that is greater than the total number of 
     service delivery areas in existence in the State on the date 
     of enactment of this Act.

     SEC. 218. FINANCIAL AND MANAGEMENT INFORMATION SYSTEMS.

       (a) In General.--Each State shall use a portion of the 
     funds it receives under section 203(a) to design a unified 
     financial and management information system. Each State that 
     receives an implementation grant under section 203(b) shall 
     require that all programs designated in the integrated system 
     use the unified financial and management information system.
       (b) Requirements.--Each unified financial and management 
     information system shall--
       (1) notwithstanding any other provision of Federal law, 
     supplant federally required fiscal reporting and monitoring 
     for each individual program included in the integrated 
     system;
       (2) be used by all agencies involved in workforce 
     development activities, including one-stop career centers 
     which shall have the capability to track the overall public 
     investments within the State and unified service delivery 
     areas, and to inform policymakers as to the results being 
     achieved through that investment;
       (3) contain a common structure of financial reporting 
     requirements, fiscal systems, and monitoring for all 
     workforce development expenditures included in the integrated 
     system that shall utilize the common data elements and 
     definitions included in subsection (b) of section 204; and
       (4) support local efforts to establish unified service 
     systems, including intake and eligibility determination for 
     all financial aid sources.

     SEC. 219. CAPACITY BUILDING GRANTS.

       From funds made available to a State for implementation 
     pursuant to section 203(b) or development pursuant to section 
     203(a), the State shall develop a strategy to enhance the 
     capacity of the institutions, organizations, and staff 
     involved in State and local workforce development activities 
     by providing services such as--
       (1) training for members of the local workforce development 
     boards;
       (2) training for front-line staff of any local education or 
     training service provider or one-stop career center;
       (3) technical assistance regarding managing systemic 
     change;
       (4) customer service training;
       (5) organization of peer-to-peer network for training, 
     technical assistance, and information sharing;
       (6) organizing a best practices database covering the 
     various workforce development system components; and
       (7) training for State and local staff on the principles of 
     quality management and decentralizing decisionmaking.
     [[Page S666]]
     
     SEC. 220. PERFORMANCE STANDARDS FOR UNIFIED SERVICE DELIVERY 
                   AREAS.

       (a) In General.--The Governor of each State that implements 
     an integrated workforce development system under section 
     203(b) may, in consultation with the State Council, the local 
     workforce development boards in the State, and employees of 
     any of the job training programs included in the integrated 
     system or the employee organizations of such employees, make 
     adjustments to existing performance standards for programs in 
     such system in the unified service delivery area of the 
     State.
       (b) Criteria.--Criteria developed pursuant to subsection 
     (a) may include such factors as--
       (1) placement, retention, and earnings of participants in 
     unsubsidized employment, including--
       (A) earnings at 1, 2, and 4 quarters after termination from 
     the program; and
       (B) comparability of wages 1 year after termination from 
     the program with wages prior to participation in the program;
       (2) acquisition of skills pursuant to a skill standards and 
     skill certification system endorsed by the National Skill 
     Standards Board established pursuant to section 503 of the 
     National Skill Standards Act of 1994;
       (3) the satisfaction of participants and employers with 
     services provided and employment outcomes; and
       (4) the quality of services provided and the level of 
     services provided to hard-to-serve populations, such as low-
     income individuals and older workers.
       (c) Adjustments.--Each Governor of a State that implements 
     an integrated workforce development system under section 
     203(b) shall, within parameters established by the National 
     Board, and after consultation with the workforce development 
     boards in the State, prescribe adjustments to the performance 
     criteria prescribed under subsections (a) and (b) for the 
     unified service delivery areas based on--
       (1) specific economic, geographic, and demographic factors 
     in the State and in regions within the State; and
       (2) the characteristics of the population to be served, 
     including the demonstrated difficulties in serving special 
     populations.
       (d) Use of Criteria.--The performance criteria developed 
     pursuant to this section shall be utilized in lieu of similar 
     criteria for programs receiving Federal funding included in 
     the integrated system of the State, to the extent determined 
     by the State Council subject to the approval of the National 
     Board.
                   Subtitle C--Local Level Activities

     SEC. 231. WORKFORCE DEVELOPMENT BOARDS.

       (a) Establishment.--In each State receiving an 
     implementation grant under section 203(b), and subject to 
     subsection (b) of this section, the local elected officials 
     of each unified service delivery area shall establish a 
     workforce development board to administer the workforce 
     development assistance provided by all the programs in the 
     integrated workforce development system in such area.
       (b) Exception.--States with a single unified delivery area 
     with contiguous borders shall not be subject to the 
     requirement of subsection (a).
       (c) Membership.--
       (1) In general.--Each workforce development board shall be 
     comprised of--
       (A) representatives of business and industry, who shall 
     constitute a majority of the board and who shall be business 
     leaders in the unified service delivery area;
       (B)(i) representatives of State and local organized labor 
     organizations, who shall be selected from among individuals 
     nominated by recognized State labor federations; and
       (ii) representatives of community-based organizations, who 
     shall be selected from among those individuals nominated by 
     officers of such organizations;
       (C) representatives of educational institutions;
       (D) community leaders, such as leaders of--
       (i) economic development agencies;
       (ii) human service agencies and institutions;
       (iii) veterans organizations; and
       (iv) entities providing job training;
       (E) representatives of nongovernmental organizations that 
     have a history of successfully protecting the rights of 
     individuals with disabilities or older persons; and
       (F) a local elected official, who shall be a nonvoting 
     member.
       (2) Special rule.--The representatives described in 
     paragraph (1)(B) shall comprise not less than 33 percent of 
     the membership of the Board.
       (d) Nominations.--
       (1) Business and industry representatives.--
       (A) In general.--The representatives of business and 
     industry under paragraph (1) of subsection (c) shall be 
     selected by local elected officials from among individuals 
     nominated by general purpose business organizations after 
     consultation with, and receiving recommendations from, other 
     business organizations in the unified service delivery area.
       (B) Definition.--For purposes of this paragraph, the term 
     ``general purpose business organization'' means an 
     organization that admits to membership any for-profit 
     business operating within the unified service delivery area.
       (2) Labor representatives.--The representatives of 
     organized labor under subsection (c)(1)(B)(i) shall be 
     selected from among individuals recommended by recognized 
     State and local labor federations.
       (3) Other members.--The members of the workforce 
     development board described in subparagraphs (A), (D), and 
     (E) of subsection (c)(1) shall be selected by chief local 
     elected officials in accordance with subsection (e) from 
     individuals recommended by interested organizations.
       (4) Expertise.--The State Council and Governor of each 
     State shall ensure that the workforce development board and 
     the staff of the State Council have sufficient expertise to 
     effectively carry out the duties and functions of existing 
     local boards described under the laws relating to the 
     applicable program.
       (e) Appointment Process.--In the case of a unified service 
     delivery area--
       (1) in which there is one unit of general local government, 
     the chief elected official of such unit shall determine the 
     number of members to serve on the workforce development board 
     and appoint the members to such board from the individuals 
     nominated or recommended under subsection (d); and
       (2) in which there are 2 or more units of general local 
     government, the chief elected officials of such units shall 
     determine the number of members to serve on the workforce 
     development board and appoint the members to such board from 
     the individuals nominated or recommended under subsection 
     (d), in accordance with an agreement entered into by such 
     units of general local government or, in the absence of such 
     an agreement, by the Governor of the State in which the 
     unified service delivery area is located.
       (f) Terms.--Each workforce development board shall 
     establish, in its bylaws, terms to be served by its members, 
     who may serve until the successors of such members are 
     appointed.
       (g) Vacancies.--Any vacancy on a workforce development 
     board shall be filled in the same manner as the original 
     appointment was made.
       (h) Removal for Cause.--Any member of a workforce 
     development board may be removed for cause in accordance with 
     procedures established by the workforce development board.
       (i) Chairperson.--Each workforce development board shall 
     select a chairperson, by a majority vote of the members of 
     the board, from among the members of the workforce 
     development board who are from business or industry. The term 
     of the chairperson shall be determined by the board.
       (j) Duties.--Each workforce development board--
       (1) shall--
       (A) prepare a workforce development board policy blueprint 
     in accordance with section 232;
       (B) issue an annual unified service delivery area report 
     card in accordance with section 233;
       (C) review and comment on the local plans for all programs 
     included in the integrated workforce development system of 
     the State and operating within the unified service delivery 
     area, prior to the submission of such plans to the 
     appropriate State Council, or the relevant Federal agency, if 
     no State approval is required;
       (D) oversee the operations of the one-stop career center 
     established in the unified service delivery area under 
     section 234, including the responsibility to--
       (i) designate one-stop career center operators within the 
     unified service delivery area consistent with selection 
     criteria specified in section 214(a)(11);
       (ii) develop and approve the budgets and annual operating 
     plans of the one-stop career centers;
       (iii) establish annual performance standards, customer 
     service quality criteria, and outcome measures for the one-
     stop career centers, consistent with measures developed 
     pursuant to sections 220;
       (iv) assess the results of programs and services;
       (v) ensure that services and skills provided through the 
     centers are of high quality and are relevant to labor market 
     demands; and
       (vi) determine priorities for client services from Federal 
     funding sources in the system;
       (E) develop a strategy to disseminate consumer reports 
     produced under section 215 to workers, jobseekers, and 
     employers, and other individuals in the unified service 
     delivery area; and
       (2) may apply to the Secretary for a matching grant 
     pursuant to section 404 in the amount of 50 percent of the 
     cost of establishing innovative models of workplace training 
     and upgrading of incumbent workers.
       (k) Administration.--
       (1) In general.--Each local workforce development board 
     shall have the authority to receive and disburse funds made 
     available for carrying out the provisions of this Act and 
     shall employ its own staff, independent of local programs and 
     service providers.
       (2) Funding.--Each workforce development board shall 
     receive a portion of its funding from the implementation 
     grant of the State, with additional funds made available from 
     participating programs.
       (l) Conflict of Interest.--No member of a workforce 
     development board shall cast a vote on the provision of 
     services by that member (or any organization which that 
     member directly represents) or vote on any matter that would 
     provide direct financial benefit to such member.

     SEC. 232. WORKFORCE DEVELOPMENT BOARD POLICY BLUEPRINT.

       (a) In General.--Each workforce development board shall 
     prepare and submit to the [[Page S667]] State Council a 
     biennial report, to be known as the workforce development 
     board policy blueprint, except that in States with a single 
     unified service delivery area, the additional elements 
     required in the regional blueprint shall be incorporated into 
     the State Blueprint.
       (b) Requirements.--The workforce development board policy 
     blueprint shall--
       (1) include a list of the key industries and industry 
     clusters of small- to mid-size firms that are most critical 
     to the current and future economic competitiveness of unified 
     service delivery area;
       (2) identify the workforce development needs of the 
     critical industries and industry clusters;
       (3) summarize the capacity of local education and training 
     providers to respond to the workforce development needs;
       (4) indicate how the local workforce development programs 
     intend to strategically deploy resources available from 
     implementation grants and existing programs operating in the 
     unified service delivery area to better meet the workforce 
     development needs of critical industries and industry 
     clusters in the unified service delivery area and enhance 
     program performance;
       (5) include a plan to develop one-stop career centers, as 
     described in section 234, including an estimate of the costs 
     in personnel and other resources to develop a network 
     adequate to provide universal access to such centers in the 
     local labor market;
       (6) describe how services will be maintained to all groups 
     served by the participating programs in accordance with their 
     legislative intent, including hard-to-serve populations;
       (7) identify actions for building the capacity of the 
     workforce development system in the unified service delivery 
     area; and
       (8) report on the level and recent changes in earned income 
     of workers in the local labor market, in relation to State 
     and national levels, by occupation and industry.
       (c) Use in Other Reports.--The workforce development board 
     policy blueprint may be utilized in lieu of local planning 
     reports required by any other Federal law for any program 
     included in the integrated workforce development system, 
     subject to the approval of the State Council.

     SEC. 233. REPORT CARD.

       (a) In General.--Each workforce development board shall 
     annually prepare and submit to the State Council a unified 
     service delivery area report card in accordance with this 
     section. The report card shall describe the performance of 
     all workforce development programs and service providers, 
     including the one-stop career centers, operating in the area 
     that is included in the integrated workforce development 
     system. In States with a single unified service delivery 
     area, the State Council shall prepare the report card.
       (b) Requirements.--The report card shall--
       (1) report on the relationship between services provided 
     and the local labor market needs as described in the 
     workforce development board policy blueprint;
       (2) using the quality assurance system information 
     established pursuant to section 215, include an analysis of 
     employment-related, and other outcomes achieved by the 
     programs and service providers operating in the area;
       (3) identity the performance of the one-stop career 
     centers;
       (4) detail the economic and demographic characteristics of 
     individuals served compared to the characteristics of the 
     general population of the unified service delivery area, and 
     the jobseekers, workers, and businesses of such area; and
       (5) assess the level of services to hard-to-serve 
     populations in relation to the number served and the outcomes 
     for those during the preceding 3 years.

     SEC. 234. ONE-STOP CAREER CENTERS.

