Congressional Record, Volume 141 Issue 11 (Thursday, January 19, 1995)

[Congressional Record Volume 141, Number 11 (Thursday, January 19, 1995)]
[Senate]
[Pages S1207-S1237]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. GRASSLEY:
S. 243. A bill to provide greater access to civil justice by reducing
costs and delay, and for other purposes; to the Committee on the
Judiciary.

the civil justice reform act of 1995

Mr. GRASSLEY. Mr. President, I rise today to introduce legislation to
reform America's Federal Civil Justice System. The purpose of this
bill, the Civil Justice Reform Act of 1995, is to
[[Page S1208]] improve deserving parties' access to the Federal courts
by reducing the volume of frivolous cases, to reduce the costs of
Federal civil litigation, and to encourage the settlement of disputes.
It is similar to the bill introduced by Senator DeConcini and myself in
March 1993.
This bill introduces some modest reforms that will reduce the
economic and social costs our society has borne due to the litigation
explosion. Our society spends billions of dollars every year on civil
lawsuits. More than $1 billion goes just to pay for the Federal
district courts, which handle hundreds of thousands of civil cases
annually. It has become clear to most Americans that our system of
dispute resolution through adversarial lawsuits has gotten out of hand,
and reason needs to be restored to it. More litigation does not
necessarily translate into more justice.
Many of the elements of this bill are based on the 1992 Access to
Justice Act. For example, my bill reintroduces a modified English rule
on attorney's fees that will award prevailing parties in Federal
diversity cases reasonable attorney's fees, with adequate safeguards to
protect against possible injustice. This provision is hardly the
radical proposition some will paint it as being. In fact, for those of
my colleagues who are always fond of pointing out that the United
States is the only industrialized country that fails to provide some
benefit or another, I would point out that this so-called English rule
is followed by most industrialized countries, with the United States
being the most notable exception. So I think it is worth trying in the
United States in a limited class of cases--diversity suits--in order to
see if it is effective in discouraging frivolous lawsuits.
By limiting the rule to diversity cases, the bill ensures that no one
will be denied a forum for their dispute, since all such cases can be
filed in State court. If the defendant removes the case to Federal
court, then the loser pays rule will not apply. This limited English
rule will expire in 5 years unless Congress chooses to continue it,
after a fourth-year report by the administrative office of the courts
on the effectiveness of the rule.
The bill also includes a number of safeguards to avoid any unintended
consequences. The amount the loser must pay is limited to the amount of
his or her own fees. Moreover, the court is given broad discretion to
limit the amount the loser must pay if it finds such payment to be
unjust under the circumstances of the case before it.
The bill also requires 30 days advance notice of intent to sue--
something most responsible lawyers already do. It also requires
prisoners with civil rights cases--which currently constitute of around
10 percent of the Federal civil docket--to first exhaust their
administrative remedies before filing suit in Federal court.
To promote early settlement of cases and reduce litigation costs, the
bill contains a statutory offer of judgment rule. It is similar to a
proposal by Judge William Schwartzer, former director of the Federal
Judicial Center. This rule will allow either party to a lawsuit to
offer a settlement to the other party at any point in the litigation.
If the settlement is declining and the party rejecting the offer
ultimately gets a judgment less favorable than the settlement offer, he
or she is then responsible for the offeror's attorneys fees from the
time the offer was made. This will give parties a strong incentive to
offer and accept reasonable settlements.
Another provision of my bill will begin to curtail some of the
excesses of the expert witness battles that dominate too many Federal
trials. Following the example of several States, particularly Arizona,
my bill will limit parties to one expert witness on a given issue.
The Civil Justice Reform Act of 1990 has had a positive effect on the
Federal courts in reforming pretrial, processes to reduce costs and
delay. This bill takes the next step by making some limited fee
shifting proposals and a few other modest reforms for reducing
litigation costs. I look forward to the hearings I intend to hold in
the Subcommittee on Administrative Oversight and Courts, and to
discussing these proposals with my colleagues on the Judiciary
Committee, as well as the full Senate.
I ask unanimous consent that the full text of the bill appear in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 243

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Civil Justice Reform Act of
1995''.

SEC. 2. DIVERSITY OF CITIZENSHIP JURISDICTION; AWARD OF
ATTORNEYS' FEES TO PREVAILING PARTY.

(a) Award of Fees.--Section 1332 of title 28, United States
Code, is amended by inserting after subsection (e) the
following new subsection:
``(f)(1) The prevailing party in an action under this
section shall be entitled to attorneys' fees only to the
extent that such party prevails on any position or claim
advanced during the action. Attorneys' fees under this
paragraph shall be paid by the nonprevailing party but shall
not exceed the amount of the attorneys' fees of the
nonprevailing party with regard to such position or claim. If
the nonprevailing party receives services under a contingent
fee agreement, the amount of attorneys' fees under this
paragraph shall not exceed the reasonable value of those
services.
``(2) In order to receive attorneys' fees under paragraph
(1), counsel of record in any actions under this section
shall maintain accurate, complete records of hours worked on
the matter regardless of the fee arrangement with his or her
client.
``(3) The court may, in its discretion, limit the fees
recovered under paragraph (1) to the extent that the court
finds special circumstances that make payment of such fees
unjust.
``(4) This subsection shall not apply to any action removed
from a State court under section 1441 of this title, or to
any action in which the United States, any State, or any
agency, officer, or employee of the United States or any
State is a party.
``(5) As used in this subsection, the term `prevailing
party' means a party to an action who obtains a favorable
final judgment (other than by settlement), exclusive of
interest, on all or a portion of the claims asserted in the
action.''.
(b) Study and Report.--(1) The Director of the
Administrative Office of the United States Courts shall
conduct a study regarding the effect of the requirements of
subsection (f) of section 1332 of title 28, United States
Code, as added by subsection (a) of this section, on the
caseload of actions brought under such section, which study
shall include--
(A) data on the number of actions, within each judicial
district, in which the nonprevailing party was required to
pay the attorneys' fees of the prevailing party; and
(B) an assessment of the deterrent effect of the
requirements on frivolous or meritless actions.
(2) No later than 4 years after the date of enactment of
this Act, the Director of the Administrative Office of the
United States Courts shall submit a report to the appropriate
committees of Congress containing--
(A) the results of the study described in paragraph (1);
and
(B) recommendations regarding whether the requirements
should be continued or applied with respect to additional
actions.
(c) Repeal.--No later than 5 years after the date of
enactment of this Act, this section and the amendment made by
this section shall be repealed.

SEC. 3. OFFER OF JUDGMENT.

(a) In General.--Part V of title 28, United States Code, is
amended by inserting after chapter 113 the following new
chapter:

``CHAPTER 114--PRETRIAL PROVISIONS

``Sec.
``1721. Offer of judgment.

``Sec. 1721. Offer of judgment

``(a)(1) In any civil action filed in a district court, any
party may serve upon any adverse party a written offer to
allow judgment to be entered for the money or property
specified in the offer.
``(2) If within 14 days after service of the offer, the
adverse party serves written notice that the offer is
accepted, either party may file the offer and notice of
acceptance and the clerk shall enter judgment.
``(3) An offer not accepted within such 14-day period shall
be deemed withdrawn and evidence thereof is not admissible,
except in a proceeding to determine reasonable attorney fees.
``(4) If the final judgment obtained by the offeree is not
more favorable than the offer made under paragraph (1) which
was not accepted by the offeree, the offeree shall pay the
offeror's reasonable attorney fees incurred after the
expiration of the time for accepting the offer, to the extent
necessary to make the offeror whole.
``(5) In no case shall an award of attorney fees under this
section exceed the amount of the judgment obtained. The court
may reduce the award of costs and attorney fees to avoid the
imposition of undue hardship on a party.
``(6) The fact that an offer is made under this section
shall not preclude a subsequent offer.
``(7)(A) Subject to the provisions of subparagraph (B),
when the liability of 1 party [[Page S1209]] has been
determined by verdict, order, or judgment, but the amount or
extent of the liability remains to be determined by further
proceedings, any party may make an offer of judgment, which
shall have the same effect as an offer made before trial.
``(B) The court may shorten the period of time an offeree
may have to accept an offer under subparagraph (A), but in no
case shall such period be less than 7 days.
``(b) A party making an offer shall not be deprived of the
benefits of an offer it makes by an adverse party's
subsequent offer, unless the subsequent offer is more
favorable than the judgment obtained.
``(c) If the judgment obtained includes nonmonetary relief,
a determination that it is more favorable to the offeree than
was the offer shall be made only when the terms of the offer
included all such nonmonetary relief.
``(d) This section shall not apply to class or derivative
actions under rules 23, 23.1 and 23.2 of the Federal Rules of
Civil Procedure.
``(e)(1) Except as provided under paragraph (2), the
provisions of this section shall not be construed to prohibit
an award or reduce the amount of an award a party may receive
under a statute which provides for the payment of attorney's
fees by another party.
``(2) The amount a party may receive under this section may
be set off against the amount of an award made under a
statute described in paragraph (1).''.
(b) Technical and Conforming Amendment.--The table of
chapters for part IV of title 28, United States Code, is
amended by inserting after the item relating to chapter 113
the following:

``114. Pretrial provisions..................................1721''.....

SEC. 4. PRIOR NOTICE AS A PREREQUISITE OF FILING A CIVIL
ACTION IN THE UNITED STATES DISTRICT COURT.

(a) In General.--Chapter 23 of title 28, United States
Code, is amended by adding at the end the following:

``Sec. 483. Prior notice of civil action

``(a)(1) No less than 30 days before filing a civil action
in a court of the United States the claimant intending to
file such action shall transmit written notice to any
intended defendant of the specific claims involved, including
the amount of actual damages and expenses incurred and
expected to be incurred. The claimant shall transmit such
notice to any intended defendant at an address reasonably
expected to provide actual notice.
``(2) For purposes of this section, the term `transmit'
means to mail by first class-mail, postage prepaid, or
contract for delivery by any company which physically
delivers correspondence as a commercial service to the public
in its regular course of business.
``(3) The claimant shall at the time of filing a civil
action, file in the court a certificate of service evidencing
compliance with this subsection.
``(b) If the applicable statute of limitations for such
action would expire during the period of notice required by
subsection (a), the statute of limitations shall expire on
the thirtieth day after the date on which written notice is
transmitted to the intended defendant or defendants under
subsection (a). The parties may by written agreement extend
that 30-day period for an additional period of not to exceed
90 days.
``(c) The requirements of this section shall not apply--
``(1) in any action to seize or forfeit assets subject to
forfeiture or in any bankruptcy, insolvency, receivership,
conservatorship, or liquidation proceeding;
``(2) if the assets that are the subject of the action or
would satisfy a judgment are subject to flight, dissipation,
or destruction, or if the defendant is subject to flight;
``(3) if a written notice prior to filing an action is
otherwise required by law, or the claimant has made a prior
attempt in writing to settle the claim with the defendant;
``(4) in proceedings to enforce a civil investigative
demand or an administrative summons;
``(5) in any action to foreclose a lien; or
``(6) in any action pertaining to a temporary restraining
order, preliminary injunctive relief, or the fraudulent
conveyance of property, or in any other type of action
involving exigent circumstances that compel immediate resort
to the courts.
``(d) If the district court finds that the requirements of
subsection (a) have not been met by the claimant, and such
defect is asserted by the defendant within 60 days after
service of the summons or complaint upon such defendant, the
claim shall be dismissed without prejudice and the costs of
such action, including attorneys' fees, shall be imposed upon
the claimant. Whenever an action is dismissed under this
subsection, the claimant may refile such claim within 60 days
after dismissal regardless of any statutory limitations
period if--
``(1) during the 60 days after dismissal, notice is
transmitted under subsection (a); and
``(2) the original action was timely filed in accordance
with subsection (b).''.
(b) Conforming Amendment.--The table of sections at the
beginning of chapter 23 of title 28, United States Code, is
amended by adding at the end the following:

``483. Prior notice of civil action.''.

SEC. 5. CIVIL RIGHTS OF INSTITUTIONALIZED PERSONS ACT.

(a) Exhaustion of Administrative Remedies.--Section 7 of
the Civil Rights of Institutionalized Persons Act (42 U.S.C.
1997e) is amended--
(1) by amending subsection (a) to read as follows:
``(a) In any action brought pursuant to section 1979 of the
Revised Statutes of the United States, by any adult convicted
of a crime confined in any jail, prison, or other
correctional facility, the court shall continue such case for
a period not to exceed 180 days in order to require
exhaustion of such plain, speedy, and effective
administrative remedies as are available.''; and
(2) in subsection (b)--
(A) by redesignating paragraphs (1) and (2) as paragraphs
(2) and (3), respectively; and
(B) by inserting immediately after ``(b)'' the following:
``(1) Upon the request of a State or local corrections
agency, the Attorney General of the United States shall
provide the agency with technical advice and assistance in
establishing plain, speedy, and effective administrative
remedies for inmate grievances.''.
(b) Proceedings in Forma Pauperis.--Section 1915(d) of
title 28, United States Code, is amended to read as follows:
``(d) The court may request an attorney to represent any
such person unable to employ counsel and may dismiss the case
if the allegation of poverty is untrue, or if satisfied that
the action fails to state a claim upon which relief can be
granted or is frivolous or malicious.''.
(c) Effective Date.--The amendments made by subsections (a)
and (b) shall take effect on the date of the enactment of
this Act.

SEC. 6. EXPERT WITNESSES.

(a) In General.--Chapter 119 of title 28, United States
Code, is amended by inserting after section 1828 the
following new section:

``Sec. 1829. Multiple expert witnesses

``In any civil action filed in a district court, the court
shall not permit opinion evidence on the same issue from more
than 1 expert witness for each party, except upon a showing
of good cause.''.
(b) Technical and Conforming Amendment.--The table of
sections for chapter 119 of title 28, United States Code, is
amended by inserting after the item relating to section 1828
the following new section:

``1829. Multiple expert witnesses.''.

SEC. 7. SEVERABILITY.

If any provision of this Act or the amendments made by this
Act or the application of any provision or amendment to any
person or circumstance is held invalid, the remainder of this
Act and such amendments and the application of such provision
and amendments to any other person or circumstance shall not
be affected by that invalidation.

SEC. 8. EFFECTIVE DATE.

Except as expressly provided otherwise, this Act and the
amendments made by this Act shall become effective 90 days
after the date of the enactment of this Act. This Act shall
not apply to any action or proceeding commenced before such
effective date.
______

By Mr. NUNN (for himself, Mr. Roth, Mr. Glenn, Mr. Bond, Mr.
Bumpers, Mr. Pressler, Mr. Lieberman, Mrs. Hutchison, Mr.
Johnston, Mr. Domenici, Mr. Hollings, Mr. Nickles, Mr. Breaux,
Mr. Warner, Mr. Robb, Mr. Cochran, Mr. Bryan, Mr. Smith, Mr.
Lautenberg, Mr. Mack, Ms. Moseley-Braun, and Mr. Shelby):
S. 244. A bill to further the goals of the Paperwork Reduction Act to
have Federal agencies become more responsible and publicly accountable
for reducing the burden of Federal paperwork on the public, and for
other purposes; to the Committee on Governmental Affairs.

the paperwork reduction act of 1995

Mr. NUNN. Mr. President, I rise this morning on behalf of myself, Mr.
Roth, Mr. Glenn, Mr. Bond, and Mr. Bumpers, to introduce the Paperwork
Reduction Act of 1995. This bill is substantially identical to S. 560,
which was unanimously approved by the Senate in the closing days of the
103d Congress.
I am pleased that the bill enjoys even broader bipartisan support
this Congress. It is being cosponsored by the chairman and ranking
Democratic member of the Committee on Governmental Affairs, Bill Roth
and John Glenn, both have worked long and hard on legislation to
strengthen the Paperwork Reduction Act of 1980 and to reauthorize
appropriations for the Office of Information and Regulatory Affairs
[OIRA], which has been without authorizing legislation since October of
1989. Leading cosponsors also include the chairman, Mr. Bond, and
ranking Democratic member, Mr. Bumpers, of the Committee on Small
Business. The Committee on Small Business, of which I am the senior
member, has played a crucial supporting role on behalf of the small
business community in maintaining the effort to enact legislation to
strengthen the 1980 act. We are being joined by 22 of our colleagues
[[Page S1210]] from both sides of the aisle, many of whom are present
or former members of the Committee on Small Business of the
Governmental Affairs.
Mr. President, as previously mentioned, the Paperwork Reduction Act
of 1995 is substantively identical to S. 560 introduced in the 103d
Congress. That bill represented the culmination of years of work which
began in the 100th Congress. It represents a skillful blending of S.
560, as introduced by me and S. 681, a bill introduced by my friend
from Ohio, Mr. Glenn, then chairman of the Governmental Affairs
Committee. His skill and leadership, and the tenacity of all of the
those involved in both bills made possible the crafting of this text of
S. 560. It garnered unanimous support within the Governmental Affairs
Committee. S. 560, as reported last year, had the support of the
Clinton administration and I am hopeful that the administration will
also support this bill I introduce today.
Senator Roth, chairman of the Governmental Affairs Committee
indicated to me that we will have a markup on this bill next week. It
is my hope that it will be an early legislative initiative in this
Congress. I have also talked to Speaker Gingrich about the bill, and it
is my hope that they will make it an important part of their
legislative agenda on the House side. So I am hoping, Mr. President, we
will be able to get this bill to the President's desk in the next
several weeks, certainly in the next several months, for actual
implementation as law.
It also had the support of the broad-based Paperwork Reduction Act
Coalition as well as elected officials, and many in the educational and
nonprofit communities. S. 560, the Paperwork Reduction Act of 1994,
passed the Senate by unanimous voice vote on October 6, 1994. The
following day, the text of S. 560 was attached to a House-passed
measure, H.R. 2561, and returned to the House. Unfortunately, the House
Governmental Operations Committee declined to clear either measure
before the adjournment of the 103d Congress, so we start anew with our
legislative effort this year.
In this congress, I am hopeful that the House of Representatives will
be more receptive to this legislation and that we can see it enacted
into law. A modified version of S. 560 has been included in H.R. 9, the
Job Creation and Wage Enhancement Act of 1995, which includes many of
the regulatory and paperwork relief provisions of the Republican
Contract With America. Representative Bill Clinger, the new chairman of
the House Committee on Government Reform and Oversight, the new name
for the Committee on Government Operations, was the principal
Republican cosponsor of H.R. 2995, the House companion to S. 560.
The Paperwork Reduction Act of 1995 provides a 5-year reauthorization
of appropriations for the Office of Information and Regulatory Affairs
[OIRA]. Created by the 1980 Act, OIRA serves as the focal point at the
Office of Management and Budget for the act's implementation.
The principal purpose of the Paperwork Reduction Act of 1995 is to
reaffirm and provide additional tools by which to attain the
fundamental objective of the Paperwork Reduction Act of 1980--to
minimize the Federal paperwork burdens imposed by individuals,
businesses, especially small businesses, educational and nonprofit
institutions, and State and local governments.
Mr. President, let me highlight some of the provisions of the bill.
This legislation reemphasizes the fundamental responsibilities of each
Federal agency minimize new paperwork burden by thoroughly reviewing
each proposed collection of information for need and practical utility,
the act's fundamental standards. The bill make explicit the
responsibility of each Federal agency to conduct this review itself,
before submitting the propose collection of information for public
comment and clearance by OIRA.
The bill before us reflects the provisions of S. 560 that further
enhance public participation in the review of paperwork burdens, when
such burdens are first being proposed or when an agency is seeking to
obtain approval to continue to use an existing paperwork requirement.
Strengthening public participation is at the core of the 1980 act.
The Paperwork Reduction Act of 1995 maintains the 1980 act's
Government-wide 5-percent goal for the reduction of paperwork burdens
on the public. Given past experience, some question the effectiveness
of such goals in producing net reductions in Government-wide paperwork
burdens. I believe that the bill should reflect individual agency goals
as well, and although this provision is not in the bill introduced
today, I am hopeful it will be strengthened in the future. If seriously
implemented, such agency goals can become an effective restraint on the
cumulative growth of Government-sponsored paperwork burdens.
Mr. President, the bill includes amendments to the 1980 act which
further empower members of the public to help police Federal agency
compliance with the act. I would like to describe two of these
provisions.
One provision would enable a member of the public to obtain a written
determination from the OIRA Administrator regarding whether a federally
sponsored paperwork requirement is in compliance with the act. If the
agency requirement is found to be noncompliant, the Administrator is
charged with taking appropriate remedial action. This provision is
based upon a similar process added to the Office of Federal Procurement
Policy Act in 1988.
The second provision encourages members of the public to identify
paperwork requirements that have not been submitted for review and
approval pursuant to the act's requirements. Although the act's public
protection provisions explicitly shield the public from the imposition
of any formal agency penalty for failing to comply with such an
unapproved, or bootleg, paperwork requirement, individuals often feel
compelled to comply. This is especially true when the individual has an
on-going relationship with the agency and that relationship accords the
agency substantial discretion that could be used to redefine their
future dealings. Under this bill, which we are introducing today, a
member of the public can blow the whistle on such a bootleg paperwork
requirement and be accorded the protection of anonymity.
Next, Mr. President, I would like to emphasize that the Paperwork
Reduction Act of 1995 clarifies the 1980 Act to make explicit that it
applies to Government-sponsored third-party paperwork burdens.
These are recordkeeping, disclosure, or other paperwork burdens that
one private party imposes on another private party at the direction of
a Federal agency. In 1990, the U.S. Supreme Court decided that such
Government-sponsored third-party paperwork burdens were not subject to
the Paperwork Reduction Act. The Court's decision in Dole versus United
Steelworkers of America created a potentially vast loophole. The public
could be denied the Act's protections on the basis of the manner in
which a Federal agency chose to impose a paperwork burden, indirectly
rather than directly. It is worthy of note that Senator Chiles, now
Governor Chiles, the father of the Paperwork Reduction Act went to the
trouble and expense of filing an amicus brief to the Supreme Court
arguing that no such exemption for third-party paperwork burdens was
intended. The Court decided otherwise. I know that Governor Chiles will
be gratified that this bill makes explicit the Act's coverage of all
Government-sponsored paperwork burdens. Once this bill is enacted, we
can feel confident that this major loophole will be closed. But given
more than a decade of experience under the Act, it is prudent to remain
vigilant to additional efforts to restrict the Act's reach and public
protections.
The smart use of information by the Government, and its potential to
minimize the burdens placed on the public, is a core concept of the
1980 Act. The information resources management [IRM] provisions of the
Paperwork Reduction Act of 1995 build upon the foundation laid more
than a decade ago by our former colleague from Florida, Lawton Chiles,
the father of the Paperwork Reduction Act. These provisions of the bill
are the major contribution of my friend from Ohio, Senator Glenn, who
has emphasized the potential of improved IRM policies to make
government more effective in serving the public.
Mr. President, I will not take any more of the Senate's time today to
discuss the individual provisions of the Paperwork Reduction Act of
1995.
[[Page S1211]]
Mr. President, the Paperwork Reduction Act of 1995 enjoys strong
support from the business community, especially the small business
community. It has the support of a broad Paperwork Reduction Act
Coalition, representing virtually every segment of the business
community. They have worked long and hard on this legislation for many
years. Without them, we would not be able to have the consensus bill
that we have today.
Participating in the coalition are the major national small business
associations--the National Federation of Independent Business [NFIB],
the Small Business Legislative Council [SBLC], and National Small
Business United [NSBU] as well as the many specialized national small
business associations, like the American Subcontractors Association,
that comprise the membership of the SBLC or NSBU. Other participants
represent manufacturers, aerospace and electronics firms, construction
firms, providers of professional and technical services, retailers of
various products and services, and the wholesalers and distributors who
support them. I would like to identify a few other organizations that
comprise the Coalition's membership: the Aerospace Industries
Association [AIA], the American Consulting Engineers Council [ACEC],
the Associated Builders and Contractors [ABC], the Associated General
Contractors of America [AGC], the Chemical Manufacturers Association
[CMA], the Computer and Business Equipment Manufacturers Association
[CBEMA], the Contract Services Association [CSA], the Electronic
Industries Association [EIA], the Independent Bankers Association of
America [IBAA], the International Communications Industries Association
[ICIA], the National Association of Manufacturers, the National
Association of Wholesalers and Distributors, the National Security
Industrial Association [NSIA], the National Tooling and Machining
Association [NTMA], the Printing Industries Association [PIA], and the
Professional Service Council [PSC]. Leadership for the coalition is
being provided by the Council on Regulatory and Information Management
[C-RIM] and by the U.S. Chamber of Commerce. C-RIM is the new name for
the Business Council on the Reduction of Paperwork, which has dedicated
itself to paperwork reduction and regulatory reform issues for more
than a half century.

The coalition also includes a number of professional associations and
public interest groups that support strengthening the Paperwork
Reduction Act of 1980. These include the Association of Records
Managers and Administrators [ARMA] and Citizens for a Sound Economy
[CSE], to name but two very active coalition members.
Mr. President, given the regulatory and paperwork burdens faced by
State and local governments, legislation to strengthen the Paperwork
Reduction Act is high on the agenda of the associations representing
elected officials. The Governor of Florida, my friend Lawton Chiles,
has worked hard on this issue within the National Governors
Association. During its 1994 annual meeting, the National Governors
Association adopted a resolution in support of legislation to
strengthen the Paperwork Reduction Act of 1980.
Mr. President, I urge my colleagues to join me in supporting this
legislation.
As I mentioned, Chairman Roth and Senator Glenn are both cosponsors
of this legislation, as is Senator Bond, the new chairman of the Small
Business Committee, and the previous chairman and now ranking member,
Senator Bumpers.
It is my understanding that we will have a markup on this bill next
week. It is my hope it can be on an accelerated schedule here on the
Senate floor. It is my hope that the Paperwork Reduction Act of 1995
will get similar expedited treatment on the House side, so that
President Clinton will have this bill on his desk in the next few
weeks. So that with a strengthened Paperwork Reduction Act we can
continue the difficult but very important process of cracking down on
Federal agency paperwork burdens that do not meet the Act's standards.
Mr. President, I ask unanimous consent that the text of the bill and
additional material be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 244

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 ``Paperwork Reduction Act of
1995''.

