[Congressional Record Volume 141, Number 39 (Thursday, March 2, 1995)]
[Senate]
[Pages S3390-S3426]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. HOLLINGS (for himself and Mr. Thurmond):
  S. 482. A bill to authorize the Secretary of Transportation to issue 
a certificate of documentation and coastwise trade endorsement for the 
vessel Emerald Ayes; to the Committee on Commerce, Science, and 
Transportation.


       ``emerald ayes'' certificate of documentation legislation

  Mr. HOLLINGS. Mr. President, I am introducing a bill today to direct 
that the vessel Emerald Ayes, official number 986099, be accorded 
coastwise trading privileges and be issued a certificate of 
documentation under section 12103 of title 46, United States Code.
  The Emerald Ayes was constructed in Canada in 1992, and is a sailing 
catamaran for use as a recreational vessel. It is 36.4 feet in length, 
18.2 feet in breadth, has a depth of 9.4 feet, and is self-propelled.
  The vessel was purchased by Dr. Stephen D. Michel of Mount Pleasant, 
SC, who purchased it with the intention of chartering the vessel for 
short sailing tours. However, because the vessel was built in Canada, 
it did not meet the requirements for coastwise license endorsement in 
the United States. Such documentation is mandatory to enable the owner 
to use the vessel for its intended purpose. He first sought to purchase 
a U.S.-built vessel, but this type of sailboat is not built by any U.S. 
shipbuilders. He has invested a considerable amount of money in this 
vessel, and without a Jones Act waiver for the boat, he will be forced 
to sell it.
  The owner of the Emerald Ayes is seeking a waiver of the existing law 
because he wishes to use the vessel for charters. His desired 
intentions for the vessel's use will not adversely affect the coastwise 
trade in U.S. waters. If he is granted this waiver, it is his intention 
to comply fully with U.S. documentation and safety requirements. The 
purpose of the legislation I am introducing is to allow the Emerald 
Ayes to engage in the coastwise trade and the fisheries of the United 
States.
                                 ______

      By Mr. HATCH (for himself, Mrs. Feinstein, and Mr. Thompson):
  S. 483. A bill to amend the provisions of title 17, United States 
Code, with respect to the duration of copyright, and for other 
purposes; to the Committee on the Judiciary.


                the copyright term extension act of 1995

  Mr. HATCH. Mr. President, Congress has in recent years passed many 
significant copyright measures, but it is a rare occasion when we 
address the fundamental aspects of copyright protection, such as the 
nature of the works protected, the scope of rights recognized, or the 
duration of copyright.
  Still, from time to time, it becomes clear that fundamental change is 
needed. I believe we are now at such a point with respect to the 
question of whether the current term of copyright adequately protects 
the interests of authors and the related question of whether the term 
of protection continues to provide a sufficient incentive for the 
creation of new works of authorship.
  The current term of copyright is, in my view, inadequate to perform 
its historic functions of spurring creativity and protecting authors. 
Thus, I am filing today the Copyright Term Extension Act of 1995, which 
has the general purpose of increasing existing copyright terms by the 
addition of a further 20 years of protection. I am pleased to be joined 
in this effort by my colleagues on the Senate Judiciary Committee, 
Senator Feinstein of California and Senator Thompson of Tennessee.
  Mr. President, Congress has protected copyrights since the very first 
Congress, and the entire history of our copyright laws has been a 
history of everincreasing protection, both with respect to the nature 
of works protected, as well as with respect to the duration of 
protection. Still, in over 200 years, the copyright term has only been 
extended on three prior occasions.
  In 1790, the first Congress set the maximum term of copyright 
protection at 28 years--a 14-year initial period that could be renewed 
for an additional 14 years. In 1831, we extended that period by 14 
years--a 28-year initial period that could be renewed for an additional 
14 years. In 1909, the major copyright reform act of that era extended 
the maximum term of copyright to 56 years--a 28-year initial term that 
could be renewed for an additional 28 years.
  Most recently, the Copyright Act of 1976 fundamentally altered the 
way in which we measure copyright by protecting works throughout the 
life of their creator plus an additional 50 years. In so doing, we 
adopted the prevailing international standard of protection--a standard 
that was first recommended by the members of the Berne Convention for 
the Protection of Literary and Artistic Works in the Act of Berlin of 
November 13, 1908, and that was made mandatory for members of the Berne 
Union by the Act of Brussels of June 26, 1948.
  For existing works, the Copyright Act of 1976 created a maximum term 
of 75 years of protection--a 34-percent increase in term of protection 
over the preceding maximum of 56 years. The 20-year increase in 
protection that the Copyright Extension Act of 1995 provides for 
existing works is a far more modest extension of copyright than that 
which we adopted in 1976, or, in fact, that which was implemented by 
the two previous congressional extensions of copyright term.
  [[Page S3391]] Every work created after the effective date of the 
Copyright Term Extension Act will be prospectively protected for the 
remainder of the author's life and for 70 years thereafter. Works in 
existence on that date will receive the identical protection, if their 
author is still living. As for the works of authors already decreased, 
my bill provides an additional 20 years of protection; provided, that 
the works have not, on the effective date of the bill, already gone 
into the public domain.
  Those works whose term of protection under the current Copyright Act 
is not tied to the life of an author but is a fixed term of years, such 
as works made for hire, will also receive an additional 20 years of 
protection. Where they are protected for 75 years under present law, 
they will be protected for 95 years under the provisions of the 
Copyright Term Extension Act.
  By providing this across-the-board extension of copyright for an 
additional 20 years, I believe that authors will reap the full benefits 
to which they are entitled from the exploitation of their creative 
works. In addition, there are significant trade benefits to be obtained 
by extending copyright in the United States to bring our law into 
conformity with the longer copyright term enjoyed by authors in other 
nations.
  As I noted above, our current basic copyright term of life plus 50 
years is prevailing international standard, one now also applicable to 
the members of the World Trade Organization through the implementation 
of the Agreement on the Trade Related Aspects of Intellectual Property 
Protection [TRIPS]. Despite the nearly universal adoption of the life-
plus-50-year term of copyright, many have observed that the term 
itself, particularly the decision to give significance to 50 years, has 
achieved dominance perhaps more through imitation and acceptance than 
through an analytical belief that the life-plus-50-year term represents 
the ideal period of protection needed to appropriately reward and 
inspire creative activity. See, that is, Ricketson, ``The Berne 
Convention for the protection of literary and artistic works: 1886-
1986'' p. 321.