       (a) Establishment.--Each workforce development board 
     receiving funds under an implementation grant awarded under 
     section 203(b) shall develop and implement a network of one-
     stop career centers in the unified service delivery area of 
     the workforce development board. The one-stop career centers 
     shall provide jobseekers, workers, and businesses universal 
     access to a comprehensive array of quality employment, 
     education, and training services.
       (b) Procedures.--Each workforce development board shall, in 
     conjunction with local elected official or officials in the 
     unified service delivery area, and consistent with criteria 
     specified in section 214(a)(11), select a method for 
     establishing one-stop career centers.
       (c) Eligible Entities.--Each entity within the unified 
     service delivery area that performs the functions specified 
     in subsections (e) and (f) for any of the programs in the 
     integrated workforce development system shall be eligible to 
     be selected as a one-stop career center.
       (d) Period of Selection.--Each one-stop career center 
     operator shall be designated for two-year periods. Every 2 
     years, one-stop career center designations shall be 
     reevaluated by the workforce development board based on 
     performance indicated in the unified service delivery area 
     report card and other criteria established by the workforce 
     development board and the State Council.
       (e) Brokerage Services to Individuals.--Each one-stop 
     career center shall make available to the public, at no 
     cost--
       (1) outreach to make individuals aware of, and encourage 
     the use of, services available from workforce development 
     programs operating in the unified service delivery area;
       (2) intake and orientation to the information and services 
     available through the one-stop career center;
       (3) preliminary assessments of the skill levels (including 
     appropriate testing) and service needs of individuals, 
     including--
       (A) basic skills;
       (B) occupational skills;
       (C) prior work experience;
       (D) employability;
       (E) interests;
       (F) aptitude; and
       (G) supportive service needs;
       (4) job search assistance, including resume and interview 
     preparation and workshops;
       (5) information relating to the supply, demand, price, and 
     quality of job training services available in each unified 
     service delivery area in the State pursuant to section 
     501(c);
       (6) information relating to eligibility requirements and 
     sources of financial assistance for entering the programs 
     described in 501(c)(2)(C); and
       (7) referral to appropriate job training, employment, and 
     employment-related education or support services in the 
     unified service delivery area.
       (f) Brokerage Services to Employers.--Each one-stop career 
     center shall provide to each requesting employer--
       (1) information relating to supply, demand, price, and 
     quality of job training services available in each unified 
     service delivery area in the State, consistent with the 
     consumer reports described in section 215;
       (2) customized screening and referral of individuals for 
     employment;
       (3) customized assessment of skills of the current workers 
     of the employer;
       (4) an analysis of the skill needs of the employer; and
       (5) other specialized employment and training services.
       (g) Conflicts.--Any entity that performs one-stop career 
     center functions shall be prohibited from making an education 
     and training referral to itself.
       (h) Fees.--
       (1) In general.--Except as provided in paragraph (2), each 
     one-stop career center may charge fees for the services 
     described in subsection (f), subject to approval by the 
     workforce development board.
       (2) Limitation.--No fee may be charged for any service that 
     an individual would be eligible to receive at no cost under a 
     participating program.
       (3) Income.--Income received by a one-stop career center 
     from the fees collected shall be used by the workforce 
     development board to expand or enhance one-stop career 
     centers available within the unified service delivery area.
       (i) Core Data Elements and Common Definitions.--Each one-
     stop career center shall adopt the core data elements and 
     common definitions as specified section 204(b), and updated 
     by the National Board.
       (j) Operating Agreements.--
       (1) In general.--Each one-stop career center operator shall 
     enter into a written agreement with the workforce development 
     board concerning the operation of the center.
       (2) Approval.--The agreement shall--
       (A) be subject to the approval of--
       (i) the local chief elected official or officials;
       (ii) the State Council; and
       (iii) the Governor of the State in which the center is 
     located; and
       (B) shall address--
       (i) the services to be provided;
       (ii) the role that local officials of the United States 
     Employment Service will play in the operation of one stop 
     career centers in the unified service delivery area;
       (iii) the financial and nonfinancial contributions to be 
     made to the centers from funds made available pursuant to 
     section 203(b) and all participating workforce development 
     programs;
       (iv) methods of administration;
       (v) procedures to be used to ensure compliance with 
     statutory requirements of the programs in the integrated 
     workforce development system; and
       (vi) other elements, as required by the workforce 
     development board or the State Council under section 214(a).

     SEC. 235. CAPACITY BUILDING.

       (a) In General.--Each workforce development board shall 
     identify actions to be taken for building the capacity of the 
     workforce development system in such unified service 
     delivery, except that in States with a single unified 
     delivery area, the State Council shall be responsible for 
     carrying out the activities under this section.
       (b) Funding.--The State Council shall make funds available 
     to each workforce development board for capacity building 
     activities from funds made available under section 203(b) and 
     any other funds within the integrated workforce development 
     budget of the State. For the activities described in 
     subsection (c), the workforce development board may also 
     submit requests to the State Council to redirect a portion of 
     training and technical assistance resources available from 
     any of the workforce development programs included in the 
     integrated system within the unified service development area 
     of the workforce development board.
       (c) Types of Activities.--Capacity building activities may 
     include--
       (1) training of workforce development board members;
       (2) staff training; [[Page S668]] 
       (3) technical assistance regarding managing systemic 
     change;
       (4) customer service training;
       (5) organization of peer-to-peer network for training, 
     technical assistance, and information sharing;
       (6) organizing a best practices database covering the 
     various system activities; and
       (7) training for local staff on the principles of quality 
     management and decentralized decisionmaking.
    TITLE III--ENHANCING INDIVIDUAL CHOICE THROUGH TRAINING ACCOUNTS

     SEC. 301. PURPOSE.

       It is the purpose of this title to promote the 
     establishment of a market-driven system for the provision of 
     services that will enhance the quality and range of choices 
     available to individuals for obtaining appropriate education 
     and training.

     SEC. 302. ESTABLISHMENT.

       (a) In General.--Each State receiving an implementation 
     grant pursuant to section 203(b) shall establish a training 
     account system for the provision of education and training 
     that meets the requirements of this title.
       (b) Definition.--For purposes of this title, the term 
     ``education and training'' means the services described in 
     clauses (v) and (ix) of section 204(b)(1)(C) and such other 
     services as the Secretary, in consultation with the Secretary 
     of Education, the Secretary of Health and Human Services, and 
     the National Board, determines are appropriate.

     SEC. 303. PARTICIPATION OF WORKFORCE DEVELOPMENT PROGRAMS.

       (a) Dislocated Workers.--Notwithstanding the Job Training 
     Partnership Act, each State that receives an implementation 
     grant pursuant to section 203(b) shall use the funds made 
     available under title III of the Job Training Partnership Act 
     and the funds appropriated under section 3(a) to provide 
     education and training under title III of such Act only 
     through the training account system established pursuant to 
     this title. Notwithstanding section 315 of such Act, not less 
     than 60 percent of the funds available to the State under 
     such title III shall be used to carry out the training 
     account system.
       (b) Additional Programs.--Beginning 1 year or later after a 
     State has commenced administration of the training account 
     system described in subsection (a), the State may provide 
     education and training through the training account system to 
     adults eligible to participate in other workforce development 
     programs if--
       (1) the State--
       (A) identifies the additional workforce development 
     programs in the State blueprint developed pursuant to section 
     214(a) or in an amendment to such blueprint; and
       (B) describes how such programs will be integrated into 
     such system; and
       (2) not less than two-thirds of the voting members of the 
     National Workforce Development Board approves the inclusion 
     of the programs identified pursuant to paragraph (1) into the 
     training account system established in the State.

     SEC. 304. ADMINISTRATION.

       (a) Application To Establish Account.--
       (1) In general.--An individual who is eligible to receive 
     education and training under a workforce development program 
     participating in the training account system pursuant to this 
     title may apply to establish a training account only at a 
     one-stop career center established under section 234.
       (2) Duties of career centers.--The career center shall--
       (A) assist such individual in completing the application;
       (B) provide information relating to the operation of the 
     training account system; and
       (C) ensure that such individual is aware of consumer 
     information available in the center relating to providers of 
     education and training, local occupations in demand, and 
     other appropriate labor market factors.
       (b) Duration; Amount of Account.--
       (1) Duration.--Upon approval of an application submitted 
     pursuant to subsection (a), an individual may be provided a 
     training account for a maximum of 2 years within any 5-year 
     period.
       (2) Amount of account.--The total amount deposited into a 
     training account for an individual for any fiscal year shall 
     be equal to the greater of the maximum amount of a Pell grant 
     established--
       (1) pursuant to paragraphs (2)(A) and (3)(A) of section 
     401(b) of the Higher Education Act of 1965 for such year; or
       (2) by an appropriation Act for such year.
       (c) Use of Funds.--An account established under subsection 
     (b) may be used by an individual to pay for education and 
     training provided by a service provider meeting the 
     eligibility requirements described in section 305.
       (d) Administrative Procedures.--Not later than 180 days 
     after the date of enactment of this Act, the Secretary, in 
     consultation with the Secretary of Education, and the 
     Secretary of Health and Human Services shall issue 
     regulations applicable to the administration of a training 
     account under this title that, consistent with the other 
     provisions of this title, specify--
       (1) the application requirements relating to a training 
     account;
       (2) the method of payment to providers from a training 
     account, including appropriate payment schedules and 
     appropriate payment for education or training in which an 
     individual enrolled but did not complete;
       (3) the financial and management information systems to be 
     used to administer the training accounts;
       (4) the Federal, State, and local roles with respect to 
     oversight of the training account system and enforcement of 
     the requirements of this title;
       (5) the manner in which the costs of administering the 
     training account system will be determined and apportioned;
       (6) the performance-based information to be submitted by 
     eligible providers of education and training and procedures 
     for verifying the accuracy of such information; and
       (7) such other procedures or conditions the Secretary 
     determines are necessary to ensure the effective 
     implementation of the training account system.
       (e) Description of System in State Blueprint.--The State 
     blueprint developed pursuant to section 214(a) shall include 
     a description of how the State will administer the training 
     account system and will ensure compliance with the 
     requirements of this title.

     SEC. 305. ELIGIBILITY REQUIREMENTS FOR PROVIDERS OF EDUCATION 
                   AND TRAINING SERVICES.

       (a) Eligibility Requirements.--A provider of education and 
     training services shall be eligible to receive funds from a 
     training account under this title if such provider--
       (1) is either--
       (A) eligible to participate in programs under title IV of 
     the Higher Education Act of 1965; or
       (B) determined to be eligible under the procedures 
     described in subsection (b); and
       (2) uses the common definitions and performance-based 
     information described in section 204(b).
       (b) Alternative Eligibility Procedure.--
       (1) In general.--The Governor of each State receiving an 
     implementation grant pursuant to section 203(b) shall 
     establish an alternative eligibility procedure for providers 
     of education and training services in such State that desire 
     to receive funds from a training account under this title, 
     but are not eligible to participate in programs under title 
     IV of the Higher Education Act of 1965. Such procedure shall 
     establish minimum acceptable levels of performance for such 
     providers based on factors and guidelines developed by the 
     Secretary, after consultation with the Secretary of 
     Education. Such factors shall be comparable in rigor and 
     scope to those provisions of part H of such title of such Act 
     that are used to determine an institution of higher 
     education's eligibility to participate in programs under such 
     title as are appropriate to the type of provider seeking 
     eligibility under this subsection and the nature of the 
     education and training services to be provided.
       (2) Limitation.--Notwithstanding paragraph (1), if the 
     participation of an institution of higher education in any of 
     the programs under title IV of the Higher Education Act of 
     1965 is terminated, such institution shall not be eligible to 
     receive funds under this Act for a period of 2 years 
     beginning on the date of such termination.
       (c) Administration.--
       (1) State agency.--Upon the recommendation of the State 
     Council, the Governor of each State receiving an 
     implementation grant pursuant to section 203(b) shall 
     designate a State agency or agencies to collect, verify, and 
     disseminate the performance-based information submitted by 
     eligible providers.
       (2) Application.--A provider of education and training 
     services that desires to be eligible to receive funds under 
     this title shall submit to the State agency or agencies the 
     information required under paragraph (1) at such time and in 
     such form as such State agency or agencies may require.
       (3) List of eligible providers.--The State agency or 
     agencies shall compile a list of eligible providers, 
     accompanied by the performance-based information submitted, 
     and disseminate such list and information to the one-stop 
     career centers in the State.

     SEC. 306. EVALUATION AND RECOMMENDATIONS.

       The National Workforce Development Board shall evaluate the 
     administration and effectiveness of the training account 
     system in enhancing individual choice and promoting high-
     quality education and training and shall include the 
     evaluation, accompanied by recommendations, in the National 
     Report Card developed pursuant to section 202(c)(1) and the 
     joint resolution to the President and the Congress pursuant 
     to section 104(b).

     SEC. 307. REPORT RELATING TO INCOME SUPPORT.

       (a) Sense of Congress.--It is the sense of the Congress 
     that--
       (1) many dislocated workers and economically disadvantaged 
     adults are unable to enroll in long-term job training because 
     such workers and adults lack income support after 
     unemployment compensation is exhausted;
       (2) evidence suggests that long-term job training is among 
     the most effective adjustment service in assisting dislocated 
     workers and economically disadvantaged adults to obtain 
     employment and enhance wages; and
       (3) there is a need to identify options relating to how 
     income support may be provided to enable dislocated workers 
     and economically disadvantaged adults to participate in long-
     term job training.
       (b) Report.--Not later than 120 days after the date of 
     enactment of this Act, the Secretary of Labor shall submit to 
     the Congress a report that--
       (1) examines the need for income support to enable 
     dislocated workers and economically disadvantaged adults to 
     participate in long-term job training; [[Page S669]] 
       (2) identifies options relating to how income support can 
     be provided to such workers and adults; and
       (3) contains such recommendations as the Secretary of Labor 
     determines are appropriate.
                   TITLE IV--PRIVATE-PUBLIC LINKAGES

     SEC. 401. PURPOSE.

       The purpose of this title is to begin to more explicitly 
     link federally funded workforce development programs with 
     training practices and systems utilized by workers and firms 
     in the private sector.

     SEC. 402. INCENTIVES TO ENCOURAGE WORKER TRAINING.

       Not later than 180 days after the date of enactment of this 
     Act, the National Board shall make recommendations to the 
     appropriate committees of Congress and the President on what 
     measures can be taken, including changes in the tax codes--
       (1) to encourage employers and workers to invest in 
     training and skills upgrading;
       (2) to encourage employers to hire and train hard-to-serve 
     individuals; and
       (3) to provide income support to enable jobseekers and 
     workers to participate in long-term training programs.

     SEC. 403. LABOR DAY REPORT ON PRIVATE-PUBLIC TRAINING 
                   PRACTICES.

       Beginning on September 1, 1996, and in each succeeding year 
     thereafter, the National Board shall issue a report that--
       (1) analyzes how businesses in the United States are--
       (A) restructuring the workplace to provide continuous 
     learning for the employees of such businesses;
       (B) improving the skills and abilities of the front-line 
     workers of such businesses; and
       (C) integrating public workforce development programs into 
     private sector training systems;
       (2) highlights innovative approaches that other countries 
     are taking to encourage firms to invest in training the 
     front-line workers of such firms and to ensure that publicly 
     funded workforce development programs in such countries are 
     relevant to the training needs of workers and firms in the 
     private sector;
       (3) reports on the progress being made by the National 
     Skills Standards Board established pursuant to section 503 of 
     the National Skill Standards Act and the degree to which 
     publicly funded education and training providers throughout 
     the United States are incorporating industry-based skill 
     standards developed by the Board into program offerings of 
     such programs; and
       (4) makes recommendations to Congress and the President on 
     ways to improve linkages between federally funded industrial 
     modernization programs and federally funded workforce 
     development programs.

     SEC. 404. MATCHING GRANTS TO ENCOURAGE INCUMBENT WORKER 
                   TRAINING.