SEC. 2. COORDINATION OF FEDERAL INFORMATION POLICY.

Chapter 35 of title 44, United States Code, is amended to
read as follows:

``CHAPTER 35--COORDINATION OF FEDERAL INFORMATION POLICY

``Sec.
``3501. Purposes.
``3502. Definitions.
``3503. Office of Information and Regulatory Affairs.
``3504. Authority and functions of Director.
``3505. Assignment of tasks and deadlines.
``3506. Federal agency responsibilities.
``3507. Public information collection activities; submission to
Director; approval and delegation.
``3508. Determination of necessity for information; hearing.
``3509. Designation of central collection agency.
``3510. Cooperation of agencies in making information available.
``3511. Establishment and operation of Government Information Locator
Service.
``3512. Public protection.
``3513. Director review of agency activities; reporting; agency
response.
``3514. Responsiveness to Congress.
``3515. Administrative powers.
``3516. Rules and regulations.
``3517. Consultation with other agencies and the public.
``3518. Effect on existing laws and regulations.
``3519. Access to information.
``3520. Authorization of appropriations.

``Sec. 3501. Purposes

``The purposes of this chapter are to--
``(1) minimize the paperwork burden for individuals, small
businesses, educational and nonprofit institutions, Federal
contractors, State, local and tribal governments, and other
persons resulting from the collection of information by or
for the Federal Government;
``(2) ensure the greatest possible public benefit from and
maximize the utility of information created, collected,
maintained, used, shared and disseminated by or for the
Federal Government;
``(3) coordinate, integrate, and to the extent practicable
and appropriate, make uniform Federal information resources
management policies and practices as a means to improve the
productivity, efficiency, and effectiveness of Government
programs, including the reduction of information collection
burdens on the public and the improvement of service delivery
to the public;
``(4) improve the quality and use of Federal information to
strengthen decisionmaking, accountability, and openness in
Government and society;
``(5) minimize the cost to the Federal Government of the
creation, collection, maintenance, use, dissemination, and
disposition of information;
``(6) strengthen the partnership between the Federal
Government and State, local, and tribal governments by
minimizing the burden and maximizing the utility of
information created, collected, maintained, used,
disseminated, and retained by or for the Federal Government;
``(7) provide for the dissemination of public information
on a timely basis, on equitable terms, and in a manner that
promotes the utility of the information to the public and
makes effective use of information technology;
``(8) ensure that the creation, collection, maintenance,
use, dissemination, and disposition of information by or for
the Federal Government is consistent with applicable laws,
including laws relating to--
``(A) privacy and confidentiality, including section 552a
of title 5;
``(B) security of information, including the Computer
Security Act of 1987 (Public Law 100-235); and
``(C) access to information, including section 552 of title
5;
``(9) ensure the integrity, quality, and utility of the
Federal statistical system;
``(10) ensure that information technology is acquired,
used, and managed to improve performance of agency missions,
including the reduction of information collection burdens on
the public; and
``(11) improve the responsibility and accountability of the
Office of Management and Budget and all other Federal
agencies to Congress and to the public for implementing the
information collection review process, information resources
management, and related policies and guidelines established
under this chapter.

``Sec. 3502. Definitions

``As used in this chapter--
``(1) the term `agency' means any executive department,
military department, Government corporation, Government
controlled corporation, or other establishment in the
executive branch of the Government (including the Executive
Office of the President), or any independent regulatory
agency, but does not include--
``(A) the General Accounting Office;
``(B) Federal Election Commission; [[Page S1212]]
``(C) the governments of the District of Columbia and of
the territories and possessions of the United States, and
their various subdivisions; or
``(D) Government-owned contractor-operated facilities,
including laboratories engaged in national defense research
and production activities;
``(2) the term `burden' means time, effort, or financial
resources expended by persons to generate, maintain, or
provide information to or for a Federal agency, including the
resources expended for--
``(A) reviewing instructions;
``(B) acquiring, installing, and utilizing technology and
systems;
``(C) adjusting the existing ways to comply with any
previously applicable instructions and requirements;
``(D) searching data sources;
``(E) completing and reviewing the collection of
information; and
``(F) transmitting, or otherwise disclosing the
information;
``(3) the term `collection of information'--
``(A) means the obtaining, causing to be obtained,
soliciting, or requiring the disclosure to third parties or
the public, of facts or opinions by or for an agency,
regardless of form or format, calling for either--
``(i) answers to identical questions posed to, or identical
reporting or recordkeeping requirements imposed on, ten or
more persons, other than agencies, instrumentalities, or
employees of the United States; or
``(ii) answers to questions posed to agencies,
instrumentalities, or employees of the United States which
are to be used for general statistical purposes; and
``(B) shall not include a collection of information
described under section 3518(c)(1);
``(4) the term `Director' means the Director of the Office
of Management and Budget;
``(5) the term `independent regulatory agency' means the
Board of Governors of the Federal Reserve System, the
Commodity Futures Trading Commission, the Consumer Product
Safety Commission, the Federal Communications Commission, the
Federal Deposit Insurance Corporation, the Federal Energy
Regulatory Commission, the Federal Housing Finance Board, the
Federal Maritime Commission, the Federal Trade Commission,
the Interstate Commerce Commission, the Mine Enforcement
Safety and Health Review Commission, the National Labor
Relations Board, the Nuclear Regulatory Commission, the
Occupational Safety and Health Review Commission, the Postal
Rate Commission, the Securities and Exchange Commission, and
any other similar agency designated by statute as a Federal
independent regulatory agency or commission;
``(6) the term `information resources' means information
and related resources, such as personnel, equipment, funds,
and information technology;
``(7) the term `information resources management' means the
process of managing information resources to accomplish
agency missions and to improve agency performance, including
through the reduction of information collection burdens on
the public;
``(8) the term `information system' means a discrete set of
information resources and processes, automated or manual,
organized for the collection, processing, maintenance, use,
sharing, dissemination, or disposition of information;
``(9) the term `information technology' has the same
meaning as the term `automatic data processing equipment' as
defined by section 111(a)(2) of the Federal Property and
Administrative Services Act of 1949 (40 U.S.C. 759(a)(2));
``(10) the term `person' means an individual, partnership,
association, corporation, business trust, or legal
representative, an organized group of individuals, a State,
territorial, or local government or branch thereof, or a
political subdivision of a State, territory, or local
government or a branch of a political subdivision;
``(11) the term `practical utility' means the ability of an
agency to use information, particularly the capability to
process such information in a timely and useful fashion;
``(12) the term `public information' means any information,
regardless of form or format, that an agency discloses,
disseminates, or makes available to the public; and
``(13) the term `recordkeeping requirement' means a
requirement imposed by or for an agency on persons to
maintain specified records.

``Sec. 3503. Office of Information and Regulatory Affairs

``(a) There is established in the Office of Management and
Budget an office to be known as the Office of Information and
Regulatory Affairs.
``(b) There shall be at the head of the Office an
Administrator who shall be appointed by the President, by and
with the advice and consent of the Senate. The Director shall
delegate to the Administrator the authority to administer all
functions under this chapter, except that any such delegation
shall not relieve the Director of responsibility for the
administration of such functions. The Administrator shall
serve as principal adviser to the Director on Federal
information resources management policy.
``(c) The Administrator and employees of the Office of
Information and Regulatory Affairs shall be appointed with
special attention to professional qualifications required to
administer the functions of the Office described under this
chapter. Such qualifications shall include relevant
education, work experience, or related professional
activities.

``Sec. 3504. Authority and functions of Director

``(a)(1) The Director shall oversee the use of information
resources to improve the efficiency and effectiveness of
governmental operations to serve agency missions, including
service delivery to the public. In performing such oversight,
the Director shall--
``(A) develop, coordinate and oversee the implementation of
Federal information resources management policies,
principles, standards, and guidelines; and
``(B) provide direction and oversee--
``(i) the review of the collection of information and the
reduction of the information collection burden;
``(ii) agency dissemination of and public access to
information;
``(iii) statistical activities;
``(iv) records management activities;
``(v) privacy, confidentiality, security, disclosure, and
sharing of information; and
``(vi) the acquisition and use of information technology.
``(2) The authority of the Director under this chapter
shall be exercised consistent with applicable law.
``(b) With respect to general information resources
management policy, the Director shall--
``(1) develop and oversee the implementation of uniform
information resources management policies, principles,
standards, and guidelines;
``(2) foster greater sharing, dissemination, and access to
public information, including through--
``(A) the use of the Government Information Locator
Service; and
``(B) the development and utilization of common standards
for information collection, storage, processing and
communication, including standards for security,
interconnectivity and interoperability;
``(3) initiate and review proposals for changes in
legislation, regulations, and agency procedures to improve
information resources management practices;
``(4) oversee the development and implementation of best
practices in information resources management, including
training; and
``(5) oversee agency integration of program and management
functions with information resources management functions.
``(c) With respect to the collection of information and the
control of paperwork, the Director shall--
``(1) review proposed agency collections of information,
and in accordance with section 3508, determine whether the
collection of information by or for an agency is necessary
for the proper performance of the functions of the agency,
including whether the information shall have practical
utility;
``(2) coordinate the review of the collection of
information associated with Federal procurement and
acquisition by the Office of Information and Regulatory
Affairs with the Office of Federal Procurement Policy, with
particular emphasis on applying information technology to
improve the efficiency and effectiveness of Federal
procurement and acquisition and to reduce information
collection burdens on the public;
``(3) minimize the Federal information collection burden,
with particular emphasis on those individuals and entities
most adversely affected;
``(4) maximize the practical utility of and public benefit
from information collected by or for the Federal Government;
and
``(5) establish and oversee standards and guidelines by
which agencies are to estimate the burden to comply with a
proposed collection of information.
``(d) With respect to information dissemination, the
Director shall develop and oversee the implementation of
policies, principles, standards, and guidelines to--
``(1) apply to Federal agency dissemination of public
information, regardless of the form or format in which such
information is disseminated; and
``(2) promote public access to public information and
fulfill the purposes of this chapter, including through the
effective use of information technology.
``(e) With respect to statistical policy and coordination,
the Director shall--
``(1) coordinate the activities of the Federal statistical
system to ensure--
``(A) the efficiency and effectiveness of the system; and
``(B) the integrity, objectivity, impartiality, utility,
and confidentiality of information collected for statistical
purposes;
``(2) ensure that budget proposals of agencies are
consistent with system-wide priorities for maintaining and
improving the quality of Federal statistics and prepare an
annual report on statistical program funding;
``(3) develop and oversee the implementation of
Governmentwide policies, principles, standards, and
guidelines concerning--
``(A) statistical collection procedures and methods;
``(B) statistical data classification;
``(C) statistical information presentation and
dissemination;
``(D) timely release of statistical data; and
``(E) such statistical data sources as may be required for
the administration of Federal programs;
``(4) evaluate statistical program performance and agency
compliance with Governmentwide policies, principles,
standards and guidelines;
``(5) promote the sharing of information collected for
statistical purposes consistent [[Page S1213]] with privacy
rights and confidentiality pledges;
``(6) coordinate the participation of the United States in
international statistical activities, including the
development of comparable statistics;
``(7) appoint a chief statistician who is a trained and
experienced professional statistician to carry out the
functions described under this subsection;
``(8) establish an Interagency Council on Statistical
Policy to advise and assist the Director in carrying out the
functions under this subsection that shall--
``(A) be headed by the chief statistician; and
``(B) consist of--
``(i) the heads of the major statistical programs; and
``(ii) representatives of other statistical agencies under
rotating membership; and
``(9) provide opportunities for training in statistical
policy functions to employees of the Federal Government under
which--
``(A) each trainee shall be selected at the discretion of
the Director based on agency requests and shall serve under
the chief statistician for at least 6 months and not more
than 1 year; and
``(B) all costs of the training shall be paid by the agency
requesting training.
``(f) With respect to records management, the Director
shall--
``(1) provide advice and assistance to the Archivist of the
United States and the Administrator of General Services to
promote coordination in the administration of chapters 29,
31, and 33 of this title with the information resources
management policies, principles, standards, and guidelines
established under this chapter;
``(2) review compliance by agencies with--
``(A) the requirements of chapters 29, 31, and 33 of this
title; and
``(B) regulations promulgated by the Archivist of the
United States and the Administrator of General Services; and
``(3) oversee the application of records management
policies, principles, standards, and guidelines, including
requirements for archiving information maintained in
electronic format, in the planning and design of information
systems.
``(g) With respect to privacy and security, the Director
shall--
``(1) develop and oversee the implementation of policies,
principles, standards, and guidelines on privacy,
confidentiality, security, disclosure and sharing of
information collected or maintained by or for agencies;
``(2) oversee and coordinate compliance with sections 552
and 552a of title 5, the Computer Security Act of 1987 (40
U.S.C. 759 note), and related information management laws;
and
``(3) require Federal agencies, consistent with the
Computer Security Act of 1987 (40 U.S.C. 759 note), to
identify and afford security protections commensurate with
the risk and magnitude of the harm resulting from the loss,
misuse, or unauthorized access to or modification of
information collected or maintained by or on behalf of an
agency.
``(h) With respect to Federal information technology, the
Director shall--
``(1) in consultation with the Director of the National
Institute of Standards and Technology and the Administrator
of General Services--
``(A) develop and oversee the implementation of policies,
principles, standards, and guidelines for information
technology functions and activities of the Federal
Government, including periodic evaluations of major
information systems; and
``(B) oversee the development and implementation of
standards under section 111(d) of the Federal Property and
Administrative Services Act of 1949 (40 U.S.C. 759(d));
``(2) monitor the effectiveness of, and compliance with,
directives issued under sections 110 and 111 of the Federal
Property and Administrative Services Act of 1949 (40 U.S.C.
757 and 759) and review proposed determinations under section
111(e) of such Act;
``(3) coordinate the development and review by the Office
of Information and Regulatory Affairs of policy associated
with Federal procurement and acquisition of information
technology with the Office of Federal Procurement Policy;
``(4) ensure, through the review of agency budget
proposals, information resources management plans and other
means--
``(A) agency integration of information resources
management plans, program plans and budgets for acquisition
and use of information technology; and
``(B) the efficiency and effectiveness of inter-agency
information technology initiatives to improve agency
performance and the accomplishment of agency missions; and
``(5) promote the use of information technology by the
Federal Government to improve the productivity, efficiency,
and effectiveness of Federal programs, including through
dissemination of public information and the reduction of
information collection burdens on the public.

``Sec. 3505. Assignment of tasks and deadlines

``In carrying out the functions under this chapter, the
Director shall--
``(1) in consultation with agency heads, set an annual
Governmentwide goal for the reduction of information
collection burdens by at least five percent, and set annual
agency goals to--
``(A) reduce information collection burdens imposed on the
public that--
``(i) represent the maximum practicable opportunity in each
agency; and
``(ii) are consistent with improving agency management of
the process for the review of collections of information
established under section 3506(c); and
``(B) improve information resources management in ways that
increase the productivity, efficiency and effectiveness of
Federal programs, including service delivery to the public;
``(2) with selected agencies and non-Federal entities on a
voluntary basis, conduct pilot projects to test alternative
policies, practices, regulations, and procedures to fulfill
the purposes of this chapter, particularly with regard to
minimizing the Federal information collection burden;
``(3) in consultation with the Administrator of General
Services, the Director of the National Institute of Standards
and Technology, the Archivist of the United States, and the
Director of the Office of Personnel Management, develop and
maintain a Governmentwide strategic plan for information
resources management, that shall include--
``(A) a description of the objectives and the means by
which the Federal Government shall apply information
resources to improve agency and program performance;
``(B) plans for--
``(i) reducing information burdens on the public, including
reducing such burdens through the elimination of duplication
and meeting shared data needs with shared resources;
``(ii) enhancing public access to and dissemination of,
information, using electronic and other formats; and
``(iii) meeting the information technology needs of the
Federal Government in accordance with the requirements of
sections 110 and 111 of the Federal Property and
Administrative Services Act of 1949 (40 U.S.C. 757 and 759),
and the purposes of this chapter; and
``(C) a description of progress in applying information
resources management to improve agency performance and the
accomplishment of missions; and
``(4) in cooperation with the Administrator of General
Services, issue guidelines for the establishment and
operation in each agency of a process, as required under
section 3506(h)(5) of this chapter, to review major
information systems initiatives, including acquisition and
use of information technology.

``Sec. 3506. Federal agency responsibilities

``(a)(1) The head of each agency shall be responsible for--
``(A) carrying out the agency's information resources
management activities to improve agency productivity,
efficiency, and effectiveness; and
``(B) complying with the requirements of this chapter and
related policies established by the Director.
``(2)(A) Except as provided under subparagraph (B), the
head of each agency shall designate a senior official who
shall report directly to such agency head to carry out the
responsibilities of the agency under this chapter.
``(B) The Secretary of the Department of Defense and the
Secretary of each military department may each designate a
senior official who shall report directly to such Secretary
to carry out the responsibilities of the department under
this chapter. If more than one official is designated for the
military departments, the respective duties of the officials
shall be clearly delineated.
``(3) The senior official designated under paragraph (2)
shall head an office responsible for ensuring agency
compliance with and prompt, efficient, and effective
implementation of the information policies and information
resources management responsibilities established under this
chapter, including the reduction of information collection
burdens on the public. The senior official and employees of
such office shall be selected with special attention to the
professional qualifications required to administer the
functions described under this chapter.
``(4) Each agency program official shall be responsible and
accountable for information resources assigned to and
supporting the programs under such official. In consultation
with the senior official designated under paragraph (2) and
the agency Chief Financial Officer (or comparable official),
each agency program official shall define program information
needs and develop strategies, systems, and capabilities to
meet those needs.
``(5) The head of each agency shall establish a permanent
information resources management steering committee, which
shall be chaired by the senior official designated under
paragraph (2) and shall include senior program officials and
the Chief Financial Officer (or comparable official). Each
steering committee shall--
``(A) assist and advise the head of the agency in carrying
out information resources management responsibilities of the
agency;
``(B) assist and advise the senior official designated
under paragraph (2) in the establishment of performance
measures for information resources management that relate to
program missions;
``(C) select, control, and evaluate all major information
system initiatives (including acquisitions of information
technology) in accordance with the requirements of subsection
(h)(5); and
``(D) identify opportunities to redesign business practices
and supporting information systems to improve agency
performance. [[Page S1214]]
``(b) With respect to general information resources
management, each agency shall--
``(1) develop information systems, processes, and
procedures to--
``(A) reduce information collection burdens on the public;
``(B) increase program efficiency and effectiveness; and
``(C) improve the integrity, quality, and utility of
information to all users within and outside the agency,
including capabilities for ensuring dissemination of public
information, public access to government information, and
protections for privacy and security;
``(2) in accordance with guidance by the Director, develop
and maintain a strategic information resources management
plan that shall describe how information resources management
activities help accomplish agency missions;
``(3) develop and maintain an ongoing process to--
``(A) ensure that information resources management
operations and decisions are integrated with organizational
planning, budget, financial management, human resources
management, and program decisions;
``(B) develop and maintain an integrated, comprehensive and
controlled process of information systems selection,
development, and evaluation;
``(C) in cooperation with the agency Chief Financial
Officer (or comparable official), develop a full and accurate
accounting of information technology expenditures, related
expenses, and results; and
``(D) establish goals for improving information resources
management's contribution to program productivity,
efficiency, and effectiveness, methods for measuring progress
towards those goals, and clear roles and responsibilities for
achieving those goals;
``(4) in consultation with the Director, the Administrator
of General Services, and the Archivist of the United States,
maintain a current and complete inventory of the agency's
information resources, including directories necessary to
fulfill the requirements of section 3511 of this chapter; and
``(5) in consultation with the Director and the Director of
the Office of Personnel Management, conduct formal training
programs to educate agency program and management officials
about information resources management.
``(c) With respect to the collection of information and the
control of paperwork, each agency shall--
``(1) establish a process within the office headed by the
official designated under subsection (a), that is
sufficiently independent of program responsibility to
evaluate fairly whether proposed collections of information
should be approved under this chapter, to--
``(A) review each collection of information before
submission to the Director for review under this chapter,
including--
``(i) an evaluation of the need for the collection of
information;
``(ii) a functional description of the information to be
collected;
``(iii) a plan for the collection of the information;
``(iv) a specific, objectively supported estimate of
burden;
``(v) a test of the collection of information through a
pilot program, if appropriate; and
``(vi) a plan for the efficient and effective management
and use of the information to be collected, including
necessary resources;
``(B) ensure that each information collection--
``(i) is inventoried, displays a control number and, if
appropriate, an expiration date;
``(ii) indicates the collection is in accordance with the
clearance requirements of section 3507; and
``(iii) contains a statement to inform the person receiving
the collection of information--

``(I) the reasons the information is being collected;
``(II) the way such information is to be used;
``(III) an estimate, to the extent practicable, of the
burden of the collection; and
``(IV) whether responses to the collection of information
are voluntary, required to obtain a benefit, or mandatory;
and

``(C) assess the information collection burden of proposed
legislation affecting the agency;
``(2)(A) except as provided under subparagraph (B), provide
60-day notice in the Federal Register, and otherwise consult
with members of the public and affected agencies concerning
each proposed collection of information, to solicit comment
to--
``(i) evaluate whether the proposed collection of
information is necessary for the proper performance of the
functions of the agency, including whether the information
shall have practical utility;
``(ii) evaluate the accuracy of the agency's estimate of
the burden of the proposed collection of information;
``(iii) enhance the quality, utility, and clarity of the
information to be collected; and
``(iv) minimize the burden of the collection of information
on those who are to respond, including through the use of
automated collection techniques or other forms of information
technology; and
``(B) for any proposed collection of information contained
in a proposed rule (to be reviewed by the Director under
section 3507(d)), provide notice and comment through the
notice of proposed rulemaking for the proposed rule and such
notice shall have the same purposes specified under
subparagraph (A) (i) through (iv); and
``(3) certify (and provide a record supporting such
certification, including public comments received by the
agency) that each collection of information submitted to the
Director for review under section 3507--
``(A) is necessary for the proper performance of the
functions of the agency, including that the information has
practical utility;
``(B) is not unnecessarily duplicative of information
otherwise reasonably accessible to the agency;
``(C) reduces to the extent practicable and appropriate the
burden on persons who shall provide information to or for the
agency, including with respect to small entities, as defined
under section 601(6) of title 5, the use of such techniques
as--
``(i) establishing differing compliance or reporting
requirements or timetables that take into account the
resources available to those who are to respond;
``(ii) the clarification, consolidation, or simplification
of compliance and reporting requirements; or
``(iii) an exemption from coverage of the collection of
information, or any part thereof;
``(D) is written using plain, coherent, and unambiguous
terminology and is understandable to those who are to
respond;
``(E) is to be implemented in ways consistent and
compatible, to the maximum extent practicable, with the
existing reporting and recordkeeping practices of those who
are to respond;
``(F) contains the statement required under paragraph
(1)(B)(iii);
``(G) has been developed by an office that has planned and
allocated resources for the efficient and effective
management and use of the information to be collected,
including the processing of the information in a manner which
shall enhance, where appropriate, the utility of the
information to agencies and the public;
``(H) uses effective and efficient statistical survey
methodology appropriate to the purpose for which the
information is to be collected; and
``(I) to the maximum extent practicable, uses information
technology to reduce burden and improve data quality, agency
efficiency and responsiveness to the public.
``(d) With respect to information dissemination, each
agency shall--
``(1) ensure that the public has timely and equitable
access to the agency's public information, including ensuring
such access through--
``(A) encouraging a diversity of public and private sources
for information based on government public information, and
``(B) agency dissemination of public information in an
efficient, effective, and economical manner;
``(2) regularly solicit and consider public input on the
agency's information dissemination activities; and
``(3) not, except where specifically authorized by
statute--
``(A) establish an exclusive, restricted, or other
distribution arrangement that interferes with timely and
equitable availability of public information to the public;
``(B) restrict or regulate the use, resale, or
redissemination of public information by the public;
``(C) charge fees or royalties for resale or
redissemination of public information; or
``(D) establish user fees for public information that
exceed the cost of dissemination.
``(e) With respect to statistical policy and coordination,
each agency shall--
``(1) ensure the relevance, accuracy, timeliness,
integrity, and objectivity of information collected or
created for statistical purposes;
``(2) inform respondents fully and accurately about the
sponsors, purposes, and uses of statistical surveys and
studies;
``(3) protect respondents' privacy and ensure that
disclosure policies fully honor pledges of confidentiality;
``(4) observe Federal standards and practices for data
collection, analysis, documentation, sharing, and
dissemination of information;
``(5) ensure the timely publication of the results of
statistical surveys and studies, including information about
the quality and limitations of the surveys and studies; and
``(6) make data available to statistical agencies and
readily accessible to the public.
``(f) With respect to records management, each agency shall
implement and enforce applicable policies and procedures,
including requirements for archiving information maintained
in electronic format, particularly in the planning, design
and operation of information systems.
``(g) With respect to privacy and security, each agency
shall--
``(1) implement and enforce applicable policies,
procedures, standards, and guidelines on privacy,
confidentiality, security, disclosure and sharing of
information collected or maintained by or for the agency;
``(2) assume responsibility and accountability for
compliance with and coordinated management of sections 552
and 552a of title 5, the Computer Security Act of 1987 (40
U.S.C. 759 note), and related information management laws;
and
``(3) consistent with the Computer Security Act of 1987 (40
U.S.C. 759 note), identify and afford security protections
commensurate with the risk and magnitude of the harm
resulting from the loss, misuse, or unauthorized access to or
modification of information [[Page S1215]] collected or
maintained by or on behalf of an agency.
``(h) With respect to Federal information technology, each
agency shall--
``(1) implement and enforce applicable Governmentwide and
agency information technology management policies,
principles, standards, and guidelines;
``(2) assume responsibility and accountability for any
acquisitions made pursuant to a delegation of authority under
section 111 of the Federal Property and Administrative
Services Act of 1949 (40 U.S.C. 759);
``(3) promote the use of information technology by the
agency to improve the productivity, efficiency, and
effectiveness of agency programs, including the reduction of
information collection burdens on the public and improved
dissemination of public information;
``(4) propose changes in legislation, regulations, and
agency procedures to improve information technology
practices, including changes that improve the ability of the
agency to use technology to reduce burden; and
``(5) establish, and be responsible for, a major
information system initiative review process, which shall be
developed and implemented by the information resources
management steering committee established under subsection
(a)(5), consistent with guidelines issued under section
3505(4), and include--
``(A) the review of major information system initiative
proposals and projects (including acquisitions of information
technology), approval or disapproval of each such initiative,
and periodic reviews of the development and implementation of
such initiatives, including whether the projected benefits
have been achieved;
``(B) the use by the committee of specified evaluative
techniques and criteria to--
``(i) assess the economy, efficiency, effectiveness, risks,
and priority of system initiatives in relation to mission
needs and strategies;
``(ii) estimate and verify life-cycle system initiative
costs; and
``(iii) assess system initiative privacy, security, records
management, and dissemination and access capabilities;
``(C) the use, as appropriate, of independent cost
evaluations of data developed under subparagraph (B); and
``(D) the inclusion of relevant information about approved
initiatives in the agency's annual budget request.

