[Congressional Record Volume 141, Number 10 (Wednesday, January 18, 1995)]
[Senate]
[Pages S1064-S1069]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             CLOTURE MOTION

  Mr. DOLE. Mr. President, I send a cloture motion to the desk.
  The PRESIDING OFFICER. The cloture motion having been presented 
[[Page S1065]] under rule XXII, the Chair directs the clerk to read the 
motion.
  The legislative clerk read as follows:

                             Cloture Motion
       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close debate on S. 1, the 
     unfunded mandates bill:
         Bob Dole, William Roth, Dirk Kempthorne, Bill Frist, 
           Trent Lott, Chuck Grassley, Craig Thomas, Judd Gregg, 
           John Ashcroft, Ted Stevens, Conrad Burns, James Inhofe, 
           Paul Coverdell, Spencer Abraham, Christopher S. Bond, 
           Bob Smith, Rod Grams, Don Nickles, Alfonse D'Amato, 
           Larry Craig.

  Mr. DOLE. Mr. President, when will that motion ripen?
  The PRESIDING OFFICER. One hour after the Senate convenes after 1 day 
of session.
  Mr. DOLE. Mr. President, I apologize to the Senator from Arkansas for 
taking so long.
  I say to my colleagues that at 11 o'clock tomorrow we will be back on 
S. 1. There will be 30 minutes equally divided between the Senator from 
Michigan and Senator Kempthorne and Senator Byrd. At the hour of 11:30 
the Senate will proceed to vote on the Levin amendment regarding 
feasibility, and immediately thereafter we will proceed to a cloture 
vote on S. 1; and, we will waive the mandatory quorum under rule XXII 
B.
  Mr. President, I yield the floor. I thank my colleague from Arkansas.
  Mr. BUMPERS addressed the Chair.
  Mr. DASCHLE. Mr. President, if I might just take 1 more minute to 
comment about the importance of the vote tomorrow, I think it is very 
important that Senators understand the difference between germaneness 
and relevance. We have a lot of amendments pending that are very 
relevant and that, under the strict rules of parliamentary definition, 
may not be germane.
  The distinguished Senator from Michigan has raised his point on a 
number of occasions during the debate over the course of the last 
several days. Senators need to be aware that in many cases, while an 
amendment in question may directly affect this legislation, may be 
directly relevant, it may be ruled not germane.
  So this is a very important vote tomorrow morning, and I hope 
Senators will take care as we consider the importance of our 
opportunity to raise these issues in a constructive way as we have been 
doing the last several days.
  With that, I yield the floor.
  Mr. BUMPERS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. BUMPERS. Mr. President, the question was how much business is the 
catalog industry doing in this country? The answer is almost $100 
billion a year and growing at a rate of 6 percent a year.
  To judge by the number of catalogs coming into my house, they are 
growing much faster than that. So you might ask, No. 1, why should 
these people bother with collecting a tax on behalf of the States where 
they sell merchandise?
  I used to be a small town merchant. I had a hardware, furniture, and 
appliance store. I even had a cemetery and practiced law as well. I did 
anything to try to feed my wife and three children.
  My biggest competitor was not the guy down the street. It was the 
Sears & Roebuck catalog. They do not do much catalog business anymore; 
I think maybe Sears does no catalog business now. But I can tell you 
that offices of every Senator in the U.S. Senate has received 
communique after communique in the last 3 days saying, please support 
Senator Bumpers' amendment. They are from small town, main street 
retailers all across America because it is not just Wal-Mart and K-Mart 
that are putting them out of business; it is the catalog business which 
enjoys a competitive advantage because they do not have to collect that 
5 to 8 percent sales tax.
  What would this mean to your State? In my State of Arkansas, it would 
mean $19.6 million a year. In Illinois, $233 million a year; 
Pennsylvania, $145 million; New York, $359 million; and California, 
$482 million.
  Call our former colleague, Governor Wilson in California, and ask him 
how he feels about this legislation. It is supported by the National 
Conference of Mayors, the National Governors Conference, the National 
Conference of County Executives. Who are we trying to help with S. 1? 
The Governors, the mayors, and the county executives.