       While the [Berne Convention's] prescriptions as to duration 
     are quite precise, there has never been any real effort made 
     to justify why, or to explain how, these terms have come to 
     be adopted * * *

  Even though the United States adopted the life-plus-50-year term of 
copyright only 19 years ago, and even though that term of protection 
has a nearly century-old history in the international arena, I do not 
believe that it should be accepted uncritically as an ideal or even 
sufficient measurement of the most appropriate duration for copyright 
term. Instead, we should be aware of the many nations that have 
historically provided longer terms of copyright as well as the recent 
developments to extend copyright in Europe. Also, we need to examine 
the real-life experience of creators, their reasonable expectations for 
exploiting their works, and the concerns and views of the descendants, 
heirs, and others whom the postmortem protection of copyright was 
designed to benefit.
  Among the European nations, Germany and Spain have for some time 
recognized respectively terms of life plus 70 pears and life plus 80 
years, and Portugal has for much of this century provided a perpetual 
term of protection. In addition, it is common for bilateral agreements 
relating to copyright protection among particular nations to provide 
for terms of protection in excess of the life-plus-50-year standard.
  As far as a general reconsideration of the life-plus-50-year term, it 
should be noted that as long ago as 1961 the permanent committee of the 
Berne Union began the process of reexamining the sufficiency of that 
term of protection. At the Stockholm Conference of 1967, a proposal to 
increase the copyright term to life plus 80 years was debated though 
not adopted. It is, however, easy to speculate that the failure to 
increase copyright term at that time may have been disproportionately 
influenced by the contemporaneous efforts in the United States to adopt 
a copyright act compatible with the existing minimum requirements of 
the Berne Convention. An extension of the minimum term at that time 
would, however meritorious, surely have made more difficult the 
eventual adoption of the Copyright Act of 1976 in the United States.
  In the intervening years, the inadequacy of the life-plus-50-year 
term has become more apparent, and nations have acted to increase the 
duration of copyright. Most significantly, the nations of the European 
Union, pursuant to an October 1993, directive of the Council of the 
European Communities, are committed to reaching a life-plus-70-minimum 
term of protection by July of this year. It is thus fair to say that 
for a significant portion of the developed world--for the nations, 
moreover, that have traditionally been in the forefront of protecting 
authors' rights--the term of life-plus-70 has gained a broad 
acceptance.
  I am pleased to be the author of the bill that I hope will bring 
American copyright law into accord with this developing international 
understanding as to the appropriate duration of copyright.
  The benefits of extending copyright by 20 years will be felt in many 
areas. The vast majority of our European and other trading partners 
have obligated themselves to extend to our
 authors the full protection of their copyright laws--at least to the 
extent that America recognizes complementary rights. Of course, I 
should add that with respect to the minimum requirements for copyright 
protection, national treatment for U.S. authors is mandated by the 
Berne Convention as well as by the TRIPS agreement. But copyright 
protections in excess of the Berne minima will not be freely granted to 
U.S. authors on the basis of national treatment. Instead, the option 
allowed by the Berne Convention's ``role of the shorter term'' will no 
doubt be often employed by foreign states with the result that American 
works will be protected in those nations only to the extent that the 
works of their authors are protected in America--article 7(1) of the EC 
directive explicitly mandates rule of the shorter term treatment for 
the works of foreign authors.