``Sec. 3507. Public information collection activities;
submission to Director; approval and delegation

``(a) An agency shall not conduct or sponsor the collection
of information unless in advance of the adoption or revision
of the collection of information--
``(1) the agency has--
``(A) conducted the review established under section
3506(c)(1);
``(B) evaluated the public comments received under section
3506(c)(2);
``(C) submitted to the Director the certification required
under section 3506(c)(3), the proposed collection of
information, copies of pertinent statutory authority,
regulations, and other related materials as the Director may
specify; and
``(D) published a notice in the Federal Register--
``(i) stating that the agency has made such submission; and
``(ii) setting forth--

``(I) a title for the collection of information;
``(II) a summary of the collection of information;
``(III) a brief description of the need for the information
and the proposed use of the information;
``(IV) a description of the likely respondents and proposed
frequency of response to the collection of information;
``(V) an estimate of the burden that shall result from the
collection of information; and
``(VI) notice that comments may be submitted to the agency
and Director;

``(2) the Director has approved the proposed collection of
information or approval has been inferred, under the
provisions of this section; and
``(3) the agency has obtained from the Director a control
number to be displayed upon the collection of information.
``(b) The Director shall provide at least 30 days for
public comment prior to making a decision under subsection
(c), (d), or (h), except as provided under subsection (j).
``(c)(1) For any proposed collection of information not
contained in a proposed rule, the Director shall notify the
agency involved of the decision to approve or disapprove the
proposed collection of information.
``(2) The Director shall provide the notification under
paragraph (1), within 60 days after receipt or publication of
the notice under subsection (a)(1)(D), whichever is later.
``(3) If the Director does not notify the agency of a
denial or approval within the 60-day period described under
paragraph (2)--
``(A) the approval may be inferred;
``(B) a control number shall be assigned without further
delay; and
``(C) the agency may collect the information for not more
than 2 years.
``(d)(1) For any proposed collection of information
contained in a proposed rule--
``(A) as soon as practicable, but no later than the date of
publication of a notice of proposed rulemaking in the Federal
Register, each agency shall forward to the Director a copy of
any proposed rule which contains a collection of information
and any information requested by the Director necessary to
make the determination required under this subsection; and
``(B) within 60 days after the notice of proposed
rulemaking is published in the Federal Register, the Director
may file public comments pursuant to the standards set forth
in section 3508 on the collection of information contained in
the proposed rule;
``(2) When a final rule is published in the Federal
Register, the agency shall explain--
``(A) how any collection of information contained in the
final rule responds to the comments, if any, filed by the
Director or the public; or
``(B) the reasons such comments were rejected.
``(3) If the Director has received notice and failed to
comment on an agency rule within 60 days after the notice of
proposed rulemaking, the Director may not disapprove any
collection of information specifically contained in an agency
rule.
``(4) No provision in this section shall be construed to
prevent the Director, in the Director's discretion--
``(A) from disapproving any collection of information which
was not specifically required by an agency rule;
``(B) from disapproving any collection of information
contained in an agency rule, if the agency failed to comply
with the requirements of paragraph (1) of this subsection;
``(C) from disapproving any collection of information
contained in a final agency rule, if the Director finds
within 60 days after the publication of the final rule that
the agency's response to the Director's comments filed under
paragraph (2) of this subsection was unreasonable; or
``(D) from disapproving any collection of information
contained in a final rule, if--
``(i) the Director determines that the agency has
substantially modified in the final rule the collection of
information contained in the proposed rule; and
``(ii) the agency has not given the Director the
information required under paragraph (1) with respect to the
modified collection of information, at least 60 days before
the issuance of the final rule.
``(5) This subsection shall apply only when an agency
publishes a notice of proposed rulemaking and requests public
comments.
``(6) The decision by the Director to approve or not act
upon a collection of information contained in an agency rule
shall not be subject to judicial review.
``(e)(1) Any decision by the Director under subsection (c),
(d), (h), or (j) to disapprove a collection of information,
or to instruct the agency to make substantive or material
change to a collection of information, shall be publicly
available and include an explanation of the reasons for such
decision.
``(2) Any written communication between the Office of the
Director, the Administrator of the Office of Information and
Regulatory Affairs, or any employee of the Office of
Information and Regulatory Affairs and an agency or person
not employed by the Federal Government concerning a proposed
collection of information shall be made available to the
public.
``(3) This subsection shall not require the disclosure of--
``(A) any information which is protected at all times by
procedures established for information which has been
specifically authorized under criteria established by an
Executive order or an Act of Congress to be kept secret in
the interest of national defense or foreign policy; or
``(B) any communication relating to a collection of
information which has not been approved under this chapter,
the disclosure of which could lead to retaliation or
discrimination against the communicator.
``(f)(1) An independent regulatory agency which is
administered by 2 or more members of a commission, board, or
similar body, may by majority vote void--
``(A) any disapproval by the Director, in whole or in part,
of a proposed collection of information of that agency; or
``(B) an exercise of authority under subsection (d) of
section 3507 concerning that agency.
``(2) The agency shall certify each vote to void such
disapproval or exercise to the Director, and explain the
reasons for such vote. The Director shall without further
delay assign a control number to such collection of
information, and such vote to void the disapproval or
exercise shall be valid for a period of 3 years.
``(g) The Director may not approve a collection of
information for a period in excess of 3 years.
``(h)(1) If an agency decides to seek extension of the
Director's approval granted for a currently approved
collection of information, the agency shall--
``(A) conduct the review established under section 3506(c),
including the seeking of comment from the public on the
continued need for, and burden imposed by the collection of
information; and
``(B) after having made a reasonable effort to seek public
comment, but no later than 60 days before the expiration date
of the control number assigned by the Director for the
currently approved collection of information, submit the
collection of information for review and approval under this
section, which shall include an explanation of how the agency
has used the information that it has
collected. [[Page S1216]]
``(2) If under the provisions of this section, the Director
disapproves a collection of information contained in an
existing rule, or recommends or instructs the agency to make
a substantive or material change to a collection of
information contained in an existing rule, the Director
shall--
``(A) publish an explanation thereof in the Federal
Register; and
``(B) instruct the agency to undertake a rulemaking within
a reasonable time limited to consideration of changes to the
collection of information contained in the rule and
thereafter to submit the collection of information for
approval or disapproval under this chapter.
``(3) An agency may not make a substantive or material
modification to a collection of information after such
collection has been approved by the Director, unless the
modification has been submitted to the Director for review
and approval under this chapter.
``(i)(1) If the Director finds that a senior official of an
agency designated under section 3506(a) is sufficiently
independent of program responsibility to evaluate fairly
whether proposed collections of information should be
approved and has sufficient resources to carry out this
responsibility effectively, the Director may, by rule in
accordance with the notice and comment provisions of chapter
5 of title 5, United States Code, delegate to such official
the authority to approve proposed collections of information
in specific program areas, for specific purposes, or for all
agency purposes.
``(2) A delegation by the Director under this section shall
not preclude the Director from reviewing individual
collections of information if the Director determines that
circumstances warrant such a review. The Director shall
retain authority to revoke such delegations, both in general
and with regard to any specific matter. In acting for the
Director, any official to whom approval authority has been
delegated under this section shall comply fully with the
rules and regulations promulgated by the Director.
``(j)(1) The agency head may request the Director to
authorize collection of information prior to expiration of
time periods established under this chapter, if an agency
head determines that--
``(A) a collection of information--
``(i) is needed prior to the expiration of such time
periods; and
``(ii) is essential to the mission of the agency; and
``(B) the agency cannot reasonably comply with the
provisions of this chapter within such time periods because--
``(i) public harm is reasonably likely to result if normal
clearance procedures are followed; or
``(ii) an unanticipated event has occurred and the use of
normal clearance procedures is reasonably likely to prevent
or disrupt the collection of information related to the event
or is reasonably likely to cause a statutory or court-ordered
deadline to be missed.
``(2) The Director shall approve or disapprove any such
authorization request within the time requested by the agency
head and, if approved, shall assign the collection of
information a control number. Any collection of information
conducted under this subsection may be conducted without
compliance with the provisions of this chapter for a maximum
of 90 days after the date on which the Director received the
request to authorize such collection.

``Sec. 3508. Determination of necessity for information;
hearing

``Before approving a proposed collection of information,
the Director shall determine whether the collection of
information by the agency is necessary for the proper
performance of the functions of the agency, including whether
the information shall have practical utility. Before making a
determination the Director may give the agency and other
interested persons an opportunity to be heard or to submit
statements in writing. To the extent that the Director
determines that the collection of information by an agency is
unnecessary for the proper performance of the functions of
the agency, for any reason, the agency may not engage in the
collection of information.

``Sec. 3509. Designation of central collection agency

``The Director may designate a central collection agency to
obtain information for two or more agencies if the Director
determines that the needs of such agencies for information
will be adequately served by a single collection agency, and
such sharing of data is not inconsistent with applicable law.
In such cases the Director shall prescribe (with reference to
the collection of information) the duties and functions of
the collection agency so designated and of the agencies for
which it is to act as agent (including reimbursement for
costs). While the designation is in effect, an agency covered
by the designation may not obtain for itself information for
the agency which is the duty of the collection agency to
obtain. The Director may modify the designation from time to
time as circumstances require. The authority to designate
under this section is subject to the provisions of section
3507(f) of this chapter.

``Sec. 3510. Cooperation of agencies in making information
available

``(a) The Director may direct an agency to make available
to another agency, or an agency may make available to another
agency, information obtained by a collection of information
if the disclosure is not inconsistent with applicable law.
``(b)(1) If information obtained by an agency is released
by that agency to another agency, all the provisions of law
(including penalties which relate to the unlawful disclosure
of information) apply to the officers and employees of the
agency to which information is released to the same extent
and in the same manner as the provisions apply to the
officers and employees of the agency which originally
obtained the information.
``(2) The officers and employees of the agency to which the
information is released, in addition, shall be subject to the
same provisions of law, including penalties, relating to the
unlawful disclosure of information as if the information had
been collected directly by that agency.

``Sec. 3511. Establishment and operation of Government
Information Locator Service

``In order to assist agencies and the public in locating
information and to promote information sharing and equitable
access by the public, the Director shall--
``(1) cause to be established and maintained a distributed
agency-based electronic Government Information Locator
Service (hereafter in this section referred to as the
`Service'), which shall identify the major information
systems, holdings, and dissemination products of each agency;
``(2) require each agency to establish and maintain an
agency information locator service as a component of, and to
support the establishment and operation of the Service;
``(3) in cooperation with the Archivist of the United
States, the Administrator of General Services, the Public
Printer, and the Librarian of Congress, establish an
interagency committee to advise the Secretary of Commerce on
the development of technical standards for the Service to
ensure compatibility, promote information sharing, and
uniform access by the public;
``(4) consider public access and other user needs in the
establishment and operation of the Service;
``(5) ensure the security and integrity of the Service,
including measures to ensure that only information which is
intended to be disclosed to the public is disclosed through
the Service; and
``(6) periodically review the development and effectiveness
of the Service and make recommendations for improvement,
including other mechanisms for improving public access to
Federal agency public information.

``Sec. 3512. Public protection

``Notwithstanding any other provision of law, no person
shall be subject to any penalty for failing to maintain,
provide, or disclose information to or for any agency or
person if the collection of information subject to this
chapter--
``(1) does not display a valid control number assigned by
the Director; or
``(2) fails to state that the person who is to respond to
the collection of information is not required to comply
unless such collection displays a valid control number.

``Sec. 3513. Director review of agency activities; reporting;
agency response

``(a) In consultation with the Administrator of General
Services, the Archivist of the United States, the Director of
the National Institute of Standards and Technology, and the
Director of the Office of Personnel Management, the Director
shall periodically review selected agency information
resources management activities to ascertain the efficiency
and effectiveness of such activities to improve agency
performance and the accomplishment of agency missions.
``(b) Each agency having an activity reviewed under
subsection (a) shall, within 60 days after receipt of a
report on the review, provide a written plan to the Director
describing steps (including milestones) to--
``(1) be taken to address information resources management
problems identified in the report; and
``(2) improve agency performance and the accomplishment of
agency missions.

``Sec. 3514. Responsiveness to Congress

``(a)(1) The Director shall--
``(A) keep the Congress and congressional committees fully
and currently informed of the major activities under this
chapter; and
``(B) submit a report on such activities to the President
of the Senate and the Speaker of the House of Representatives
annually and at such other times as the Director determines
necessary.
``(2) The Director shall include in any such report a
description of the extent to which agencies have--
``(A) reduced information collection burdens on the public,
including--
``(i) a summary of accomplishments and planned initiatives
to reduce collection of information burdens;
``(ii) a list of all violations of this chapter and of any
rules, guidelines, policies, and procedures issued pursuant
to this chapter; and
``(iii) a list of any increase in the collection of
information burden, including the authority for each such
collection;
``(B) improved the quality and utility of statistical
information;
``(C) improved public access to Government information; and
``(D) improved program performance and the accomplishment
of agency missions through information resources management.
``(b) The preparation of any report required by this
section shall be based on performance results reported by the
agencies and shall [[Page S1217]] not increase the collection
of information burden on persons outside the Federal
Government.

``Sec. 3515. Administrative powers

``Upon the request of the Director, each agency (other than
an independent regulatory agency) shall, to the extent
practicable, make its services, personnel, and facilities
available to the Director for the performance of functions
under this chapter.

``Sec. 3516. Rules and regulations

``The Director shall promulgate rules, regulations, or
procedures necessary to exercise the authority provided by
this chapter.

``Sec. 3517. Consultation with other agencies and the public

``(a) In developing information resources management
policies, plans, rules, regulations, procedures, and
guidelines and in reviewing collections of information, the
Director shall provide interested agencies and persons early
and meaningful opportunity to comment.
``(b) Any person may request the Director to review any
collection of information conducted by or for an agency to
determine, if, under this chapter, a person shall maintain,
provide, or disclose the information to or for the agency.
Unless the request is frivolous, the Director shall, in
coordination with the agency responsible for the collection
of information--
``(1) respond to the request within 60 days after receiving
the request, unless such period is extended by the Director
to a specified date and the person making the request is
given notice of such extension; and
``(2) take appropriate remedial action, if necessary.

``Sec. 3518. Effect on existing laws and regulations

``(a) Except as otherwise provided in this chapter, the
authority of an agency under any other law to prescribe
policies, rules, regulations, and procedures for Federal
information resources management activities is subject to the
authority of the Director under this chapter.
``(b) Nothing in this chapter shall be deemed to affect or
reduce the authority of the Secretary of Commerce or the
Director of the Office of Management and Budget pursuant to
Reorganization Plan No. 1 of 1977 (as amended) and Executive
order, relating to telecommunications and information policy,
procurement and management of telecommunications and
information systems, spectrum use, and related matters.
``(c)(1) Except as provided in paragraph (2), this chapter
shall not apply to the collection of information--
``(A) during the conduct of a Federal criminal
investigation or prosecution, or during the disposition of a
particular criminal matter;
``(B) during the conduct of--
``(i) a civil action to which the United States or any
official or agency thereof is a party; or
``(ii) an administrative action or investigation involving
an agency against specific individuals or entities;
``(C) by compulsory process pursuant to the Antitrust Civil
Process Act and section 13 of the Federal Trade Commission
Improvements Act of 1980; or
``(D) during the conduct of intelligence activities as
defined in section 4-206 of Executive Order No. 12036, issued
January 24, 1978, or successor orders, or during the conduct
of cryptologic activities that are communications security
activities.
``(2) This chapter applies to the collection of information
during the conduct of general investigations (other than
information collected in an antitrust investigation to the
extent provided in subparagraph (C) of paragraph (1))
undertaken with reference to a category of individuals or
entities such as a class of licensees or an entire industry.
``(d) Nothing in this chapter shall be interpreted as
increasing or decreasing the authority conferred by Public
Law 89-306 on the Administrator of the General Services
Administration, the Secretary of Commerce, or the Director of
the Office of Management and Budget.
``(e) Nothing in this chapter shall be interpreted as
increasing or decreasing the authority of the President, the
Office of Management and Budget or the Director thereof,
under the laws of the United States, with respect to the
substantive policies and programs of departments, agencies
and offices, including the substantive authority of any
Federal agency to enforce the civil rights laws.

``Sec. 3519. Access to information

``Under the conditions and procedures prescribed in section
716 of title 31, the Director and personnel in the Office of
Information and Regulatory Affairs shall furnish such
information as the Comptroller General may require for the
discharge of the responsibilities of the Comptroller General.
For the purpose of obtaining such information, the
Comptroller General or representatives thereof shall have
access to all books, documents, papers and records,
regardless of form or format, of the Office.

``Sec. 3520. Authorization of appropriations

``(a) Subject to subsection (b), there are authorized to be
appropriated to the Office of Information and Regulatory
Affairs to carry out the provisions of this chapter, and for
no other purpose, $8,000,000 for each of the fiscal years
1996, 1997, 1998, 1999, and 2000.
``(b)(1) No funds may be appropriated pursuant to
subsection (a) unless such funds are appropriated in an
appropriation Act (or continuing resolution) which separately
and expressly states the amount appropriated pursuant to
subsection (a) of this section.
``(2) No funds are authorized to be appropriated to the
Office of Information and Regulatory Affairs, or to any other
officer or administrative unit of the Office of Management
and Budget, to carry out the provisions of this chapter, or
to carry out any function under this chapter, for any fiscal
year pursuant to any provision of law other than subsection
(a) of this section.''.

SEC. 3. EFFECTIVE DATE.

The provisions of this Act and the amendments made by this
Act shall take effect on June 30, 1995.
____

S. 244, THE `Paperwork Reduction Act of 1995'--Summary

The ``Paperwork Reduction Act of 1995'' will--
Reaffirm the fundamental purpose of the Paperwork Reduction
Act of 1980: to minimize the Federal paperwork burdens
imposed on individuals, small businesses, State and local
governments, educational and non-profit institutions, and
Federal contractors.
Provide a five-year authorization of appropriations for the
Office of Information and Regulatory Affairs (OIRA) within
the Office of Management and Budget, the paperwork
``watchdog'' under the Act.
Clarify that the Act's public protections apply to all
Government-sponsored paperwork, eliminating any confusion
over the coverage of so-called ``third-party burdens'' (those
imposed by one private party on another private party due to
a Federal regulation), caused by the U.S. Supreme Court's
1989 decision in Dole v. United Steelworkers of America.
Seek to reduce the paperwork burdens imposed on the public
through an annual Government-wide paperwork reduction goal of
5 percent.
Emphasize the fundamental responsibilities of each Federal
agency to minimize paperwork burdens and foster paperwork
reduction, by requiring--
a thorough review of each proposed collection of
information for need and practical utility, the Paperwork
Reduction Act's fundamental standards, which enables an
agency to collect needed information while minimizing the
burden imposed on the public;
agency planning to maximize the use of information already
collected by the public;
better notice and opportunity for public participation with
at least a 60-day comment period for each proposed paperwork
requirement;
agency certification of compliance with public
participation requirements and the Act's fundamental
standards of need and practical utility for each proposed
paperwork requirement before its submission to OIRA for
review, approval and assignment of a control number
clearance; and
Strengthen OIRA's responsibilities in the fight to minimize
paperwork burdens imposed on the public, by--
empowering OIRA to establish standards under which Federal
agencies can more accurately estimate the burden placed upon
the public by a proposed paperwork requirements;
working with the Office of Federal Procurement Policy
(OFPP) to reduce the substantial paperwork burdens associated
with Government contracting; and
Empower the public further in the paperwork reduction fight
by enabling an individual to obtain a written determination
from the OIRA Administrator regarding whether a Federally
sponsored paperwork requirement complies with the Act's
standards and public protections, in the same manner that a
determination can be sought from the OFPP Administrator
regarding whether a procurement regulation issued by an
individual agency or buying activity is consistent with the
Government-wide Federal Acquisition Regulation.
Improves the Government's ability to make more effective
use of the information collected from the public by--
specifying responsibilities of individual agencies
regarding information resources management (IRM);
enhancing OIRA's responsibility and authority for
establishing Government-wide IRM policy;
establishing policies for linking information technology
(IT) budgeting and IRM decision-making to agency program
performance, consistent with ``Best Practices'' studies
conducted by the U.S. General Accounting Office.
Strengthen OIRA's leadership role in Federal statistical
policy.
____

The Paperwork Reduction Act Coalition

Aerospace Industries Association of America.
Air Transport Association of America.
Alliance of American Insurers.
American Consulting Engineers Council.
American Institute of Merchant Shipping.
American Iron and Steel Institute.
American Petroleum Institute.
American Subcontractors Association.
American Telephone & Telegraph.
Associated Builders & Contractors.
Associated Credit Bureaus.
Associated General Contractors of America.
Association of Manufacturing Technology.
Association of Records Managers and Administrators.
Automative Parts and Accessories
Association. [[Page S1218]]
Biscuit and Cracker Manufacturers' Association.
Bristol Myers.
Chemical Manufacturers Association.
Chemical Specialties Manufacturers Association.
Citizens Against Government Waste.
Citizens For A Sound Economy.
Computer and Business Equipment Manufacturers Association.
Contract Services Association of America.
Copper & Brass Fabricators Council.
Dairy and Food Industries Supply Association.
Direct Selling Association.
Eastman Kodak Company.
Electronic Industries Association.
Financial Executive Institute.
Food Marketing Institute.
Gadsby & Hannah.
Gas Appliance Manufacturers Association.
General Electric.
Glaxo, Inc.
Greater Washington Board of Trade.
Hardwood Plywood and Veneer Association.
Independent Bankers Association of America.
International Business Machines.
International Communication Industries Association.
International Mass Retail Association.
Kitchen Cabinet Manufacturers Association.
Mail Advertising Service Association International.
McDermott, Will & Emery.
Motorola Government Electronics Group.
National Association of Homebuilders of the United States.
National Association of Manufacturers.
National Association of Plumbing-Heating-Cooling
Contractors.
National Association of the Remodeling Industry.
National Association of Wholesalers-Distributors.
National Federation of Independent Business.
National Food Brokers Association.
National Food Processors Association.
National Foundation for Consumer Credit.
National Glass Association.
National Restaurant Association.
National Roofing Contractors Association.
National Security Industrial Association.
National Small Business United.
National Society of Professional Engineers.
National Society of Public Accountants.
National Tooling and Machining Association.
Northrop Corporation.
Packaging Machinery Manufacturers Institute.
Painting and Decorating Contractors of America.
Printing Industries of America.
Professional Services Council.
Shipbuilders Council of America.
Small Business Legislative Council.
Society for Marketing Professional Services.
Sun Company, Inc.
Sunstrand Corporation.
Texaco.
United Technologies.
Wholesale Florists and Florist Suppliers of America.
____

Members of the Small Business Legislative Council

Air Conditioning Contractors of America.
Alliance for Affordable Health Care.
Alliance of Independent Store Owners and Professionals.
American Animal Hospital Association.
American Association of Nurserymen.
American Bus Association.
American Consulting Engineers Council.
American Council of Independent Laboratories.
American Floorcovering Association.
American Gear Manufacturers Association.
American Machine Tool Distributors Association.
American Road & Transportation Builders Association.
American Society of Travel Agents, Inc.
American Sod Producers Association.
American Subcontractors Association.
American Textile Machinery Association.
American Trucking Associations, Inc.
American Warehouse Association.
American Wholesale Marketers Association.
AMT-The Association for Manufacturing Technology.
Apparel Retailers of America.
Architectural Precast Association.
Associated Builders & Contractors.
Associated Equipment Distributors.
Associated Landscape Contractors of America.
Association of Small Business Development Centers.
Automotive Service Association.
Automotive Recyclers Association.
Bowling Proprietors Association of America.
Building Service Contractors Association International.
Business Advertising Council.
Christian Booksellers Association.
Council of Fleet Specialists.
Council of Growing Companies.
Direct Selling Association.
Electronics Representatives Association.
Florists' Transworld Delivery Association.
Health Industry Representatives Association.
Helicopter Association International.
Independent Bakers Association.
Independent Bankers Association of America.
Independent Medical Distributors Association.
International Association of Refrigerated Warehouses.
International Communications Industries Association.
International Formalwear Association.
International Television Association.
Machinery Dealers National Association.
Manufacturers Agents National Association.
Manufacturers Representatives of America, Inc.
Mechanical Contractors Association of America, Inc.
National Association for the Self-Employed.
National Association of Catalog Showroom Merchandisers.
National Association of Home Builders.
National Association of Investment Companies.
National Association of Plumbing-Heating-Cooling
Contractors.
National Association of Private Enterprise.
National Association of Realtors.
National Association of Retail Druggists.
National Association of RV Parks and Campgrounds.
National Association of Small Business Investment
Companies.
National Association of the Remodeling Industry.
National Association of Truck Stop Operators.
National Association of Women Business Owners.
National Chimney Sweep Guild.
National Association of Catalog Showroom Merchandisers.
National Coffee Service Association.
National Electrical Contractors Association.
National Electrical Manufacturers Representatives
Association.
National Food Brokers Association.
National Independent Flag Dealers Association.
National Knitwear Sportswear Association.
National Lumber & Building Material Dealers Association.
National Moving and Storage Association.
National Ornamental & Miscellaneous Metals Association.
National Paperbox Association.
National Shoe Retailers Association.
National Society of Public Accountants.
National Tire Dealers & Retreaders Association.
National Tooling and Machining Association.
National Tour Association.
National Venture Capital Association.
Opticians Association of America.
Organization for the Protection and Advancement of Small
Telephone Companies.
Passenger Vessel Association.
Petroleum Marketers Association of America.
Power Transmission Representatives Association.
Printing Industries of America, Inc.
Promotional Products Association International.
Retail Bakers of America.
Small Business Council of America, Inc.
Small Business Exporters Association.
SMC/Pennsylvania Small Business.
Society of American Florists.