       (a) Purpose.--The purpose of this section is to establish a 
     program to award competitive matching grants to assist local 
     workforce development boards respond to the training needs of 
     front-line workers in the communities in which such boards 
     are located.
       (b) Application.--Each local workforce development board 
     seeking a grant under this section shall submit an 
     application to the State Council of the State in which such 
     board is located, at such time, in such manner, and 
     containing such information as the Secretary may prescribe. 
     Not later than 30 days after receiving an application, the 
     State Council shall review and forward the application, with 
     comments, to the National Board and the Secretary.
       (c) Selection of Grantees.--
       (1) In general.--The Secretary, with the advice of the 
     National Board, shall award a grant under this section only 
     if the Secretary determines, from the grant application, that 
     the grant will be used to maintain or enhance the competitive 
     position of local industries that are committed to making the 
     investments necessary to develop the skills of their workers.
       (2) Criteria.--In awarding grants under this section, the 
     Secretary shall take into account--
       (A) the policy priorities and training needs of local 
     industries identified in the local workforce development 
     policy blueprints;
       (B) whether there is a demonstrated need for skill 
     upgrading to maintain firm or industry competitiveness;
       (C) whether the application contains proposals for training 
     that will directly lead to increased earnings of front-line 
     workers;
       (D) whether the labor organizations representing such 
     front-line workers support the grant proposal;
       (E) initiatives by firms or firm partnerships to develop 
     high performance work organizations;
       (F) whether the grant proposal meets the training needs of 
     small- and medium-sized firms;
       (G) whether the grant proposal is focused on workers with 
     substantial firm or industry tenure; and
       (H) whether the proposed industry activities are integrated 
     with private sector activities under the School-to-Work 
     Opportunities Act of 1994.
       (d) Use of Funds.--Grants awarded under this section shall 
     be used for skill enhancement and training activities that 
     may include--
       (1) basic skills;
       (2) occupational skills;
       (3) statistical process control training;
       (4) total quality management techniques;
       (5) team building and problem solving skills; and
       (6) other training or activities that will result in the 
     increased likelihood of job retention, higher wages, or 
     increased firm competitiveness.
       (e) Funding.--
       (1) Cost share.--
       (A) Federal share.--A grant awarded under this section 
     shall be in an amount equal to 50 percent of the cost of 
     carrying out the grant proposal.
       (B) Local share.--As a condition to receiving Federal funds 
     under this section, local businesses, industry associations, 
     and worker organizations shall provide funding in an amount 
     equal to 50 percent of the cost of carrying out the grant 
     proposal.
       (2) Limitations.--
       (A) Use of funds.--Amounts awarded under this section shall 
     not be used to pay the wages of workers during the training 
     of such workers.
       (B) Additional funding.--Each recipient of funds under this 
     section shall certify that such funds shall supplement and 
     not supplant other public or private funds otherwise spent on 
     worker training.
          TITLE V--INTEGRATED LABOR MARKET INFORMATION SYSTEM

     SEC. 501. INTEGRATED LABOR MARKET INFORMATION.

       (a) Findings.--The Congress finds that accurate, timely, 
     and relevant data for the Nation, States, and localities are 
     required to achieve Federal domestic policy goals, such as--
       (1) economic growth and productivity through--
       (A) career planning and successful job training and job 
     searching by youth and adults; and
       (B) efficient hiring, effective worker training, and 
     appropriate location and organization of work by employers;
       (2) accountability, through planning and evaluation, in 
     workforce development and job placement programs funded by 
     the Federal Government or developed by other public or 
     private entities;
       (3) equity and efficiency in the allocation of Federal 
     funds; and
       (4) greater understanding of local labor market dynamics 
     through the support of research.
       (b) Purpose.--The purpose of this title is to provide for 
     the development, maintenance, and continuous improvement of a 
     nationwide integrated system for the collection, analysis, 
     and dissemination of labor market information.
       (c) System.--
       (1) Development.--The Secretary, in cooperation with the 
     National Board, the State Councils, where appropriate, and 
     the Governors, shall oversee and ensure the development, 
     maintenance, and continuous improvement of a nationwide 
     integrated system of labor market information that will--
       (A) promote comprehensive workforce development planning, 
     evaluation, and service integration;
       (B) meet and be responsive to the customer needs of 
     jobseekers, employers, and public officials at all government 
     levels who develop economic and social policy, allocate 
     funds, plan and implement workforce development systems, are 
     involved in career planning or exploration, and deliver 
     integrated services;
       (C) serve as the foundation for automated information 
     delivery systems that provide easy access to labor market, 
     occupational and career information; and
       (D) meet the Federal domestic policy goals specified in 
     section (a).
       (2) Information to be included.--The integrated system 
     described in paragraph (1) shall include statistical data 
     from survey and projection programs and data from 
     administrative reporting systems which, taken together, shall 
     enumerate, estimate, and project the supply of and demand for 
     labor at national, State, and local levels in a timely 
     manner, including data on--
       (A) labor market demand, such as--
       (i) profiles of occupations that describe job duties, 
     education, and training requirements, skills, wages, 
     benefits, working conditions, and the industrial distribution 
     of occupations;
       (ii) current and projected employment opportunities and 
     trends, by industry and occupation, including growth 
     projections by industry, and growth and replacement need 
     projections by occupation;
       (iii) job openings, job locations, hiring requirements, and 
     application procedures;
       (iv) profiles of industries and employers in the local 
     labor market describing the nature of the work performed, 
     employment skill and experience requirements, specific 
     occupations, wages, hours, and benefits, and hiring patterns;
       (v) industries, occupations, and geographic locations 
     facing significant change or dislocation; and
       (vi) information maintained in a longitudinal manner on the 
     quarterly earnings, establishment, industry affiliation, and 
     geographic location of employment for all individuals for 
     whom such information is collected by the States;
       (B) labor supply, such as--
       (i) educational attainment, training, skills, skill levels, 
     and occupations of the population;
       (ii) demographic, socioeconomic characteristics, and 
     current employment status of the [[Page S670]] population, 
     including self-employed, part-time, and seasonal workers;
       (iii) jobseekers, including their education and training, 
     skills, skill levels, employment experience, and employment 
     goals;
       (iv) the number of workers displaced by permanent layoffs 
     and plant closings by industry, occupation, and geographic 
     location; and
       (v) current and projected training completers who have 
     acquired specific occupational or work skills and 
     competencies; and
       (C) consumer information, which shall be current, 
     comprehensive, localized, automated, and in a form useful for 
     immediate employment, entry into training and education 
     programs, and career exploration, including--
       (i) job openings, locations, hiring requirements, 
     application procedures, and profiles of employers in the 
     local labor market describing the nature of the work 
     performed, employment requirements, wages, benefits, and 
     hiring patterns;
       (ii) jobseekers, including their education and training, 
     skills, skill levels, employment experience, and employment 
     goals;
       (iii) the labor market experiences, in terms of wages and 
     annual earnings, by industry and occupation, of workers in 
     local labor markets, by sex and racial or ethnic group, 
     including information on hard-to-serve populations;
       (iv) education courses, training programs, and job 
     placement programs, including information derived from 
     statistically based performance evaluations and their user 
     satisfaction ratings; and
       (v) eligibility for funding and other assistance in job 
     training, job search, income support, supportive services, 
     and other employment services.
       (3) Technical standards.--The integrated labor market 
     information system shall use common standards that will 
     include--
       (A) standard classification and coding systems for 
     industries, occupations, skills, programs, and courses;
       (B) nationally standardized definitions of terms consistent 
     with subsections (b), (c), and (d) of section 204 and with 
     paragraph (2);
       (C) a common system for designating geographic areas 
     consistent with the unified service delivery areas;
       (D) data standards and quality control mechanisms; and
       (E) common schedules for data collection and dissemination.
       (4) Availability of information.--Data generated by the 
     labor market information system including information on 
     quarterly employment and earnings, together with matched data 
     on individuals who have participated in a federally supported 
     job training activity, shall be made available to the 
     National Board for use in the preparation of the National 
     Report Card. Aggregate level information shall be made 
     available to consumers in automated information delivery 
     systems.
       (5) Dissemination, technical assistance, and research.--The 
     Secretary, in cooperation with the National Board, the 
     Governors, and State Councils, where appropriate, shall 
     oversee the development, maintenance, and continuous 
     improvement of--
       (A) dissemination mechanisms for data and analysis, 
     including mechanisms that may be standardized among the 
     States;
       (B) programs of technical assistance and staff development 
     for States and localities, including assistance in adopting 
     and utilizing automated systems and improving the access, 
     through electronic and other means, to labor market 
     information; and
       (C) programs of research and demonstration, on ways to 
     improve the products and processes authorized by this 
     section.

     SEC. 502. RESPONSIBILITIES OF THE NATIONAL BOARD.

       (a) In General.--The National Board shall plan, review, and 
     evaluate the Nation's integrated labor market information 
     system.
       (b) Duties.--The National Board shall--
       (1) be responsible for providing policy guidance;
       (2) evaluate the integrated labor market information system 
     and ensure the cooperation of participating agencies; and
       (3) recommend to the Secretary needed improvements in 
     Federal, State, and local information systems to support the 
     development of an integrated labor market information system.

     SEC. 503. RESPONSIBILITIES OF THE SECRETARY.

       (a) In General.--The Secretary shall manage the investment 
     in an integrated labor market information system by--
       (1) reviewing all requirements for labor market information 
     across all programs within the system;
       (2) developing a comprehensive annual budget, including 
     funds at the Federal level, funds allotted to States by 
     formula, and funds supplied to the States by contracts with 
     departmental entities;
       (3) administering grants allotted to States by formula;
       (4) negotiating and executing contracts with the States;
       (5) coordinating the activities of Federal workforce 
     development agencies responsible for collecting the 
     statistics and program administrative data that comprise the 
     integrated system and disseminating labor market information 
     at the National, State, regional, and local levels; and
       (6) ensuring that standards are designed to meet the 
     requirements of chapter 35 of title 44, United States Code, 
     and are coordinated and consistent with other appropriate 
     Federal standards established by the Bureau of Labor 
     Statistics and other statistical agencies.
       (b) Requirements.--In carrying out the duties of the 
     Secretary under this section, the Secretary shall--
       (1) in consultation with the States and the private sector, 
     define a common core set of labor market information data 
     elements as specified in section 501(c)(2) that will be 
     consistently available across States in an integrated labor 
     market information system; and
       (2) ensure that data is sufficiently timely and locally 
     detailed for use, including uses specified in subsections (b) 
     and (c)(2) of section 501.
       (c) Annual Plan.--
       (1) In general.--The Secretary shall annually prepare and 
     submit to the National Board for review, a plan for improving 
     the Nation's integrated labor market information system. The 
     Secretary shall also submit the plan, together with the 
     comments and recommendations of the National Board, to the 
     President and Congress.
       (2) Contents.--The plan shall describe the budgetary needs 
     of the labor market information system, and shall describe 
     the activities of such Federal agencies with respect to data 
     collection, analysis, and dissemination for each fiscal year 
     succeeding the fiscal year in which the plan is developed. 
     The plan shall--
       (A) establish goals for system development and improvement 
     based on information needs for achieving economic growth and 
     productivity, accountability, fund allocation equity, and an 
     understanding of labor market characteristics and dynamics;
       (B) specify the common core set of data that shall be 
     included in the integrated labor market information system;
       (C) describe the current spending on integrated labor 
     market information activities from all sources, assess the 
     adequacy of the funds and identify the specific budget needs 
     of the Federal and State workforce development agencies with 
     respect to implementing and improving an integrated labor 
     market information system and the activities of such agencies 
     with respect to data compilation, analysis, and dissemination 
     for each fiscal year in which the plan is developed;
       (D) develop a budget for an integrated labor market 
     information system that accounts for all funds in 
     subparagraph (C) and any new funds made available pursuant to 
     this Act, and describes the relative allotments to be made 
     for--
       (i) the operation of the cooperative statistical programs 
     under section 501(c)(2);
       (ii) ensuring that technical standards are met pursuant to 
     section 501(c)(3); and
       (iii) consumer information and analysis, matching data, 
     dissemination, technical assistance, and research under 
     paragraphs (2)(C), (4), and (5) of section 501(c);
       (E) describe the existing system, information needs, and 
     the development of new data programs, analytical techniques, 
     definitions and standards, dissemination mechanisms, 
     governance mechanisms, and funding processes to meet new 
     needs;
       (F) summarize the results of an annual review of the costs 
     to the States of meeting contract requirements for data 
     production, including a description of how the budget request 
     for an integrated labor market information system will cover 
     such costs;
       (G) describe how the State Councils will be reimbursed for 
     carrying out the duties for labor market information;
       (H) recommend methods to simplify and integrate automated 
     client intake and eligibility determination systems across 
     workforce development programs to permit easy determination 
     of eligibility for funding and other assistance in job 
     training, job search, income support, supportive services, 
     and other reemployment services; and
       (I) provide for the involvement of States in developing the 
     plan by holding formal consultations conducted in cooperation 
     with representatives of the Governor or State Council, where 
     appropriate, pursuant to a process established by the 
     National Board.
       (d) Assistance From Other Agencies.--The Secretary may 
     receive assistance from member and other Federal agencies 
     (such as the Bureau of Labor Statistics and the Employment 
     and Training Administration of the Department of Labor, the 
     Administration on Children and Families of the Department of 
     Health and Human Services, and the Office of Adult and 
     Vocational Education and the National Center for Education 
     Statistics of the Department of Education) to assist in the 
     collection, analysis, and dissemination of labor market 
     information, and in the provision of training and technical 
     assistance to users of information, including States, 
     employers, youth, and adults.

     SEC. 504. RESPONSIBILITIES OF GOVERNORS.