  After the European law goes into effect, American authors will be 
theoretically protected for an additional 20 years, but will in reality 
be unprotected for that entire period of time--unless American law is 
strengthened in the manner proposed by the bill I am filing today.
  America exports more copyrighted intellectual property than any 
country in the world, a huge percentage of it to the nations of the 
European Union. Intellectual property is, in fact, our second largest 
export; it is an area in which we possess a large trade surplus. At a 
time when we face trade deficits in many other areas, we cannot afford 
to abandon 20 years' worth of valuable overseas protection now 
available to our creators and copyright owners. We must adopt a life-
plus-70-year term of copyright if we wish to improve our international 
balance. It just makes plain common sense to ensure fair compensation 
for the American creators whose efforts fuel this important 
intellectual property sector of our economy by extending our copyright 
term to allow American copyright owners to benefit from foreign uses. 
By so doing, we guarantee that our trading partners do not get a free 
ride for their use of our intellectual property.
  While we may be accustomed to a substantial American balance-of-trade 
surplus with respect to trade in works of intellectual property, we 
cannot afford to take this condition for granted. In a world economy 
where copyrighted works flow through a fiber optic global information 
infrastructure, American competitiveness demands that we adapt our 
laws--and adapt them quickly--to provide the maximum advantage for our 
creators.
  Anonymous and pseudonymous works: I noted about that the copyright 
term extension provided by the bill I file today is not mandated by our 
treaty obligations. But it may be well to note parenthetically that at 
least in one respect the 20-year term extension does advance our 
ongoing efforts to fulfill our obligations under the Berne Convention. 
I am speaking of the term of protection applicable to anonymous and 
pseudonymous works. Article 7(3) of the Berne Convention mandates that 
such works be protected for at least 50 years after they are first made 
lawfully available to the public. Our current law protects those works 
for 75 years, yet Sec. 302(c) of the Copyright Act also establishes a 
maximum term of protection-- 
[[Page S3392]] 100 years from the date of their creation--beyond which 
no anonymous or pseudonymous work will be protected, regardless of the 
date on which it may ultimately be made available to the public. My 
bill increases each of these terms by 20 years.
  Since the Stockholm Act of July 14, 1967, the Berne Convention has 
recognized the need for an outer limit on the protection of anonymous 
and pseudonymous works by providing that, ``The countries of the Union 
shall not be required to protect anonymous or pseudonymous works in 
respect of which it is reasonable to presume that their author has been 
dead for fifty years.'' Art. 7(3). It has been argued that the American 
provision setting an outer limit of 100 years of protection for 
anonymous and pseudonymous works is in violation of the Berne 
Convention, see Nimmer, ``Copyright'' Sec. 9.01[D], at least with 
respect to works whose country of origin is not the United States. By 
increasing the maximum protection from its current 100 years to a 
period of 120 years, the Copyright Term Extension Act will at least 
serve to reduce greatly the number of potential situations in which our 
law may operate in violation of the Berne Convention. This for the 
reason that it is far more reasonable to presume that an author who 
created a work 120 years ago may have been deceased for 50 years, than 
it is to presume that the author of a work created only 100 years ago 
may have been deceased for at least 50 years.
  Mr. President, that is the theoretical, one might say 
jurisprudential, background of the copyright issue before us today. But 
it may be well to consider this legal question in its practical aspect 
as well. What works are we talking about? Who is affected by this 
legislation?
  Mr. President, this legislation matters and it matters to some of the 
most distinguished members of America's cultural and artistic 
community. If we examine the significance of this legislation just in 
the area of popular music alone, I believe we will see its importance.
  Consider the following songs that fell into the public domain just 2 
months ago at the end of 1994--works still widely performed in theaters 
and through media around the world:
  ``Swanee'' by George Gershwin and Irving Caesar; ``A Pretty Girl Is 
Like a Melody'' by Irving Berlin; ``Alice Blue Gown'' by Joseph 
McCarthy and Harry Tierney.
  In the preceding 2 years, the following standards also lost
   copyright protection, despite their continued popularity: ``After 
You've Gone'' by Henry Creamer and turner Layton; ``Till the Clouds 
Roll By'' by Jerome Kern and P.G. Wodehouse; ``Over There'' by George 
M. Cohan; ``Till We Meet Again'' by Richard Whiting and Raymond Egan.

  If the Copyright Term Extension Act of 1995 is not adopted this year 
in this session of Congress, the following songs will no longer be 
protected by copyright: ``Look for the Silver Lining'' by Jerome Kern 
and bud DeSylva; ``Avalon'' by Al Jolson, Bud DeSylva, and Vincent 
Rose.
  Within the next few years, if Congress does not act to adopt 
legislation such as that which I introduce today, the following musical 
works will also fall into the public domain: ``Rahpsody in Blue'' by 
George Gershwin; ``My Buddy'' by Walter Donaldson and Gus Kahn; 
``What'll I Do'' by Irving Berlin; ``Georgia'' by Walter Donaldson and 
Howard Johnson; ``It Had To Be You'' by Isham Jones and Gus Kahn; 
``Showboat'' by Jerome Kern and Oscar Hammerstein II.
  All of these songwriters and composers are household names still, 
after 75 years. Indeed ``Showboat'' is back on Broadway, eight 
performances a week, nearly 70 years after its premiere.
  But I would like to draw particular attention to the career of Walter 
Donaldson. He composed the songs cited above when he was in his 
twenties, and he died in 1947 when he was in his midfifties. He 
composed innumerable standards and will forever be linked to the 
extraordinary success of the 1927 film ``The Jazz Singer'' in which his 
songs were sung by Al Jolsen. The historical significance of that 
motion picture, the first sound film to be commercially released, can 
hardly be overstated.
  If the present copyright law had been in effect in the 1920's, all of 
Walter Donaldson's compositions would fall into the public domain 
within the next 2 years. Yet these historical facts should not mislead 
us into thinking that the copyright status of his works is an academic 
issue. For it was Ellen Donaldson, the composer's daughter, who first 
alerted me to the importance of this issue only 2 years ago. I do not 
think she will mind my pointing out that she is now only in her early 
fifties. She remains extremely active in publishing and exploiting her 
father's music and in protecting his copyrights. Like the children of 
composers such as Richard Rogers, Irving Berlin, Richard Whiting, Hoagy 
Carmichael, and many, many others, her legitimate interest in her 
father's copyrights can be expected to continue for decades, certainly 
for another 20 years.
  Mr. President, from interviews I have had with writers, authors, and 
artists of all kinds, and from the hearings we have held on issues of 
concern to authors in the Judiciary Committee over the past 18 years, I 
have come to the conclusion that the vast majority of authors expect 
their copyrights to be a potentially valuable resource to be passed on 
to their children and through them into the succeeding generation. I 
believe that they are reasonable in this expectation and that such a 
general expectation is what the Framers of the Constitution had in mind 
when they constrained the power of Congress to grant patents and 
copyrights only with the very broad and flexible requirement that such 
rights be granted ``for limited times.'' Article I, section 8. When, 
however, we so often see copyrights expiring before even the first 
generation of an author's heirs have fully benefited from them, then I 
believe that is accurate to say that our term of copyright is too short 
and for a too limited time.
  One could also cite demographic factors that point to the need for a 
longer term if copyright is truly to reflect the natural desire of 
authors to provide for their heirs. Principal among these would be the 
increasing lifespan of the average American, as well as the increasing 
fact of children being born far later, in a marriage than in past 
decades. Whatever the reason, the inescapable conclusion must be drawn 
that copyrights in valuable works are too often expiring before they 
have served their purpose of allowing an author to pass their benefits 
on to his or her heirs. I urge my colleagues to pass the Copyright Term 
Extension Act of 1995 to remedy this situation.
  Mr. President, we in Congress are currently dealing with a number of 
fundamental issues that bring into question how we have done things in 
the Federal government over many years. These debates raise the 
question of the proper role of the Federal Government in sponsoring, 
stimulating, and, where appropriate, funding artistic activity across a 
wide range of fields. We are asking virtually every Federal program now 
in existence to justify its function. And, as a result, we hear much 
about the programs that do not work.
  We hear all too little about the good that Government can do when it 
functions in a limited and effective way. I would submit that the 
copyright system--in the way that it rewards private initiative through 
governmental protection, all without the need for a regulatory 
bureaucracy--is a model for the best that government can do to improve 
the life of its citizens.
  And when one considers that all works of creativity fixed by any 
method now known or later developed are invested from the moment of 
their creation with substantial rights that can be protected in any 
Federal court, then I think it becomes clear that the copyright system 
is something we should encourage and, where appropriate, extend.
  Because the bill I introduce today does extend the benefits of 
copyright in an appropriate and obviously needed way, I am proud to be 
its sponsor. I urge my colleagues to give it their most serious 
consideration.
  Mr. President, I ask unanimous consent that the text of this 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