Mr. ROTH. Mr. President, I am pleased to join today with the
distinguished gentleman from Georgia [Senator Nunn] in introducing the
Paperwork Reduction Act of 1995. Last year, this legislation, after
thorough consideration by the Committee on Governmental Affairs, was
reported unanimously and then passed the Senate on two different
occasions, also unanimously.
This legislation is part of the Contract With America. While the
contract contains the original version which Senator Nunn and I
introduced in the last Congress, we believe that the new House
leadership would be receptive to the improved version we are today
introducing. I am hopeful that the Senate will take the lead once again
in passing this legislation. As chairman of the Committee on
Governmental Affairs, I intend to process this legislation quickly, and
ask my colleagues on the committee to join with Senator Nunn, Senator
Glenn, and myself in this effort.
I would hope that this legislation could be acted on this month to
become the third Governmental Affairs bill in this young session to be
considered on the floor.
This legislation enjoys widespread support among the business
community, both big and small, as well as among State, local, and
tribal governments and the people--all who bear the burden of Federal
Government paperwork collections. This legislation strengthens the
paperwork reduction [[Page S1219]] aspects of the 1980 act and directs
OIRA to reduce paperwork burdens on the public by 5 percent annually.
By overturning the 1990 Supreme Court decision in Dole versus United
Steel Workers of America, it extends the jurisdiction of the act by 50
percent. One could thus expect the burden-saving results of this
legislation to be substantial.
The Committee on Governmental Affairs has broad jurisdiction over
subjects of paperwork burdens, information technology, and regulations.
No one piece of legislation can adequately deal with all facets of
those subjects. This legislation is not the last that will be addressed
on those subjects by the committee.
On February 1, 1995, the committee will hold a hearing on the
Government's use of information technology as part of the Committee's
Reinventing Government effort.
On February 8, 1995, the committee will begin a set of hearings on
the broad subject of regulatory reform.
Mr. GLENN. Mr. President, it gives me great pleasure to join with my
colleagues from the Government Affairs Committee, Senator Nunn and
Senator Roth, to cosponsor our bipartisan legislation to reauthorize
the Paperwork Reduction Act. The legislation we introduce today
reflects the compromise we achieved in the last Congress, which the
Senate passed by a unanimous vote on October 6, 1994. I am confident
that this bill will once again be passed by the Senate and then move
quickly in the House.
This legislation has two very important and closely related purposes.
First, the Paperwork Reduction Act is vital to reducing Government
paperwork burdens on the American public. Too often, individuals and
businesses are burdened by having to fill out questionnaires and forms
that simply are not needed to implement the laws of the land. Too much
time and money is wasted in an effort to satisfy bureaucratic excess.
The Paperwork Reduction Act of 1980 created a clearance process to
control this Government appetite for information. The Paperwork
Reduction Act of 1995 strengthens this process and will reduce the
burdens of Government redtape on the public.
Second, the act is key to improving the efficiency and effectiveness
of government information activities. The Federal Government is now
spending over $25 billion a year on information technology. The new age
of computers and telecommunications provides many opportunities for
improvements in Government operations. Unfortunately, as oversight by
our committee and others has shown, the Government is wasting millions
of dollars on poorly designed and often incompatible systems. This must
stop. The Paperwork Reduction Act of 1980 took a first step on the road
to reform when it created information resources management [IRM]
policies to be overseen by OMB. The Paperwork Reduction Act of 1995
strengthens that mandate and establishes new requirements for agency
IRM improvements.
In these and other ways, this legislation strengthens the Paperwork
Reduction Act and reflects the concerns of a broad array of Senators.
As my colleagues know, I have been working for several years to
reauthorize this important law. I am very pleased with the result. With
this legislation, we:
Reauthorize the act for 5 years;
Overturn the Dole versus United Steelworkers Supreme Court decision,
so that information disclosure requirements are covered by the OMB
paperwork clearance process;
Require agencies to evaluate paperwork proposals and solicit public
comment on them before the proposals go to OMB for review;
Create additional opportunities for the public to participate in
paperwork clearance and other information management decisions;
Strengthen agency and OMB information resources management [IRM]
requirements;
Establish information dissemination standards and require the
development of a government information locator service [GILS] to
ensure improved public access to government information, especially
that maintained in electronic format; and
Make other improvements in the areas of government statistics,
records management, computer security, and the management of
information technology.
These are important reforms. They are the result of over a year long
process of consultation among members of the Governmental Affairs
Committee, the administration, and the General Accounting Office. Of
course, reaching agreement on this legislation has involved compromises
that displease some. It may also not completely resolve conflicting
views on many of the OMB paperwork and regulatory review controversies
that have dogged congressional oversight of the Paperwork Reduction
Act. But again, this legislation is a compromise that addresses many
important issues and will help the Government reduce paperwork burdens
on the public and improve the management of Federal information
resources. I believe this is a very good compromise that can and should
pass both the Senate and the House. I urge my colleagues to support
this legislation.
______

By Mr. COHEN (for himself, Mr. Dole, Mr. Simpson, Mr. Stevens,
Mr. D'Amato, Mr. Graham, Mr. Coats, Mr. Gregg, Mr. Warner, Mr.
Nickles, Mr. Pryor, Mr. Bond, Mr. Chafee, Mr. Ford, and Mr.
Domenici):
S. 245. A bill to provide for enhanced penalties for health care
fraud, and for other purposes; to the Committee on Finance.

the health care fraud prevention act of 1995

Mr. COHEN. Mr. President, I rise today to introduce, on behalf of
myself, Senators Dole, Simpson, Stevens, D'Amato, Graham of Florida,
Coats, Gregg, Warner, Nickles, Pryor, Chafee, Bond, and Ford, the
Health Care Fraud Prevention Act of 1995.
Mr. President, health care reform has now taken a back seat to some
other measures that are now before the Congress, as our colleagues in
the House debate their Contract With America provisions and this body
debates unfunded mandates, a balanced budget amendment, and entitlement
reform. Apparently health care reform is going to have to wait. But I
must say that it is just as important as these other issues as far as
the American people are concerned. But as we await the debate on health
care reform, which I believe must come this session, we also have to
take steps immediately to toughen our defenses against fraudulent
practices that are driving up the cost of health care for families,
businesses and taxpayers alike.
You may recall that last year I introduced a measure which contained
some additions to the criminal law provisions of our title 18 statutes.
Those provisions were adopted unanimously by the Senate. They were sent
over to the House where they were stripped out of the anticrime bill at
conference because the majority rationalized that these provisions
should not go on the crime bill but on a health care reform bill. As we
know, there was no health care reform bill passed last year.
On a number of occasions, I sought to attach the provisions to
pending legislation, for example, the D.C. appropriations bill and the
Labor, HHS appropriations bill. I was prevailed upon to withdraw the
legislation at that time so as to allow the appropriations bills to go
forward. And I pointed out at that time, which was at the conclusion of
last year's session of Congress, that we would lose as much as $100
billion a year due to health care fraud and abuse. That amounts to $275
million a day or $11.5 million every single hour.
Mr. President, I do not think we can afford to delay this any longer.
Over the past 5 years, we have lost as much as $418 billion from health
care fraud and abuse, which is approximately four times the total
losses associated with the savings and loan crisis.
Just imagine the furor that enveloped this country over the bailout
necessary because of the savings and loan problems that afflicted this
country. It is four times that as far as health care fraud is
concerned, and yet there does not seem to be much of a sense of urgency
on the part of our colleagues to do much about it.

Mr. President, I have worked with the Justice Department, the FBI,
Medicaid fraud units, inspectors general, and others in developing this
legislation. As I pointed out last year there is a song, I think it was
by Paul Simon-- [[Page S1220]] not our Paul Simon but the song writer
Paul Simon--who had a song called ``Fifty Ways To Leave Your Lover.''
We showed through an Aging Committee's year-long investigation at least
50 ways in which to pick the pockets of Uncle Sam and of private
insurers.
I will not, because of the length of the report, introduce it now
into the Record. I will simply ask unanimous consent that at the
conclusion of my remarks the executive summary of this year-long
investigation be introduced in the Record and included as part of it.
Let me simply add a few more examples of the kinds of activities that
are taking place now while we are debating other amendments, germane
and nongermane, to the pending unfunded mandates bill. First, let me
point out that there are roughly a half billion Medicare claims
processed each year and the overwhelming majority of those are
submitted for legitimate services by conscientious health care
providers and beneficiaries--the overwhelming majority. It is the
minority who are taking as much as $100 billion out of the system.
Let me give you examples of what is going on. A doctor promoted his
clinic in television, radio, newspaper, and telephone book ads as a
``one-stop, walk-in diagnostic center.'' You can walk in, and they can
take care of any problem you have got. So a person might go in for an
examination for a shoulder injury and be subjected to a huge battery of
tests which have nothing to do with the shoulder, resulting in bills of
$4,000 and more per patient.
Using the names of dozens of dead patients, a phantom laboratory in
Miami allegedly cheated the Government out of $300,000 in Medicare
payments in a matter of just a few weeks for lab tests never performed.
The lab that was submitting the bills for the tests was basically a
rented mailbox and a Medicare billing number. That was it.
Employees of an airline were indicted for filing false and fraudulent
claims for reimbursement to a private insurance company for medical
care and services they claimed to have received in another country. The
allegations are that the employees attempted to mail false and
fictitious forms totaling close to $600,000 for treatments and services
never performed.
A durable medical equipment company, its owner and sales manager pled
guilty to supplying unnecessary medical equipment such as hospital beds
and oxygen concentrators to residents of adult congregate living
facilities and then billing Medicare for more than $600,000. These
conspirators induced the facilities' managers to allow them to provide
the equipment by promising to leave the equipment when the patients
died or were transferred.
Physician-owners of a clinic in New York stole over $1.3 million from
the State Medicaid program by fraudulently billing for over 50,000
phantom psychotherapy sessions never given to Medicaid patients.
Finally, a medical equipment supplier stole $1.45 million from
Medicaid by repeatedly billing for expensive back supports that were
never authorized by the patients' physicians.
These cases are but a small sample of the fraudulent and abusive
schemes that are plaguing our health care system daily, freezing
millions of Americans out of affordable health care coverage, and
driving up costs for taxpayers.
The bill I am introducing today will go far in strengthening our
defenses against health care fraud.
Specifically, it will:
Give prosecutors stronger tools and tougher statutes to combat
criminal health care fraud. It would, for example, provide a specific
health care offense in title 18 so that prosecutors are not forced to
spend excessive time and resources to develop a nexus to the mail or
wire fraud statutes to pursue clear cases of fraud, or to track the
cash-flow from health care schemes in order to prosecute under money
laundering statutes.
It will allow injunctive relief and forfeiture for criminal health
care fraud; provide greater authority to exclude violators from
Medicare and Medicaid programs; create tough administrative civil
penalties and remedies for fraud and abuse so that a range of sanctions
will be available; and coordinate enforcement programs and beef up
investigative resources, which are now woefully inadequate. For
example, the HHS' inspector general states that it produces $80 in
savings for each Federal dollar invested in their office yet their
full-time equivalent position level has actually decreased over the
last few years.
The FBI recently testified that they have over 1,300 cases pending
but that regardless of this prioritization, the amount of health care
fraud not being addressed due to a lack of available resources is
growing and that health care fraud appears to be a problem of immense
proportion which is presently not being fully addressed.
I might point out we have been reading about the extent of global
international crime, even all the way from Russia, now moving into this
country and ripping off the Medicare-Medicaid Programs and other health
care systems by the millions. This is a growing problem of great
concern to me, so the FBI needs help. This bill helps agencies like
the FBI and HHS and DOD inspectors general by financing additional
health care fraud enforcement resources with proceeds derived from
forfeiture, fines, and other health care fraud enforcement efforts.

It will also provide guidance to health care providers and industries
on how to comply with fraud rules, so they will know what is and what
is not prohibited activity.
I have worked closely with law enforcement and health care fraud
experts in developing these proposals, and am continuing to work with
industry representatives to ensure that fraud and abuse statutes and
requirements are fair, clearly understood by health care providers, and
reflect the changing health care market. Our goal should not be to
burden health care providers with complicated, murky rules on fraud and
abuse, but rather to lay down clear rules and guidance, followed by
tough enforcement for violations.
Mr. President, when we are losing as much as $275 million per day to
health care fraud and abuse, we cannot afford to delay any longer. The
only ones who benefit from delay on this important issue are those who
are bilking billions from our system. The very big losers will be the
American taxpayers, patients, and families who cannot afford health
care coverage because premiums and health care costs are escalating to
cover the exorbitant costs of fraud and abuse.
I want to thank Senator Dole for his steadfast support and leadership
on this issue and I urge my colleagues to support and act expeditiously
on this legislation.
Mr. President, I ask unanimous consent that the text of the bill and
additional material be printed in the Record.
There being no objection, the material was ordered to be printed.

Executive Summary

gaming the health care system: billions of dollars lost each year to
fraud and abuse

For the past year, the Minority Staff of the Senate Special
Committee on Aging under my direction has investigated the
explosion of fraud and abuse in the U.S. health care system.
This report examines emerging trends, patterns of abuse, and
types of tactics used by fraudulent providers, unscrupulous
suppliers, and ``professional'' patients who game the system
in order to reap billions of dollars in reimbursements by
Medicare, Medicaid, and private insurers.
The consequences of fraud and abuse to the health care
system are staggering: as much as 10 percent of U.S. health
care spending, or $100 billion, is lost each year to health
care fraud and abuse. Over the last five years, estimated
losses from these fraudulent activities totaled about $418
billion--or almost four times as much as the cost of the
entire savings and loan crisis to date.
Our investigation revealed that vulnerabilities to fraud
exist throughout the entire health care system and that
patterns of fraud within some provider groups have become
particularly problematic. Major patterns of abuse that plague
the system are overbilling, billing for services not
rendered, ``unbundling'' (whereby one item, for example a
wheelchair, is billed as many separate component parts),
``upcoding'' services to receive higher reimbursements,
providing inferior products to patients, paying kickbacks and
inducements for referrals of patients, falsifying claims and
medical records to fraudulently certify an individual for
government benefits, and billing for ``ghost'' patients, or
``phantom'' sessions or services.
This report provides 50 case examples of scams that have
recently infiltrated our health care system. While these are
but a [[Page S1221]] small sampling of schemes that were
reviewed during the investigation, they serve to illustrate
how our health care system is rife with abuse, and how
Medicare, Medicaid and private insurers have left their doors
wide open to fraud.
Patients--and, in the case of Medicare and Medicaid,
taxpayers--pay a high price for health care fraud and abuse
in the form of higher health care costs, higher premiums, and
at times, serious risks to patients' health and safety. For
example;
Physician-owners of a clinic in New York stole over $1.3
million from the State Medicaid program by fraudulently
billing for over 50,000 ``phantom'' psychotherapy sessions
never given to Medicaid recipients;
A speech therapist submitted false claims to Medicare for
services ``rendered to patients'' several days after they had
died;
A home health care company stole more than $4.6 million
from Medicaid by billing for home care provided by
unqualified home care aides. In addition to cheating
Medicaid, elderly and disabled individuals were at risk from
untrained and unsupervised aides;

Nursing home operators charged personal items such as
swimming pools, jewelry, and the family nanny to Medicaid
cost reports;
Fifteen hundred workers lost their prescription drug
coverage because a scam drove up the cost of the insurance
plan for their employer. The scam involved a pharmacist who
stole over $370,000 from Medicaid and private health
insurance plans by billing over one thousand times for
prescription drugs that he did not actually dispense;
Large quantities of sample and expired drugs were dispensed
to nursing home patients and pharmacy customers without their
knowledge. When complaints were received from nursing home
staff and patient relatives regarding the ineffectiveness of
the medications, one of the scam artists stated ``those
people are old, they'll never know the difference and they'll
be dead soon anyway'';
Durable medical equipment suppliers stole $1.45 million
from the New York State Medicaid program by repeatedly
billing for expensive orthotic back supports that were never
prescribed by physicians;
A scheme involved the distribution of $6 million worth of
reused pacemakers and mislabeled pacemakers intended for
``animal use only.'' The scheme involved kickbacks to
cardiologists and surgeons to induce them to use pacemakers
that had already expired; and
A clinical psychologist was indicted for having sexual
intercourse with some of his patients and then seeking
reimbursement from a federal health plan for these encounters
as ``therapy'' sessions.
Our investigation found that scams such as these are
perpetrated against both public and private health plans, and
that health care fraud schemes have become more complex and
sophisticated, often involving regional or national
corporations and other organized entities. No part of the
health care system is exempt from these fraudulent practices,
however, we found that major patterns of fraud and abuse have
infiltrated the following health care sectors: ambulance and
taxi services, clinical laboratories, durable medical
equipment suppliers, home health care, nursing homes,
physicians, psychiatric services, and rehabilitative services
in nursing homes. Our investigation further concludes that
fraud and abuse is particularly rampant in Medicaid, and
that many of the fraudulent schemes that have preyed on
the Medicare program in recent years are now targeting the
Medicaid program for further abuse.

Greater Opportunities For Fraud Will Exist Under Health Care Reform

As our health care system moves toward a managed care
model, opportunities for fraud and abuse will increase unless
enforcement efforts and tools are strengthened. The structure
and incentives of a managed care system will result in a
concentration of particular types of schemes, such as the
failure to provide services and quality of care deficiencies
in order to cut costs. In addition, while efforts toward
simplification and electronic filing of health care claims
offer tremendous savings, they also pose particular
opportunities for abuse. Thus, it is crucial that any such
system be designed with safeguards built in to detect and
deter fraud and abuse.

Findings of Investigation

Deficiencies in the current system expose billions of health
care dollars to fraud and abuse
A. Current Criminal and Civil Statutes Are Inadequate to
Effectively Sanction and Deter Hearth Care Fraud:
Federal prosecutors now use traditional fraud statutes,
such as the mail and wire fraud statutes, the False Claims
Act, false statement statutes, and money laundering statute
to persecute health care fraud. Our investigation found that
the lack of a specific federal health care fraud criminal
statute, inadequate tools available to prosecutors, and weak
sanctions have significantly hampered law enforcement's
efforts to combat health care fraud. Inordinate time and
resources are lost in pursuing these cases under indirect
federal statutes. Often, even when law enforcement shuts down
a fraudulent scheme, the same players resurface and continue
their fraud in another part of the health care system.
This cumbersome federal response to health care fraud has
resulted in a system whereby the mouse has outsmarted the
mousetrap. Those defrauding the system are ingenious and
motivated, while the government and private sector responses
to these perpetrators have not kept pace with the
sophistication and extent of those they must pursue.
B. The Fragmentation of Health Care Fraud Enforcement
Allows Fraud to Flourish:
Despite the multiplicity of Federal, State and local law
enforcement agencies, and private health insurers and health
plans involved in the investigation and prosecution of health
care fraud, these enforcement efforts are inadequately
coordinated, allowing health care fraud to permeate the
system. While some strides have been made in coordinating law
enforcement efforts, immediate steps must be taken to
streamline and toughen our response to health care fraud.

Recommendations

Based on our investigation and findings, we recommend the
following to reduce fraud and abuse throughout the health
care system:
1. Establish an all-payer fraud and abuse program to
coordinate the functions of the Attorney General, Department
of Health and Human Services, and other organizations, to
prevent, detect, and control fraud and abuse; to coordinate
investigations; and to share data and resources with Federal,
State, and local law enforcement and health plans.
2. Establish an all-payer fraud and abuse trust fund to
finance enforcement efforts. Fines, penalties, assessments,
and forfeitures collected from health care fraud offenders
would be deposited in this fund, which would in turn be used
to fund additional investigations, audits, and prosecutions.
3. Toughen federal criminal laws and enforcement tools for
intentional health care fraud.
4. Improve the anti-kickback statute and extend
prohibitions of Medicare and Medicaid to private payers.
5. Provide a greater range of enforcement remedies to
private sector health plans, such as civil penalties.
6. Establish a national health care fraud data base which
includes information on final adverse actions taken against
health care providers. Such a data base should contain strong
safeguards in order to ensure the confidentiality and
accuracy of the information data contained in the data base.
7. Design a simplified, uniform claims form for
reimbursement and an electronic billing system, with tough
anti-fraud controls incorporated into these designs.
8. Take several steps to better protect Medicare from
fraudulent and abusive provider billing practices and
excessive payments by Medicare. Specifically:
Revise and strengthen national standards that suppliers and
other providers must meet in order to obtain or renew a
Medicare provider number;
Prohibit Medicare from issuing more than one provider
billing number to an individual or entity (except in
specified circumstances), in order to prevent providers from
``jumping'' from one billing number to another in order to
double-bill or avoid detection by auditors;
Require Medicare to establish more uniform national
coverage and utilization policies for what is reimbursed
under Medicare, so that providers cannot ``forum shop'' in
order to seek out the Medicare carrier who will pay a higher
reimbursement rate;
Require the Health Care Financing Administration to review
and revise its billing codes for supplies, equipment and
services in order to guard against egregious overpayments for
inferior quality items or services; and
As we revise the health care system, give guidance to
health care providers on how to do business properly and how
to avoid fraud.
Adoption of these recommendations will go far in shoring up
our defenses against unscrupulous providers, patients, and
suppliers who are bleeding billions of dollars from our
health care system through fraud and abuse. Since Medicare
and Medicaid lose as much as $31 billion annually to fraud
and abuse, the savings from reducing fraud in these programs
would go far toward paying for much needed reforms in our
health care system, such as providing access to health care
coverage for the uninsured, prescription drug benefits for
the elderly, or long-term care for the elderly and
individuals with disabilities.
We must not wait to fix these serious problems in the
health care system until we see what form health care reform
takes. We are losing as much as $275 million each day to
health care fraud, and effective steps can be taken within
the current system to curb this abuse. With billions of
dollars and millions of lives at stake, we can no longer
afford to wait.
____