       (a) Designation of State Agency.--The Governor of each 
     State and the State Council, where appropriate, shall 
     designate one State agency to be the agency responsible for--
       (1) the management and oversight of a statewide 
     comprehensive integrated labor market information system; and
       (2) developing a State unified labor market information 
     budget on an annual basis.
       (b) Requirements.--As a condition of receiving Federal 
     financial assistance under this title, the Governor or State 
     Council, where appropriate, shall-- [[Page S671]] 
       (1) develop, maintain, and continuously improve a 
     comprehensive integrated labor market information system, 
     which shall--
       (A) include the data specified in section 501(c)(2);
       (B) be responsive to the needs of the State and the 
     localities of such State for planning and evaluative data, 
     including employment and economic analyses and projections, 
     and program outcome data on employment and earnings for the 
     quality assurance system under section 204; and
       (C) meet Federal standards under chapter 35 of title 44, 
     United States Code, and other appropriate Federal standards 
     established by the Bureau;
       (2) ensure the performance of contract and grant 
     responsibilities for data compilation, analysis, and 
     dissemination;
       (3) conduct such other data collection, analysis, and 
     dissemination activities as will ensure the availability of 
     comprehensive State and local labor market information;
       (4) coordinate the data collection, analysis, and 
     dissemination activities of other State and local agencies, 
     with particular attention to State education, economic 
     development, human services, and welfare agencies, to ensure 
     complementary and compatibility among data; and
       (5) cooperate with the National Board and the Secretary by 
     making available, as requested, data for the evaluation of 
     programs covered by the labor market information and the 
     quality assurance systems under section 204.
       (c) Noninterference With State Functions.--Nothing in this 
     Act shall limit the ability of the State agency designated 
     under this section to conduct additional data collection, 
     analysis, and dissemination activities with funds derived 
     from sources other than this Act.
                                                                    ____


                The Workforce Development Act--Overview

       The federal government currently spends billions each year 
     on a wide array of different job training programs. There is 
     widespread consensus that these programs are not collectively 
     doing a good enough job of preparing workers for high skill 
     jobs in an increasingly competitive world economy.
       This bill takes immediate action to streamline and reform 
     current job training programs. In addition, over the next 
     four years states will be encouraged to experiment with 
     creative new approaches to transform federally-funded job 
     training efforts from a collection of free standing 
     bureaucratically-driven programs into an integrated and 
     accountable market-driven workforce development system.
       After examining lessons learned from the experimentation 
     taking place in the states, Congress will act upon 
     recommendations to create a new system to help workers to 
     compete in the 21st century economy.


                 Title I Streamlining and Consolidation

       This title immediately repeals 15 duplicative or outmoded 
     programs and encourages states to compete for grants to set 
     up integrated workforce development system that will, over 
     time, include one-stop career centers and voucher programs 
     for a wide range of adult training programs.
       This title establishes an expedited wavier authority 
     process to allow states and communities to waive programmatic 
     requirements that may impede the ability of those that are 
     willing to embark on the challenge of building a more 
     integrated workforce development system.
       This title also establishes a clear timetable and process 
     for taking action on the lessons learned from the experiments 
     undertaken by the states. By June 1, 1999, a tripartite 
     National Board must submit a joint resolution to the 
     President and Congress containing recommendations for a new 
     public/private workforce development system suitable for the 
     needs of the 21st century. To ensure that Congress acts on 
     these recommendations, twenty separate programs with more 
     than $4 billion in funding will sunset September 30, 1999. 
     The National Board will itself be sunsetted after if issues 
     this joint resolution.


                  TITLE II MARKET BUILDING ACTIVITIES

       This title establishes a framework at the federal, state, 
     and local levels for key stakeholders to work cooperatively 
     to build the information, accountability, and brokerage 
     systems needed to transform currently federally funded job 
     training programs into a market-driven workforce development 
     system.
       At the federal level, new streamlined accountability, labor 
     market information and management systems will replace the 
     myriad of existing federal monitoring and compliance systems 
     currently utilized by separate categorical programs. All 
     states will receive grants to develop these new systems which 
     will, for the first time, give policy makers and individuals 
     a clear sense of how well each program is doing in preparing 
     and placing people in jobs. Each year the National Board will 
     issue a National Report Card documenting the performance of 
     the nation's workforce development system.
       States will be given the opportunity to compete for multi-
     year implementation grants to experiment with new approaches 
     to building a market-driven workforce development system. 
     States that receive these grants will create a new tripartite 
     State Workforce Development Council to replace the multiple 
     existing boards created by separate federal job training 
     programs. These Council's responsibilities will include 
     developing a strategic plan that identifies ways to integrate 
     existing job training, education and economic development 
     programs to meet the needs of critical industries in the 
     state; and developing a quality assurance system to provide 
     consumer reports on the supply, demand, price and quality of 
     job training services throughout the state.
       At the local level, private sector led boards will be 
     established to bring coherence to job training activities at 
     the labor market level. These boards will identify the 
     training needs of critical industries in their region, and 
     develop strategies to redeploy public and private training 
     resources to respond to these needs. These boards will also 
     be responsible for establishing a network of one-stop career 
     centers to provide local jobseekers, workers, and businesses 
     universal access to a comprehensive array of quality 
     employment services.


                 title iii  enhancing individual choice

       This title will promote the establishment of a market-
     driven workforce development system by establishing training 
     accounts that make vouchers available to individuals to allow 
     them to choose the education and training service most 
     appropriate for their own career advancement.
       States that receive implementation grants to establish 
     market-driven workforce development systems will initially 
     establish training accounts from which dislocated workers can 
     receive vouchers. States will also have the option, over 
     time, of converting additional training programs into a 
     voucher system, subject to the approval of the National 
     Board.


                   title iv  private-public linkages

       This title take steps to begin to explicitly link federally 
     funded workforce development programs with training practices 
     and systems utilized by workers and firms in the private 
     sector.
       These steps include: recommending changes in the tax codes 
     to encourage employers and workers to invest in training and 
     skills upgrading for both existing workers and hard-to-serve 
     individuals; analyzing how businesses and labor in the United 
     States are restructuring the workplace to provide continuous 
     learning for their employees; overseeing the degree to which 
     publicly funded education and training providers throughout 
     the United States are incorporating industry-based skill 
     standards into their program offerings; and making matching 
     grants available on a competitive basis to encourage firms to 
     develop innovative approaches to upgrade the skills of their 
     front-line workers.


                   title v  labor market information

       This title establishes a comprehensive labor market 
     information system to provide accurate, timely data to 
     improve the functioning of local labor markets. These new 
     information systems will allow job seekers, workers and firms 
     to determine where the growth industries are in their 
     communities, what skills jobs in these industries require, 
     and which local training providers are successfully meeting 
     the training needs of these industries.


                                funding

       This bill authorizes funding of $250 million in fiscal year 
     1996--$160 million for the market building activities 
     identified in Title II and the matching grants for incumbent 
     worker training in Title IV; and the remaining $90 million 
     for the development of the integrated labor market 
     information system described in Title V. The funds are not 
     new spending, but are cost savings realized from streamlining 
     activities undertaken in Title I.
                                 ______

      By Mr. HATCH:
  S. 181. A bill to amend the Internal Revenue Code, of 1986 to provide 
tax incentives to encourage small investors, and for other purposes; to 
the Committee on Finance.
  S. 182. A bill to amend the Internal Revenue Code of 1986 to 
encourage investment in the United States by reforming the taxation of 
capital gains, and for other purposes; to the Committee on Finance.


                     CAPITAL GAINS TAX LEGISLATION

  Mr. HATCH. Mr. President, I rise today to introduce two pieces of 
capital gains tax legislation that will significantly change and 
improve America's capital formation, tax fairness, and saving rate. 
These bills are alternative solutions to reform a tax code that 
discourages investment and unfairly taxes investors on gains caused 
solely by inflation. Enactment of either of these bills would 
strengthen this Nation's precarious economic condition by stimulating 
economic growth and creating new jobs.
  These bills are the Small Investors Tax Relief Act of 1995 and the 
Capital Formation and Jobs Creation Act of 1995.
  Mr. President, the first bill, the Small Investors Tax Relief Act of 
1995 [SITRA], features three simple provisions that solve several 
problems that face America's small investors. First, it gives every 
individual an annual exemption from capital gains of $10,000 
[[Page S672]] per year. This amount is doubled on a joint return and 
the thresholds are indexed for inflation. This provision will encourage 
lower- and middle-income taxpayers to save and invest in stocks, real 
estate, or a new business. It will also unlock billions of dollars of 
unrealized capital gains in this country and put it to work creating 
new jobs.
  Second, SITRA provides an annual exemption from tax for the first 
$1,000 of interest and dividends earned by individuals each year. The 
exemption threshold is $2,000 for joint returns and is also indexed for 
inflation. This provision will provide a tremendous incentive for 
taxpayers to invest, rather than spend, their dollars. Our current tax 
law actually discourages savings by taxing every cent of earnings from 
interest and dividends. The result is a miserably low saving rate for 
the United States. All of our major trading partners enjoy a higher 
saving rate than does than the United States. Yet, our long-term 
prosperity demands a higher rate of savings, according to practically 
every economist. This bill will go a long way toward providing the 
encouragement that is now lacking for taxpayers to save money.
  Finally, SITRA would provide for indexing the bases of most capital 
assets to eventually eliminate the unfair taxation of gains caused 
solely by inflation. There is nothing fair about having to pay tax on 
inflationary gains. The tax on inflationary capital gains is not a tax 
on income or even on the increase in the real value of the asset. It is 
purely a tax on capital very much like the property tax, but only 
assessed when the property is sold.

  Mr. President, I am also introducing today the Capital Formation and 
Jobs Creation Act of 1995. This bill is identical to the capital gains 
tax bill included in H.R. 9, which is part of the Contract With 
America, introduced last week by Congressman Bill Archer. I commend 
Congressman Archer, the new chairman of the Ways and Means Committee, 
for his expertise and many years of leadership in the area of capital 
gains taxation and I look forward to working with him on this issue.
  This bill is also very simple. First, it would provide a deduction of 
50 percent of net capital gains realized. Thus, only half of a 
taxpayer's capital gains would be subject to taxation. Second, it would 
also index the bases of capital assets to ensure that inflationary 
gains are eliminated. Finally, it would allow a capital loss deduction 
for losses suffered on a sale or exchange of a taxpayer's principal 
residence.
  Mr. President, the debate about whether to cut the tax on capital 
gains has been very loud, long, and partisan. Our colleagues have heard 
much from both sides of the issue for many years. For the first time in 
several years, however, there is a realistic possibility that Congress 
will pass legislation this year to lower the tax on capital gains.
  The two bills I am introducing today offer different approaches to 
increasing economic growth, creating jobs, and enhancing fairness to 
taxpayers. I urge my colleagues to take a look at these bills as we 
consider how to best improve our Tax Code this year. I will have more 
to say on the need for capital gains tax reductions and the different 
approaches of these two bills in the days to come. My main purpose in 
introducing these bills today is to get these ideas before my 
colleagues and before the Nation. I ask unanimous consent that the text 
of the Small Investors Tax Relief Act of 1995 and the Capital Formation 
and Jobs Creation Act of 1995 be printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 181

       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 1986 CODE.

       (a) Short Title.--This Act may be cited as the ``Small 
     Investors Tax Relief Act of 1995''.
       (b) Amendment of 1986 Code.--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 Internal 
     Revenue Code of 1986.

     SEC. 2. EXEMPTION OF CERTAIN INTEREST AND DIVIDEND INCOME 
                   FROM TAX.

       (a) In General.--Part III of subchapter B of chapter 1 
     (relating to amounts specifically excluded from gross income) 
     is amended by inserting after section 115 the following new 
     section:

     ``SEC. 116. PARTIAL EXCLUSION OF DIVIDENDS AND INTEREST 
                   RECEIVED BY INDIVIDUALS.

       ``(a) Exclusion From Gross Income.--Gross income does not 
     include the sum of the amounts received during the taxable 
     year by an individual as--
       ``(1) dividends from domestic corporations, or
       ``(2) interest.
       ``(b) Limitations.--
       ``(1) Maximum amount.--The aggregate amount excluded under 
     subsection (a) for any taxable year shall not exceed $1,000 
     ($2,000 in the case of a joint return).
       ``(2) Certain dividends excluded.--Subsection (a)(1) shall 
     not apply to any dividend from a corporation which, for the 
     taxable year of the corporation in which the distribution is 
     made, or for the next preceding taxable year of the 
     corporation, is a corporation exempt from tax under section 
     501 (relating to certain charitable, etc., organization) or 
     section 521 (relating to farmers' cooperative associations).
       ``(3) Indexing for inflation.--In the case of any taxable 
     year beginning after 1995--
       ``(A) the $1,000 amount under paragraph (1) shall be 
     increased by an amount equal to--
       ``(i) $1,000, multiplied by
       ``(ii) the cost-of-living adjustment under section 1(f)(3) 
     for the calendar year in which the taxable year begins, 
     except that subparagraph (B) thereof shall be applied by 
     substituting `1994' for `1992', and
       ``(B) the $2,000 amount under paragraph (1) shall be 
     increased to an amount equal to twice the amount to which the 
     $1,000 amount is increased to under subparagraph (a).

     .If the dollar amount determined after the increase under 
     subparagraph (A) is not a multiple of $100, such dollar 
     amount shall be rounded to the next lowest multiple of $100.
       ``(c) Special Rules.--For purposes of this section--
       ``(1) Distributions from regulated investment companies and 
     real estate investment trusts.--Subsection (a) shall apply 
     with respect to distributions by--
       ``(A) regulated investment companies to the extent provided 
     in section 854(c), and
       ``(B) real estate investment trusts to the extent provided 
     in section 857(c).
       ``(2) Distributions by a trust.--For purposes of subsection 
     (a), the amount of dividends and interest properly allocable 
     to a beneficiary under section 652 or 662 shall be deemed to 
     have been received by the beneficiary ratably on the same 
     date that the dividends and interest were received by the 
     estate or trust.
       ``(3) Certain nonresident aliens ineligible for 
     exclusion.--In the case of a nonresident alien individual, 
     subsection (a) shall apply only--
       ``(A) in determining the tax imposed for the taxable year 
     pursuant to section 871(b)(1) and only in respect of 
     dividends and interest which are effectively connected with 
     the conduct of a trade or business within the United States, 
     or
       ``(B) in determining the tax imposed for the taxable year 
     pursuant to section 877(b).''
       (b) Clerical and Conforming Amendments.--
       (1) The table of sections for part III of subchapter B of 
     chapter 1 is amended by inserting after the item relating to 
     section 115 the following new item:

``Sec. 116. Partial exclusion of dividends and interest received by 
              individuals.''
       (2) Paragraph (2) of section 265(a) is amended by inserting 
     before the period at the end thereof the following: ``, or to 
     purchase or carry obligations or shares, or to make deposits, 
     to the extent the interest thereon is excludable from gross 
     income under section 116''.
       (3) Subsection (c) of section 584 is amended by adding at 
     the end the following new sentence:
     ``The proportionate share of each participant in the amount 
     of dividends or interest received by the common trust fund 
     and to which section 116 applies shall be considered for 
     purposes of such section as having been received by such 
     participant.''
       (4) Subsection (a) of section 643 is amended by inserting 
     after paragraph (6) the following new paragraph:
       ``(7) Dividends or interest.--There shall be included the 
     amount of any dividends or interest excluded from gross 
     income pursuant to section 116.''
       (5) Section 854 is amended by adding at the end the 
     following new subsection:
       ``(c) Treatment Under Section 116.--
       ``(1) In general.--For purposes of section 116, in the case 
     of any dividend (other than a dividend described in 
     subsection (a)) received from a regulated investment company 
     which meets the requirements of section 852 for the taxable 
     year in which it paid the dividend--
       ``(A) the entire amount of such dividend shall be treated 
     as a dividend if the aggregate dividends and interest 
     received by such company during the taxable year equal or 
     exceed 75 percent of its gross income, or
       ``(B) if subparagraph (A) does not apply, a portion of such 
     dividend shall be treated as a dividend (and a portion of 
     such dividend shall be treated as interest) based on the 
     portion of the company's gross income which consists of 
     aggregate dividends or aggregate interest, as the case may 
     be.