  Mr. President, I used to be Governor of my State. These mandates 
drove me crazy. It was a big issue with me 24 years ago when I first 
became Governor of my State.
  I am not too crazy about this particular unfunded mandates bill, even 
though I was a cosponsor of it last year, and I am not at all sure I am 
going to vote for this one. But be that as it may, if you were to ask 
some Governors in their State, ``Would you rather have the right you 
would get under the Bumpers amendment or the mandates bill?'' they 
would take this legislation, because they are scared to death that this 
mandate legislation will never amount to anything.
  And you might say, ``These people do not do business in your State, 
so why should they collect a sales tax there?'' But they do impose a 
burden on the States--they send 3.3 million tons of catalogs and 
solicitations into the landfills of this country every year. And what 
is one of the biggest problems every mayor has? Why, the local 
landfill. In a lot of jurisdictions in this country it costs $100 a ton 
to dispose of garbage. But it is not just the 3.3 million tons of 
catalogs which mail-order companies send into the States. All the 
packaging that their merchandise comes in has to be disposed of, too. 
How much are the catalog houses contributing to the mayors to help them 
dispose of these millions of tons of garbage? Not one red dime.
  Mr. President, this is not designed to be punitive. It is designed to 
be fair. In order to be fair, I want to say this: There are a few mail 
order houses in this country which collect sales taxes in every State 
where they send products. There is one very notable case of such a 
company--essentially an office supply house which does over $200 
million in business a year. When they formed the company, they sat down 
in the boardroom and said, ``Shall we or shall we not collect sales 
taxes on our sales and remit to the States?'' They decided, as good 
citizens, they would collect a sales tax and remit it back to every 
State they shipped into. Do you know who the founder of that company 
was? It was Senator Robert Bennett of the great State of Utah. He said 
to the Small Business Committee during a hearing last year that ``We 
thought it was the right thing to do.''
  Mr. President, we have made this bill as simple and fair as we know 
how to make it. No. 1, we only require mail order companies to file a 
return with the States every 3 months. No. 2, we set up a toll-free 
telephone number at the State level so that any questions the catalog 
houses have can be resolved free of charge. And we have exempted all 
but 875 of the 7,500 mail order houses in the country, because we 
exempt every company which does less than $3 million in business a 
year. Of the 7,500 mail order companies in this country, 6,675 of them 
do not do $3 million a year. The mayors did not like it because I 
exempted them. But we thought it was fair to do so because this 
amendment could create a slight administrative burden on small 
companies. So only 825 of the 7,500 catalog sales houses in this 
country are going to be affected by this bill.
  Mr. President, sometimes the mail order houses say this is too 
complicated. I am not going to belabor it tonight, but tomorrow I am 
going to bring about a week's supply of catalogs that came into my 
home, and I am going to show you why that argument that this is too 
complicated on us will not fly. The reason it will not fly is because a 
lot of them already collect use taxes in as many as 25 or 30 States. 
Senator Bennett's company says, ``Include sales tax unless you are from 
Alaska, Delaware, Montana, New Hampshire or Oregon, which do not have 
sales taxes.'' And then look at what they say: ``If your order is less 
than $10, include $2 for shipping charge. If your order is $10 to $25, 
include $2.50,'' and here is another chart that you have to look at 
when you order. So they themselves have very complicated catalogs 
sometimes. And it would be immensely less cumbersome if you simply 
said: ``Send with your order the local sales tax.''
   [[Page S1066]] Mr. President, main street merchants are suffering 
because they are at such a competitive disadvantage. Let me tell you 
one other thing. There are some out-of-State companies that really 
drive local retailers up the wall. There are out-of-State companies 
which say, ``Go down to the local store, get the model number of the 
product you want, and call us toll free at this 800 number.'' You think 
they do not say that? Look at this advertisement: ``Discount 
Wallcovering. Shop the phone way. All brands, first quality, free 
delivery. No sales tax (outside Pennsylvania).'' But here is the real 
clincher: ``Shop in your neighborhood. Write down the pattern number 
book and then call Wallcovering, Inc.''