Section-by-section Analysis

The Cohen legislation establishes an improved coordinated
federal effort to combat fraud and abuse in our health care
system. It expands certain existing criminal and civil
penalties for health care fraud to provide a stronger
deterrent to the billing of fraudulent claims and to
eliminate waste in our health care system resulting from such
practices.
Section 101. a. All-Payer Fraud and Abuse Control Program:
The Secretary of Health [[Page S1222]] and Human Services and
the Attorney General are required to jointly establish and
coordinate an all-payer national health care fraud control
program to restrict fraud and abuse in private and public
health programs. The Secretary and Attorney General (through
its Inspectors General and the Federal Bureau of
Investigation) would be authorized to conduct investigations,
audits, evaluations and inspections relating to the delivery
and payment for health care and would be required to arrange
for the sharing of data with representatives of health plans.
b. Health Care Fraud and Abuse Control Account: To
supplement regularly appropriated funds, a special account
would be established to fund the all-payer program, managed
by the Secretary and Attorney General. All criminal fines,
penalties, and civil monetary penalties imposed for
violations of fraud and abuse provisions of this legislation
would be deposited into the account and used for carrying out
the proposed requirements.
Section 102. Application of Certain Federal Health Anti-
Fraud and Abuse Sanctions to All Fraud and Abuse Against Any
Health Plan: The provisions under the Medicare and Medicaid
program, which provide for criminal penalties for specified
fraud and abuse violations, would apply and be extended in
certain circumstances to similar violations for all payers in
the health care system. The violations would include willful
submission of false information or claims. Penalties would
include fines and possible imprisonment. The Secretary could
also consider community service opportunities.
Section 103. Health Care Fraud and Abuse Guidance: Provides
mechanisms for further guidance to health care providers on
the scope and applicability of the anti-fraud statutes in
order to better comply with these statutes. The further
guidance would be provided by the modifications of existing
safe harbors and the promulgation of new safe harbors;
interpretive rulings providing the HHS' Inspector General's
interpretation of anti-fraud statutes; and special fraud
alerts setting activities that the Inspector General
considers suspect under the anti-fraud statutes.
Section 104. Reporting of Fraudulent Actions Under
Medicare: The Secretary is required to establish a program
through which Medicare beneficiaries may report instances of
suspected fraudulent actions on a confidential basis.
Section 201. Mandatory Exclusion from Participation in
Medicare and State Health Care Programs: The Secretary
currently has authority to exclude individuals and entities
from Medicare and Medicaid based on convictions or program-
related crimes relating to patient abuse or neglect. This
section would extend the Secretary's authority to felony
convictions relating to fraud and felony convictions relating
to controlled substances. Currently, the Secretary is
permitted, but not required, to exclude those convicted of
such an offense. Adoption of this proposal would better
recognize the seriousness of such offenses and ensure that
beneficiaries are well protected from dealing with such
individuals.
Section 202. Establishment of Minimum Period of Exclusion
for Certain Individuals and Entities Subject to Permissive
Exclusion from Medicare and State Health Care Programs:
Mandatory exclusions contain a minimum period of exclusion
for five years. This section establishes a minimum period of
exclusion expressly determined in statute for certain
permissive exclusions, such as three years for specific
convictions.
Section 203. Permissive Exclusion of Individuals with
Ownership or Control Interest in Sanctioned Entities: Some of
the current permissive exclusions are ``derivative''
exclusions--that is they are based on an action previously
taken by a court, licensure board, or other agency. Current
law allows permissive exclusion authority for entities when a
convicted individual has ownership, control or agency
relationship with such entity. However, if an entity rather
than an individual is convicted under Medicare fraud, the IG
has no authority to exclude the individuals who own or
control the entity and who may really have been behind the
fraud.
This creates a loophole whereby an individual who is
indicated for fraud along with a corporation owned by his can
avoid being excluded from the programs by persuading the
prosecutor to dismiss his indictment in exchange for agreeing
to have the corporation plead guilty or pay fines. The bill
would extend the current permissive exclusion authority for
entities controlled by a sanctioned individual to individuals
with control interest in sanctioned entities.
Section 205. Intermediate Sanctions for Medicare Health
Maintenance Organizations: The Secretary would be able to
impose civil monetary penalties on Medicare-qualified HMOs
for violations of Medicare contracting requirements.
Section 301. Establishment of the Health Care Fraud and
Abuse Data Collection Program: The Secretary would create a
comprehensive national data collection program for the
reporting of information about final adverse actions against
health care providers, suppliers, or licensed practitioners
including criminal convictions, exclusions from participation
in Federal and State programs, civil monetary penalties and
license revocations and suspensions.
Section 401. Civil Monetary Penalties: The provisions under
Medicare and Medicaid which provide for civil monetary
penalties for specified violations apply to similar
violations in certain circumstances for all payers in the
health care system. The violations would include billing for
services not provided or submitting fraudulent claims for
payment.
The provisions would also clarify that repeatedly claiming
a higher code, or repeatedly billing for medically
unnecessary services, for purposes of reimbursement is
prohibited and subject to civil monetary penalties. The
intent of this provision is to impose sanctions for patterns
of prohibited conduct.
An intermediate civil monetary penalty would also be
established for criminal anti-kickback violations.
One abusive technique now used by some Medicare providers
is to waive the patient's copayment for services covered by
Medicare. The concern is that routine waivers of copayments
result in unnecessary procedures and overutilization (because
the beneficiary has no financial stake in the decision to
order a medical item or service). The provision would clarify
that the routine waiver of Medicare Part B copayments and
deductibles would be prohibited and subject to civil monetary
penalties although exceptions are provided.
In addition, retention by an excluded individual of an
ownership or control interest of an entity who is
participating in Medicare or Medicaid would be prohibited and
subject to civil monetary penalties.
Finally, the amount of civil monetary penalty that can be
assessed is increased from $2,000 to $10,000.
Section 501. Health Care Fraud: Establishes a new health
care fraud statute in the criminal code. Provides a penalty
of up to 10 years in prison, or fines, or both for knowingly
executing a scheme to defraud a health plan in connection
with the delivery of health care benefits, as well as for
obtaining money or property under false pretenses from a
health plan. This section is patterned after existing mail
and wire fraud statutes.
Section 502. Forfeitures for Federal Health Care Offenses:
Requires the court, in imposing sentence on a person
convicted of a Federal health care offense, to order the
forfeiture to the United States of property used in
commission of an offense if it results in a loss or gain of
$50,000 or more and constitutes or is derived from proceeds
traceable to the commission of the offense.
Section 503. Injunctive Relief Relating to Federal Health
Care Offenses: This provision expands the scope of the
current injunctive relief section by adding the commission of
a health care offense. This provision allows the Attorney
General to commence a civil action to enjoin such violation
as well as to freeze assets.
Section 504. Grand Jury Disclosure: This provision allows
the disclosure of grand jury information to federal
prosecutors to use in a civil proceeding relating to health
care fraud.
Section 505. False Statements: Provides penalties for
making false statements relating to health care matters.
Section 506. Voluntary Disclosure Program: Creates a
program of voluntary disclosure to the Attorney General and
Secretary to provide an incentive for disclosure of
violations and wrongdoing.
Section 507. Obstruction of Criminal Investigations:
Provides a penalty for the obstruction of criminal
investigations of federal health care offenses.
Section 508. Theft or Embezzlement: Establishes a statute
that provides penalties for the willful embezzlement or theft
from a health care benefit program.
Section 509. Laundering of Monetary Instruments: Provides
that a federal health care offense is a predicate to current
money laundering statutes.
Sections 601-604: Payments for State Health Care Fraud
Control Units: Provides language to establish state health
care provider fraud control units modeled on the current
state Medicaid Fraud Control Units. The jurisdiction of these
units would be expanded to include investigation and
prosecution of provider fraud in other federally-funded or
mandated programs. The proposal also allows the states to
choose whether to conduct investigations and prosecutions for
patient abuse related crimes occurring in board and care
facilities and other alternative residential settings.
The HHS' Inspector General would continue oversight and the
state units would detail its activities in its yearly grant
applications. This section also contains a recitation of the
units' original authorization language as currently contained
in the Social Security Act, and also allows the units to
participate in the all-payer fraud abuse control program.

Mr. DOLE. Mr. President, I want to take a few moments to express my
support for the Health Care Fraud Prevention Act of 1995, which was
introduced earlier today by my distinguished colleague from Maine,
Senator Cohen.
As Senator Cohen has pointed out, health care fraud and abuse costs
the American taxpayers literally billions and billions of hard-earned
dollars each year. Unscrupulous doctors who overbill patients, medical
suppliers who sell unnecessary or defective equipment to unsuspecting
customers, clinic operators who submit false Medicaid reimbursement
claims--all these scams have the effect of driving up the
[[Page S1223]] cost of health care for families and businesses alike.
To combat these activities, the act establishes a new health care
fraud statute in title 18 of the United States Code. This statute
provides for an array of penalties, including imprisonment and fines,
for those who knowingly scheme to defraud a health care plan. This
statute is patterned after the existing mail and wire fraud statutes.
The act also gives the Secretary of HHS greater authority to exclude
health care scam artists from the Medicaid and Medicare programs, while
establishing tough civil penalties for fraud so that a range of
sanctions will be available.
In addition, the act directs the Attorney General and the Secretary
of Health and Human Services to establish an all-payer national health
care fraud control program. Under this program, both the Secretary and
the Attorney General would be authorized to conduct investigations and
audits of health care delivery systems. To pay for these
investigations, the act establishes a ``Health care fraud and abuse
control account.'' Criminal and civil fines imposed on violators would
be deposited into the account and then used to finance future law
enforcement efforts.
Of course, the vast majority of health care providers are good people
committed to the well-being of their patients. Their hard work and
commitment should not be tarnished in any way by those few bad apples
who attempt to game the health care system for their own personal
benefit. This legislation won't put an end to the health care fraud
racket, but it will help to ensure that our law enforcement authorities
have the tools to get the job done.
Not surprisingly, the Health Care Fraud Prevention Act was crafted
with the help of law enforcement officials, including officials at both
the FBI and the Department of Justice.
Finally, I want to commend my distinguished colleague from Maine for
bringing this important issue to the attention of the Senate. Today's
legislation is the product of a 2-year ongoing investigation conducted
by the staff of the Special Committee on Aging. And last year, Senator
Cohen successfully offered many of the provisions contained in this
bill as an amendment to the 1994 Crime-Control Act. Unfortunately, the
amendment was dropped in conference.
To his credit, Senator Cohen has continued to speak out on this
issue, and I fully expect that his persistence will pay off later this
year when the Senate has an opportunity to consider this important
legislation.
Mr. DORGAN. Mr. President, let me say as I begin, to my friend from
Maine, the work he has done on this issue in Medicare fraud is
extraordinary work. During the period between the end of the last
session and the beginning of this session, I saw some newspaper reports
about Medicare fraud. I bothered to once again review the work he did
in the last session, the bill he introduced in the last session on this
issue. I hope we make progress on this issue that he is leading on, in
this session of the Senate, because I think what he is doing is very
important. There is too much fraud. The fact is, we are not detecting
enough of it and not prosecuting enough of it vigorously, so I support
his efforts and thank him for making those efforts.
Mr. PRYOR. Mr. President, I rise to support S. 245, the Health Care
Fraud Prevention Act of 1995. Health care fraud and abuse in our health
care system is draining billions of dollars a year from American
families, businesses, and government. The Department of Justice and
other experts have estimated that as much as 10 percent of our national
health care bill is lost to fraud and abuse. Every dollar stolen from
the health care system--be it from Medicare, Medicaid, or a private
health care plan--means one less dollar for patient care or for lower
insurance premiums. With health care costs still escalating, the last
thing we need to be doing is allowing criminals to steal from the
system.
Fraud also tarnishes the good names of honest health care
professionals and companies. While the vast majority of providers are
honest and hard working, the crooks cast a cloud over the entire health
care system.
Mr. President, there are too many examples of fraud in our health
care system. For example, seven New York physicians were recently
excluded from the New York Medicaid program for their part in a scheme
that stole over $8 million from the program. As part of this Medicaid
fraud scheme, indigent individuals with no legitimate medical need for
prescription drugs would enter the doctors' clinics and obtain
prescriptions for expensive drugs. They, in turn, would resell the
prescriptions to people on the street. In exchange for the
prescriptions, the ``patients'' would subject themselves to unnecessary
medical tests and procedures for which Medicaid could then be
fraudulently billed.
In other cases, it is not so clear that there has been fraud, but
rather that a health care plan has been taken advantage of. As an
example, I received a letter from a constituent of mine, Jennie H., not
too long ago. Jennie wrote that Medicare had paid a medical supplier
$2,136 for 300 adult incontinence pads that were delivered to her
mother. That works out to almost $7.12 for each pad, far more than what
they would cost at the drug store.
Much studying has been on the health care fraud problem in recent
years. In addition to the report issued last year by my friend from
Maine, Senator Cohen, the incoming chairman of the Senate Special
Committee on Aging, reports by the General Accounting Office, the HHS
inspector general, and congressional committees have also documented
the extent and range of the problem. They have detailed abuses ranging
from the billing of services never provided to the illegal sale of
controlled substances.
This is a subject about which I too have long been concerned. When I
was chairman of the Senate Special Committee on Aging, I held several
hearings on fraud and abuse in the health care system. In addition, the
health care bill reported out of the Finance Committee last year
included an antifraud provision that I helped develop.
Mr. President, now is the time to take action against health care
fraud. While I would have preferred to see the health care fraud
problem addressed as part of health care reform, it is clear that we
cannot wait for that to happen. Each day we wait to give crime fighters
the authority and tools they need to combat fraud in a coordinated and
effective manner means millions of wasted health care dollars.
The bill which I have joined Senator Cohen in sponsoring today
represents a balanced, bipartisan approach to combating health care
fraud and takes the best provisions common to the bills debated last
year, such as the President's proposal. It establishes an improved,
coordinated effort to combat fraud and abuse. It expands certain
existing criminal and civil penalties for health care fraud to provide
a stronger deterrent to the billing of fraudulent claims and to
eliminate waste in our health care system. I encourage my colleagues to
support this legislation.
______

By Mr. LIEBERMAN:
S. 246. A bill to establish demonstration projects to expand
innovations in State administration of the aid to families with
dependent children under title IV of the Social Security Act, and for
other purposes; to the Committee on Finance.

the welfare reforms that work act

Mr. LIEBERMAN. Mr. President, today I am introducing the Welfare
Reforms That Work Act of 1995. The welfare system is in crisis. The
United States has one of the most expensive welfare systems in the
world. But 20 percent of America's children are poor, a higher
percentage than any other industrialized country. The welfare system is
a disaster for those who are on it and those who pay for it.
This Congress has a historic opportunity to begin to fix this
disaster. The primary welfare program--Aid to Families With Dependent
Children [AFDC]--is viewed by those participating in it and those
paying for it as a failure. It is failing at its primary task, moving
people into the work force. Worse yet, it is contributing to the cycle
of poverty. By rewarding single parents who don't work, don't marry,
and have additional children out of wedlock, the current system demeans
our most cherished values and deepens society's most serious problems.
Democrats, Republicans, and the American [[Page S1224]] public agree
that the system must be changed.
But little consensus exists on how best to reform the system so that
it promotes work and family. Last year both President Clinton and
Republicans in Congress proposed legislation that would impose time
limits and work requirements on welfare recipients and would begin to
turn welfare incentives around. But in this Congress some have gone
further. The Republican Contract With America proposes, among other
things, ending benefits abruptly for teenage mothers who have children
out of wedlock. More recently some Members have advocated giving the
States total control of AFDC and other Federal welfare programs, ending
the entitlement status of these programs, and capping Federal outlays.
While I believe that each of these ideas should be tested to see if
they will produce better results than the current failed welfare
system, I cannot support mandating any of them nationally because no
one knows whether they will work. If Congress imposes them nationally
and they do not work, millions of children's lives will be put at risk.
While I am pleased to see that my colleagues are advocating State
flexibility, I am concerned about their blank-check approach. I agree
that States should be the testing ground for bold programmatic changes.
But handing the AFDC Program over to the States with no strings
attached does not guarantee reform and may produce national division
and welfare shopping. And, placing caps on block grants works against
State flexibility by limiting State experiments to those that save
money in the short term but may do nothing to promote work and
reconstruct families in the long term. The American people are asking
us to reform, not eliminate, the way we are carrying out our
responsibility to help poor children.
Mr. President, today I am proposing an alternative welfare reform
approach that I hope will meet our welfare reform goals in a way that
is acceptable to both sides of the aisle--the Welfare Reforms That Work
Act. The bill would allow States to test--with appropriate Federal
oversight--bold welfare reform initiatives that are promising but
unproven, and that involve some human or financial risk. It would also
establish a process for identifying successful reform approaches--
welfare reforms that work--that can be applied nationally. The bill
does not preclude our mandating immediately those reforms about which
there is growing agreement--such as requiring unwed teenage mothers to
live at home as a condition of receiving welfare payments--and which
involve limited human risk or Federal expense.
States should be at the forefront of reform for three reasons. First,
a State-based approach is financially prudent. Some reforms that merit
testing--including imposing time limits and work requirements or
expanding residential child care options, including orphanages--will
cost money in the short term. In an article in the New Republic, Paul
Offner of the Senate Finance Committee staff advises us to learn an
important lesson from the 1988 Family Support Act: overly ambitious and
underfunded reform efforts are doomed to failure. They do little to
change the expectations of those working in the system or those using
it. My bill would allow States to fund ambitious changes at the more
affordable city, county, or State level.
Second, a State-driven approach allows us to test bold changes
responsibly. We have few proposed reforms that we know will work, and
those that have been tested, such as the model education and training
programs launched in California and Florida, have delivered only
marginal results to date. In a recent Wall Street Journal James Q.
Wilson bluntly confessed that he simply does not know what reforms will
work.
Absent better information, we would be wise to heed the advice of
proverbs and avoid zealous acts without knowledge. Changes to welfare
are consequential. They affect people's lives, children's lives. Under
my bill States could test bold welfare rules changes--such as totally
denying benefits to teenage mothers or establish orphanages--but only
if the States can ensure that children are not unintended victims of
these tests. As we try to change the behavior of parents, we must not
cause more pain to the children.
Third, States are eager and able to lead our reform efforts. In
testimony last year before the Senate Finance Committee's Subcommittee
on Social Security and Family Policy, the American Public Welfare
Association [APWA] and other State organizations indicated their strong
desire to pursue innovative strategies. When I introduced S. 1932, a
similar State-based welfare reform bill last year, all 11 States that
commented on the bill praised the bill's general approach.
States are already leading the way. Over half the States have
proposed reforms and received waivers from Federal rules under section
1115 of the Social Security Act to implement their proposed changes. My
own State of Connecticut recently received a waiver to implement a
comprehensive reform initiative.
But the waiver process does not go far enough. In testimony before
the House Committee on Government Operations last September, the APWA,
State welfare administrators, and other witnesses testified that the
budget neutrality requirement of the current process creates a
substantial barrier to reform. As States seek to promote work and
family through changing eligibility rules, it give States an incentive
to test sticks but not carrots. Witnesses at the hearing urged that the
Federal Government share in the cost of demonstrations programs, make
the results of demonstrations readily available, and tallow States to
adopt, without a waiver, those demonstrations that prove effective. In
other words, we must be honest and acknowledge that we may have to
spend a little more money in the short run to save a lot more money and
a lot more lives in the long run.
My bill addresses these and other concerns voiced by States about the
current waiver process. To ensure that States will be able to test the
broadest array of reforms, my bill authorizes $675 million over 5 years
to support demonstration projects and independent program evaluations.
Half of these funds would support innovative pilot programs specified
in the bill, and the remaining half would fund other State-proposed
demonstrations. Demonstration projects would last up to 5 years. States
would report on progress annually. As results of interim and final
reports on State tests become available, the Secretary of the
Department of Health and Human Services [HHS] will submit legislation
to Congress to provide for the national implementation of successful
programs. As a result of this process, those innovations that proved
successful could be rapidly adopted by other States or imposed
nationwide.
The bill promotes State-initiated welfare reforms that meet what I
believe should be our four main reform goals: moving welfare recipients
into the work force; strengthening families, stopping illegitimate
births and breaking the cycle of welfare dependency; increasing child
support collection and paternal responsibility, and improving the
delivery of welfare services.

title i authorizes initiatives to move welfare recipients into the work
force

We must make returning to work the primary focus of the welfare
system. The current system demands little of people on welfare. It
often impedes, rather than empowers, those who seek to return to the
work force. If an AFDC mother goes back to work, her income increases
only minimally--often not enough to cover child care--and she loses her
Medicaid benefits. She is likely to be economically worse off if she
returns to the work force, so she stays on welfare.
Title I includes initiatives to move people on welfare into the work
force. Two pilot programs focus on teenage parents--those at greatest
risk for long-term welfare dependency. The first allows States to
condition AFDC benefits for single parents under 20 years of age on:
first, attending school, participating in job training or holding a
job; and second, living at home. The second allows States to include
young AFDC clients in the Job Corps--a successful, residential
antipoverty program for youths 16 to 22 years of age.
Title I also allows States to require 30 days of State-assisted job
search or, where appropriate, substance abuse treatment, during the
usual lag time between application for and receipt of
[[Page S1225]] benefits. Welfare clients should be engaged in job
search from the day they first seek a welfare grant. Other provisions
in this title assist people on welfare in accumulating assets to invest
in education or to start a small business.

title II authorizes initiatives to strengthen families and break the
cycle of welfare dependency

Current Federal welfare rules discourage family unification and
encourage out-of-wedlock childbearing. This title seeks to turn these
incentives around. It recognizes that while welfare is a privilege
granted by Government, not a right for parents, the States and the
Federal Government have a moral responsibility to ensure the well-being
of American children.
The title seeks to address what is perhaps the most compelling and
difficult challenge of welfare reform, to discourage out-of-wedlock
births without harming children. An increasing percentage of those
entering the welfare system are never-married mothers at greatest risk
of long-term welfare dependency. Between 1983 and 1992, families headed
by unwed mothers accounted for about four-fifths of the growth in
people on welfare, and at least 40 percent of never-married mothers
receiving AFDC remain in the system for 10 years or more.
Never-married teen parents are particularly likely to fall into long-
term welfare dependency. More than one half of welfare spending goes to
women who first gave birth as teens. As William Raspberry noted last
winter in a Washington Post column aptly entitle ``Out of Wedlock, Out
of Luck,'' children born to parents who had their first child out-of-
wedlock before they finished high school and reached the age of 20 are
``almost guaranteed a life of poverty.'' In other words, they and their
parents are almost guaranteed a life on welfare. Citing William A.
Galston's analyses, Raspberry notes that a startling 79 percent of
children in this category lived in poverty in 1992. In contrast, only 8
percent of children whose parents had achieved all three milestones--
marriage, graduation, and the 20th birthday--before having their first
child were living in poverty.
The potential effect of welfare on illegitimacy has taken center
stage in the welfare reform debate but there is considerable
disagreement about its effects. David Ellwood, economist and Department
of Heath and Human Services official, has found little evidence that
welfare contributes to the increase in illegitimacy. In his book,
``Poor Support,'' he points to several other concurrent social changes
that are likely contributors to the increase--the growing percentage of
women in the work force, the drop in earnings and rise in unemployment
among young men, and changes in attitudes toward marriage.
Others interpret the data differently. Most notably, Charles Murray
believes that welfare is the primary cause of the increase in
illegitimate births. In a catalytic Wall Street Journal article
published October 29, 1993, Murray argues that welfare has reduced the
economic penalty associated with out-of-wedlock childbearing and, in
turn, has reduced the social stigma associated with it. He concludes
that the removal of both of these disincentives has led to more out-of-
wedlock births. Based on this conclusion, Murray recommends the
dramatic step of ending welfare altogether. Murray acknowledges that
his approach may put this generation of children at risk and advocates,
among other things, Government investment in new facilities to care for
these children--thus the ensuing brouhaha about orphanages--just the
kinds of facilities this act would enable states to create.
The stigma of illegitimacy was not just an accident of social
history; it was a societal attempt to protect children. Today, the
stigma is largely gone and so the children have suffered terribly.
Raspberry's previously mentioned article cites polling results
indicating that 70 percent of Americans aged 18 to 34 believe that
people having children out of wedlock do not deserve any moral
reproach. That is an outrageous result, one that we must turn around
because the decision to bear a child has profound moral and human
content. We must infuse our children with a clear understanding of the
consequences of teenage childbearing. We must teach them that it is
wrong to have children unless you are married, always morally wrong for
the mother and father, and usually horrible for the child and the
mother.
Few would argue that a national campaign to discourage unmarried
teenagers from having children is not a good thing to do. Indeed,
Senate Minority leader Daschle introduced a bill, S. 8, on the first
day of this session to combat teen pregnancy. His bill, among other
things, would require unwed mothers under age 18 to live at home or in
an alternative adult-supervised living arrangement as a condition of
receiving AFDC. This measure seems appropriate; it would eliminate the
incentive teenagers now have to bear a child so they can move out of
the house, and it imposes little risk to the children of teenagers who
have a child anyway.
The more difficult question for those of us working on welfare reform
is this: Should we pursue changes in welfare policy--such as cutting
off benefits to teenage mothers--that may discourage out-of-wedlock
births but would put children at risk? Some might say no, believing
that there is little correlation between welfare and out-of-wedlock
births. The empirical evidence is generally viewed as inconclusive. But
some controlled studies have demonstrated a positive association
between welfare payments and out-of-wedlock births, and my own
conversations with teenage mothers bears this out.
If we choose to reduce or eliminate AFDC grants to deter
childbearing, however, we should acknowledge that a portion of the
current and potential welfare population--perhaps a small but
significant portion--is unlikely to respond to stronger inducements and
penalties and will continue to have children society must provide for.
In a Los Angeles Times article published last January, Adela de la
Torre, an economist at California State University at Long Beach,
writes that the children of such parents ``become victims of trickle
down welfare programs * * * if we deem the parent unfit for welfare
support, the child, too, loses.'' De la Torre rejects the notion that
building stronger parental inducements into the welfare system will
change the behavior of all parents and calls instead for a more child-
centered social service agenda that recognizes and serves the needs of
children in a more direct, comprehensive, and integrated fashion. She
makes an important point.