      [[Page S673]] For purposes of the preceding sentence, gross 
     income and aggregate interest received shall each be reduced 
     by so much of the deduction allowable by section 163 for the 
     taxable year as does not exceed aggregate interest received 
     for the taxable year.
       ``(2) Notice to shareholders.--The amount of any 
     distribution by a regulated investment company which may be 
     taken into account as a dividend for purposes of the 
     exclusion under section 116 shall not exceed the amount so 
     designated by the company in a written notice to its 
     shareholders mailed not later than 45 days after the close of 
     its taxable year.
       ``(3) Definitions.--For purposes of this subsection--
       ``(A) the term `gross income' does not include gain from 
     the sale or other disposition of stock or securities, and
       ``(B) the term `aggregate dividends received' includes only 
     dividends received from domestic corporations other than 
     dividends described in section 116(b)(2).

     In determining the amount of any dividend for purposes of 
     subparagraph (B), the rules provided in section 116(c)(1) 
     (relating to certain distributions) shall apply.''
       (6) Subsection (c) of section 857 of such Code is amended 
     to read as follows:
       ``(c) Limitations Applicable to Dividends Received From 
     Real Estate Investment Trusts.--
       ``(1) In general.--For purposes of section 116 (relating to 
     an exclusion for dividends and interest received by 
     individuals) and section 243 (relating to deductions for 
     dividends received by corporations), a dividend received from 
     a real estate investment trust which meets the requirements 
     of this part shall not be considered as a dividend.
       ``(2) Treatment as interest.--In the case of a dividend 
     (other than a capital gain dividend, as defined in subsection 
     (b)(3)(C)) received from a real estate investment trust which 
     meets the requirements of this part for the taxable year in 
     which it paid the dividend--
       ``(A) such dividend shall be treated as interest if the 
     aggregate interest received by the real estate investment 
     trust for the taxable year equals or exceeds 75 percent of 
     its gross income, or
       ``(B) if subparagraph (A) does not apply, the portion of 
     such dividend which bears the same ratio to the amount of 
     such dividend as the aggregate interest received bears to 
     gross income shall be treated as interest.
       ``(3) Adjustments to gross income and aggregate interest 
     received.--For purposes of paragraph (2)--
       ``(A) gross income does not include the net capital gain,
       ``(B) gross income and aggregate interest received shall 
     each be reduced by so much of the deduction allowable by 
     section 163 for the taxable year (other than for interest on 
     mortgages on real property owned by the real estate 
     investment trust) as does not exceed aggregate interest 
     received by the taxable year, and
       ``(C) gross income shall be reduced by the sum of the taxes 
     imposed by paragraphs (4), (5), and (6) of section 857(b).
       ``(4) Notice to shareholders.--The amount of any 
     distribution by a real estate investment trust which may be 
     taken into account as interest for purposes of the exclusion 
     under section 116 shall not exceed the amount so designated 
     by the trust in a written notice to its shareholders mailed 
     not later than 45 days after the close of its taxable year.''
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to amounts received after December 
     31, 1994, in taxable years ending after such date.

     SEC. 3. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF 
                   DETERMINING GAIN OR LOSS.

       (a) In General.--Part II of subchapter O of chapter 1 
     (relating to basis rules of general application) is amended 
     by inserting after section 1021 the following new section:

     ``SEC. 1022. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF 
                   DETERMINING GAIN OR LOSS.

       ``(a) General Rule.--
       ``(1) Indexed basis substituted for adjusted basis.--Except 
     as provided in paragraph (2), if an indexed asset which has 
     been held for more than 1 year is sold or otherwise disposed 
     of, then, for purposes of this title, the indexed basis of 
     the asset shall be substituted for its adjusted basis.
       ``(2) Exception for depreciation, etc.--The deduction for 
     depreciation, depletion, and amortization shall be determined 
     without regard to the application of paragraph (1) to the 
     taxpayer or any other person.
       ``(b) Indexed Asset.--
       ``(1) In general.--For purposes of this section, the term 
     `indexed asset' means--
       ``(A) stock in a corporation,
       ``(B) tangible property (or any interest therein), which is 
     a capital asset or property used in the trade or business (as 
     defined in section 1231(b)), and
       ``(C) the principal residence of the taxpayer (within the 
     meaning of section 1034).
       ``(2) Certain property excluded.--For purposes of this 
     section, the term `indexed asset' does not include--
       ``(A) Creditor's interest.--Any interest in property which 
     is in the nature of a creditor's interest.
       ``(B) Options.--Any option or other right to acquire an 
     interest in property.
       ``(C) Net lease property.--In the case of a lessor, net 
     lease property (within the meaning of subsection (h)(1)).
       ``(D) Certain preferred stock.--Stock which is preferred as 
     to dividends and does not participate in corporate growth to 
     any significant extent.
       ``(E) Stock in certain corporations.--Stock in--
       ``(i) an S corporation (within the meaning of section 
     1361),
       ``(ii) a personal holding company (as defined in section 
     542), and
       ``(iii) a foreign corporation.
       ``(3) Exception for stock in foreign corporation which is 
     regularly traded on national or regional exchange.--Clause 
     (iii) of paragraph (2)(E) shall not apply to stock in a 
     foreign corporation the stock of which is listed on the New 
     York Stock Exchange, the American Stock Exchange, or any 
     domestic regional exchange for which quotations are published 
     on a regular basis other than--
       ``(A) stock of a foreign investment company (within the 
     meaning of section 1246(b)), and
       ``(B) stock in a foreign corporation held by a United 
     States person who meets the requirements of section 
     1248(a)(2).
       ``(c) Indexed Basis.--For purposes of this section--
       ``(1) Indexed basis.--The indexed basis for any asset is--
       ``(A) the adjusted basis of the asset, multiplied by
       ``(B) the applicable inflation ratio.
       ``(2) Applicable inflation ratio.--The applicable inflation 
     ratio for any asset is the percentage arrived at by 
     dividing--
       ``(A) the CPI for the calendar year preceding the calendar 
     year in which the disposition takes place, by
       ``(B) the CPI for the calendar year preceding the calendar 
     year in which the asset was acquired by the taxpayer (or, in 
     the case of an asset acquired before 1995, the CPI for 1993).

     The applicable inflation ratio shall not be taken into 
     account unless it is greater than 1. The applicable inflation 
     ratio for any asset shall be rounded to the nearest one-tenth 
     of 1 percent.
       ``(3) CPI.--The CPI for any calendar year shall be 
     determined under section 1(f)(4).
       ``(4) Secretary to publish tables.--The Secretary shall 
     publish tables specifying the applicable inflation ratio for 
     each calendar year.
       ``(d) Special Rules.--For purposes of this section--
       ``(1) Treatment as separate asset.--In the case of any 
     asset, the following shall be treated as a separate asset:
       ``(A) A substantial improvement to property.
       ``(B) In the case of stock of a corporation, a substantial 
     contribution to capital.
       ``(C) Any other portion of an asset to the extent that 
     separate treatment of such portion is appropriate to carry 
     out the purposes of this section.
       ``(2) Assets which are not indexed assets throughout 
     holding period.--
       ``(A) In general.--The applicable inflation ratio shall be 
     appropriately reduced for calendar months at any time during 
     which the asset was not an indexed asset.
       ``(B) Certain short sales.--For purposes of applying 
     subparagraph (A), an asset shall be treated as not an indexed 
     asset for any short sale period during which the taxpayer or 
     the taxpayer's spouse sells short property substantially 
     identical to the asset. For purposes of the preceding 
     sentence, the short sale period begins on the day after the 
     substantially identical property is sold and ends on the 
     closing date for the sale.
       ``(3) Treatment of certain distributions.--A distribution 
     with respect to stock in a corporation which is not a 
     dividend shall be treated as a disposition.
       ``(4) Section cannot increase ordinary loss.--To the extent 
     that (but for this paragraph) this section would create or 
     increase a net ordinary loss to which section 1231(a)(2) 
     applies or an ordinary loss to which any other provision of 
     this title applies, such provision shall not apply. The 
     taxpayer shall be treated as having a long-term capital loss 
     in an amount equal to the amount of the ordinary loss to 
     which the preceding sentence applies.
       ``(5) Acquisition date where there has been prior 
     application of subsection (a)(1) with respect to the 
     taxpayer.--If there has been a prior application of 
     subsection (a)(1) to an asset while such asset was held by 
     the taxpayer, the date of acquisition of such asset by the 
     taxpayer shall be treated as not earlier than the date of the 
     most recent such prior application.
       ``(6) Collapsible corporations.--The application of section 
     341(a) (relating to collapsible corporations) shall be 
     determined without regard to this section.
       ``(e) Certain Conduit Entities.--
       ``(1) Regulated investment companies; real estate 
     investment trusts; common trust funds.--
       ``(A) In general.--Stock in a qualified investment entity 
     shall be an indexed asset for any calendar month in the same 
     ratio as the fair market value of the assets held by such 
     entity at the close of such month which are indexed assets 
     bears to the fair market value of all assets of such entity 
     at the close of such month.
       ``(B) Ratio of 90 percent or more.--If the ratio for any 
     calendar month determined under subparagraph (A) would (but 
     for this subparagraph) be 90 percent or more, such ratio for 
     such month shall be 100 percent.
       ``(C) Ratio of 10 percent or less.--If the ratio for any 
     calendar month determined under subparagraph (A) would (but 
     for this [[Page S674]] subparagraph) be 10 percent or less, 
     such ratio for such month shall be zero.
       ``(D) Valuation of assets in case of real estate investment 
     trusts.--Nothing in this paragraph shall require a real 
     estate investment trust to value its assets more frequently 
     than once each 36 months (except where such trust ceases to 
     exist). The ratio under subparagraph (A) for any calendar 
     month for which there is no valuation shall be the trustee's 
     good faith judgment as to such valuation.
       ``(E) Qualified investment entity.--For purposes of this 
     paragraph, the term `qualified investment entity' means--
       ``(i) a regulated investment company (within the meaning of 
     section 851),
       ``(ii) a real estate investment trust (within the meaning 
     of section 856), and
       ``(iii) a common trust fund (within the meaning of section 
     584).
       ``(2) Partnerships.--In the case of a partnership, the 
     adjustment made under subsection (a) at the partnership level 
     shall be passed through to the partners.
       ``(3) Subchapter s corporations.--In the case of an 
     electing small business corporation, the adjustment under 
     subsection (a) at the corporate level shall be passed through 
     to the shareholders.
       ``(f) Dispositions Between Related Persons.--
       ``(1) In general.--This section shall not apply to any sale 
     or other disposition of property between related persons 
     except to the extent that the basis of such property in the 
     hands of the transferee is a substituted basis.
       ``(2) Related persons defined.--For purposes of this 
     section, the term `related persons' means--
       ``(A) persons bearing a relationship set forth in section 
     267(b), and
       ``(B) persons treated as single employer under subsection 
     (b) or (c) of section 414.
       ``(g) Transfers To Increase Indexing Adjustment or 
     Depreciation Allowance.--If any person transfers cash, debt, 
     or any other property to another person and the principal 
     purpose of such transfer is--
       ``(1) to secure or increase an adjustment under subsection 
     (a), or
       ``(2) to increase (by reason of an adjustment under 
     subsection (a)) a deduction for depreciation, depletion, or 
     amortization,

     the Secretary may disallow part or all of such adjustment or 
     increase.
       ``(h) Definitions.--For purposes of this section--
       ``(1) Net lease property defined.--The term `net lease 
     property' means leased real property where--
       ``(A) the term of the lease (taking into account options to 
     renew) was 50 percent or more of the useful life of the 
     property, and
       ``(B) for the period of the lease, the sum of the 
     deductions with respect to such property which are allowable 
     to the lessor solely by reason of section 162 (other than 
     rents and reimbursed amounts with respect to such property) 
     is 15 percent or less of the rental income produced by such 
     property.
       ``(2) Stock includes interest in common trust fund.--The 
     term `stock in a corporation' includes any interest in a 
     common trust fund (as defined in section 584(a)).
       ``(i) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''
       (b) Adjustment To Apply for Purposes of Determining 
     Earnings and Profits.--Subsection (f) of section 312 
     (relating to effect on earnings and profits of gain or loss 
     and of receipt of tax-free distributions) is amended by 
     adding at the end thereof the following new paragraph:
       ``(3) Effect on earnings and profits of indexed basis.--

  ``For substitution of indexed basis for adjusted basis in the case of 
the disposition of certain assets after December 31, 1994, see section 
1022(a)(1).''

       (c) Clerical Amendment.--The table of sections for part II 
     of subchapter O of such chapter 1 is amended by inserting 
     after the item relating to section 1021 the following new 
     item:

``Sec. 1022. Indexing of certain assets for purposes of determining 
              gain or loss.''

       (d) Effective Date.--The amendments made by this section 
     shall apply to dispositions after December 31, 1994.

     SEC. 4. REDUCTION IN CAPITAL GAINS TAX FOR INDIVIDUALS.

       (a) General Rule.--Part I of subchapter P of chapter 1 
     (relating to treatment of capital gains) is amended by adding 
     at the end thereof the following new section:

     ``SEC. 1203. CAPITAL GAINS DEDUCTION FOR INDIVIDUALS.