[[Page S3393]]

                                 S. 483

       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 ``Copyright Term Extension Act 
     of 1995''.

     SEC. 2. DURATION OF COPYRIGHT PROVISIONS.

       (a) Preemption With Respect to Other Laws.--Section 301(c) 
     of title 17, United States Code, is amended by striking out 
     ``February 15, 2047'' in each place it appears and inserting 
     ``February 15, 2067'' in each such place.
       (b) Duration of Copyright: Works Created on or After 
     January 1, 1978.--Section 302 of title 17, United States 
     Code, is amended--
       (1) in subsection (a) by striking out ``fifty'' and 
     inserting in lieu thereof ``seventy'';
       (2) in subsection (b) by striking out ``fifty'' and 
     inserting in lieu thereof ``seventy'';
       (3) in subsection (c) in the first sentence--
       (A) by striking out ``seventy-five'' and inserting in lieu 
     thereof ``ninety-five''; and
       (B) by striking out ``one hundred'' and inserting in lieu 
     thereof ``one hundred and twenty''; and
       (4) in subsection (e) in the first sentence--
       (A) by striking out ``seventy-five'' and inserting in lieu 
     thereof ``ninety-five'';
       (B) by striking out ``one hundred'' and inserting in lieu 
     thereof ``one hundred and twenty''; and
       (C) by striking out ``fifty'' in each place it appears and 
     inserting ``seventy'' in each such place.
       (c) Duration of Copyright: Works Created but not Published 
     or Copyrighted Before January 1, 1978.--Section 303 of title 
     17, United States Code, is amended in the second sentence--
       (1) by striking out ``December 31, 2002'' in each place it 
     appears and inserting ``December 31, 2012'' in each such 
     place; and
       (2) by striking out ``December 31, 2027'' and inserting in 
     lieu thereof ``December 31, 2047''.
       (d) Duration of Copyright: Subsisting Copyrights.--
       (1) Section 304 of title 17, United States Code, is 
     amended--
       (A) in subsection (a)--
       (i) in paragraph (1)--
       (I) in subparagraph (B) by striking out ``47'' and 
     inserting in lieu thereof ``67''; and
       (II) in subparagraph (C) by striking out ``47'' and 
     inserting in lieu thereof ``67'';
       (ii) in paragraph (2)--
       (I) in subparagraph (A) by striking out ``47'' and 
     inserting in lieu thereof ``67''; and
       (II) in subparagraph (B) by striking out ``47 and inserting 
     in lieu thereof ``67''; and
       (iii) in paragraph (3)--
       (I) in subparagraph (A)(i) by striking out ``47'' and 
     inserting in lieu thereof ``67''; and
       (II) in subparagraph (B) by striking out ``47'' and 
     inserting in lieu thereof ``67''; and
       (B) in subsection (b) by striking out ``seventy-five'' and 
     inserting in lieu thereof ``ninety-five''.
       (2) Section 102 of the Copyright Renewal Act of 1992 
     (Public Law 102-307; 106 Stat. 266; 17 U.S.C. 304 note) is 
     amended--
       (A) in subsection (c)--
       (i) by striking out ``47'' and inserting in lieu thereof 
     ``67'';
       (ii) by striking out ``(as amended by subsection (a) of 
     this section)''; and
       (iii) by striking out ``effective date of this section'' 
     each place it appears and inserting in each such place 
     ``effective date of the Copyright Term Extension Act of 
     1995''; and
       (B) in subsection (g)(2) in the second sentence by 
     inserting before the period the following: ``, except each 
     reference to forty-seven years in such provisions shall be 
     deemed to be sixty-seven years''.