Similarly, Thomas Corbett of the University of Wisconsin asks in a
spring, 1993 Focus article whether it is ``compassionate to throw a
little bit of welfare into troubled families and do little else to aid
the children?'' The answer is, of course, relative. AFDC reflects our
best intentions toward these children, but it has more often failed
them. Whether cash payments to unresponsive parents is the most
compassionate approach, Corbett concludes, ``depends partly on how many
children are involved and whether we can design and finance the
technologies required to assist them.''
It is incumbent on us, as part of welfare reform, to explore the
alternatives to a largely parent-based system, and find the answers to
his question. Title II of the bill supports State efforts to do just
that. Section 201 allows States to shift part or all of AFDC payments
to block grants and combine the grants with other funds available under
this bill to care for children, strengthen families, and implement
other reforms. In contrast to the Republican block grant proposals,
however, the provision requires the Secretary of HHS to ensure that
States pursuing the Block Grant Program protect the well-being of
affected children. Title II supports other demonstrations as well,
including pilots that discourage welfare recipients from having
additional children while on welfare by denying benefit increases for
additional children and pilots to test innovative teen pregnancy
prevention programs.

title iii of the bill authorizes state initiatives to increase child
support collection and paternal responsibility

Too often absent parents, typically fathers, are not held accountable
for their children's care. The Federal Government must also take the
lead in improving child support enforcement. As a starting point, we
should fully implement the recommendations of the U.S.
[[Page S1226]] Commission on Interstate Child Support. In the last
Congress Senator Bill Bradley, a member of the Commission, introduced
S. 689, the Interstate Child Support Enforcement Act, to implement the
Commission's recommendations. My Connecticut colleague, Congresswoman
Kennelly, also a Commission member, introduced a similar bill, H.R.
1961, in the House. This year I will again support Senator Bradley's
legislation which will, among other things: Mandate hospital-based
paternity acknowledgement programs; require employers to submit
W-4 forms for all new employees to State child support
enforcement agencies; and provide States the authority they need to
assert jurisdiction over nonresident parents. The era of deadbeat dads
should end.
While improving interstate coordination is critical to strengthening
child support enforcement, State innovation should play a role as well.
Title III of my bill authorizes State efforts to improve child support
collection and paternity establishment. To strengthen welfare
recipients incentives to work with authorities to collect child
support, it would allow States to increase the child support disregard
from $50 to a higher level decided by the State. States could also hold
parents accountable for the child support obligations of their minor
children. Additionally, States could propose their own demonstrations
projects to increase paternity establishment and improve child support
collection.

title IV authorizes initiatives to diversify and improve the
performance of welfare services

Changing the welfare system to move people back into the work force
and to better serve the needs of children will require changing the way
the welfare bureaucracy does business. Too many welfare workers focus
on whether and how to get a welfare check to the recipient rather than
how to get the recipient off of welfare and back to work. Many welfare
offices don't know how many children they have in foster care. Many
still operate out of cardboard files and lose people in the shuffle of
paper. Offices often suffer from interagency rivalry and bureaucratic
bickering. It is tragic when a child suffers needlessly because the
system fails under the weight of its own inefficiency.
This need not happen. Some innovative States and municipalities have
tried to make their welfare systems more efficient and service
oriented. At a hearing I held in the last Congress, Carmen Nazario, the
Secretary of Health and Human Services in Delaware, testified that her
State has brought public and private social services together in a
single location and is now developing a computer network to link
programs.
David Truax from the Maryland Department of Human Resources described
a second approach to improving services. Maryland now provides each
participant with a debit card that has AFDC, food stamps, and general
assistance benefits on it. Electronic benefit transfer [EBT] cards have
several advantages: They preclude the trading of food stamps for drugs;
they introduce people to the banking system; they make it easier for
them to budget their money since they don't have to cash one single
check, and they reduce recipients vulnerability to crime.
Further, offices should encourage and empower, not discourage and
demean, those they serve. It can be done. America Works, a private
organization that trains people on welfare for work and places them in
jobs, provides proof. During my visit to their Hartford, CT, office I
found that clients felt they were getting the help they needed to
succeed, and were motivated and optimistic. I asked one young woman who
had just completed her training if she expected to be placed
successfully in a job. She responded with enthusiasm, ``absolutely.''
This spirit does not typically pervade traditional welfare offices.
Most important, welfare offices should be held accountable for
results. They need to make the shift from writing checks to moving
people on welfare into jobs. To promote this change, we should seek to
establish competition among agencies and greater choice for people on
welfare. We should encourage public agencies to contract with effective
private sector companies and to better reward those public employees
who successfully help people become self-sufficient.
Title IV supports initiatives to diversify and improve the
performance of welfare services. It supports State pilots to provide
incentives to private sector, for-profit and nonprofit groups to place
people on welfare in private sector jobs. Companies would keep a
portion of welfare savings as payment for successful job placements.
Title IV also supports State pilots to improve the performance of
welfare office employees through, for example, providing direct bonuses
to employees and judging their performance based on their clients'
progress toward self-sufficiency.
In addition, title IV incorporates legislation I introduced earlier
this month with Senators Domenici, Feinstein, Pressler, and Hatfield to
remove a Federal barrier to improving services. That bill, S. 131, the
Electronic Benefits Regulatory Relief Act of 1995, exempts EBT cards
from the Federal Reserve Board's regulation E. Regulation E limits
cardholder liability to $50 for lost or stolen cards--a policy that
promotes fraud and makes EBT Programs costly for States. Earlier this
month the Vice President issued the first report from the EBT task
force and called for nationwide implementation. Without passage of this
provision, that goal will not be reached.

finally, title v authorizes offsetting expenditure reductions to ensure
the bill is budget neutral

In other words, the bills pay for itself. Specifically, it eliminates
the three-entity rule. Currently, an individual farmer can qualify for
up to $125,000 per year in certain Government subsidies. If he forms
two other business entities with two other individuals (say, a friend
and a sister), each of these entities can qualify for another $125,000
per year. So the individual farmer can receive up to $250,000 in
subsidies per year--$125,000 for his first business entity, and half of
$125,000 for each of his second and third entities. My bill says,
``enough is enough,'' and caps the amount of agricultural subsidies any
one person gets from the Federal Government at $125,000. A preliminary
Congressional Budget Office estimate indicates this change will save
$675 million over 5 years, money that is better spent on the truly
needy.
Americans continue to show concern for the poor, and particularly
poor children. A 1994 poll commissioned by the Children's Defense Fund
and others found that 64 percent of Americans believe we should spend
more on poor children. But the same poll found that 55 percent think we
spend too much on welfare, and 68 percent think we should not increase
payments to parents for any additional children they have while on
welfare.
Our current approach to helping the poor is clearly not working. The
goal of welfare reform is to shake up the status quo which promotes
dependency, illegitimacy, and social disfunctions like crime into a
system that promotes work, family, and responsibility and protects
children from a life of poverty. The Federal Government does not have a
ready formula for how to achieve this goal. I concur with my colleagues
who say that we should look to the States for answers. But we must
proceed in a way that meets our obligation to ensure the well-being of
all of America's children. Our aim should be to make sure that this
generation of welfare children do not become the next generation of
welfare parents. This bill offers an approach to do just that.
Mr. President, I ask unanimous consent that the text of the bill and
additional material be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 246

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Welfare
Reforms That Work Act''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purpose.
Sec. 3. Definitions.
Sec. 4. General provisions relating to demonstration
projects. [[Page S1227]]
Sec. 5. Authorization of appropriations.

TITLE I--INITIATIVES TO MOVE WELFARE RECIPIENTS INTO THE WORK FORCE

Sec. 101. Demonstration projects which condition AFDC benefits for
certain individuals on school attendance or job training,
limit the time period for receipt of such benefits, and
require teenage parents to live at home.
Sec. 102. Pilot Job Corps program for recipients of Aid to Families
with Dependent Children.
Sec. 103. Demonstration projects requiring up-front 30-day assisted job
search, or substance abuse treatment before receiving
AFDC benefits.
Sec. 104. Disregard of education and employment training savings for
AFDC eligibility.
Sec. 105. Incentives and assistance in starting a small business.
Sec. 106. Increased emphasis in JOBS program on moving people into the
work force.
Sec. 107. Additional demonstration projects to move AFDC recipients
into the work force.

TITLE II--INITIATIVES TO STRENGTHEN FAMILIES AND BREAK THE CYCLE OF
WELFARE DEPENDENCY

Sec. 201. Demonstration projects to establish child centered programs
through conversion of certain AFDC and JOBS payments into
block grants.
Sec. 202. Demonstration projects providing no additional benefits with
respect to children born while a family is receiving AFDC
and allowing increases in the earned income disregard.
Sec. 203. Demonstration projects providing incentives to marry.
Sec. 204. Demonstration projects reducing AFDC benefits if school
attendance is irregular or preventive health care for
dependent children is not obtained.
Sec. 205. Demonstration projects to develop community-based programs
for teenage pregnancy prevention and family planning
Sec. 206. Additional demonstration projects to strengthen families and
break the cycle of welfare dependency.

TITLE III--CHANGES TO FEDERAL LAWS AND STATE INITIATIVES TO INCREASE
CHILD SUPPORT AND PATERNAL RESPONSIBILITY

Sec. 301. Demonstration projects to increase paternity establishment.
Sec. 302. Demonstration projects to increase child support collection.

TITLE IV--INITIATIVES TO DIVERSIFY AND IMPROVE THE PERFORMANCE OF
WELFARE SERVICES

Sec. 401. Demonstration projects for providing placement of AFDC
recipients in private sector jobs.
Sec. 402. Demonstration projects providing performance-based incentives
for State public welfare providers.
Sec. 403. Electronic benefit transfers.

TITLE V--OFFSETTING EXPENDITURE REDUCTIONS

Sec. 501. Offsetting expenditure reductions.

SEC. 2. PURPOSE.

The purposes of this Act are--
(1) to promote bold State initiated welfare reforms that
will--
(A) move welfare recipients into the work force,
(B) strengthen families,
(C) break the cycle of welfare dependence,
(D) increase child support collection and paternal
responsibility, and
(E) improve the delivery of welfare services; and
(2) to make immediate State-by-State changes to the
existing system while establishing a process for identifying
successful reform approaches that can be applied nationally.

SEC. 3. DEFINITIONS.

For purposes of this Act:
(1) Aid to families with dependent children.--The term
``aid to families with dependent children'' has the meaning
given to such term by section 406(b) of the Social Security
Act (42 U.S.C. 606(b)).
(2) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.

SEC. 4. GENERAL PROVISIONS RELATING TO DEMONSTRATION
PROJECTS.

(a) Applications.--
(1) In general.--Each State desiring to conduct a
demonstration project under this Act shall prepare and submit
to the Secretary an application in such manner and containing
such information as the Secretary may require. The Secretary
shall actively encourage States to submit such applications.
(2) Approval.--The Secretary shall consider all
applications received from States desiring to conduct
demonstration projects under this Act and shall approve such
applications in a number of States to be determined by the
Secretary, taking into account the overall funding levels
available under section 5.
(3) Consideration of research needs and purposes.--The
Secretary shall pursue a broad range of reforms consistent
with the purposes of this Act and with research needs in
approving demonstration projects under this Act.
(b) Duration.--A demonstration project under this Act shall
be conducted for not more than 5 years plus an additional
time period of up to 12 months for final evaluation and
reporting. The Secretary may terminate a project if the
Secretary determines that the State conducting the project is
not in substantial compliance with the terms of the
application approved by the Secretary under this Act.
(c) Evaluation Plan.--
(1) In general.--Each State conducting a demonstration
project under this Act shall submit an evaluation plan
(meeting the standards developed by the Secretary under
paragraph (2)) to the Secretary not later than 90 days after
the State is notified of the Secretary's approval for such
project. A State shall not receive any Federal funds for the
operation of the demonstration project or be granted any
waivers of the Social Security Act necessary for operation of
the demonstration project until the Secretary approves such
evaluation plan.
(2) Standards.--Not later than 3 months after the date of
the enactment of this Act, the Secretary shall develop
standards for the evaluation plan required under paragraph
(1) which shall include the requirement that an independent
expert entity provide an evaluation of each demonstration
project to be included in the State's annual and final
reports to the Secretary under subsection (d)(1).
(d) Reports.--
(1) State.--A State that conducts a demonstration project
under this Act shall prepare and submit to the Secretary
annual and final reports in accordance with the State's
evaluation plan under subsection (c)(1) for such
demonstration project.
(2) Secretary.--The Secretary shall prepare and submit to
the Congress annual reports concerning each demonstration
project under this Act.
(e) Legislative Proposal.--
(1) Evaluations.--
(A) In general.--On each of the dates described in
subparagraph (B), the Secretary shall evaluate the
demonstration projects based on the reports received from
each State under subsection (d)(1) and if the Secretary
determines that any of the reforms in the demonstration
projects will be effective in achieving the purposes of this
Act, the Secretary shall submit proposed legislation to the
Congress to--
(i) implement such successful reforms nationally if
appropriate, or
(ii) give States the option of adopting a successful reform
in a State plan approved under section 402 of the Social
Security Act (42 U.S.C. 602) where the reform may be
effective in some States but not in others.

The proposed legislation shall take into account factors
important to implementing local demonstration projects on a
national scale, including variation in population density and
poverty.
(B) Dates for evaluation and submission.--A date is
described in this subparagraph, if it is a date that is--
(i) 2 years after the date of the enactment of this Act,
(ii) 4 years after the date of the enactment of this Act,
or
(iii) not later than 6 months after the date the Secretary
receives the last final report due under subsection (d)(1)
with respect to a demonstration project.
(2) Other legislative submissions.--At any time other than
a date described in paragraph (1)(B), if the Secretary
determines that a reform in a demonstration project is ready
to be implemented on a national scale or to be made a State
option, the Secretary may submit proposed legislation to the
Congress to implement the reform.
(f) Clearinghouse.--The Secretary shall establish and
maintain a clearinghouse to collect and disseminate to State
officials and the public current information on approved
demonstration projects, and on interim and final reports
submitted under subsection (d)(1) with respect to
demonstration projects. To the extent practicable,
clearinghouse information shall be made available through
electronic format.
(g) Provisions Subject To Waiver.--The Secretary may waive
such requirements of title IV of the Social Security Act (42
U.S.C. 601 et seq.) as the Secretary determines to be
necessary to carry out the purposes of the demonstration
projects established under this Act.
(h) Expenditures Otherwise Included Under the State Plan.--
The costs of a demonstration project under this Act which
would not otherwise be included as expenditures under the
applicable State plan under title IV of the Social Security
Act (42 U.S.C. 601 et seq.) shall to the extent and for the
period prescribed by the Secretary, be regarded as
expenditures under the applicable State plan under such
title, or for administration of such State plan or plans, as
may be appropriate.

SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--There is authorized to be appropriated
$150,000,000 for each of fiscal years 1996 and 1997, and
$125,000,000 for each of fiscal years 1998, 1999, and 2000 to
carry out the provisions of sections 4(c), 4(d), 101, 103,
105(b), 105(c), 105(d), 107, 201, 202, 203, 204, 205, 206,
207, 301, and 302. [[Page S1228]]
(b) Allocation of Funds.--Of the amount appropriated
pursuant to subsection (a), the Secretary shall obligate--
(1) 50 percent of such amount to--
(A) offset any increase in the amount of the Federal share
resulting from any demonstration project established under a
section described in subsection (a) (other than demonstration
projects established under sections 107 and 207 of this Act);
and
(B) to the extent such amount remains after any such
offset--
(i) increase the otherwise applicable Federal share rate
under a State plan under title IV of the Social Security Act
(42 U.S.C. 601 et seq.) for such demonstration projects; and
(ii) increase the amount of a State's block grant under the
demonstration project under section 201 of this Act; and
(2) 50 percent of such amount to--
(A) offset any increase in the amount of the Federal share
resulting from any demonstration project established under
sections 107 and 207 of this Act; and
(B) to the extent such amount remains after any such offset
increase the otherwise applicable Federal share rate under a
State plan under title IV of the Social Security Act (42
U.S.C. 601 et seq.) for such demonstration projects.
(c) Reservation of Certain Amounts Until Final Report
Submitted.--The Secretary shall reserve 10 percent of any
amounts obligated to a State for a demonstration project
under subsection (b), and shall not pay such reserved amounts
until such State has submitted a final report on such
demonstration project.
TITLE I--INITIATIVES TO MOVE WELFARE RECIPIENTS INTO THE WORK FORCE

SEC. 101. DEMONSTRATION PROJECTS WHICH CONDITION AFDC
BENEFITS FOR CERTAIN INDIVIDUALS ON SCHOOL
ATTENDANCE OR JOB TRAINING, LIMIT THE TIME
PERIOD FOR RECEIPT OF SUCH BENEFITS, AND
REQUIRE TEENAGE PARENTS TO LIVE AT HOME.

(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--
(1) In general.--Except as provided in paragraph (2), each
State conducting a demonstration project under this section
shall provide that--
(A) a family described in paragraph (3) shall not receive
aid to families with dependent children--
(i) unless the individual described in paragraph (3)(A) is,
for a minimum of 35 hours a week--

(I) attending school,
(II) studying for a general equivalency diploma, or
(III) participating in a job, job training, or job
placement program; and

(ii) except in the case of a situation described in clause
(i) through (v) of section 402(a)(43)(B) of the Social
Security Act (42 U.S.C. 602(a)(43)(B))--

(I) such individual is residing in a place of residence
maintained by a parent, legal guardian, or other adult
relative of such individual as such parent's, guardian's, or
adult relative's own home, or residing in a foster home,
maternity home, or other adult-supervised supportive living
arrangement, and
(II) such aid (where possible) shall be provided to the
individual's parent, legal guardian, or other adult relative
on behalf of such individual and the individual's dependent
child; and

(B) such family shall be entitled to receive such aid for a
time period determined appropriate by the State which shall,
at a minimum, permit such individual to complete the
activities described in subparagraph (A)(i).
(2) Limitation.--A State conducting a demonstration project
under this section shall not apply the provisions of
paragraph (1) to a family unless--
(A) the State has made adequate child care available to
such family;
(B) the State has paid all tuition and fees applicable to
the activities described in paragraph (1)(A); and
(C) such application does not endanger the welfare and
safety of a dependent child who is a member of such family.
(3) Family described.--A family described in this paragraph
is a family which--
(A) includes a parent under 20 years of age;
(B) includes at least 1 dependent child of such parent; and
(C) does not include a child under 6 months of age.

SEC. 102. PILOT JOB CORPS PROGRAM FOR RECIPIENTS OF AID TO
FAMILIES WITH DEPENDENT CHILDREN.

Section 433 of the Job Training Partnership Act (29 U.S.C.
1703) is amended by adding at the end the following new
subsection:
``(f)(1) The Secretary may enter into appropriate
agreements with agencies as described in section 427(a)(1)
for the development of pilot projects to provide services at
Job Corps centers to eligible individuals--
``(A) who are eligible youth described in section 423;
``(B) whose families receive aid to families with dependent
children under part A of title IV of the Social Security Act
(42 U.S.C. 601 et seq.); and
``(C) who are mothers of children who have not reached the
age of compulsory school attendance in the State in which the
children reside.
``(2) A Job Corps center serving the eligible individuals
shall--
``(A) provide child care at or near the Job Corps center
for the individuals;
``(B) provide the activities described in section 428 for
the individuals; and
``(C) provide for the individuals, and require that each
such individual participate in, activities through a parents
as teachers program that--
``(i) establishes and operates parent education programs,
including programs of developmental screening of the children
of the eligible individuals;
``(ii) provides group meetings and home visits for the
family of each such individual by parent educators who have
had supervised experience in the care and education of
children and have had training; and
``(iii) provides periodic screening, by such parent
educators, of the educational, hearing, and visual
development of the children of such individuals.
``(3) The Secretary shall prescribe specific standards and
procedures under section 424 for the screening and selection
of applicants to participate in pilot projects carried out
under this subsection. In addition to the agencies described
in the second sentence of such section, such standards and
procedures may be implemented through arrangements with
welfare agencies.
``(4) As used in this subsection:
``(A) The term `developmental screening' means the process
of measuring the progress of children to determine if there
are problems or potential problems or advanced abilities in
the areas of understanding and use of language, perception
through sight, perception through hearing, motor development
and hand-eye coordination, health, and physical development.
``(B) The term `parent education' includes parent support
activities, the provision of resource materials on child
development and parent-child learning activities, private and
group educational guidance, individual and group learning
experiences for the eligible individual and child, and other
activities that enable the eligible individual to improve
learning in the home.''.

SEC. 103. DEMONSTRATION PROJECTS REQUIRING UP-FRONT 30-DAY
ASSISTED JOB SEARCH, OR SUBSTANCE ABUSE
TREATMENT BEFORE RECEIVING AFDC BENEFITS.

(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--
(1) In general.--Except as provided in paragraph (2), each
State conducting a demonstration project under this section
shall require a parent or other relative of a dependent child
to undergo 30 days of assisted job search or substance abuse
treatment (or both) before the family may receive aid to
families with dependent children as part of the application
process for the receipt of such aid.
(2) Limitation.--A State conducting a demonstration project
under this section shall not apply the provisions of
paragraph (1) to a family unless--
(A) all of the dependent children in the family are over 6
months of age;
(B) the State has made adequate child care available to
such family;
(C) the State has paid all fees applicable to the
activities described in paragraph (1); and
(D) such application does not endanger the welfare and
safety of a dependent child who is a member of such family.

SEC. 104. DISREGARD OF EDUCATION AND EMPLOYMENT TRAINING
SAVINGS FOR AFDC ELIGIBILITY.

(a) Disregard as Resource.--Subparagraph (B) of section
402(a)(7) of the Social Security Act (42 U.S.C. 602(a)(7)) is
amended--
(1) by striking ``or'' before ``(iv)'', and
(2) by inserting ``, or (v) except in the case of the
family's initial determination of eligibility for aid to
families with dependent children, any amount up to $10,000 in
a qualified education and employment account (as defined in
section 406(i)(1))'' before ``; and''.
(b) Disregard as Income.--
(1) In general.--Subparagraph (A) of section 402(a)(8) of
such Act (42 U.S.C. 602(a)(8)) is amended--
(A) by striking ``and'' at the end of clause (vii), and
(B) by inserting after clause (viii) the following new
clause:
``(ix) shall disregard any qualified distributions (as
defined in section 406(i)(2)) made from any qualified
education and employment account (as defined in section
406(i)(1)) while the family is receiving aid to families with
dependent children; and''.
(2) Nonrecurring lump sum exempt from lump sum rule.--
Section 402(a)(17) (42 U.S.C. 602(a)(17)) is amended by
adding at the end the following: ``; and that this paragraph
shall not apply to earned and unearned income received in a
month on a nonrecurring basis to the extent that such income
is placed in a qualified education and employment account (as
defined in section 406(i)(1)) the total amount which, after
such placement, does not exceed $10,000.''.
(c) Qualified Education and Employment Accounts.--Section
406 of such Act (42 U.S.C. 606) is amended by adding at the
end the following:
``(i)(1) The term `qualified education and employment
account' means a mechanism established by the State (such as
escrow accounts or education savings bonds) that allows
savings from the earned income of a dependent child or parent
of such child in a [[Page S1229]] family receiving aid to
families with dependent children to be used for qualified
distributions.
``(2) The term `qualified distributions' means
distributions from a qualified education and employment
account for expenses directly related to the attendance at an
eligible postsecondary or secondary institution or directly
related to improving the employability (as determined by the
State) of a member of a family receiving aid to families with
dependent children.
``(3) The term `eligible postsecondary or secondary
institution' means a postsecondary or secondary institution
determined to be eligible by the State under guidelines
established by the Secretary.''.
(d) Effective Date.--The amendments made by this section
shall apply to payments under part A of title IV of the
Social Security Act (42 U.S.C. 601 et seq.) for calendar
quarters beginning on or after January 1, 1995.

SEC. 105. INCENTIVES AND ASSISTANCE IN STARTING A SMALL
BUSINESS.

(a) Authority for States To Permit Certain Self-Employment
Program Participants a One-Time Election To Purchase Capital
Equipment for a Small Business in Lieu of Depreciation;
Repayments by Such Persons of the Principal Portion of Small
Business Loans Treated as Business Expenses for Purposes of
AFDC.--
(1) Amendments to the social security act.--Section
402(a)(8) of the Social Security Act (42 U.S.C. 602(a)(8)) is
amended--
(A) in subparagraph (B)(ii)(II), by striking ``and'' after
the semicolon;
(B) by redesignating subparagraph (C) as subparagraph (D);
and
(C) by inserting after subparagraph (B) the following new
subparagraph:
``(C) provide that, in determining the earned income of a
family any of the members of which owns a small business and
is a participant in a self-employment program offered by a
State in accordance with section 482(d)(1)(B)(ii), the State
may--
``(i)(I) during the 1-year period beginning on the date the
family makes an election under this clause, treat as an
offset against the gross receipts of the business the sum of
the capital expenditures for the business by any member of
the family during such 1-year period; and
``(II) allow each such family eligible for aid under this
part not more than 1 election under this clause; and
``(ii) treat as an offset against the gross receipts of the
business--
``(I) the amounts paid by any member of the family as
repayment of the principal portion of a loan made for the
business; and
``(II) cash retained by the business for future use by the
business; and''.
(2) Amendment to the internal revenue code of 1986.--
Section 167 of the Internal Revenue Code of 1986 (relating to
depreciation) is amended by redesignating subsection (g) as
subsection (h) and by inserting after subsection (f) the
following new subsection:
``(g) Certain Property of AFDC Recipients Not
Depreciable.--No depreciation deduction shall be allowed
under this section (and no depreciation or amortization
deduction shall be allowed under any other provision of this
subtitle) with respect to the portion of the adjusted basis
of any property which is attributable to expenditures treated
as an offset against gross receipts under section
402(a)(8)(C)(i) of the Social Security Act.''.
(3) Effective date.--
(A) Social security act amendments.--The amendments made by
paragraph (1) shall apply to payments made under part A of
title IV of the Social Security Act (42 U.S.C. 601 et seq.)
on or after January 1, 1996.
(B) Internal revenue code amendment.--The amendments made
by paragraph (2) shall apply to property placed in service on
or after January 1, 1996.
(b) Demonstration Projects Establishing Public-Private
Partnerships for Technical Assistance to Self-Employed AFDC
Recipients.--
(1) In general.--The Secretary shall provide for
demonstration projects to be conducted in States with
applications approved under this Act under which one or more
partnerships are developed between State agencies and
community businesses or educational institutions to provide
assistance to eligible participants.
(2) Eligible participants.--For purposes of this
subsection, the term ``eligible participants'' means--
(A) individuals who are receiving aid to families with
dependent children; and
(B) individuals who cease to be eligible to receive such
aid who have been participating in a demonstration project
conducted by a State under this subsection.
(3) Permissible expenditures.--Funds from any demonstration
project conducted under this subsection may be used to pay
the costs associated with developing and implementing a
process through which businesses or educational institutions
would work with the State agency to provide assistance to
eligible participants seeking to start or operate small
businesses, including--
(A) mentoring;
(B) training for eligible participants in administering a
business;
(C) technical assistance in preparing business plans; and
(D) technical assistance in the process of applying for
business loans, marketing services, and other activities
related to conducting such small businesses.
(c) Demonstration Projects for Training AFDC Recipients as
Self-Employed Providers of Child Care Services.--
(1) In general.--The Secretary shall provide for
demonstration projects to be conducted in States with
applications approved under this Act under which one or more
partnerships are developed between State agencies and
community businesses or educational institutions to provide
assistance to eligible participants in the establishment and
operation of child care centers in the home or in the
community which would provide child care services.
(2) Eligible participants.--For purposes of this
subsection, the term ``eligible participants'' means--
(A) individuals who are receiving aid to families with
dependent children; and
(B) individuals who cease to be eligible to receive such
aid who have been participating in a demonstration project
conducted by a State under this subsection.
(3) Permissible expenditures.--Funds from any demonstration
project conducted under this subsection may be used to pay
the costs associated with developing and implementing a
process through which businesses or educational institutions
would work with the State agency to provide assistance to
train eligible participants to provide licensed child care
services, including--
(A) mentoring;
(B) training in the provision of child care services;
(C) training for eligible participants in administering a
business;
(D) training in early childhood education;
(E) technical assistance in preparing business plans;
(F) technical assistance in the process of applying for
loans, marketing services, qualifying for Federal and State
programs, and other activities related to the provision of
child care services; and
(G) technical assistance in obtaining a license and
complying with Federal, State, and local regulations
regarding the provision of child care.
(d) Demonstration Project To Promote Ownership of Family-
Owned Businesses by AFDC Recipients.--
(1) Establishment.--The Secretary shall provide for
demonstration projects described in paragraph (2) in States
with applications approved under this Act.
(2) Project described.--Each State conducting a
demonstration project under this subsection shall develop a
program under which the State shall--
(A) encourage incentives for families receiving aid to
families with dependent children to work together as managers
and employees in family-owned businesses;
(B) develop State and private partnerships for making or
guaranteeing small business loans, including seed money,
available to such families;
(C) provide such families with technical training in small
business management, accounting, and bookkeeping;
(D) regularly evaluate the status of the recipients of
assistance under the project; and
(E) continue a transitional period of benefits under title
IV and title XIX of the Social Security Act for recipients of
assistance under the project until such time as the State
determines such family is self-sufficient.

For purposes of this paragraph, a family-owned business may
include other relatives of the family receiving aid to
families with dependent children regardless if such relatives
are also receiving aid to families with dependent children.

SEC. 106. INCREASED EMPHASIS IN JOBS PROGRAM ON MOVING PEOPLE
INTO THE WORK FORCE.