       ``(a) In General.--In the case of an individual, there 
     shall be allowed as a deduction for the taxable year an 
     amount equal to the annual capital gains deduction (if any) 
     determined under subsection (b).
       ``(b) Annual Capital Gains Deduction.--
       ``(1) In general.--For purposes of subsection (a), the 
     annual capital gains deduction determined under this 
     subsection is the lesser of--
       ``(A) the net capital gain for the taxable year, or
       ``(B) $10,000 ($20,000 in the case of a joint return).
       ``(2) Coordination with exclusion for gain from small 
     business stock.--For purposes of paragraph (1)(A), net 
     capital gain shall be determined without regard to any gain 
     from the sale or exchange of qualified small business stock 
     (as defined in section 1202(c)) held for more than 5 years.
       ``(3) Certain individuals not eligible.--This subsection 
     shall not apply to any individual with respect to whom a 
     deduction under section 151 is allowable to another taxpayer 
     for a taxable year beginning in the calendar year in which 
     such individual's taxable year begins.
       ``(4) Annual deduction not available for sales to related 
     persons.--The amount of the net capital gain taken into 
     account under paragraph (1)(A) shall not exceed the amount of 
     the net capital gain determined by not taking into account 
     gains and losses from sales and exchanges to any related 
     person (as defined in section 267(f)).
       ``(5) Indexing for inflation.--In the case of any taxable 
     year beginning after 1995--
       ``(A) the $10,000 amount under paragraph (1)(B) shall be 
     increased by an amount equal to--
       ``(i) $10,000, multiplied by
       ``(ii) the cost-of-living adjustment under section 1(f)(3) 
     for the calendar year in which the taxable year begins, 
     except that subparagraph (B) thereof shall be applied by 
     substituting `1994' for `1992', and
       ``(B) the $20,000 amount under paragraph (1)(B) shall be 
     increased to an amount equal to twice the amount determined 
     under subparagraph (A) for the taxable year.

     If the dollar amount determined after the increase under this 
     paragraph is not a multiple of $100, such dollar amount shall 
     be rounded to the next lowest multiple of $100.
       ``(c) Section Not To Apply to Estates or Trusts.--No 
     deduction shall be allowed under this section to an estate or 
     trust.
       ``(d) Special Rules.--
       ``(1) Deduction available only for sales or exchanges after 
     december 31, 1994.--The amount of the net capital gain taken 
     into account under subsection (b)(1)(A) shall not exceed the 
     amount of the net capital gain determined by only taking into 
     account gains and losses from sales and exchanges after 
     December 31, 1994.
       ``(2) Special rule for pass-thru entities.--
       ``(A) In general.--In applying this section with respect to 
     any pass-thru entity, the determination of when the sale or 
     exchange occurs shall be made at the entity level.
       ``(B) Pass-thru entity defined.--For purposes of 
     subparagraph (A), the term `pass-thru entity' means--
       ``(i) a regulated investment company,
       ``(ii) a real estate investment trust,
       ``(iii) an S corporation,
       ``(iv) a partnership,
       ``(v) an estate or trust, and
       ``(vi) a common trust fund.''
       (b) Conforming Amendments.--
       (1) Subsection (a) of section 62 is amended by inserting 
     after paragraph (15) the following new paragraph:
       ``(16) Capital gains deduction.--The deduction allowed by 
     section 1203.''
       (2) Paragraph (2) of section 172(d) is amended by inserting 
     ``and the deduction provided by section 1203'' after 
     ``1202''.
       (3)(A) Section 220 (relating to cross reference) is amended 
     to read as follows:

     ``SEC. 220. CROSS REFERENCES.

  ``(1) For deduction for net capital gains in the case of a taxpayer 
other than a corporation, see section 1203.
  ``(2) For deductions in respect of a decedent, see section 691.''

       (B) The table of sections for part VII of subchapter B of 
     chapter 1 is amended by striking ``reference'' in the item 
     relating to section 220 and inserting ``references''.
       (4) Paragraph (4) of section 691(c) is amended by inserting 
     ``1203,'' after ``1202,''.
       (5) The second sentence of paragraph (2) of section 871(a) 
     is amended by inserting ``or 1203'' after ``1202''.
       (c) Clerical Amendment.--The table of sections for part I 
     of subchapter P of chapter 1 is amended by adding at the end 
     thereof the following new item:


``Sec. 1203. Capital gains deduction for individuals.''

       (d) Effective Date.--The amendments made by this section 
     shall apply to sales or exchanges after December 31, 1994, in 
     taxable years ending after such date.
                                                                    ____


                                 S. 182

       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 1986 CODE.

       (a) Short Title.--This Act may be cited as the ``Capital 
     Formation and Job Creation Act of 1995''.
       (b) Amendment of 1986 Code.--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 Internal 
     Revenue Code of 1986.

     SEC. 2. 50 PERCENT CAPITAL GAINS DEDUCTION.

       (a) General Rule.--Part I of subchapter P of chapter 1 
     (relating to treatment of capital gains) is amended to read 
     as follows:

                  ``PART I--TREATMENT OF CAPITAL GAINS

``Sec. 1201. Capital gains deduction.

     ``SEC. 1201. CAPITAL GAINS DEDUCTION.

       ``(a) General Rule.--If for any taxable year a taxpayer has 
     a net capital gain, 50 [[Page S675]] percent of such gain 
     shall be a deduction from gross income.
       ``(b) Estates and Trusts.--In the case of an estate or 
     trust, the deduction shall be computed by excluding the 
     portion (if any) of the gains for the taxable year from sales 
     or exchanges of capital assets which, under sections 652 and 
     662 (relating to inclusions of amounts in gross income of 
     beneficiaries of trusts), is includible by the income 
     beneficiaries as gain derived from the sale or exchange of 
     capital assets.
       ``(c) Coordination With Treatment of Capital Gain Under 
     Limitation on Investment Interest.--For purposes of this 
     section, the net capital gain for any taxable year shall be 
     reduced (but not below zero) by the amount which the taxpayer 
     takes into account as investment income under section 
     163(d)(4)(B)(iii).
       ``(d) Transitional Rule.--
       ``(1) In general.--In the case of a taxable year which 
     includes January 1, 1995--
       ``(A) the amount taken into account as the net capital gain 
     under subsection (a) shall not exceed the net capital gain 
     determined by only taking into account gains and losses 
     properly taken into account for the portion of the taxable 
     year on or after January 1, 1995, and
       ``(B) if the net capital gain for such year exceeds the 
     amount taken into account under subsection (a), the rate of 
     tax imposed by section 1 on such excess shall not exceed 28 
     percent.
       ``(2) Special rules for pass-thru entities.--
       ``(A) In general.--In applying paragraph (1) with respect 
     to any pass-thru entity, the determination of when gains and 
     losses are properly taken into account shall be made at the 
     entity level.
       ``(B) Pass-thru entity defined.--For purposes of 
     subparagraph (A), the term `pass-thru entity' means--
       ``(i) a regulated investment company,
       ``(ii) a real estate investment trust,
       ``(iii) an S corporation,
       ``(iv) a partnership,
       ``(v) an estate or trust, and
       ``(vi) a common trust fund.''
       (b) Deduction Allowable in Computing Adjusted Gross 
     Income.--Subsection (a) of section 62 is amended by inserting 
     after paragraph (15) the following new paragraph:
       ``(16) Long-term capital gains.--The deduction allowed by 
     section 1201.''
       (c) Technical and Conforming Changes.--
       (1) Section 13113 of the Revenue Reconciliation Act of 1993 
     (relating to 50-percent exclusion for gain from certain small 
     business stock), and the amendments made by such section, are 
     hereby repealed; and the Internal Revenue Code of 1986 shall 
     be applied as if such section (and amendments) had never been 
     enacted.
       (2) Section 1 is amended by striking subsection (h).
       (3) Paragraph (1) of section 170(e) is amended by striking 
     ``the amount of gain'' in the material following subparagraph 
     (B)(ii) and inserting ``50 percent of the amount of gain''.
       (4)(A) Paragraph (2) of section 172(d) is amended to read 
     as follows:
       ``(2) Capital gains and losses.--
       ``(A) Losses of taxpayers other than corporations.--In the 
     case of a taxpayer other than a corporation, the amount 
     deductible on account of losses from sales or exchanges of 
     capital assets shall not exceed the amount includible on 
     account of gains from sales or exchanges of capital assets.
       ``(B) Deduction under section 1201.--The deduction under 
     section 1201 shall not be allowed.''
       (B) Subparagraph (B) of section 172(d)(4) is amended by 
     striking ``paragraphs (1) and (3)'' and inserting 
     ``paragraphs (1), (2)(B), and (3)''.
       (5) Paragraph (4) of section 642(c) is amended to read as 
     follows:
       ``(4) Adjustments.--To the extent that the amount otherwise 
     allowable as a deduction under this subsection consists of 
     gain from the sale or exchange of capital assets held for 
     more than 1 year, proper adjustment shall be made for any 
     deduction allowable to the estate or trust under section 1201 
     (relating to deduction for excess of capital gains over 
     capital losses). In the case of a trust, the deduction 
     allowed by this subsection shall be subject to section 681 
     (relating to unrelated business income).''
       (6) Paragraph (3) of section 643(a) is amended by adding at 
     the end the following new sentence: ``The deduction under 
     section 1201 (relating to deduction of excess of capital 
     gains over capital losses) shall not be taken into account.''
       (7) Paragraph (4) of section 691(c) is amended by striking 
     ``sections 1(h), 1201, and 1211'' and inserting ``sections 
     1201 and 1211''.
       (8) The second sentence of section 871(a)(2) is amended by 
     inserting ``such gains and losses shall be determined without 
     regard to section 1201 (relating to deduction for capital 
     gains) and'' after ``except that''.
       (9) Subsection (d) of section 1044 is amended by striking 
     the last sentence.
       (10)(A) Paragraph (2) of section 1211(b) is amended to read 
     as follows:
       ``(2) the sum of--
       ``(A) the excess of the net short-term capital loss over 
     the net long-term capital gain, and
       ``(B) one-half of the excess of the net long-term capital 
     loss over the net short-term capital gain.''
       (B) So much of paragraph (2) of section 1212(b) as precedes 
     subparagraph (B) thereof is amended to read as follows:
       ``(2) Special rules.--
       ``(A) Adjustments.--
       ``(i) For purposes of determining the excess referred to in 
     paragraph (1)(A), there shall be treated as short-term 
     capital gain in the taxable year an amount equal to the 
     lesser of--

       ``(I) the amount allowed for the taxable year under 
     paragraph (1) or (2) of section 1211(b), or
       ``(II) the adjusted taxable income for such taxable year.

       ``(ii) For purposes of determining the excess referred to 
     in paragraph (1)(B), there shall be treated as short-term 
     capital gain in the taxable year an amount equal to the sum 
     of--

       ``(I) the amount allowed for the taxable year under 
     paragraph (1) or (2) of section 1211(b) or the adjusted 
     taxable income for such taxable year, whichever is the least, 
     plus
       ``(II) the excess of the amount described in subclause (I) 
     over the net short-term capital loss (determined without 
     regard to this subsection) for such year.''

       (11) Paragraph (1) of section 1402(i) is amended by 
     inserting ``, and the deduction provided by section 1201 
     shall not apply'' before the period at the end thereof.
       (12) Section 12 is amended by striking paragraph (4) and 
     redesignating the following paragraphs accordingly.
       (13) Paragraph (2) of section 527(b) is hereby repealed.
       (14) Subparagraph (D) of section 593(b)(2) is amended by 
     adding ``and'' at the end of clause (iii), by striking ``, 
     and'' at the end of clause (iv) and inserting a period, and 
     by striking clause (v).
       (15) Paragraph (2) of section 801(a) is hereby repealed.
       (16) Subsection (c) of section 831 is amended by striking 
     paragraph (1) and redesignating the following paragraphs 
     accordingly.
       (17)(A) Subparagraph (A) of section 852(b)(3) is amended by 
     striking ``, determined as provided in section 1201(a), on'' 
     and inserting ``of 17.5 percent of''.
       (B) Clause (iii) of section 852(b)(3)(D) is amended--
       (i) by striking ``65 percent'' and inserting ``82.5 
     percent'', and
       (ii) by striking ``section 1201(a)'' and inserting 
     ``subparagraph (A)''.
       (18) Clause (ii) of section 857(b)(3)(A) is amended by 
     striking ``determined at the rate provided in section 1201(a) 
     on'' and inserting ``of 17.5 percent of''.
       (19) Paragraph (1) of section 882(a) is amended by striking 
     ``section 11, 55, 59A, or 1201(a)'' and inserting ``section 
     11, 55, or 59A''.
       (20) Subsection (b) of section 904 is amended by striking 
     paragraphs (2)(B), (3)(B), (3)(D), and (3)(E).
       (21) Subsection (b) of section 1374 is amended by striking 
     paragraph (4).
       (22) Subsection (b) of section 1381 is amended by striking 
     ``or 1201''.
       (23) Subsection (e) of section 1445 is amended--
       (A) in paragraph (1) by striking ``35 percent (or, to the 
     extent provided in regulations, 28 percent)'' and inserting 
     ``17.5 percent (or, to the extent provided in regulations, 
     19.8 percent)'', and
       (B) in paragraph (2) by striking ``35 percent'' and 
     inserting ``17.5 percent''.
       (24) Clause (i) of section 6425(c)(1)(A) is amended by 
     striking ``or 1201(a)''.
       (25) Clause (i) of section 6655(g)(1)(A) is amended by 
     striking ``or 1201(a)''.
       (26)(A) The second sentence of section 7518(g)(6)(A) is 
     amended--
       (i) by striking ``during a taxable year to which section 
     1(h) or 1201(a) applies'', and
       (ii) by striking ``28 percent (34 percent'' and inserting 
     ``19.8 percent (17.5 percent''.
       (B) The second sentence of section 607(h)(6)(A) of the 
     Merchant Marine Act, 1936 is amended--
       (i) by striking ``during a taxable year to which section 
     1(h) or 1201(a) of such Code applies'', and
       (ii) by striking ``28 percent (34 percent'' and inserting 
     ``19.8 percent (17.5 percent''.
       (d) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to taxable years ending after December 31, 1994.
       (2) Contributions.--The amendment made by subsection (c)(3) 
     shall apply only to contributions on or after January 1, 
     1995.
       (3) Withholding.--The amendment made by subsection (c)(23) 
     shall apply only to amounts paid after the date of the 
     enactment of this Act.

     SEC. 3. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF 
                   DETERMINING GAIN OR LOSS.

       (a) In General.--Part II of subchapter O of chapter 1 
     (relating to basis rules of general application) is amended 
     by inserting after section 1021 the following new section:

     ``SEC. 1022. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF 
                   DETERMINING GAIN OR LOSS.