  How would you like to be a wallcovering retailer and somebody comes 
in and goes through all your merchandise, picks out the number of the 
wallcovering they like and they said, ``Adios, see you later.'' They go 
home, get on a 1-800 line and call this outfit and they say, ``Here is 
the pattern I want, ship it to me with no sales tax.''
  There are going to be a lot of Senators that vote against this 
amendment. But there is not one Senator in the U.S. Senate in his heart 
of hearts that would not tell you that such a practice is grossly 
unfair.
  Here is an ad by an outfit that is too small for anybody to read 
unless you are right on top of it, so I will tell you what it says. It 
is a company that sells boats, motors, fuel, water pump kits, 
everything from the world of boats to everything that makes a boat run. 
What do they do? They say, ``Nobody beats our deal.'' Up here in red it 
says, ``No sales tax added outside of North Carolina.''
  Mr. President, I hate to belabor the Record, and I am not going to do 
the whole thing, but I want to read you a letter that I got from a 
person in the state of California that was in the boat business, Long 
Beach Yacht Sales, Long Beach, CA.
                                                 January 18, 1994.
     Hon. Senator Bumpers,
     Chairman, Committee on Small Business, Russell Senate Office 
         Building, Washington, DC.
       Attention: Mr. Stan Fendley, Tax Council: Thank you, in 
     advance, for your sponsorship of legislation regarding the 
     collection of interstate sales tax. This week we lost a 
     $240,000 deal as a result of a sales tax issue. The buyer 
     bought a boat in Oregon to avoid our local and state sales 
     tax. The vessel will be kept out of state for the required 
     period of time and will be subsequently brought into 
     California after the waiting period has elapsed. Based on our 
     local tax rate of 8.25% the resulting tax would have been 
     $19,800.
       Not only did we (and the State) lose this deal, but we also 
     lost the time and expenses involved in upselling the customer 
     to a more expensive boat (from $140,000 to $240,000), sea 
     trialing the boat and providing extensive consultation 
     regarding the product. The customer thanked us but basically 
     said for $19,800 he would have to make an economic choice to 
     buy elsewhere.
           Sincerely,
                                                 Ray Jones, Owner.
  He told them, ``I can buy it in another State and bring it into this 
State and save myself almost $20,000.''
  Who in their heart of hearts in the U.S. Senate thinks that is fair?
  So I say, this is not punitive, and I am not just pointing the finger 
at all of these people. Fingerhut out in Minnesota said they do not 
think this would be much of a burden on them. L.L. Bean, in the State 
of Maine, said they did not think this would be much of a burden on 
them, either. So I applaud them. I applaud them for their generous 
statements and their citizenship. I do not blame them for not 
collecting the applicable taxes. I would not collect them either if I 
did not have to.
  Mr. President, the thrust of this amendment is to give the States the 
discretion. This does not impose one single thing on the States. It 
says to the States, ``You have the discretion of requiring the 
collection of use tax on merchandise being shipped into your State so 
that retailers in your State are competing on a level playing field 
with out-of-State companies.''
  Mr. President, until that fateful November 8, 1994, I was chairman of 
the Small Business Committee. As chairman of the Small Business 
Committee, and as a former small businessman, I have always championed 
the rights of people to start a business, make Government as 
unobtrusive as possible, reduce the paperwork burden, reduce the 
regulatory burden, everything to give people an opportunity to grow and 
prosper.
  When we held hearings on this bill last year, we had retailers from 
all over the country come and testify. We had a music store owner in my 
State talk about how many people came into his store, got the model 
number off the instrument they wanted, and went back home and ordered 
it.
  The retail Main Street jewelry stores left in this country, you can 
count them on one hand, because they cannot compete. Yet these are the 
people we look to organize the Christmas parades in rural America. They 
are the people that every State depends on to pay sales taxes to 
educate their children. They are losing billions of dollars of sales 
every year to this absolutely burgeoning catalog sales business and it 
is time we give the States an opportunity to do something about it.
  Mr. President, in the morning I am going to do two things: I am going 
to read you some additional letters from retailers as to what they are 
putting up with out there. Second, I have a whole stack of catalogs. I 
am going to go through some of them and show you how complicated it is 
now and how, if you adopt this amendment, you not only curry favor of 
the mayors and Governors of this country, you probably lighten the 
administrative burden on some catalog companies because they will only 
have one tax rate to worry about in each State instead of many 
different local rates.