Section 481(a) of the Social Security Act (42 U.S.C.
681(a)) is amended by adding at the end the following new
sentence: ``It is further the purpose of this part to
encourage individuals receiving education and training to
enter the permanent work force by developing programs through
which such individuals enter the work force and then receive
post-employment education and training.''.

SEC. 107. ADDITIONAL DEMONSTRATION PROJECTS TO MOVE AFDC
RECIPIENTS INTO THE WORK FORCE.

(a) Establishment.--The Secretary shall provide for
additional demonstration projects described in subsection (b)
in States with applications approved under this Act.
(b) Project Described.--Each State conducting a
demonstration project under this section shall develop a
program or programs to better move recipients of aid to
families with dependent children into the work force.
TITLE II--INITIATIVES TO STRENGTHEN FAMILIES AND BREAK THE CYCLE OF
WELFARE DEPENDENCY

SEC. 201. DEMONSTRATION PROJECTS TO ESTABLISH CHILD CENTERED
PROGRAMS THROUGH CONVERSION OF CERTAIN AFDC AND
JOBS PAYMENTS INTO BLOCK GRANTS.

(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--
(1) In general.--Each State conducting a demonstration
project under this section shall elect to receive payments
under paragraph (2) in lieu of--
(A) all payments to which the State would otherwise be
entitled to under section 403 of the Social Security Act (42
U.S.C. 603) for aid to families with dependent children under
part A of title IV of such Act or the job opportunities and
basic skills training program under part F of such title;
or [[Page S1230]]
(B) any portion of the payment described in subparagraph
(A) to which the State would otherwise be entitled under such
section for benefits (identified by the State) under part A
or part F of such title for populations (identified by the
State) who receive such benefits.
(2) Payment.--The Secretary shall make payment under this
paragraph for each year of the project in an amount equal
to--
(A) during fiscal year 1996--
(i) 100 percent of the total amount to which the State was
entitled under section 403 of the Social Security Act (42
U.S.C. 603) for aid to families with dependent children under
part A of title IV of such Act or the job opportunities and
basic skills training program under part F of such title; or
(ii) the amount to which the State was entitled to under
such section for those benefits and populations identified by
the State in paragraph (1)(B),

for fiscal year 1995 plus the product of such amount and the
percentage increase in the consumer price index for all urban
consumers (U.S. city average) during such fiscal year; and
(B) during each subsequent fiscal year, the amount
determined under this paragraph in the previous fiscal year
plus the product of such amount and the percentage increase
in such consumer price index during such previous fiscal
year.
(3) Description of activities.--
(A) In general.--Each State which is paid under paragraph
(2) shall expend the amount received under such paragraph and
the amount, if any, made available to such State under
section 5(b)(1)(B)(ii) for one or more of the following
purposes:
(i)(I) Establish residential programs for teenage mothers
with dependent children where education, job training,
community service, or other employment is provided.
(II) Support the pilot project described in section 433(f)
of the Jobs Training Partnership Act, as added by section 102
of this Act, to provide such services to teenage mothers with
dependent children.
(ii) Establish programs to promote, expedite, and ensure
adoption of children, particularly neglected or abused
children.
(iii) Expand child care assistance for the children of
needy working parents (as determined by the State).
(iv) Establish residential schooling with appropriate
support services for children from needy families (as
determined by the State) enrolled at the request of the
parents of such children.
(v) Establish other services which will be provided
directly to children from needy families (as determined by
the State).
(vi) Implement other reforms consistent with this Act.
(4) Community-based activities.--The Secretary shall ensure
that each State receiving a grant under this section--
(A) takes adequate steps to assure the well-being of the
children affected by the State's receipt of the grant; and
(B) to the fullest extent possible, utilizes the grant
under this section to support community-based services in
communities affected by the State's receipt of the grant.

SEC. 202. DEMONSTRATION PROJECTS PROVIDING NO ADDITIONAL
BENEFITS WITH RESPECT TO CHILDREN BORN WHILE A
FAMILY IS RECEIVING AFDC AND ALLOWING INCREASES
IN THE EARNED INCOME DISREGARD.

(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--If a child is born to a family
after the date on which such family begins receiving aid to
families with dependent children, a State conducting a
demonstration project under this section--
(1) shall not take such child into account in determining
the need of such family for such aid; and
(2) shall increase the amounts disregarded from earned
income under section 402(a)(8)(A) of the Social Security Act
(42 U.S.C. 602(a)(8)(A)).

SEC. 203. DEMONSTRATION PROJECTS PROVIDING INCENTIVES TO
MARRY.

(a) Aid to Two-Parent Families.--
(1) Establishment.--The Secretary shall provide for
demonstration projects described in paragraph (2) in States
with applications approved under this Act.
(2) Project described.--
(A) In general.--Each State conducting a demonstration
project under this subsection shall not apply the
requirements described in subparagraph (B) to a parent of a
dependent child who is married to the natural parent of such
child.
(B) Requirements waived.--The requirements described in
this subparagraph are:
(i) The work history requirement described in section
407(b)(1)(A)(iii) of the Social Security Act (42 U.S.C.
607(b)(1)(A)(iii)).
(ii) The 100-hour rule under section 233.100(a)(1)(i) of
title 45, Code of Federal Regulations.
(b) Increase in Stepparent Earned Income Disregard.--
(1) Establishment.--The Secretary shall provide for
demonstration projects described in paragraph (2) in States
with applications approved under this Act.
(2) Project described.--For purposes of making
determinations for any month under section 402(a)(7) of the
Social Security Act (42 U.S.C. 602(a)(7)), each State
conducting a demonstration project under this subsection
shall modify the income disregards provided in subparagraphs
(A) through (D) of section 402(a)(31) of such Act (42 U.S.C.
602(a)(31)) in order to decrease the amount of income
determined under such section with respect to a dependent
child's stepparent.

SEC. 204. DEMONSTRATION PROJECTS REDUCING AFDC BENEFITS IF
SCHOOL ATTENDANCE IS IRREGULAR OR PREVENTIVE
HEALTH CARE FOR DEPENDENT CHILDREN IS NOT
OBTAINED.

(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--
(1) In general.--Each State conducting a demonstration
project under this section shall reduce the amount of aid to
families with dependent children received by a family if the
State agency determines that one or both (at the State's
option) of the following conditions exist:
(A) A member of such family is attending school or
participating in a course of vocational or technical training
and such family member is absent from such school or training
with no excuse for more than a number of days per month
determined appropriate by the State.
(B) A member of such family is a child under the age of 6
who has not received appropriate immunizations (as determined
by the State).
(2) Limitation.--Each State conducting a demonstration
project under this section shall establish procedures which
ensure that no reduction in aid to families with dependent
children under paragraph (1) will endanger the welfare and
safety of any dependent child.

SEC. 205. DEMONSTRATION PROJECTS TO DEVELOP COMMUNITY-BASED
PROGRAMS FOR TEENAGE PREGNANCY PREVENTION AND
FAMILY PLANNING

(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--Each State conducting a
demonstration project under this section shall develop a
community-based program for teenage pregnancy prevention and
family planning.

SEC. 206. ADDITIONAL DEMONSTRATION PROJECTS TO STRENGTHEN
FAMILIES AND BREAK THE CYCLE OF WELFARE
DEPENDENCY.

(a) Establishment.--The Secretary shall provide for
additional demonstration projects described in subsection (b)
in States with applications approved under this Act.
(b) Project Described.--Each State conducting a
demonstration project under this section shall develop a
program or programs to strengthen families and break the
cycle of welfare dependency.
TITLE III--CHANGES TO FEDERAL LAWS AND STATE INITIATIVES TO INCREASE
CHILD SUPPORT AND PATERNAL RESPONSIBILITY

SEC. 301. DEMONSTRATION PROJECTS TO INCREASE PATERNITY
ESTABLISHMENT.

SEC. 302. DEMONSTRATION PROJECTS TO INCREASE CHILD SUPPORT
COLLECTION.

(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--Each State conducting a
demonstration project under this section shall increase the
State's child support collection efforts through one or more
of the following methods:
(1) Enhanced child support enforcement and collection,
including holding a parent accountable for supporting any
children of the parent's minor children.
(2) Applying section 402(a)(8)(vi) of the Social Security
Act (42 U.S.C. 602(a)(8)(vi)) by substituting an amount
greater than $50 (to be determined by the State) for ``$50''
each place such dollar amount appears.
(3) Any other method that the State deems appropriate.
TITLE IV--INITIATIVES TO DIVERSIFY AND IMPROVE THE PERFORMANCE OF
WELFARE SERVICES

SEC. 401. DEMONSTRATION PROJECTS FOR PROVIDING PLACEMENT OF
AFDC RECIPIENTS IN PRIVATE SECTOR JOBS.

(a) Establishment.--The Secretary shall provide for
demonstration projects described in subsection (b) in States
with applications approved under this Act.
(b) Project Described.--Each State conducting a
demonstration project under this section shall--
(1) contract with private for-profit and nonprofit groups
to provide any individual receiving aid to families with
dependent children with training, support services, and
placement in a private sector job which permits such
individual to cease receiving aid to families with dependent
children; and
(2) upon employment of such individual, pay such groups a
negotiated portion of the total amount that such individual's
family [[Page S1231]] would have received over the course of
the year in which such individual began such employment in
the form of aid to families with dependent children.

SEC. 402. DEMONSTRATION PROJECTS PROVIDING PERFORMANCE-BASED
INCENTIVES FOR STATE PUBLIC WELFARE PROVIDERS.

(a) Establishment.--The Secretary shall provide for
demonstration projects to establish performance-based
incentives for State public welfare providers in States with
applications described in subsection (b)(1) which are
approved under this Act.
(b) Applications.--
(1) Application described.--An application described under
this paragraph is an application which--
(A) identifies the State offices or administrative units
which will participate in the demonstration project;
(B) describes indicators of employee or program performance
based on outcome measures for--
(i) training and education;
(ii) job search and placement assistance;
(iii) child support collection;
(iv) teen pregnancy prevention programs; and
(v) any other program objective that the State finds
appropriate;
(C) describes budgetary incentives for program performance,
including direct financial incentives for employees where
appropriate;
(D) describes a process for developing, in cooperation with
employees of participating offices or units, a job evaluation
system based on performance measures; and
(E) describes the way in which State public welfare
providers, private providers, welfare clients, and members of
the community have been or shall be involved in the planning
and implementation of a performance based welfare delivery
system.
(2) Technical assistance.--The Secretary shall provide a
State desiring to submit an application for a demonstration
project under this section with technical assistance in
preparing an application described under paragraph (1).

SEC. 403. ELECTRONIC BENEFIT TRANSFERS.

Section 904(d) of the Electronic Fund Transfer Act (15
U.S.C. 1693b(d)) is amended--
(1) by inserting ``(1)'' after ``(d)''; and
(2) by adding at the end the following new paragraph:
``(2)(A) The disclosures, protections, responsibilities,
and remedies created by this title or any rules, regulations,
or orders issued by the Board in accordance with this title,
do not apply to an electronic benefit transfer program
established under State or local law, or administered by a
State or local government, unless the payment under such
program is made directly into a consumer's account held by
the recipient.
``(B) Subparagraph (A) does not apply to employment related
payments, including salaries, pension, retirement, or
unemployment benefits established by Federal, State, or local
governments.
``(C) Nothing in subparagraph (A) alters the protections of
benefits established by any Federal, State, or local law, or
preempts the application of any State or local law.
``(D) For purposes of subparagraph (A), an electronic
benefit transfer program is a program under which a Federal,
State, or local government agency distributes needs-tested
benefits by establishing accounts to be accessed by
recipients electronically, such as through automated teller
machines, or point-of-sale terminals. A program established
for the purpose of enforcing the support obligations owed by
absent parents to their children and the custodial parents
with whom the children are living is not an electronic
benefit transfer program.''.
TITLE V--OFFSETTING EXPENDITURE REDUCTIONS

SEC. 501. OFFSETTING EXPENDITURE REDUCTIONS.

(a) In General.--Subparagraph (C) of section 1001(5) of the
Food Security Act of 1985 (7 U.S.C. 1308(5)(C)) is amended to
read as follows:
``(C) In the case of corporations and other entities
included in subparagraph (B) and partnerships, the Secretary
shall attribute payments to natural persons in proportion to
their ownership interests in an entity and in any other
entity, or partnership, that owns or controls the entity, or
partnership, receiving the payments.''.
(b) Removal of 3-Entity Rule.--Section 1001A(a)(1) of the
Food Security Act of 1985 (7 U.S.C. 1308-1(a)(1)) is
amended--
(1) in the first sentence--
(A) by striking ``substantial beneficial interests in more
than two entities'' and inserting ``a substantial beneficial
interest in any other entity''; and
(B) by striking ``receive such payments as separate
persons'' and inserting ``receives the payments as a separate
person''; and
(2) by striking the second sentence.
(c) Effective Date.--The amendments made by this section
shall take effect on October 1, 1995.
____

The Welfare Reforms That Work Act--Summary

Sections 1-4.--Purpose of bill and general provisions
relating to state pilot projects:
Sec. 2. States that the purpose of the bill is to promote
bold State-initiated welfare reforms to move welfare
recipients into the work force; strengthen families; break
the cycle of welfare dependency; increase child support
collection and paternal responsibility; and improve the
delivery of welfare services. The bill is designed to make
immediate State-by-State changes to the existing system while
establishing a process for identifying successful reform
approaches that can be applied nationally. The bill reflects
the findings that: the current welfare system is failing
children and contributing to the cycle of poverty and other
societal ills; mandatory job training and many other
incremental reforms tested to date have had minimal effects
on welfare dependency; and the States are best positioned to
test far-reaching reform proposals that involve some human or
financial risk. While this bill in no way precludes national
reforms such as time-limits, work requirements or requiring
teenage parents to live at home, it gives States the central
reform role and provides the authority and resources they
need to pursue bold and untested reforms.
Sec. 4. Sets forth general provisions relating to
demonstration projects. Authorizes $150 million/yr for the
first two years and $125 million/yr in the following three
year to support pilots and evaluations of pilots, and
requires States to have evaluation plans approved by the
Department of Health and Human Services (HHS) before
receiving funds. A portion of these funds would support
innovative pilot programs not specified in the bill but
proposed by States. Demonstration projects could last up to 5
years. States would report on progress annually. As results
of interim and final reports become available, the Secretary
of HHS will submit legislation to Congress to implement
promising reforms nationally.

title I.--initiatives to move welfare recipients into the work force

From the first day that an individual applies for welfare,
the primary focus of welfare offices should be to help that
person move into the work force. A welfare grant should be
conditioned on responsible behavior. This Title supports
state reforms to move welfare recipients into the work force.
Sec. 101. Supports State pilots to condition AFDC benefits
for single parents under 20 years of age with at least one
dependent child and no children under 6 months of age on
attending school or participating in a job or job training
program for a minimum of 35 hours per week and on living at
home. States would also impose a time limit (not specified)
on benefits, and make child care available during training
and work activities. Since the program would be expensive, it
targets those at greatest risk of long-term welfare
dependency--teenage mothers.
Sec. 102. Authorizes the Secretary of HHS to establish a
pilot program with the Jobs Corps (a successful, residential
anti-poverty program for youths 16-22 years of age) targeting
teenage mothers on AFDC with below school-age children. The
pilot would include a Parents-as-Teachers type program
designed to teach parents how to help prepare their children
for school and learning.
Sec. 103. Supports State pilots to require 30 days of
assisted job search or, where appropriate, substance abuse
treatment immediately following application for AFDC,
coinciding with the usual lag time between application for
and receipt of benefits. Applicants would have to complete
the assigned activities before receiving AFDC payments.
Sec. 104. A national change to permit States to allow AFDC
families to save money (up to $10,000) for education and
training or starting a small business.
Sec. 105. Expands on legislation introduced in 1993 with
Senator Dodd.
A national change to permit States to help recipients start
a small business by allowing participants a one-time election
to fully deduct capital equipment purchases in one year;
Supports State pilots to establish public-private
partnerships to provide technical assistance to self-employed
AFDC recipients;
Supports State pilots to train AFDC recipients as self-
employed providers of child care services; and
Supports State pilot projects to promote ownership of
extended family-owned businesses by AFDC recipients. Would
provide incentives and assistance for families receiving aid
to families with dependent children to work together as
managers and employees in extended family-owned businesses.
Sec. 106. Amends JOBS provisions to emphasize efforts to
move people into the work force over training and education.
Sec. 107. Supports additional demonstration projects
proposed by States to move AFDC recipients into the work
force.

Title II.--Initiatives to Strengthen Families and Break the Cycle of
Welfare Dependency

The current Federal welfare rules discourage family
unification and encourage out-of-wedlock childbearing. The
most serious victims of these policies are children born into
poor, unstable families. This Title supports State reforms
that promote parental responsibility and family unity. It
recognizes that while welfare is a privilege for parents,
States and the Federal government have a moral responsibility
to ensure the well-being of all American children.
Sec. 201. Supports State pilots to establish child centered
programs through conversion of AFDC and JOBS payments into
block grants, plus funds available under other sections of
this bill. States could apply portions of funds to: (1)
establish residential homes for teenage mothers with
children, including [[Page S1232]] supporting the pilot
project described in section 102; (2) expand programs to
expedite and improve adoption of children; (3) expand child
care assistance for needy children of working families; (4)
establish supportive residential schools for children
enrolled at the request of their parents; (5) provide other
services directly to needy children; and (6) fund other
programs that are consistent with the purposes of the Act.
The Secretary of HHS, in reviewing the application, must
ensure that the State's program will protect the well-being
of affected children.
Sec. 202. Supports State pilots to discourage welfare
recipients from having additional children while on welfare
and increase the financial reward for work. Recipients who
had a second child would not get additional benefits but
would be allowed to keep a higher portion of job earnings.
Sec. 203. Supports State pilots to improve incentives to
get married. States would disregard to a greater extent the
second parent's earnings and work patterns in determining
benefits.
Sec. 204. Supports State pilots to reduce AFDC benefits if
school attendance of mother or child is irregular or
preventive health care for the dependent children is not
attained.
Sec. 205. Supports State demonstrations of innovative
teenage pregnancy prevention programs.
Sec. 206. Supports additional demonstration projects
proposed by States to strengthen families and break the cycle
of welfare dependency.

title iii.--changes to federal laws and state initiatives to increase
child support collection and paternal responsibility

Increased child support enforcement and paternity
establishment must be part of the welfare reform. Too often
absent parents, typically fathers, are not held accountable
for their children's care. In the last Congress Senator
Bradley introduced and I cosponsored the comprehensive
Interstate Child Support Enforcement Act, which I will
support again this year. My bill authorizes additional State
efforts to improve child support collection and paternity
establishment.
Sec. 301. Supports demonstration projects to increase
paternity establishment.
Sec. 302. Supports demonstration projects to increase child
support collection, including: increasing the child support
disregard, from $50 to a higher level decided by the state;
and, holding parents accountable for child support
obligations of their minor children.

title iv.--initiatives to diversify and improve performance of welfare
services

Welfare offices are notoriously bureaucratic and
unresponsive. Under current Federal laws, they have few
incentives and some disincentives to improve performance.
This Title supports state efforts to promote competition
among welfare service providers and to implement performance-
based management programs in welfare offices. It also removes
a current Federal impediment to the use of electronic benefit
transfer ``smart cards.''
Sec. 401. Supports State pilots to provide incentives to
private sector, for profit and non-profit groups to place
welfare recipients in private sector jobs. Companies would
keep a portion of welfare savings as payment for successful
job placements.
Sec. 402. Supports State pilots to implement performance-
based management systems for public welfare providers.
Sec. 403. To promote the use of electronic benefit transfer
(EBT) ``smart cards'' that reduce fraud and improve services,
this section exempts state EBT programs from the Federal
Reserve Board's ``Regulation E.'' Reg. E currently limits
cardholder liability to $50 for lost or stolen cards--a
policy that promotes fraud and makes EBT programs costly for
States.

title v.--offsetting expenditure reductions

Sec. 501. Eliminates the ``three-entity'' rule, reducing
the amount of certain Federal subsidies individual farmers
can receive from $250,000 to $125,000 per year.
______

By Mr. GREGG (for himself and Mr. Cochran):
S. 247. A bill to improve senior citizen housing safety; to the
Committee on Banking, Housing, and Urban Affairs.

the senior citizens housing safety act

Mr. GREGG. Mr. President, last year, I introduced the Senior
Citizens Housing Safety Act, a bill that will end the terror that
unfortunately runs rampant throughout many housing projects
specifically designated for elderly and disabled residents. I
reintroduce this important legislation.
In my home State of New Hampshire, most people are still afforded the
luxury of not having to lock their front door before turning in for the
evening. However, many elderly residents of public housing facilities
in my State and across America have been forced to not only lock their
front doors, but are literally being held prisoner in their own homes.
I believe this is outrageous. I have received numerous complaints from
residents of elderly housing facilities throughout New Hampshire who
are worried about their personal safety in housing specifically
reserved for them.
Under current housing laws nonelderly persons considered disabled,
because of past drug and alcohol abuse problems, are eligible to live
in section 8 housing designated for the elderly. This mixing of
populations may have filled up the housing projects across the country,
but it has opened a Pandora's box of trouble. Simply put, young,
recovering alcoholics and drug addicts are not compatible with elderly
persons. Many of these young people hold all-night, loud parties, shake
down many of the elderly residents for money, sell drugs within the
housing facility, and generally disturb the right to the peaceful
enjoyment of the premises by other tenants.
This problem has occurred because the definition of handicapped under
the Fair Housing Act was amended in 1988 to include recovering
alcoholics and drug addicts. Under the mixed population rules of 1992,
Congress determined that the elderly and disabled should be housed
together. Historically, disabled individuals have lived in complexes
for the elderly because the apartments there--one-bedroom units
equipped with such features as hand rails--best fit their needs.
However, drug addicts and alcoholics who are considered disabled do not
have the same needs. Many elderly persons hope to retire in a community
surrounded by persons their own age, elderly people who choose to live
a peaceful existence in the company of their peers. I want to restore
that hope and this legislation will attack this problem with a two-tier
approach.

First, my legislation will institute a front-end screening process.
This will prevent nonelderly individuals, classified as disabled
because they are recovering from alcoholism and drug addiction, from
becoming eligible for housing that is designated for the elderly. It
simply says they cannot live in housing designated for the elderly
additionally, it will prevent the further mixing of two groups that are
obviously incompatible. This will not, however, exclude these
nonelderly, disabled individuals from the housing I believe they need
and deserve.
Second, my legislation will force local public housing agencies to
evict nonelderly individuals occupying the facility who engage on three
separate documented occasions in activities that threaten the health,
safety, or right to peaceful enjoyment of the premises by other tenants
and involves the use of drugs or alcohol.
This process, by no means, circumvents the current housing eviction
procedure. Under current law the public housing agency could evict
these persons after one infraction if deemed necessary. It simply
mandates that these nonelderly individuals be evicted after three
incidents which threaten the health, safety, or right to peaceful
enjoyment of the premises by other tenants.
This is a simple bill that prevents the mixing of two populations who
have proved incompatible.
This bill will restore order in housing projects designated for
elderly and disabled tenants by screening out nonelderly alcoholics and
drug addicts, as well as evicting those nonelderly persons who
continuously raise havoc within the housing project. I urge my
colleagues to support this important bill. I ask unanimous consent that
the text of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 247

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 ``Senior Citizen Housing
Safety Act''.

SEC. 2. SENIOR CITIZEN HOUSING SAFETY.