       ``(a) General Rule.--
       ``(1) Indexed basis substituted for adjusted basis.--Except 
     as otherwise provided in this subsection, if an indexed asset 
     which has been held for more than 1 year is sold or otherwise 
     disposed of, for purposes of this title the indexed basis of 
     the asset shall be substituted for its adjusted basis.
       ``(2) Exception for depreciation, etc.--The deduction for 
     depreciation, depletion, and amortization shall be determined 
     without regard to the application of paragraph (1) to the 
     taxpayer or any other person.
       ``(b) Indexed Asset.-- [[Page S676]] 
       ``(1) In general.--For purposes of this section, the term 
     `indexed asset' means--
       ``(A) stock in a corporation, and
       ``(B) tangible property (or any interest therein),
     which is a capital asset or property used in the trade or 
     business (as defined in section 1231(b)).
       ``(2) Certain property excluded.--For purposes of this 
     section, the term `indexed asset' does not include--
       ``(A) Creditor's interest.--Any interest in property which 
     is in the nature of a creditor's interest.
       ``(B) Options.--Any option or other right to acquire an 
     interest in property.
       ``(C) Net lease property.--In the case of a lessor, net 
     lease property (within the meaning of subsection (i)(3)).
       ``(D) Certain preferred stock.--Stock which is fixed and 
     preferred as to dividends and does not participate in 
     corporate growth to any significant extent.
       ``(E) Stock in foreign corporations.--Stock in a foreign 
     corporation.
       ``(F) Stock in s corporations.--Stock in an S corporation.
       ``(3) Exception for stock in foreign corporation which is 
     regularly traded on national or regional exchange.--Paragraph 
     (2)(E) shall not apply to stock in a foreign corporation the 
     stock of which is listed on the New York Stock Exchange, the 
     American Stock Exchange, the national market system operated 
     by the National Association of Securities Dealers, or any 
     domestic regional exchange for which quotations are published 
     on a regular basis other than--
       ``(A) stock of a foreign investment company (within the 
     meaning of section 1246(b)),
       ``(B) stock in a passive foreign investment company (as 
     defined in section 1296), and
       ``(C) stock in a foreign corporation held by a United 
     States person who meets the requirements of section 
     1248(a)(2).
       ``(4) Treatment of american depository receipts.--For 
     purposes of this section, an American depository receipt for 
     stock in a foreign corporation shall be treated as stock in 
     such corporation.
       ``(c) Indexed Basis.--For purposes of this section--
       ``(1) General rule.--The indexed basis for any asset is--
       ``(A) the adjusted basis of the asset, multiplied by
       ``(B) the applicable inflation ratio.
       ``(2) Applicable inflation ratio.--The applicable inflation 
     ratio for any asset is the percentage arrived at by 
     dividing--
       ``(A) the gross domestic product deflator for the calendar 
     quarter in which the disposition takes place, by
       ``(B) the gross domestic product deflator for the calendar 
     quarter in which the asset was acquired by the taxpayer (or, 
     if later, the calendar quarter ending on December 31, 1994).

     The applicable inflation ratio shall never be less than 1. 
     The applicable inflation ratio for any asset shall be rounded 
     to the nearest \1/1000\.
       ``(3) Gross domestic product deflator.--The gross domestic 
     product deflator for any calendar quarter is the implicit 
     price deflator for the gross domestic product for such 
     quarter (as shown in the first revision thereof).
       ``(d) Short Sales.--
       ``(1) In general.--In the case of a short sale of an 
     indexed asset with a short sale period in excess of 1 year, 
     for purposes of this title, the amount realized shall be an 
     amount equal to the amount realized (determined without 
     regard to this paragraph) multiplied by the applicable 
     inflation ratio. In applying subsection (c)(2) for purposes 
     of the preceding sentence, the date on which the property is 
     sold short shall be treated as the date of acquisition and 
     the closing date for the sale shall be treated as the date of 
     disposition.
       ``(2) Short sale of substantially identical property.--If 
     the taxpayer or the taxpayer's spouse sells short property 
     substantially identical to an asset held by the taxpayer, the 
     asset held by the taxpayer and the substantially identical 
     property shall not be treated as indexed assets for the short 
     sale period.
       ``(3) Short sale period.--For purposes of this subsection, 
     the short sale period begins on the day after property is 
     sold and ends on the closing date for the sale.
       ``(e) Treatment of Regulated Investment Companies and Real 
     Estate Investment Trusts.--
       ``(1) Adjustments at entity level.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the adjustment under subsection (a) shall be 
     allowed to any qualified investment entity (including for 
     purposes of determining the earnings and profits of such 
     entity).
       ``(B) Exception for qualification purposes.--This section 
     shall not apply for purposes of sections 851(b) and 856(c).
       ``(2) Adjustments to interests held in entity.--
       ``(A) In general.--Stock in a qualified investment entity 
     shall be an indexed asset for any calendar month in the same 
     ratio as the fair market value of the assets held by such 
     entity at the close of such month which are indexed assets 
     bears to the fair market value of all assets of such entity 
     at the close of such month.
       ``(B) Ratio of 90 percent or more.--If the ratio for any 
     calendar month determined under subparagraph (A) would (but 
     for this subparagraph) be 90 percent or more, such ratio for 
     such month shall be 100 percent.
       ``(C) Ratio of 10 percent or less.--If the ratio for any 
     calendar month determined under subparagraph (A) would (but 
     for this subparagraph) be 10 percent or less, such ratio for 
     such month shall be zero.
       ``(D) Valuation of assets in case of real estate investment 
     trusts.--Nothing in this paragraph shall require a real 
     estate investment trust to value its assets more frequently 
     than once each 36 months (except where such trust ceases to 
     exist). The ratio under subparagraph (A) for any calendar 
     month for which there is no valuation shall be the trustee's 
     good faith judgment as to such valuation.
       ``(3) Qualified investment entity.--For purposes of this 
     subsection, the term `qualified investment entity' means--
       ``(A) a regulated investment company (within the meaning of 
     section 851), and
       ``(B) a real estate investment trust (within the meaning of 
     section 856).
       ``(f) Other Pass-Thru Entities.--
       ``(1) Partnerships.--In the case of a partnership, the 
     adjustment made under subsection (a) at the partnership level 
     shall be passed through to the partners.
       ``(2) S corporations.--In the case of an S corporation, the 
     adjustment made under subsection (a) at the corporate level 
     shall be passed through to the shareholders.
       ``(3) Common trust funds.--In the case of a common trust 
     fund, the adjustment made under subsection (a) at the trust 
     level shall be passed through to the participants.
       ``(g) Dispositions Between Related Persons.--
       ``(1) In general.--This section shall not apply to any sale 
     or other disposition of property between related persons 
     except to the extent that the basis of such property in the 
     hands of the transferee is a substituted basis.
       ``(2) Related persons defined.--For purposes of this 
     section, the term `related persons' means--
       ``(A) persons bearing a relationship set forth in section 
     267(b), and
       ``(B) persons treated as single employer under subsection 
     (b) or (c) of section 414.
       ``(h) Transfers To Increase Indexing Adjustment.--If any 
     person transfers cash, debt, or any other property to another 
     person and the principal purpose of such transfer is to 
     secure or increase an adjustment under subsection (a), the 
     Secretary may disallow part or all of such adjustment or 
     increase.
       ``(i) Special Rules.--For purposes of this section:
       ``(1) Treatment as separate asset.--In the case of any 
     asset, the following shall be treated as a separate asset:
       ``(A) A substantial improvement to property.
       ``(B) In the case of stock of a corporation, a substantial 
     contribution to capital.
       ``(C) Any other portion of an asset to the extent that 
     separate treatment of such portion is appropriate to carry 
     out the purposes of this section.
       ``(2) Assets which are not indexed assets throughout 
     holding period.--The applicable inflation ratio shall be 
     appropriately reduced for periods during which the asset was 
     not an indexed asset.
       ``(3) Net lease property defined.--The term `net lease 
     property' means leased property where--
       ``(A) the term of the lease (taking into account options to 
     renew) was 50 percent or more of the useful life of the 
     property, and
       ``(B) for the period of the lease, the sum of the 
     deductions with respect to such property which are allowable 
     to the lessor solely by reason of section 162 (other than 
     rents and reimbursed amounts with respect to such property) 
     is 15 percent or less of the rental income produced by such 
     property.
       ``(4) Treatment of certain distributions.--A distribution 
     with respect to stock in a corporation which is not a 
     dividend shall be treated as a disposition.
       ``(5) Section cannot increase ordinary loss.--To the extent 
     that (but for this paragraph) this section would create or 
     increase a net ordinary loss to which section 1231(a)(2) 
     applies or an ordinary loss to which any other provision of 
     this title applies, such provision shall not apply. The 
     taxpayer shall be treated as having a long-term capital loss 
     in an amount equal to the amount of the ordinary loss to 
     which the preceding sentence applies.
       ``(6) Acquisition date where there has been prior 
     application of subsection (a)(1) with respect to the 
     taxpayer.--If there has been a prior application of 
     subsection (a)(1) to an asset while such asset was held by 
     the taxpayer, the date of acquisition of such asset by the 
     taxpayer shall be treated as not earlier than the date of the 
     most recent such prior application.
       ``(7) Collapsible corporations.--The application of section 
     341(a) (relating to collapsible corporations) shall be 
     determined without regard to this section.
       ``(j) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''
       (b) Clerical Amendment.--The table of sections for part II 
     of subchapter O of chapter 1 is amended by inserting after 
     the item relating to section 1021 the following new item:

``Sec. 1022. Indexing of certain assets for purposes of determining 
              gain or loss.''


[[Page S677]]

       (c) Adjustment To Apply for Purposes of Determining 
     Earnings and Profits.--Subsection (f) of section 312 
     (relating to effect on earnings and profits of gain or loss 
     and of receipt of tax-free distributions) is amended by 
     adding at the end thereof the following new paragraph:
       ``(3) Effect on earnings and profits of indexed basis.--

  ``For substitution of indexed basis for adjusted basis in the case of 
the disposition of certain assets, see section 1022(a)(1).''

       (d) Effective Date.--The amendments made by this section 
     shall apply to dispositions after December 31, 1994, in 
     taxable years ending after such date.

     SEC. 4. CAPITAL LOSS DEDUCTION ALLOWED WITH RESPECT TO SALE 
                   OR EXCHANGE OF PRINCIPAL RESIDENCE.

       (a) In General.--Subsection (c) of section 165 (relating to 
     limitation on losses of individuals) is amended by striking 
     ``and'' at the end of paragraph (2), by striking the period 
     at the end of paragraph (3) and inserting ``; and'', and by 
     adding at the end the following new paragraph:
       ``(4) losses arising from the sale or exchange of the 
     principal residence (within the meaning of section 1034) of 
     the taxpayer.''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to sales and exchanges after December 31, 1994, 
     in taxable years ending after such date.
                                 ______

      By Mr. ABRAHAM:
  S. 183. A bill to provide that pay for Members of Congress shall be 
reduced whenever total expenditures of the Federal Government exceed 
total receipts in any fiscal year, and for other purposes; to the 
Committee on Governmental Affairs.


              the congressional fiscal responsibility act

    
    
 Mr. ABRAHAM. Mr. President, I introduce S. 183, the 
Congressional Fiscal Responsibility Incentive Act, which provides that 
the salary of Members of Congress be reduced by 10 percent whenever the 
Federal Government is unable to balance the budget at the close of a 
fiscal year. If further provides that such a reduced salary level 
remain in effect until the Government is successful in achieving a 
balanced budget. The bill's requirements would ``sunset,'' however, 
upon passage of a balanced budget constitutional amendment by both 
Houses of the Congress.
  It is a fundamental responsibility of Government to live within its 
means. When it fails to do so, damaging economic consequences result--
either in terms of increased levels of inflation, higher interest 
rates, or diminished levels of capital for private investment. The 
principal reason for the Federal Government failing to balance its 
budget is that Members of Congress find it difficult to resist 
temptations to spend more money than they are willing to raise from 
taxpayers. There is strong political incentive for Members to engage in 
deficit spending. On the one hand, they reap the benefits of such 
spending by pleasing individuals who are its beneficiaries. On the 
other hand, they do not have to displease other individuals who would 
otherwise have to pay higher taxes to support the spending.
  This political incentive structure encourages deficit spending and 
the negative economic consequences which flow from such spending. In 
part, I support the balanced budget constitutional amendment because I 
believe that it would alter these incentives. However, until such time 
as the balanced budget amendment is passed by both Houses of the 
Congress I would propose a more limited restructuring of incentives. 
The proposed legislation would hold Members collectively responsible 
for year-end deficits by reducing their pay.
  Such a pay reduction is premised upon the fact that the Congress has 
failed in an essential responsibility when it has failed to legislate a 
balanced budget. By demonstrating an inability to contain its appetite 
for spending, the Congress has acted irresponsibly by imposing upon the 
present and future generations of the American people the burdens of 
deficit spending. As a result, the long-term fiscal stability of the 
country which Members of Congress have been selected to govern is 
eroded. The disincentive toward deficit spending contained in S. 183, 
while admittedly an imprecise counterweight to the political incentives 
which operate in favor of deficit spending, at least balances to some 
degree the calculus of forces confronting Members who are tempted by 
the lure of deficit spending.
  Section 1 of S. 183 sets forth in short title, the Congressional 
Fiscal Responsibility Incentive Act. Section 2(a) defines the essential 
procedures by which a determination is made at the end of each fiscal 
year whether or not a balanced budget has been achieved. If it has not 
been achieved, the 10 percent pay cut takes effect immediately. Such a 
reduction in pay is maintained until it is determined, by the same 
procedures, that a balanced budget has been achieved for a subsequent 
fiscal year. Section 2(b) sets forth procedures designed to ensure that 
the objectives of this legislation are not undermined in various ways. 
It would require that measures to increase congressional pay not be 
combined in bills laden with other subjects and it would require that a 
explicit rollcall vote be cast on pay increases. Finally, section 3 
would have the proposed legislation take effect in connection with the 
first fiscal year beginning after its enactment. It would also 
``sunset'' the legislation upon the passage of a balanced budget 
constitutional amendment by both Houses of the Congress. Under this 
amendment, a balanced budget would become the norm and further deficit 
spending would require the express support of a three-fifths super 
majority of each House of the Congress.
  Mr. President, S. 183 is not a panacea for our current fiscal 
problems. However, until such time as a balanced budget amendment is 
placed into the Constitution, it would effect a small but potentially 
important step toward more responsible Government.
                                 ______

      By Mr. HATFIELD:
  S. 184. A bill to establish an Office for Rare Disease Research in 
the National Institutes of Health, and for other purposes; to the 
Committee on Labor and Human Resources.


            the office for rare disease research act of 1995

 Mr. HATFIELD. Mr. President, last October, I was distressed as 
I confronted two painful losses: the death of a very dear friend of 
mine, Eric Lopez, and the demise of my legislation to create an Office 
for Rare Disease Research at the National Institutes of Health. It was 
devastating yet apt that both were lost at the same time, because it 
was Eric and his rare debilitating disease, Epidermolysis bullosa, that 
originally inspired me to introduce this legislation.
  I am proud to announce that the National Institute of Arthritis, 
Musculoskeletal and Skin Diseases will rename the National Registry of 
Epidermolysis bullosa in honor of Eric Lopez. His courage and 
perseverance helped to raise the public's awareness of this disease 
through the establishment of the Dystrophic Epidermolysis Bullosa 
Research Association, known as DEBRA.
  Eric personalized the plight of a large group of Americans afflicted 
by rare diseases. Last session, my legislation passed the Senate but 
ran out of time in the House. We were so close to enacting this bill 
that we cannot justify its dissolution now. In the memory of Eric and 
many others like him, let us endorse this legislation with unanimous 
consent.
  Diseases are labeled as rare when less than 200,000 people are 
afflicted; however, grouped together, these diseases affect over 10 to 
20 million Americans. Collectively, the term ``rare'' appears to be a 
misnomer. A large portion of our population is battling diseases that 
are not only extremely difficult to diagnose but also difficult to 
treat and almost impossible to cure. These individuals exist as islands 
without answers, without support systems, and paramount, without hope. 
Ambiguous symptoms involving multiple organ systems lead to years of 
frustration in testing and misdiagnosis for the sufferers. The medical 
profession also shares in this frustration as the information to aid in 
diagnosis is nonexistent or scarce at best. There are currently no 
centers of research, information, or support for the patient or the 
physician. In today's environment of progressive health care, this is a 
travesty.
  Research is the most vital aspect of medicine, as we look to 
discovering cures. NIH has 20 Institutes of research that are centered 
around groups of diseases or organ systems. Rarely do these separate 
organizations communicate and coordinate research initiatives. 
Obviously, such a fragmented approach further worsens the status of 
research on multisystemic diseases, such as the rare diseases, and 
lends itself to repetition and duplication of [[Page S678]] projects. 
Unlike the larger, more visible diseases such as heart and kidney 
disease, oftentimes the rare diseases are lost in the bureaucratic 
shuffle.