     SEC. 3. EFFECTIVE DATE.

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

  Mrs. FEINSTEIN. Mr. President, as always when it comes to matters of 
copyright law, the distinguished chairman of the Judiciary Committee 
has spoken well and to the point as to why extending the basic term of 
copyright protection by 20 years is both the right and the economically 
desirable thing to do, and to do without delay. As the bill's coauthor, 
I'd like to add just a few thoughts about our proposal to extend the 
length of copyright protection for only the fourth time since the 
Founding Fathers established such rights more than 200 years ago.
  First principles come first. The fundamental animating principle of 
copyright protection was--and remains--assuring that the Nation's most 
creative individuals have and retain a sufficient economic incentive to 
continue to craft, work by copyrightable work, the incomparable mosaic 
of our Nation's cultural life. For many years now, such incentive has 
been considered to be the right to profit from licensing one's work 
during one's lifetime and to take pride and comfort in knowing that 
one's children--and perhaps their children--might also benefit from 
one's posthumous popularity. Indeed, it was to preserve that incentive 
that Congress adopted the current life plus 50 years term that is now 
the law.
  Human longevity, however, is increasingly undermining this 
fundamental precept of copyright law, Mr. President, and with it the 
economic incentive deemed essential by the authors of the Constitution. 
We all had the great good fortune, for example, to have the 
incomparable Irving Berlin among us until 1989, when he died at the age 
of 101. By that time, however, Mr. Berlin had outlived the period in 
which he was entitled to royalties from the immortal ``Alexander's 
Ragtime Band.'' Although not every American copyright owner will reach 
the century mark, Mr. President, it's clear that we as a Nation are 
living longer and more active lives.
  Copyright law has in the past--and should now again--reflect that 
central fact of life. Accordingly, the Copyright Term Extension Act of 
1995 uniformly extends the life of copyright protection in this country 
by 20 years, a modest extension relative to past adjustments, as 
Chairman Hatch points out. Writers, artists, filmmakers, composers, 
photographers, sculptors, and cartographers alike--and their children, 
all will benefit from this overdue adjustment. Perhaps more 
importantly, as the ultimate beneficiaries of the creativity that 
copyright protection is intended to assure, so will we all.
  Second, Mr. President, as important as America's cultural enrichment 
is, the United States also stands to benefit dramatically on the world 
economic stage from extension of the current copyright term. As the 
tense and protracted negotiations with China just concluded 
underscored, intellectual property--the collective copyrightable output 
of America's creators of movies, music, art and other works--is an 
enormous asset to the Nation's balance of trade.
  Indeed, in a recent Billboard magazine commentary, Prof. Arthur 
Miller of the Harvard Law School noted that, ``In 1990, America's 
`copyright industries' recorded $34 billion in foreign sales * * *.'' 
It's no wonder, Mr. President, that the Chinese preferred to 
appropriate American film and music for resale--two great exports from 
my State of California--rather than license American works.
  By extending to life plus 70 years the basic copyright protection 
afforded in the United States for new works, Congress will assure 
comparable protection for American authors in the countries of the 
European Union, which will formally adopt the life-plus-70 standard 
this summer. If we do not act, Mr. President, those nations quite 
simply will not be required to provide American authors, artists and 
other copyright holders with more than the protection we afford their 
intellectual property holders here at home. Simply put, Mr. President, 
conforming our intellectual property laws with those of our trading 
partners in the service of American competitiveness is critical.
  As Professor Miller aptly put it: ``Unless Congress matches the 
copyright extension adopted by the European Union, we will lost 20 
years of valuable protection against rip-off artists around the 
world.'' I'm certain that the tired, but successful team from the 
United States Trade Representative's office just returned from China 
will testify if asked, Mr. President, that the stronger our copyright 
laws here at home, the better the deal they can negotiate for American 
copyright holders abroad. Since America is--and is likely to remain--
the world's principal exporter of popular culture, extension of the 
basic copyright term makes international dollars and sense.
  Third, and finally, Mr. President, I want to note for the record the 
extraordinary support for this legislation within the intellectual 
property community. Not only do movie and music companies strongly back 
this bill as written, as one would expect, but book and music 
publishers, performing rights societies representing America's premier 
songwriters and composers, and major software producing firms all 
concur that Congress can and must pass this important legislation.
  I want to thank Chairman Hatch and his staff once again, Mr. 
President, for another--to my mind--successful collaboration to protect 
and encourage the production of American intellectual property. Just as 
was the case with the digital performance rights legislation which we 
first introduced in the last Congress and jointly offered again 
recently, it is equity and economics which make the Copyright 
[[Page S3394]] Term Extension Act of 1995 an important and worthwhile 
bill.
  I commend it to my colleagues, and look forward to working with them 
and the copyright community at large to put it--as well as digital 
performance rights legislation--before the President by the end of this 
session of Congress.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

              [From Billboard magazine, January 14, 1995]

              Extending Copyrights Preserves U.S. Culture

                         (By Arthur R. Miller)