(a) Limitation on Occupancy in Public Housing Designated
for Elderly Families.--
(1) In general.--Section 7(a) of the United States Housing
Act of 1937 (42 U.S.C. 1437e(a)) is amended--
(A) in paragraph (1), by striking ``Notwithstanding any
other provision of law'' and inserting ``Subject only to the
provisions of this subsection'';
(B) in paragraph (4), by inserting ``, except as provided
in paragraph (5)'' before the period at the end; and
(C) by adding at the end the following new
paragraph: [[Page S1233]]
``(5) Limitation on occupancy in projects for elderly
families.--
``(A) Occupancy limitation.--Notwithstanding any other
provision of law, a dwelling unit in a project (or portion of
a project) that is designated under paragraph (1) for
occupancy by only elderly families or by only elderly and
disabled families shall not be occupied by--
``(i) any person with disabilities who is not an elderly
person and whose history of use of alcohol or drugs
constitutes a disability; or
``(ii) any person who is not an elderly person and whose
history of use of alcohol or drugs provides reasonable cause
for the public housing agency to believe that the occupancy
by such person may interfere with the health, safety, or
right to peaceful enjoyment of the premises by other tenants.
``(B) Required statement.--A public housing agency may not
make a dwelling unit in such a project available for
occupancy to any person or family who is not an elderly
family, unless the agency acquires from the person or family
a signed statement that no person who will be occupying the
unit--
``(i) uses (or has a history of use of) alcohol; or
``(ii) uses (or has a history of use of) drugs;
that would interfere with the health, safety, or right to
peaceful enjoyment of the premises by other tenants.''.
(2) Lease provisions.--Section 6(l) of the United States
Housing Act of 1937 (42 U.S.C. 1437d(l)) is amended--
(A) in paragraph (5), by striking ``and'' at the end;
(B) by redesignating paragraph (6) as paragraph (7); and
(C) by inserting after paragraph (5) following new
paragraph:
``(6) provide that any occupancy in violation of the
provisions of section 7(a)(5)(A) or the furnishing of any
false or misleading information pursuant to section
7(a)(5)(B) shall be cause for termination of tenancy; and''.
(b) Eviction of Nonelderly Tenants Having Drug or Alcohol
Use Problems From Public Housing Designated for Elderly
Families.--Section 7(c) of the United States Housing Act of
1937 (42 U.S.C. 1437e(c)) is amended to read as follows:
``(c) Standards Regarding Evictions.--
``(1) Limitation.--Any tenant who is lawfully residing in a
dwelling unit in a public housing project may not be evicted
or otherwise required to vacate such unit because of the
designation of the project (or a portion of the project)
pursuant to this section or because of any action taken by
the Secretary or any public housing agency pursuant to this
section.
``(2) Requirement to evict nonelderly tenants for 3
instances of prohibited activity involving drugs or
alcohol.--With respect to a project (or portion of a project)
described in subsection (a)(5)(A), the public housing agency
administering the project shall evict any person who is not
an elderly person and who, during occupancy in the project
(or portion thereof), engages on 3 separate occasions
(occurring after the date of the enactment of this Act) in
any activity that threatens the health, safety, or right to
peaceful enjoyment of the premises by other tenants and
involves the use of alcohol or drugs.
``(3) Rule of construction.--The provisions of paragraph
(2) requiring eviction of a person may not be construed to
require a public housing agency to evict any other persons
who occupy the same dwelling unit as the person required to
be evicted.''.
______

By Mr. GREGG (for himself, Mrs. Hutchison, Mr. Lott, Mr. Gramm,
Mr. Nickles, and Mr. Warner):
S. 248. A bill to delay the required implementation date for enhanced
vehicle inspection and maintenance programs under the Clean Air Act and
to require the Administrator of the Environmental Protection Agency to
reissue the regulations relating to the programs, and for other
purposes; to the Committee on Environment and Public Works.

the auto inspection reform act of 1995

Mr. GREGG. Mr. President, I introduce the Auto Inspection
Reform [AIR] Act of 1995. I am pleased that Senators Hutchison, Lott,
Gramm, Nickles, and Warner have joined as cosponsors. This legislation
will postpone the implementation of the enhanced vehicle inspection and
maintenance programs under the Clean Air Act until March 1, 1996. The
bill requires EPA to reissue the regulations relating to these
programs, and to reassess its initial position that effectively
mandated centralized tests.
Under the 1990 Clean Air Act, Congress imposed enhanced auto emission
inspection and maintenance requirements on States in nonattainment
areas and on States in the statutory-mandated Northeast ozone transport
region. Under the act, Congress provided a clear option to centralized
systems for States that proved that decentralized testing could be as
effective.
Despite the clear statutory language that indicates Congress wanted
decentralized testing to be a viable option, EPA has acted to
fundamentally undermine this congressional intent. Through two
decisions, EPA has effectively forced States to adopt centralized
systems. First, EPA determined that an extremely high cost test known
as the IM-240 was mandated under the act. Second, EPA determined that
the pollution reduction that States say can be achieved by a
decentralized system must be discounted by roughly 50 percent.
As a result, States have either yielded to EPA's mandate, or are
trying to get EPA to change its views. States that chose the first
course are facing a citizen rebellion and States choosing the second
are facing a brick wall. If a State does not meet the enhanced
emissions testing requirements to EPA's satisfaction, the Agency can
have the State's Federal highway funding cut off.
EPA has just recently indicated a willingness to reconsider and
negotiate increased flexibility with some of the affected States'
Governors and not implement fines for States moving forward in ``good
faith.'' This is a good first step. However, it has only been
implemented on a State-by-State basis and EPA has yet to issue any
codified guidance to define this apparent change in policy. States
remain at the mercy of EPA's discretion. I believe that any new policy
should be formalized to provide States certainty and predictability.
This bill will help ensure that the Clean Air Act will be complied with
by giving States the necessary flexibility to implement the most
suitable inspection program for their States. I urge my colleagues to
give this bill careful consideration.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 248

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 ``Auto Inspection Reform (AIR)
Act of 1995''.

SEC. 2. FINDINGS AND PURPOSE.

(a) Findings.--Congress finds that, in carrying out title I
of the Clean Air Act (42 U.S.C. 7401 et seq.), the
Administrator of the Environmental Protection Agency
(referred to in this Act as the ``Administrator'') has failed
to--
(1) adequately consider alternative programs to centralized
vehicle emission testing programs, as required by section
182(c)(3)(C)(vi) of the Clean Air Act (42 U.S.C.
7511a(c)(3)(C)(vi)); and
(2) provide adequate credit to States for the alternative
programs.
(b) Purpose.--The purpose of this Act is to require the
Administrator to--
(1) reassess the determinations of the Administrator with
respect to the equivalency of centralized and decentralized
programs under section 182(c)(3)(C)(vi) of the Clean Air Act
(42 U.S.C. 7511a(c)(3)(C)(vi)); and
(2) issue new regulations governing the programs that--
(A) result in minimum disruption to the ability of States
to comply with other requirements of the Act (42 U.S.C. 7401
et seq.); and
(B) provide States a reasonable opportunity to comply with
the new regulations and implement any decentralized testing
programs that the States demonstrate are equally effective as
centralized programs.

SEC. 3. IMPLEMENTATION OF ENHANCED VEHICLE INSPECTION
PROGRAMS.

(a) In General.--Notwithstanding any other provision of
law, a State shall not be required to implement an enhanced
vehicle inspection and maintenance program under section
182(c)(3) of the Clean Air Act (42 U.S.C. 7511a(c)(3)) prior
to March 1, 1996.
(b) Reassessment of Regulations.--
(1) In general.--The Administrator shall--
(A) immediately rescind the regulations issued on November
5, 1992 (57 Fed. Reg. 52950), relating to operation of the
program described in subsection (a) on a centralized basis;
and
(B) during the period beginning on the date of enactment of
this Act and ending on March 1, 1996--
(i) reassess the determinations made by the Administrator
with respect to operation of the program described in
subsection (a) on a centralized basis, taking into
consideration comments submitted by States; and
(ii) issue new regulations relating to operation of the
program described in subsection (a) on a centralized basis,
or, at the option of each State, on any decentralized basis
if the State demonstrates that such a decentralized program
is equally effective as a centralized program.
(2) Requirements.--The regulations issued under paragraph
(1)(B)(ii) shall--
(A) in accordance with the intent of section
182(c)(3)(C)(vi) of the Clean Air Act (42 U.S.C.
7511a(c)(3)(C)(vi))--
(i) make reasonably available to States the option of
operation of the program described [[Page S1234]] in
subsection (a) on any decentralized basis if the State
demonstrates that such a decentralized program is equally
effective as a centralized program; and
(ii) establish criteria that a State must meet in order to
demonstrate that a decentralized program of the State is
equally effective as a centralized program; and
(B)(i) provide each State a reasonable opportunity to
submit (at the option of the State) a new revision to a plan
under section 182(c)(3) of the Act (42 U.S.C. 7511a(c)(3))
based on the new regulations, which revision shall replace
any revision to a plan previously submitted by the State
under section 182(c)(3) of the Act; and
(ii) include a schedule that provides States a reasonable
opportunity to implement any new revisions to plans that the
States submit.
(3) Judicial review.--Notwithstanding section 706 of title
5, United States Code, or any other provision of law, if the
regulations issued pursuant to paragraph (1)(B)(ii) are
reviewed by a court, the court shall hold unlawful and set
aside the regulations if the regulations are found to be
unsupported by a preponderance of the evidence.
(c) Prohibition on Imposition of Sanctions.--Until such
time as the Administrator has carried out subsection (b)(1)--
(1) the Administrator may not issue a finding, disapproval,
or determination under section 179(a) of the Clean Air Act
(42 U.S.C. 7509(a)), or apply a sanction specified in section
179(b) of the Act, to a State with respect to a failure to
implement a program described in subsection (a), or any
portion of such a program; and
(2) the Administrator and the Administrator of the Federal
Highway Administration of the Department of Transportation
may not take any adverse action, against a State with respect
to a failure described in paragraph (1), under--
(A) section 176 of the Clean Air Act (42 U.S.C. 7506);
(B) chapter 53 of title 49, United States Code;
(C) subpart T of part 51, or subpart A of part 93, of title
40, Code of Federal Regulations (commonly known as the
``transportation conformity rule''); or
(D) part 6, 51, or 93 of title 40, Code of Federal
Regulations (commonly known as the ``general conformity
rule'').
(d) Full Credit for Decentralized Programs.--Until such
time as the Administrator has carried out subsection (b)(1),
for the purpose of the attainment demonstration and the
reasonable further progress demonstration required under
section 182(c)(2) of the Clean Air Act (42 U.S.C.
7511a(c)(2)), the Administrator shall--
(1) deem that the emission reductions calculated by States
for inspection and maintenance under their State
implementation plans would be achieved as if the planned
program had been implemented; or
(2) if appropriate, consider the operation of the program
described in subsection (a) on a decentralized basis as
equivalent to the operation of the program on a centralized
basis in any case in which a State demonstrates that a
determination of such an equivalency is reasonable.
______

By Mr. McCONNELL:
S. 250. A bill to amend chapter 41 of title 28, United States Code,
to provide for an analysis of certain bills and resolutions pending
before the Congress by the Director of the Administrative Office of the
United States Courts, and for other purposes; to the Committee on the
Judiciary.

the litigation impact statements act of 1995

Mr. McCONNELL. Mr. President, today, I am introducing a bill
that joins the effort to improve our legal system with the goal of
eliminating unfunded Federal mandates.
Too often, Mr. President, Congress passes a bill without regard as to
its impact on the court system. How many new cases will the law
generate? Will they be Federal court cases or State court cases? How
much will it cost government to enforce the new law through the legal
system? How much liability will government, as well as the private
sector, incur as a result of the new law?
These questions are rarely asked by Congress before a bill becomes
law. The bill I am introducing will change all of that. It requires the
Administrative Office of the U.S. Courts to provide a litigation impact
statement for all bills reported from committees--except private relief
bills and appropriation bills.
The A.O. is equipped to perform this task; in fact, the staff already
does provide a judicial impact statement for certain bills. They did it
for the Violence Against Women's Act, and they did for a bill I
introduced in the 102d Congress, the Pornography Victims' Compensation
Act.
In 1994, more than 281,000 new cases were filed in the Federal
courts, with an increase in the civil filings of 3 percent over last
year--Interestingly, the criminal filings have gone down.
In 4 of the last 5 years, filings in the Federal courts have
increased. This increase in court filings occurs at the State level,
where hundreds of thousands of cases are also filed. Too many of these
cases are a direct result of Federal legislation enacted without a
thought as to the effect on the courts. My bill will give Congress the
opportunity to consider, for every bill, what burdens it will create
for the courts, as well as the financial impact for potential liability
the new law will have on governmental and private entities. Cities and
towns are spending more and more of their budgets on liability
insurance, and part of the blame for that rests with Congress for the
new laws creating runaway liability.

Will a litigation impact statement slow Congress down? I certainly
hope so. It would be just fine with the American people, if Congress
imposed fewer burdens on them. After all, they delivered a loud message
last November. They said our government does not work properly; it's
too big, too expensive and inefficient. So, before Congress goes off
passing laws which will create more lawsuits, let's get Congress
educated about the impact any new laws will have on our court system.
Congress already gets an assessment of the budget impact for any new
legislation. Let's also have a litigation impact statement. It is a
very good beginning on the road to reforming the legal system.
And on reforming the legal system, I will have more to say in the
coming days. The time is right to undertake comprehensive reform of our
legal system. I know it will be a top priority of the Senate Judiciary
Committee, and I look forward to working with that committee on this
issue.
______

By Mr. McCAIN:
S. 251. A bill to make provisions of title IV of the Trade Act of
1974 applicable to Cambodia; to the Committee on Finance.

most-favored-nation status for cambodia legislation

Mr. McCAIN. Mr. President, last year, I introduced legislation
to clear up an anomaly in United States law that prohibits the
President from granting Cambodia most-favored-nation status [MFN].
Despite my efforts, Cambodia is without MFN and the President is still
without the statutory power to grant it. There were many more important
issues for Congress to address in 1994. But MFN is very important to
Cambodia. And it should be important to all of us interested in a
stable and prosperous Southeast Asia. Accordingly, today, I am
reintroducing legislation to grant MFN to Cambodia.
Areas of Indochina under Communist control, including significant
portions of Cambodia, were denied MFN under the Trade Agreements
Extension Act of 1951 and the 1974 Trade Act. Cambodia as a whole was
denied MFN in 1975 by Executive action and its new trading status was
confirmed by Congress in the 1988 Trade Act.
The 1974 Trade Act provided a process for restoring MFN to those
nations then denied it. However, only a portion of Cambodia was denied
MFN at the time the 1974 act was signed into law. There is no clear
legal authority for restoring MFN to the entire nation under the
processes established by the 1974 Trade Act. It cannot be restored by
reversing the action taken in 1975 through an Executive order because
Cambodia's non-MFN trading status was made law in the 1988 Trade Act.
In short, the President wants to grant MFN to Cambodia, but lacks the
authority to do so.
The legislation I am introducing would give the President the
authority to grant Cambodia MFN status by bringing the entire country
under the restoration procedure of the 1974 Trade Act. Under these
procedures, Cambodia will have to demonstrate compliance with the
requirements of the Jackson-Vanik amendment, reach a bilateral
agreement with the United States, and have its status approved by the
Congress. The President may also waive the requirements of Jackson-
Vanik, which has for political reasons come to mean a policy decision
far beyond the original concern for emigration, and immediately upon
this legislation becoming law, extend MFN to Cambodia. Cambodia would
be eligible to receive MFN by virtually the same process
[[Page S1235]] that all other non-MFN countries, except the Baltics,
have received it since the signing of the 1974 Trade Act.
I want to emphasize that if this bill becomes law, the President will
retain his prerogatives to respond to developments in Cambodia.
Despite some disturbing developments in Cambodia since I introduced
this legislation for the first time last May, I remain hopeful for the
future of Cambodia. Cambodia's democracy is a very fragile and
incomplete one, but it is a democracy. It needs careful attention to
fully develop and sustain the rights of the Cambodian people. Promoting
economic development through open markets would offer considerable
support for Cambodian democracy and demonstrate American concern for
its future. I encourage my colleagues to act on legislation to grant
MFN to Cambodia at the earliest possible opportunity.
______

By Mr. THOMPSON (for himself, Mr. Ashcroft, Mr. Abraham, Mr.
Bond, Mr. Brown, Mr. Burns, Mr. Coverdell, Mr. Craig, Mr.
Faircloth, Mr. Frist, Mrs. Hutchison, Mr. Inhofe, Mr. Mack, Mr.
Packwood, Mr. Smith, and Mr. Thomas):
S.J. Res. 21. A joint resolution proposing a constitutional amendment
to limit congressional terms; to the Committee on the Judiciary.

TERM LIMITS CONSTITUTIONAL AMENDMENT

Mr. THOMPSON. Mr. President, today, I, along with Senator Ashcroft,
will introduce a joint resolution to impose term limits on Members of
Congress. This legislation will limit Members of the Senate to two
terms and it will limit Members of the House to three terms. The time
has come to pass this legislation. It is needed and it has the
overwhelming support of the American people. In fact, never has there
been an idea so popular that has received so little attention by the
U.S. Congress. It is because term limits does not have to do with
spending other people's tax money or regulating other people's lives as
is the case with most legislation coming out of Congress. This
provision, term limits, hits much closer to home. It calls for
sacrifice or at least adjustment in the lives of ourselves. At least,
with regard to those in Congress who see the Congress as a permanent
career. It is time that the Congress put aside the personal interest
that individual Members might have and respond to the will of the
people, the good of the country, as well as the good of Congress as an
institution.
Because term limits is not about punishing Congress or denigrating
the institution of Congress, although it has come to the point where
many in our society would love to do so. On the contrary. Term limits
would strengthen and elevate Congress in the eyes of the American
people at a time when it is most needed. Today people feel alienated
from their Government and have concluded that Congress does not have
the will to deal with the tough challenges that face this country in
the future. And who can disagree with that notion. Yesterday we passed
out of the Judiciary Committee a balanced budget amendment to the
Constitution. I have concluded, as I think most others have, that
passage of a balanced budget amendment is absolutely necessary if we
are going to avoid bankrupting the next generation. The reason is that
Congress doesn't have the political will to do what we all know is
necessary. Therefore, we must resort to the straitjacket of a balanced
budget amendment. It is a reflection upon us and upon our current
system that such a straitjacket is needed. But constitutional
amendments with regard to specific matters cannot indefinitely save us
from ourselves. We must start developing the will that is necessary to
face tough issues. To me that means that we must have more people
coming into the system who view service in the U.S. Congress not as a
permanent career but as an interruption to a career. I believe that
term limits would more likely produce individuals who would take on the
tough challenges, since their careers would not be at stake every time
they did so. It would also draw them into the system and encourage more
citizens to run for office since they would not automatically face the
difficult uphill struggle of running against a well-entrenched, well-
financed incumbent.
There have been many Members who have served much longer than the
limitations of this legislation would allow. A case can be made for the
proposition that up until recently our current system has served us
pretty well. There is no need to argue that point. However, different
times and different circumstances require different measures. As the
Federal Government has grown there has been a proliferation of special
interest groups each with their demand on the Treasury and each holding
a carrot and a stick for every Member of Congress. The carrot is
political and financial support. And the stick is mobilizing of their
forces in order to try to end a Member's career. So every time a Member
takes a tough stand for the benefit of those yet unborn, who do not
have votes, his career is on the line. For a Member whose entire future
is based upon indefinite continued service, these forces are too often
overwhelming. So we now have a $5 trillion debt and a deficit that will
start to skyrocket again in 1998. Apparently, we have decided to let
our children and grandchildren make the tough choices. That's not being
responsible. Surely, we are better than that. We owe it to them to take
the measures necessary to give us the best chance of putting ourselves
in the position to deal with such problems. That is why we need term
limits and I urge my colleagues support.
Mr. ASHCROFT. Mr. President, 1994 was a watershed year in America.
Our people spoke with a clarity and intensity seldom heard in the halls
of politics. Their voices reverberated across the continent like the
revolutionary shot heard round the world at Lexington and Concord two
centuries ago.
The voters' voice was a clarion cry for revolution in Washington,
DC--a revolution that returns the right of self-governance to the
people.
We, the American people, are self governing. We are free people. We
have the right to govern ourselves. We have spilt American blood not
only across this continent, but around the globe, to preserve our right
to self-government.
Fifty years ago, to win the Battle of the Bulge, commanders compelled
the cooks, the clerks, and the corpsmen to join the front lines and to
defend our freedom of self-governance. For victory, all had to fight,
all were necessary, none were excluded. Well, we again must invite
everyone to join the battle and participate in victory for self-
governance.
Those of us who were in the trenches of politics this year heard the
battle cry for reentry by the public into the public policy arena. The
citizens of this Nation are determined to regain the right to
participate in their government. They want to reopen the door to self-
governance--a door that too often has been slammed in their face. We
must not slam it in their face again.
The people want the right to self-governance. They want the
opportunity to decide on term limits.
Some say that the States can decide on term limits, but the courts
have struck those statutes down almost uniformly. In one remaining
case, the Arkansas case, the Attorney General, the executive branch,
has slammed the door in the face of the people, saying they have no
right to make such a determination; States and the people have no right
to establish term limits, the executive branch says.
The judicial branch considering the case is likely to slam the door,
as well, saying the people have no right to chart the course of their
own future, to establish limits on the terms of those of us who have
the privilege of representing the people in making public policy
decisions here in Washington.
Congress, then, the last remaining branch of Government, holds the
key to opening the door of self-governance to the people.
Back in 1951, the Congress sent to the American people the
opportunity to enact term limits for the President. Congress could not
enact them, but it called upon the people to make a judgment to
participate in the process of public policy development.
Presidential term limits were not imposed by the Congress. The door
of decisionmaking was swung wide for the people of this great country
to decide whether or not they wanted term limits for the President.
Indeed, they did decide; they participated. It was good public policy.
They ratified the 22nd amendment. [[Page S1236]]
The question is not whether we will provide term limits to America.
The question is whether or not we will allow the American people the
privilege of participating in public policy determinations, whether we
will let the American people decide for themselves whether or not they
want term limits for Members of the U.S. Congress.
I have a hint about what the American people believe and how they
think. Twenty-two States have already overwhelmingly endorsed this
concept. And of the States given the opportunity to make such a
decision, the people voting in those States almost uniformly and
without exception have endorsed the understanding that people should
not go to Washington for an entire lifetime, but should go expecting to
return from public service.
The question then is, will we let the people decide or will we slam
the door of self-governance in the face of the American people again?
We must let the people decide.
It is time for us to acknowledge again the principle of self-
governance. Let the people decide.
It is time that we trust our people, the people of America, as our
forefathers did. Let the people decide.
Let us demolish the misleading myth that Congress exists to protect
people from themselves. We must instead respect the reality that there
is wisdom in the people. We must acknowledge the reality that self-
governance is not simply a politically expedient idea, it is, in fact,
governmentally beneficial.
The people are eager to participate in shaping the tomorrows in which
they live and in which all of us work. They are demanding the
opportunity to decide whether or not to limit the terms of Members of
this body and of the U.S. House of Representatives.
As servants of the people, we must pass a resolution on term limits
that recognizes that term limits cannot be in the exclusive province of
the House or Senate, but this is a decision to be reached by the
American people. This is an opportunity for self-governance.
They have spoken with clarity and intensity this year, saying they
want us to reopen the door of opportunity to decisionmaking and let
them decide. I submit that we must respond to their call; that we must
pass a resolution on term limits and thereby let the people decide to
enact or reject term limits as they would apply to the U.S. House of
Representatives and the U.S. Senate.
Mr. BOND. Mr. President, my colleague from Missouri comes to the
floor for his first floor statement on an issue that will not surprise
any of his fellow Missourians, and that is a message of change.
Change is what John Ashcroft talked about so clearly during his
campaign, and now he is doing exactly what he told the people of
Missouri he would do if they sent him here--to be a leader for change.
I take great pleasure in cosponsoring this legislation for term
limits, because I think this is a very important first step toward
doing actually what the people so clearly indicated they wanted done
last November 8. It is no surprise to me that John Ashcroft is leading
the way.
John is an old and very dear friend. I have come to know him as an
American patriot. He believes in this country and its people. He is
able to cut through the fog of confusion that so often surrounds public
policy issues. Missourians know him as a plain speaker in the finest
Missouri tradition. He knows what he believes and how to say it so
everyone knows just exactly what he believes. We once had a President
with the same reputation from Missouri. What John Ashcroft believes is
shaped by an upbringing that reflects the essence of middle-American
values, its traditions and beliefs.
John is one of three boys raised in Springfield, MO. His family was
modest of means, but rich in respect for their community, for each
other, and for their God.
Earlier this month, John's father, Dr. J. Robert Ashcroft a highly
respected educational and religious leader, passed away after returning
home to Missouri from witnessing John's swearing-in as a U.S. Senator
in this Chamber. Dr. Ashcroft's passing was a great loss to Missouri,
but his contribution, his memory, and his commitment will live on. We
have suffered the loss along with John and his family, but we know that
he knew his son would continue his efforts to serve, and to serve his
fellow man. We all give thanks for Dr. Ashcroft's life and the many
lives which he touched while he was with us.
John Ashcroft has served as Missouri's State auditor--he followed me
in that job--and then he served as attorney general, following John
Danforth. He followed me as Governor. He understands State government
and its relationship with the Federal Government. He also knows
something about cleaning up the problems that have been left behind.
At a time when Congress will reexamine the relationship and hopefully
return much of the decisionmaking back to the States, Americans will
have no better leader than John Ashcroft.
So we hear today from a plain-spoken Missourian what will undoubtedly
be the first of many clearly reasoned, morally grounded floor speeches
from our good friend, John Ashcroft.
I would say that our fellow Senators will understand very well his
contributions. We value John Ashcroft's friendship. We welcome him and
his wife, Janet, to Washington. I am confident that all my colleagues
will come to know and respect him as I have. It will be a great and
very meaningful friendship for all Members.
______

By Mr. GRAMS (for himself, Mr. Lott, Mr. Inhofe, Mr. Thomas, Mr.
Grams, and Mr. Mack): Senate Joint Resolution 22. A joint
resolution proposing an amendment to the Constitution of the
United States to require a balanced budget; to the Committee on
the Judiciary.

THE TAXPAYER PROTECTION BALANCED BUDGET AMENDMENT

Mr. GRAMS. Mr. President, I am today introducing legislation
calling for a balanced budget amendment to the Constitution. I am
pleased to be joined by the distingshed majority whip, Senator Lott,
and my colleagues, Senate Inhofe, and Thomas.
This legislation is what the American people are calling for. It
balances the budget, but ensures that it is not balanced on the backs
of the American taxpayers.
There is no question that Congress must pass a balanced budget
amendment and send it to the States for ratification. For years,
Washington has been racking up deficits. In the process, we've racked
up $4\1/2\ trillion national debt. And sadly, we've got very little to
show for it.
Without the balanced budget amendment, Congress will continue it
deficit-digging, debt-building ways. That's bad news for the taxpayers
and worse news for our children.
If you look at every so-called deficit reduction package Congress has
passed in the last decade, you'll find that each one follows a
consistent formula. Raise taxes now. Cut spending later.
Tragically, however, once Congress raised in taxes, it always forgot
about the spending cuts. So, year after year, taxes would go up,
spending would go up, and the deficit would go up, too. It's time to
put an end to this madness.
That's why I am today introducing a taxpayer protection balanced
budget amendment in the Senate. My amendment would require a three-
fifths super majority vote in both houses of Congress to raise taxes.
A supermajority requirement is the best way to show the American
taxpayers that Congress is serious about balancing the budget through
spending cuts, and not through higher taxes.
That's what I promised the taxpayers of Minnesota during my campaign
for the U.S. Senate. That's what they elected me to do. That's what my
bill delivers.
Is there enough support in Congress to pass it? If we listen to the
folks back home there sure ought to be.
A poll released today by the American Conservative Union that shows
that the American people overwhelmingly support the supermajority
requirement.
In fact, two thirds of those who already support a balanced budget
amendment say that without a supermajority provision, the bill would be
a sham.
The people have spoken. A balanced budget must be achieved through
cuts in Government spending. Americans are willing to do that, but they
aren't willing to be patsies for a big-spending
[[Page S1237]] government that just hasn't learned when to say ``no.''
The supermajority requirement is simply good government, and
Americans support it just as they support the $500 per-child tax
credit. They're tired of watching their paychecks grow smaller while
Washington grows bigger.
They voted for change last November, and it's our job to see that
they get it.
That's what's best for the taxpayers, that's what's best for our
children, that's what's best for Minnesota, that's what's best for
America.

____________________