  Mr. President, before I yield the floor, I ask unanimous consent that 
this amendment be set aside until we return to S. 1 tomorrow morning. I 
am not sure what the hour is.
  Mr. President, when are we scheduled to return to S. 1 in the 
morning?
  Mr. President, I will withdraw that request.
  Mr. COHEN addressed the Chair.
  The PRESIDING OFFICER (Mr. Santorum). The Senator from Maine.
  Mr. COHEN. Mr. President, I was home when I learned that the Senator 
from Arkansas was going to take the floor this evening and offer this 
amendment. I had no prior notification that it was coming up this 
evening.
  I can perhaps understand why the Senator from Arkansas would want to 
file this amendment prior to the cloture vote tomorrow. This is 
precisely what the majority leader was just talking about.
  Here we have a bill dealing with unfunded mandates, and we have the 
minority leader saying, ``Well, we just want to amend it in a 
substantive way dealing with relevant and germane issues pertaining to 
unfunded mandates,'' and the first thing that happens is the Senator 
from Arkansas gets up and offers this amendment which has no particular 
relevance to this bill.
  It is an example of what I mentioned on the floor the other day. We 
are back at it again. No sooner do we go into a new session with a new 
Congress, with new hopes of perhaps moving legislation at a much more 
expeditious fashion, at least, than we just have a series of amendments 
and more amendments that have nothing to do with the bill under 
consideration.
  Now that is consistent with the Senate rules. And the majority leader 
said he does not want to see a change in the Senate rules; keep the 
Senate as the Senate and not as the House.
  But the American people ought to understand why it is we cannot move 
forward with legislation: because every individual Member has his or 
her particular amendment that they want to offer.
  With respect to this particular amendment, this would reflect a major 
change in existing law. There is no mistake about it. This would be a 
major change in existing law.
  It is being offered without any hearings having been held in the 
Finance Committee--not one. And yet on the floor of the Senate, the 
Senator from Arkansas wishes to make this rather significant change. 
The Small Business Committee, I am told, held one hearing on the issue. 
But none in Finance which is the committee of jurisdiction.
  Now the supporters of the amendment argue this is a matter of 
fairness for local retailers.
  It is grossly unfair to ask mail order companies to collect taxes for 
over 6,000 jurisdictions. Do you really want to talk about putting 
burdens on people? Ask a mail order company to collect taxes for 46 
States. There are some 
[[Page S1067]] 6,000--just count them, 6,000--different taxes in this 
country that would have to be considered.
  But the Senator from Arkansas says, ``Well, that is just too bad. We 
are going to impose that burden on these mail order companies.''
  We have a Maine snack tax, to give you an example. It is virtually 
indecipherable to most Maine companies. I think it would be absurd--
absurd--to expect every fruitcake vendor in this country to understand 
it. But that is what the Senator's amendment would do.
  Second, about 30 percent of all of the mail orders are paid not by 
credit cards, but by check. So if the check is made out in the wrong 
amount, any mail order company, L.L. Bean or any other company in the 
country-would have a difficult time collecting this particular tax if 
the calculation is wrong.
  Now the Home Shopping Network collects State and local taxes. They 
are made via credit cards, where the seller simply adds an appropriate 
tax to it.
  The Senator from Arkansas has talked about the great advantage that 
is being held by these mail order companies over the local retailer. 
The fact is, the local retailers also pay taxes to enjoy benefits that 
out-of-State companies do not.
  As a matter of fact the out-of-State companies are not at a 
competitive advantage. They have to add the shipping cost. These are 
costs that are added to the product. They have to do it on a single 
item basis rather than in bulk, because when people call up and say, 
``Can we have the product?'' they have to order and pay the shipping 
and mailing costs, which far exceed the sales tax in many cases. That 
is an added expense the local retailer does not have to bear. So 
Senator Bumpers may talk about competitive advantage, but it does not 
exist. Mail order companies do not, let me repeat, do not enjoy a 
competitive advantage by not having to collect these taxes.