       Beginning this summer, all member nations of the European 
     Union will extend the length of copyright protection to the 
     life of the author plus 70 years. Should we in America 
     provide the same protection for our own writers, musicians, 
     artists, computer programmers, and other creators of 
     copyrighted items?
       Some feel that we should not tamper with existing U.S. law, 
     which provides copyright protection for life plus 50 years. 
     But this status-quoism ignores some fundamental changes that 
     have occurred in the 20th century.
       One of the major reasons Congress originally adopted life-
     plus-50-years was to offer protection not only to the creator 
     of the copyrighted works, but to his or her children and 
     grandchildren--that is, to three generations in all. With 
     people living longer today, an extension of the copyright 
     term by 20 years would roughly correspond to the increase in 
     longevity that has occurred during the 20th century.
       In addition, Congress has already recognized the wisdom of 
     extending copyright protection to match the terms guaranteed 
     by other nations. That is exactly what Congress did in 1976 
     when it extended the copyright term to life-plus-50-years, in 
     order to bring American law into line with the term then 
     commonly recognized by other nations.
       But beyond this, the main arguments for term extension are 
     equity and economics.
       If Congress does not extend to Americans the same copyright 
     protection afforded Europeans, American creators will have 20 
     years less protection than their European counterparts--20 
     years during which Europeans will not be paying Americans for 
     our copyrighted products. This situation would not only be 
     unfair to creators of copyrighted works, but would be harmful 
     economically to the country as a whole.
       The export of intellectual property is growing at a 
     tremendous rate because America dominates popular culture the 
     world over. In 1990, America's ``copyright industries'' 
     recorded $34 billion in foreign sales of records, CDs, 
     computer software, motion pictures, music, books, scientific 
     journals, periodicals, photographs, designs, and pictorial 
     and sculptural works. Because the world is so eager for the 
     products of America's copyright industries, they are one of 
     the few bright spots in our balance-of-trade picture.
       The question of copyright extension should be viewed in the 
     larger context of bilateral and multilateral trade talks--
     including the Trade Related Intellectual Property Rights 
     (TRIPS) negotiations under GATT. U.S. trade representatives 
     have found that shortcomings in our own copyright law are 
     used against us when we call for stronger protection for 
     American works overseas. One can just hear the Europeans 
     objecting in future negotiations: ``How can you ask for 
     better protection in Europe when you do not even grant the 
     same term of protection we do?''
       The need for strong copyright protection becomes more 
     important every year as a weapon with which to fight the 
     piracy of intellectual property. Overseas piracy of American 
     copyrighted material has grown dramatically in recent years 
     due to the
      availability of equipment that can make cheap copies of 
     movies, videotapes, sound recordings, and computer 
     programs. As more and more digital technology arrives on 
     the scene, the problem will only become worse.
       Indeed, China alone produced an estimated $2 billion worth 
     of counterfeit recordings and computer discs last year. 
     According to the International Federation of the Phonographic 
     Industry, China now has as many as 26 factories capable of 
     producing 62 million compact discs. China's domestic market 
     accounts for only about 3 million discs, so the dimension of 
     the loss to copyright owners is obvious. Unless Congress 
     matches the copyright extension adopted by the European 
     Union, we will lose 20 years of valuable protection against 
     rip-off artists around the world.
       It would not take long to see what harm can come from not 
     changing our laws to match those of Europeans. America may be 
     a young nation, but we have the world's oldest popular 
     culture. Many wonderful motion pictures and songs--including 
     Irving Berlin's ``Alexander's Rag Time Band''--already have 
     lost their copyright protection. Dozens, if not hundreds, of 
     other valuable songs and motion pictures--the legacy of 
     American culture--also will lose their protection in the next 
     few years. For example, if Congress does not act soon, such 
     classics as ``After You've Gone,'' ``I'm Always Chasing 
     Rainbows,'' ``A Pretty Girl Is Like A Melody,'' ``Swanee,'' 
     and ``The World Is Waiting For The Sunrise'' will fall into 
     the public domain, and that is only the beginning.
       Commentary writer Professor Lewis Kurlantzick (Billboard, 
     Oct. 29, 1994) asserted that when copyrighted works lose 
     their protection, they become more widely available. At first 
     blush, this appears logical. But, paradoxically, works of art 
     become less available to the public when they enter the 
     public domain--at least in a form that does credit to the 
     original. This is because few businesses will invest the 
     money necessary to reproduce and distribute products that 
     have lost their copyright protection and can therefore be 
     reproduced by anyone. The only products that do tend to be 
     made available after a copyright expires are ``down and 
     dirty'' reproductions of such poor quality that they degrade 
     the original copyrighted work. And there is very little 
     evidence that the consumer really benefits economically from 
     works falling into the public domain.
       Kurlantzick also denigrates the importance of long-term 
     copyright protection by stating that ``a dollar to be 
     received 75 years from now is worth a small fraction of one 
     cent.'' But, he fails to see that the dollar value placed on 
     future copyright advantages will increase more or less in 
     proportion with the inflation rate. That is to say, if the 
     dollar loses 90% of its value over the next 75 years, then 
     the cost of goods and services will be roughly 90% higher in 
     75 years than it is today.
       For all these reasons, it's clear why Congress should act. 
     America can reap valuable benefits, at no cost to itself, if 
     Congress enacts legislation to extend our copyright 
     protection by 20 years. By harmonizing our laws with the EU, 
     we can reduce our balance-of-trade deficit, encourage 
     economic investment, strengthen our hand in dealing with 
     intellectual piracy, and see to it that America's authors, 
     composers, artists, and computer programmers receive the same 
     level of protection afforded the creative people of other 
     nations. Thus, copyright term extension makes economic sense, 
     and it's equitable.
                                 ______