  My legislation avoids the establishment of yet another bureaucratic 
center by delineating and defining the duties of the already existing 
Office of the Director of NIH. Foremost, the Office will formulate a 
strategic plan for rare disease research which will support research, 
award grants and contracts, and coordinate efforts among Institutes and 
other Federal agencies. Identification of present research projects, 
both private and Federal, and of opportunities and needs for future 
research will assist in preventing unnecessary duplication. 
Coordination among the Institutes will facilitate research efforts and 
thereby increase the effectiveness of every Federal dollar expended.
  In addition, the bill establishes a National Advisory Council on Rare 
Disease Research, which will be composed of individuals appointed by 
the Director of the NIH. The Council will review and assess research 
needs, priorities, and funding to advise the NIH on the development and 
implementation of the strategic research plan.
  Finally, my legislation establishes a national research database, 
accessible to both medical professionals and the public. This will 
connect researchers with patients for clinical trials, provide 
physicians and individuals with information on trials, and connect 
patients with support groups. This database will provide the necessary 
information to cohesively plan an attack on these diseases.
  In these times of tightening fiscal resources, Federal expenditures 
need to be stringently examined for worthiness and applicability to the 
majority of population. Despite the inability to put a dollar value on 
human suffering, it is still our duty as legislators to address and 
hopefully diminish it. The legislation I reintroduce today has the 
merits of assisting many Americans in desperate need and, not necessity 
by requiring further expenditure of Federal dollars. The funding for 
this program was included in the appropriations bill for NIH in fiscal 
year 1995 and, therefore, is already available. This is an ideal 
opportunity to demonstrate that humanitarianism can coexist with 
financial acumen. Let us open this congressional session with a 
bipartisan triumph and enact this legislation as soon as possible.
  I ask for unanimous consent that the text of the bill, along with a 
letter from the National Organization of Rare Disorders be placed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 184

       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 ``Office for Rare Disease 
     Research Act of 1995''.

     SEC. 2. ESTABLISHMENT OF OFFICE FOR RARE DISEASE RESEARCH.

       Part A of title IV of the Public Health Service Act (42 
     U.S.C. 281 et seq.) is amended by adding at the end thereof 
     the following new section:

     ``SEC. 404F. OFFICE FOR RARE DISEASE RESEARCH.

    
    
       ``(a) Establishment.--There is established within the 
     Office of the Director of the National Institutes of Health 
     an office to be known as the Office for Rare Disease Research 
     (in this section referred to as the `Office'). The Office 
     shall be headed by a director, who shall be appointed by the 
     Director of the National Institutes of Health.
       ``(b) Purpose.--The purpose of the Office is to promote and 
     coordinate the conduct of research on rare diseases through a 
     strategic research plan and to establish and manage a rare 
     disease research clinical database.
       ``(c) Advisory Council.--The Secretary shall establish an 
     advisory council for the purpose of providing advice to the 
     director of the Office concerning carrying out the strategic 
     research plan and other duties under this section. Section 
     222 shall apply to such council to the same extent and in the 
     same manner as such section applies to committees or councils 
     established under such section.
       ``(d) Duties.--In carrying out subsection (b), the director 
     of the Office shall--
       ``(1) develop a comprehensive plan for the conduct and 
     support of research on rare diseases;
       ``(2) coordinate and disseminate information among the 
     institutes and the public on rare diseases;
       ``(3) support research training and encourage the 
     participation of a diversity of individuals in the conduct of 
     rare disease research;
       ``(4) identify projects or research on rare diseases that 
     should be conducted or supported by the National Institutes 
     of Health;
       ``(5) develop and maintain a central database on current 
     government sponsored clinical research projects for rare 
     diseases;
       ``(6) determine the need for registries of research 
     subjects and epidemiological studies of rare disease 
     populations; and
       ``(7) prepare biennial reports on the activities carried 
     out or to be carried out by the Office and submit such 
     reports to the Secretary and the Congress.''.
                                                                    ____

                                         National Organization for


                                         Rare Disorders, Inc.,

                             New Fairfield, CT, November 30, 1994.
     Hon. Mark O. Hatfield,
     Hart Senate Office Building,
     Washington, DC.

     Attention: Meagan Sexauer.

       Dear Senator Hatfield: The National Organization for Rare 
     Disorders (NORD) fully supports your effort to enact 
     legislation to create the Office for Rare Disease Research at 
     NIH. As you know, creation of a central office to coordinate 
     the various research activities on behalf of these diseases 
     was the primary recommendation of the National Commission on 
     Orphan Diseases. The Commission's report was submitted to 
     Congress in 1989, and until now Congress has not acted upon 
     those recommendations.
       The scope of the orphan disease problem is enormous. There 
     are more than 5,000 of these disorders, each one affecting 
     fewer than 200,000 Americans. Combined together all rare 
     disorders touch the lives of an estimated 20 million 
     Americans. They cripple, maim and kill thousands of people 
     every year, yet little research is being pursued on most of 
     these illnesses. The National Institutes of Health (NIH) 
     support the vast majority of biomedical research on rare 
     disorders because there is little interest in the private 
     sector to pursue development of treatments that have such 
     limited commercial value due to their small potential 
     markets.
       The various institutes of NIH are responsible for research 
     on diseases that effect specific body systems. Yet many rare 
     diseases cross the boundaries of each institutes' 
     responsibilities. For example, a rare disease may have 
     neurological and immunological components (NINDS and NIAID), 
     dermatological symptoms (NIAMS), effect infants and children 
     (NICHD) and be inherited (NIGMS and the Human Genome Center). 
     An Office for Rare Disease Research at NIH would coordinate 
     these various research efforts in order to avoid duplication 
     and waste of precious resources. It would also develop and 
     operate a rare disease clinical database so that patients and 
     physicians could locate research projects relevant to their 
     disease. Conversely, since 47% of rare disease researchers 
     complain that it is difficult to locate a sufficient number 
     of patients to participate in clinical protocols, the Office 
     and the database would greatly alleviate this problem.
       Senator Hatfield, so much of public policy is directed 
     toward ``major'' health threats; rare disorders are treated 
     as if they are ``minor'' problems. The suffering is quite 
     real, the morbidity and mortality is immeasurable, and the 
     hopelessness of knowing that research is not being pursued is 
     devastating not only to 20 million patients but to their 
     families and friends. The suffering of these people is not 
     ``minor,'' and the frustrations of rare disease scientists is 
     compelling. When they cannot get funding for their research, 
     when they cannot find a commercial sponsor to market a new 
     treatment, when they cannot locate patients for clinical 
     trials, they are forced to change their focus and move to 
     diseases that have more chance of attracting funds.
       The Office of Rare Disease Research will provide hope and 
     comfort to masses of Americans with rare disorders who 
     continue to fall through the cracks of biomedical research, 
     and a safe haven for scientists who have devoted their 
     careers to these devastating illnesses. It will also signify 
     for the first time that the federal government, through a 
     carefully planned and coordinated program, is determined to 
     eradicate orphan diseases.
           Very truly yours,
                                                  Abbey S. Meyers,

                                                President.

                                 ______

      By Mr. BUMPERS:
  S. 185. A bill to transfer the Fish Farming Experimental Laboratory 
in Stuttgart, Arkansas, to the Department of Agriculture, and for other 
purposes; to the Committee on Environment and Public Works.


     the stuttgart national aquaculture research center act of 1995

    
    
  Mr. BUMPERS. Mr. President, today I am introducing legislation to 
transfer the Fish Farming Experimental Laboratory in Stuttgart, AR, 
from the Department of the Interior to the Department of Agriculture. 
This legislation also requires that the name of the lab be changed to 
the Stuttgart National Aquaculture Research Center. [[Page S679]] 
    
    
  This Fish Farming Experimental Laboratory was established under the 
Fish and Rice Rotation Act of 1958, with a mandate to conduct research 
related to the commercial production and harvesting of warm water fish. 
When the lab was established, there was little or no information 
available to commercial fish farmers about warm water aquaculture. 
Thanks in large part to the lab, which has pioneered research in such 
areas as fish nutrition, water quality management and fish disease 
prevention, commercial fish farming is now one of the fastest growing 
industries in the country.
  Originally, the legislation creating the lab, provided that it be 
administered by the Department of Agriculture. However, because the 
Department of the Interior already had an established fisheries 
program, Congress placed the program under the Department of the 
Interior's Fish and Wildlife Service. In retrospect, this decision was 
a mistake. The Department of Agriculture, not the Department of the 
Interior has become the lead Federal agency in the research, 
development, and promotion of commercial aquaculture. While the 
Department of the Interior is involved in the aquaculture arena, its 
emphasis is more conservation related.
  My belief that the Department of the Interior is no longer the 
appropriate agency to administer the lab was confirmed when during an 
internal reorganization the Stuttgart lab was transferred from the Fish 
and Wildlife Service to the National Biological Survey [NBS]. As my 
colleagues know, the NBS is charged with developing an inventory of 
plant and animal species and their habitats. A worthy endeavor, but one 
that is in no way related to the lab's statutory mission of developing 
methods for the commercial production of aquatic species. I believe it 
is only a matter of time before the staff and the resources of the lab 
are redirected toward research efforts that are more in keeping with 
the mission of the NBS.
  I have expressed my concerns to Secretary of the Interior Bruce 
Babbitt, who agrees with me that the Department of Agriculture is a 
much more appropriate place for the Stuttgart lab. The Department of 
Agriculture recognizes that private commercial aquaculture is an 
important and growing component of the U.S. economy and is committed to 
providing a broad range of services to it. I have no doubt that the 
Fish Farming Experimental Laboratory can complement and enhance the 
Department's existing and growing aquaculture program.
  Mr. President, I hope my colleagues will support this legislation and 
I look forward to its speedy passage.
  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. 185

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Stuttgart National 
     Aquaculture Research Center Act of 1995''.

     SEC. 2. TRANSFER OF FUNCTIONS TO THE SECRETARY OF 
                   AGRICULTURE.

       (A) Title of Public Law 85-342.--The title of Public Law 
     85-342 (16 U.S.C. 778 et seq.) is amended by striking 
     ``Secretary of the Interior'' and inserting ``Secretary of 
     Agriculture''.
       (b) Authorization.--The first section of Public Law 85-342 
     (16 U.S.C. 778) is amended--
       (1) by striking ``Secretary of the Interior'' and all that 
     follows through ``directed'' and inserting ``Secretary of 
     Agriculture is authorized and directed'';
       (2) by striking ``station and stations'' and inserting ``1 
     or more centers''; and
       (3) in paragraph (5), by striking ``Department of 
     Agriculture'' and inserting ``Secretary of the Interior''.
       (c) Authority.--Section 2 of Public Law 85-342 (16 U.S.C. 
     778a) is amended by striking ``, the Secretary'' and all that 
     follows through ``authorized'' and inserting ``, the 
     Secretary of Agriculture is authorized.''
       (d) Assistance.--Section 3 of Public Law 85-342 (16 U.S.C. 
     778b) is amended--
       (1) by striking ``Secretary of the Interior'' and inserting 
     ``Secretary of Agriculture''; and
       (2) by striking ``Department of Agriculture'' and inserting 
     ``Secretary of the Interior''.

     SEC. 3. TRANSFER OF FISH FARMING EXPERIMENTAL LABORATORY TO 
                   DEPARTMENT OF AGRICULTURE.

       (A) Designation of Stuttgart National Aquaculture Research 
     Center.--
       (1) In general.--The Fish Farming Experimental Laboratory 
     in Stuttgart, Arkansas, shall be known and designated as the 
     ``Stuttgart National Aquaculture Research Center''.
       (2) References.--Any reference in a law, map, regulation, 
     document, paper, or other record of the United States to the 
     laboratory referred to in paragraph 1 shall be deemed to be a 
     reference to the ``Stuttgart National Aquaculture Research 
     Center''.
       (b) Transfer of Laboratory to the Department of 
     Agriculture.--Subject to section 1531 of title 31, United 
     States Code, not later than 90 days after the date of 
     enactment of this Act, there are transferred to the 
     Department of Agriculture--
       (1) the personnel employed in connection with the 
     laboratory referred to in subsection (a);
       (2) the assets, liability, contracts, and real and personal 
     property of the laboratory;
       (3) the records of the laboratory; and
       (4) the unexpended balance of appropriations, 
     authorizations, allocations and other funds employed, held, 
     arising from, available to, or to be made available in 
     connection with the laboratory.

                          ____________________