  The States have numerous ways to handle the collection of their 
taxes? In Maine, for instance, we assume that people in each income 
category have purchased a number of goods from out of State, and the 
State imposes a presumptive use tax. Maine has devised its own means of 
collecting taxes for goods purchased across State lines through mail 
order. Why not let the States handle it without the Senator from 
Arkansas mandating another rule, where no hearings have been held by 
the committee on jurisdiction. It is an extensive change. We ought not 
to undertake it on this particular bill.
  Mr. President, as I indicated, I was not aware that this was going to 
be brought up this evening. But I understand why it was. Last year an 
agreement was nearly reached involving the voluntary collection of 
State use taxes. This was negotiated by the direct marketing 
association and the multistate taxes commission, federation of tax 
administers, and small businesses. They tried to reach an agreement to 
reduce the 6,000 taxes down to maybe 46 so that within each State there 
would be only one rate. Unfortunately, the agreement fell apart in the 
end.
  This amendment is very significant and should not be offered to this 
bill. I support the majority leader, where he says it is time to file 
cloture. I hope that we do invoke cloture tomorrow. And to eliminate 
those amendments including these types of amendments that are being 
offered tonight on the Senate floor.
  Mr. President, I will have more to say tomorrow, but for the moment I 
will yield the floor.
  Mr. BUMPERS. Mr. President, I just want to comment for a minute or 
two, because I know the other Senator from Maine wishes to be heard.
  No. 1, if I were a Senator from Maine I would be making the same 
speech I just heard. The second biggest catalog sales house in the 
United States is L.L. Bean from the great State of Maine.
  But there is another very cogent point I neglected to make in my 
opening comments, and that is the State of Maine collects the sales 
taxes for every dime's worth of goods that L.L. Bean sells in the State 
of Maine. They do not collect 1 penny for the other 49 States. They are 
probably in the half billion dollar range now, maybe much more than 
that. They are the second biggest. I believe Lands' End in Wisconsin is 
the biggest in the country.
  So, No. 1, everybody should understand that under current law, law 
established in various Supreme Court decisions, any mail order house 
that maintains a retail outlet in another State has to collect the 
sales tax for that State. J. Crew, they have retail outlets in Maryland 
and Virginia. Eddie Bauer has retail outlets in about 15 States. So 
those companies must collect use taxes when their mail order 
merchandise goes into States where they maintain retail outlets. It is 
only when they do not have a retail outlet in a particular State that 
they do not have to collect use taxes on the mail order goods sent into 
that State.
  To suggest that this does not give mail order houses a competitive 
advantage when I just got through reading a letter about how this 
company in Long Beach, CA, lost a $250,000 sale because of a $20,000 
savings in the sales tax. Why, of course people price shop. I will fill 
the record up tomorrow with cases just like it where people tried their 
very best to make a sale, and they say thank you very much for telling 
us about it, we will go across the State line and buy the merchandise 
and bring it back in and save the money.
  Mr. President, to say that this amendment is not germane to the 
Unfunded Mandates bill is something that defies imagination. With the 
Unfunded Mandates bill, we are talking about the burden that Congress 
has been putting on the States of this Nation, ordering them how to 
build their landfills, how to fill the landfill, what their municipal 
water supplies must do, every kind of environmental regulation we could 
put on them. They say ``we want you to start paying for it.''
  The thrust of that idea is legitimate. I believe in it. It is a very 
complex issue. But this amendment says to the States, ``Those burdens 
we have already placed on you, we will help you pay for that.'' And to 
say that principle is not germane to this bill makes no sense. We are 
simply saying we will help you pay for your landfill, if you, State and 
local government, want us to.
  Let me repeat what I started off saying in the beginning: Maine, 
since it already collects the sales tax from all the sales made off of 
L.L. Bean--and I misspoke earlier, Senator--it was Lands' End that said 
they do not think this would be a burden.
  L.L. Bean has not said that, to my knowledge.

  But Maine has the best of all worlds. And I love Maine. I have the 
utmost respect for my colleagues from Maine. But they are collecting 
sales taxes on all the sales they make in Maine, but they do not 
collect a red cent for the merchandise they send into other States 
through catalog sales. They do not pay for disposing of the catalogs in 
the local landfill or the packaging they send the merchandise in. The 
Senator says that is not germane. That is what this bill is all about, 
trying to help the States.