      By Mr. GRAHAM:
  S. 484. A bill to amend the Omnibus Crime Control and Safe Streets 
Act of 1968 to establish a national clearinghouse to assist in 
background checks of applicants for law enforcement positions, and for 
other purposes; to the Committee on the Judiciary.


 the law enforcement and correctional officers employment registration 
                              act of 1995

 Mr. GRAHAM. Mr. President, I introduce the Law Enforcement and 
Correctional Officers Employment Registration Act of 1995, which will 
establish a national clearinghouse to assist in background checks on 
law enforcement applicants.
  This legislation would establish a national data bank to provide 
quick, accurate and prior officer employment history on all applicants 
for law enforcement agencies. This clearinghouse has been called a 
Pointer File and simply maintains basic information of all certified 
officers, including names, dates of birth, social security numbers, 
dates of employment, and any decertifications. The Department of 
Justice would maintain and offer computer access to all criminal 
agencies.
  The intent of my legislation is to help prevent what ``Dateline NBC'' 
has referred to as gypsy cops. These are police officers who have been 
dismissed or have been forced to resign from previous positions but 
conceal prior employment history in future job applications.
  In the case of the beating death of Bobby Jewett on November 24, 
1990, in West Palm Beach, FL, ``Dateline NBC'' was able to subsequently 
trace the prior employment histories of the two officers involved in 
the case through four States and eight different law enforcement 
agencies. Much of this had been concealed in their job applications.
  As noted in a Tampa Tribune editorial in support of a clearinghouse,

       Few agencies, particularly those in rural areas and smaller 
     towns, have the personnel and resources to conduct thorough 
     background checks on police applicants. Not even the largest 
     agencies always succeed in finding an officer's past if he or 
     she is determined to hide it.

  Florida Department of Law Enforcement Commissioner James T. Moore 
adds, ``Experience has shown that, after being found guilty of 
misconduct, many problem officers resign or are fired, only to seek 
police jobs elsewhere. The clearinghouse system would allow a law 
enforcement agency to review each officer applicant's prior history as 
an officer.'' In order to protect the rights of officers, however, the 
clearinghouse would not contain information relating to causes of 
dismissal.
  Thomas J. O'Loughlin, chief of police of Wellesley, MA, notes,

       [[Page S3395]] The safety of the citizens of this 
     Commonwealth and this Nation is either weakened or solidified 
     by the character of the individuals that we entrust with the 
     responsibility to protect. This legislation provides society 
     with the necessary tools to ensure that individuals who have 
     violated this trust do not simply relocate and once again 
     commit grievous offenses against the public good, and it 
     ensures that a complete and thorough background investigation 
     will be completed prior to an individual assuming the 
     public's trust to be a protector of society.

  This legislation is essential to maintaining public confidence in the 
police. Further, the financial impact of office misconduct, as measured 
by the costs of civil liability litigation, is alarming. A 1992 survey 
of members of the National Institute of Municipal Law Officers found 
police liability to be the leading cause of soaring litigation costs 
since 1989. For the majority of law enforcement officers, this is also 
an issue of job integrity and job safety. The misdeeds of a few place 
others in an unfavorable light and also at risk.
  It is safe to say that a history of past dishonorable service in 
other criminal justice agencies is the most compelling reason to reject 
an offer. However, this critical information is often unavailable. That 
is why the International Association of Chiefs of Police has endorsed 
this legislation.
  In addition, the Florida Criminal Justice Standards and Training 
Commission adopted a unanimous resolution in support of such a program. 
I would like to thank these organizations, as well as Commissioner 
Moore, for their efforts to protect effectiveness and professionalism 
in law enforcement as well as the public's safety.
  I urge my colleagues to join me in support of this important 
legislation.
                                 ______

      By Mrs. HUTCHISON:
  S. 485. A bill to amend the Solid Waste Disposal Act to provide and 
clarify the authority for certain municipal solid waste flow control 
arrangements; to the Committee on Environment and Public Works.


        the municipal waste flow control transition act of 1995

 Mrs. HUTCHISON. Mr. President, on May 16, 1994 the U.S. 
Supreme Court handed down a decision in C&A Carbone versus Clarkstown, 
NY that has important implications for local municipal waste management 
planning.
  At issue in the Carbone case was the constitutionality of local 
ordinances that enforce flow control. A flow control ordinance enables 
a local government to direct locally generated waste to a specific 
waste disposal facility. The waste disposal facility is typically a 
solid waste combustor that is owned by the local government.
  In its Carbone decision the Court found that flow control was an 
unconstitutional interference in interstate commerce. In general, this 
ruling was a victory for taxpaying consumers who will benefit from the 
improved service and prices that result from competition for waste 
disposal services.
  However, the Court's decision leaves local governments with flow 
control regimes in a vulnerable position. In most cases, flow control 
assures the financial feasibility of a locally owned or financed waste 
disposal facility. That is, municipal bonds were sold and facilities 
built in reliance on flow control guaranteed waste disposal income. 
Lacking this the financial feasibility of such disposal facilities and 
local governments is jeopardized.
  At the end of the 103d Congress a number of my colleagues and I 
worked on a bill that would have grandfathered existing flow control 
arrangements. Unfortunately, the Senate did not complete action before 
adjournment.
  If anything, the urgency of cushioning the effects of the Carbone 
decision on affected local governments has increased. Although there 
have not yet been any defaults, the risk of local and municipal bond 
market disruptions continues.
  Today I offer legislation, the Municipal Waste Flow Control 
Transition Act of 1995, that is very similar to that supported by most 
of the affected parties at the end of the last Congress.
  My bill preserves flow control for local governments that made 
substantial investments predicated on flow control authority before 
Carbone. It ensures flow control authority for the life of the affected 
facilities. However, my legislation would not permit new flow control 
arrangements, thereby assuring free competition and unfettered 
interstate commerce in the future.
  Mr. President, we should protect the local governments and local 
taxpayers who are threatened financially by invalidation of their flow 
control ordinances. We can do so, as my bill does, in a straight 
forward fashion and, at the same time, assure that businesses and 
homeowners will have the benefits of a free market in the 
future.
                                 ______