  So, Mr. President, I cannot say it often enough, this amendment gives 
the States the discretion. It does not require the States to do one 
blessed thing. It says if the States want to require out-of-State 
companies to collect use taxes, just as retail outlets in your State 
have to collect sales taxes, the States can do it. It has only been 
since 1992 when the Supreme Court ruled in Quill versus North Dakota, 
that we could even debate this issue here.
  Now, Mr. President, this is an idea that will not go away. It will 
happen, sure as God made little apples. Maybe not on this bill, but it 
will happen. And the sooner the people in this business understand 
that, the better off we will all be. I yield the floor.
  Ms. SNOWE. Mr. President, I rise in opposition to the amendment that 
has been offered by the Senator from Arkansas, and I want to associate 
myself with the remarks made by the Senator from Maine, [Mr. Cohen].
  I guess in hearing the arguments presented by the Senator from 
Arkansas tonight one would think this is a very simple matter. In fact, 
it would put national marketers and mail order companies as well as 
consumers at a disadvantage, and certainly would hurt the thousands of 
jobs that are provided by these companies.
  There is no tax advantage for mail order companies, as the Senator 
from Maine indicated. They have to charge for postal rates, and many 
times these charges exceed the cost of local taxes 
[[Page S1068]] or State taxes. Also, mail order companies do not derive 
the benefits from having their presence in a local community like many 
of the local merchants and, therefore, do not create additional costs 
do a local community.
  In a State like Maine, we have taken a very reasonable approach. What 
we have done is require the taxpayer to play a flat rate on their tax 
return when they file it in April for the amount of the taxes they owe 
in out-of-State purchases. That is the requirement. Granted, it 
requires a good-faith effort on the part of the taxpayers in Maine, but 
it has worked and it is a far better approach than applying this kind 
of a tax through a bill that has no relation to the issue before us in 
the Senate.
  This amendment would impose a major new burden on many companies 
throughout the country without the benefit of hearings to explore the 
ramifications of such a tax on mail order companies. We are not only 
talking about the imposition of a tax, we are talking about compliance 
costs, and those are not minimal, if you consider the fact that mail 
order companies would be required to cope with no less than 46 types of 
procedures and exemptions from over 6,000 State and local tax rates. 
The compliance tax alone would be 6.5 times greater for mail order 
companies than for local retailers who must only contend with one tax 
rate and one set of exemptions.
  The Senator from Arkansas mentioned L.L. Bean. For L.L. Bean, that 
would cost $500,000 per year for compliance, just in the administrative 
accounting and legal fees that would be involved, not to mention the 
fact that, of course, a blended tax rate would mean that for many 
customers, in fact, for probably half the customers, they would pay 
more tax than they actually owe. So, of course, that would contribute 
to a loss of confidence and erode sales for the company. I suspect the 
100 million Americans who shop by mail order today would also find such 
an unfair tax scheme unjustifiable.
  This amendment would have an economic impact on everyone. Jobs would 
be lost in Maine and elsewhere in the country.
  This is an unfair imposition, it is an unreasonable administrative 
burden when there are other approaches that can be taken and, in fact, 
are being pursued.
  As Senator Cohen mentioned, there has been an approach taken by the 
industry to look at resolving this matter in a way which could be fair 
to the industry without creating additional and onerous burdens, as 
well as excessive costs far beyond the local taxes that they would be 
required to collect, and they are working on such an agreement.
  I think we ought to encourage a negotiated settlement that would 
satisfy both parties without unnecessarily burdening companies or 
consumers and costing thousands of jobs all across this country.
  The revenues raised under this proposal, according to the Senator 
from Arkansas, would be about $1.6 billion. But, in fact, it would be 
far less than that when you deduct compliance costs. This amendment 
would require States to audit out-of-State firms.
 It would certainly add costs to the States as well as to the mail 
order companies.

  The Senator from Arkansas mentioned that this would benefit local 
merchants and small businesses, but it is interesting to note that the 
one organization that represents thousands of small businesses and 
merchants all across America undertook a survey last year asking their 
clients whether or not they support such a collection by mail order 
companies. Only 25 percent said yes and 67 percent said no to such a 
mandate.
  It is because they recognize that it would hurt many local economies 
across America. It would cost jobs, and the administrative burden would 
be a nightmare. It would be very difficult to comply with such a 
mandate and that the tax structure would be so complex that there would 
be many mistakes in the process of calculation.
  I hope that my colleagues in the Senate will oppose the amendment 
offered by the Senator from Arkansas because, clearly, it would not 
result in the kind of benefits that he mentioned this evening and 
certainly would result in the loss of thousands of jobs and additional 
regulatory costs. Now is not at a time when we can afford these 
economic losses.
  I thank my colleagues and yield the floor.
  Mr. LOTT addressed the Chair.
  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. LOTT. Mr. President, Senator Hatch, the chairman of the Judiciary 
Committee, has provided a statement which addresses constitutional 
issues raised earlier today by Senator Byrd with regard to the unfunded 
mandates legislation. He states in this statement that he is 
``unpersuaded that there would be any constitutional problem'' with the 
issues raised.
  (At the request of Mr. Lott, the following statement was ordered to 
be printed in the Record:)
  Mr. HATCH. Mr. President, I have listened with care to what Senator 
Byrd has said regarding what he sees as a constitutional question 
raised by one provision of this unfunded mandates legislation. I 
appreciate his thoughts on this issue. I am unpersuaded, however, that 
he has identified a serious constitutional problem. Indeed, I am 
convinced that a careful analysis will show that his concern is 
unwarranted.
  In the first place, Senator Byrd's concern is not that a provision of 
S. 1 is facially unconstitutional but merely that it might possibly be 
applied in an unconstitutional manner. This same objection could be 
raised against virtually every law. The mere possibility that a 
provision might be applied in an unconstitutional manner has never been 
regarded as sufficient to invalidate it. Otherwise, Congress could 
never enact anything. In any event, if a problem with a possible 
application of this provision were to arise in the future, that problem 
would be raised by an implementing bill. It is that future implementing 
bill that would require reconsideration, not the bill currently before 
us. In other words, since the concern raised by Senator Byrd relates to 
one manner in which the provision might be applied, that concern should 
be raised if and when a later bill adopts that manner. In short, the 
concerns raised by Senator Byrd are not suited to a facial challenge to 
the provisions of this unfunded mandates legislation.
  Second, even under the speculative possibility raised by Senator 
Byrd, I am unpersuaded that there would be any constitutional problem 
with the possibility that he raises. It is noteworthy that Senator Byrd 
is unable to cite even a single Supreme Court case--or any case from 
any court, for that matter--in support of his argument that the 
provision he is concerned about presents constitutional problems. This 
is not surprising, for his argument is, I believe, unsustainable. 
Congress can act to sunset legislation through a variety of means. That 
it might do so through a mechanism that involves administrative 
agencies does not make that mechanism ipso facto constitutionally 
suspect. In short, I see nothing in the provision at issue that 
involves any delegation of legislative powers to agencies, much less 
any unconstitutional delegation.
  Third, it seems clear to me that Senator Byrd misunderstands the 
provision that he is worried about. This provision specifies a 
requirement that must under some circumstances be satisfied in order to 
avoid having a point of order lie. Let's assume for the sake of 
argument that the requirement was constitutionally defective. All that 
would mean is that the requirement could not be lawfully satisfied and 
that a point of order would therefore lie. Were this the case, the 
Senate could decide whether or not to overrule the point of order.
  Mr. President, some people will look for any excuse, however flimsy, 
to continue imposing burdensome unfunded mandates on States and 
localities. It is especially amusing that my colleagues on the other 
side of the aisle who have championed a massive Federal bureaucracy are 
now invoking an exaggerated, hyperrestrictive version of the doctrine 
that Congress is limited in the powers that it can delegate to 
administrative agencies. There is no merit to the argument, and no one 
should hide behind it.
  Ms. MIKULSKI. Mr. President, I rise today to discuss S. 1, the 
Unfunded Mandate Reform Act. Mr. President, in traveling throughout the 
State of Maryland, I have heard complaints of 
[[Page S1069]] local officials who have been forced to balance the 
needs of their community against compliance with Federal regulations.
  These local officials have raised valid concerns over the pressure to 
implement mandates imposed by Washington with no funds to back it up. I 
believe we need to work as a partner with our cities, towns, and 
counties--not as their adversary.
  I support the validity of their concerns. I am on their side.
  We need to have a better understanding about the costs of Federal 
mandates--on the public sector and private sector--and help our local 
partners meet those costs.
  I am glad the Senate has finally begun the debate on this important 
issue. I believe the Unfunded Mandate Reform Act takes an important 
step toward correcting many of the problems of the past.
  This legislation will make Congress estimate the costs of new 
legislation and regulations on State and local governments and the 
private sector, specify the means to pay for it, and reduce or 
eliminate a mandate if adequate funding is not provided.
  This bill applies only to new legislation. It does not effect any 
existing law or program. Furthermore, this legislation exempts any law 
or regulation that enforces constitutional rights, establishes or 
enforces laws that prohibit discrimination, provides emergency 
assistance to State and local governments, pertains to national 
security or treaty ratification and any bill designated as an emergency 
by the President and Congress.
  While I wholeheartedly support these exemptions, as well as the 
overall intent of this legislation, I have a number of questions 
regarding its impact and applicability.
  I am very concerned about this bill's impact on laws that are 
designed to protect public health and safety. Will this bill diminish 
the Government's ability to protect public health and provide essential 
public safety?
  I am concerned about how this bill defines public and private and how 
it impacts future laws and programs. Could a mandate exempt the public 
sector while applying to the private sector? Could public schools be 
exempt from a mandate while Catholic or other religious day schools 
would be forced to comply?
  Would future emissions standards apply to UPS trucks but not MTA 
buses?
  I am concerned about how Federal agencies will have to implement the 
complex provisions of this legislation. For example, will Federal 
agencies be forced to rewrite regulations every year if funding levels 
change?
  I am concerned about confusion this bill may generate to State and 
local governments and the private sector.
  I believe we need laws and regulations that are clear, enforceable, 
and universally applicable. I support the intent of this legislation 
and many of its provisions; at the same time I remain concerned over 
the issues I have outlined. I believe these questions need to be 
answered before the Senate adopts any unfunded mandates legislation.
    regarding relationship between unfunded mandates and sound risk 
                               regulation

  Mr. JOHNSTON. Mr. President, I want to point out to my colleagues the 
connection between S. 1, the unfunded mandates bill, and a matter that 
is close to my heart--the risk assessment and cost-benefit provision 
that passed the Senate twice on the last Congress, only to die in the 
House. As my colleagues may recall, it passed by a vote of 95 to 3 on 
the EPA Cabinet bill in 1993, and then, after significant revision, 
passed again on the safe drinking water bill in 1994 by a vote of 90 to 
8.
  One of the best ways to reduce unfunded mandates--whether it be on 
State and local governments or the private sector--is to set aside the 
issue of funding and examine whether the mandate itself is sound. 
Federal regulations that do not address a significant risk in a cost-
effective manner must be avoided, regardless of who pays. Put another 
way, the argument over who should pay for a mandate will be much easier 
to resolve if the mandate itself is as lean as possible to do the job.
  Section 202 of S. 1 begins to get at this idea when it requires the 
Federal agency, when promulgating a regulation that will cost $100 
million or more, to prepare a written statement providing ``a 
qualitative, and if possible, a quantitative assessment of costs and 
benefits anticipated from the Federal intergovernmental mandate, such 
as the enhancement of health and safety and the protection of the 
natural environment * * *.'' This is a certainly a good provision as 
far as it goes.
  But this problem will not be fully addressed until the Senate turns 
once again to the subject of risk-based regulatory reform. I was 
initially inclined to offer last year's risk amendment to this bill, 
but I have been convinced to withhold so that we can consider possible 
improvements to last year's risk provision.
  Right now, Chairman Murkowski and I are working on legislation that 
will build on last year's provision. We intend to introduce the bill 
soon, hold hearings in the Energy Committee soon thereafter, and move 
to consideration of the bill on the Senate floor at the earliest 
opportunity.


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