      By Mr. HEFLIN (for himself, Mr. Specter, Mr. Ford, Mr. Thurmond, 
        Mr. Bumpers, Mr. Brown, Mr. Simon, Mr. Shelby, Ms. Moseley-
        Braun, and Mr. Cohen):
  S. 486. A bill to reorganize the Federal administrative law 
judiciary, and for other purposes; to the Committee on the Judiciary.


     the reorganization of the federal administrative judiciary act

  Mr. HEFLIN. Mr. President, I am pleased to rise in support of 
legislation entitled ``the Reorganization of the Federal Administrative 
Judiciary Act.'' I am pleased to advise that I have been joined today 
by nine colleagues from both sides of the aisle and who are original 
cosponsors of this reform legislation. They are Senators Specter, Ford, 
Thurmond, Bumpers, Brown, Simon, Shelby, Moseley-Braun, and Cohen.
  The purpose of this legislation is to reorganize and establish an 
independent corps of administrative law judges within the executive 
branch of Government. The bill is designed to address two critical 
issues which face our Nation. First, an independent corps is vital to 
the continued impartial resolution of issues and decision of cases 
arising under the administrative procedure act. Second, this bill 
streamlines the Federal bureaucracy in order to better meet the needs 
of the people of the United States. For these reasons, legislation 
needs to be adopted to improve this Nation's administrative system of 
justice.
  In the 103d Congress, I introduced similar legislation, and on 
September 15, 1993, the Judiciary Committee considered this 
legislation, and ordered it favorably reported in the nature of a 
substitute to the Senate. On November 19, 1993, this bill was 
considered on the floor of the Senate and adopted a technical amendment 
which I offered and two valuable amendments offered by my colleagues 
Senator Hank Brown of Colorado and Senator William Cohen of Maine. The 
legislation I am introducing today is identical to the legislation 
which unanimously passed the Senate on November 19, 1993.
  While the House of Representatives regretfully failed to consider S. 
486 during the second session of the 103d Congress, I am hopeful, in 
light of the recent election results by which the American people 
expressed their support for leaner, more efficient, and less costly 
Federal Government, that the new Congress will favorably consider and 
adopt this legislation and send it to President Clinton for signature.
  the primary objective of this legislation is to reorganize the 
Federal administrative judiciary to promote efficiency, productivity, 
and the reduction of overhead functions. It will provide for economies 
of scale to better serve the public in the resolution of administrative 
disputes. This goal will be accomplished by placing all ALJ's in a 
unified corps with a chief judge as the primary administrative officer. 
The chief judge will be responsible for developing programs and 
practices, which attain this objective. Those programs and practices 
will include the training of judges in more than one subject area. This 
training will permit the utilization of the skills and expertise of 
each judge across agency lines to meet the demands of the existing 
workload.
  Generally, this bill would establish an independent corps for 
administrative law judges which would operate under the executive 
branch of the Government. The corps would be governed by a chief 
administrative law judge. Further, the corps would be divided into 
eight divisions, with each division governed by a division chief 
administrative law judge. The chief and division chief ALJ's would be 
Presidential appointments, by and with the advice and consent of the 
U.S. Senate.
  The chief and division chief ALJ's would form a council. The council 
would be the policy making body for 
[[Page S3396]] the corps. The council would have the authority to 
assign judges to divisions, appoint persons as administrative law 
judges, prescribe rules of practice and procedure for the corps, issue 
appropriate rules and regulations for the efficient conduct of the 
corps, and generally manage the day-to-day operations of the corps.
  This bill provides explicit protection for ALJ's. The corps would 
continue to make appointments of administrative law judges from a 
register of qualified candidates maintained by the Office of Personnel 
Management. In order for an ALJ to be involuntarily reassigned to a new 
permanent duty station, an ALJ must receive a written explanation from 
the council stating that such a move is required in order to meet 
substantial changes in workloads. ALJ's would continue to hear and 
adjudicate the same types of cases which they presently decide. 
Further, ALJ's would continue to be assigned cases within their 
division on a rotating basis, taking into account issues of expertise 
and education. In addition, ALJ's would be given explicit authority to 
continue to act as special masters pursuant to Federal Rule of Civil 
Procedure 53(a). This bill also contains provisions for the removal and 
discipline of administrative law judges.
  In the committee report (103-154) to this legislation, my colleague, 
Senator Cohen. expressed support for the concept of establishing an 
independent corps of administrative law judges within the executive 
branch of Government and for the concept which would reform and 
streamline the Federal bureaucracy in order to serve the American 
public. Senator Cohen did have legitimate concerns and offered 
excellent suggestions to improve and strengthen section 599(e) of the 
bill relating to removal and discipline of judges.
  I have worked with Senator Cohen to strengthen and improve the 
removal and discipline provisions of the bill, and I believe these 
provisions are a balanced effort to make the provisions fairer to all 
interest parties concerned by insuring public members serve on the 
complaint resolution board--and its panels--to ensure objectivity and 
impartiality. This legislation is better because of Senator Cohen's 
participation and I greatly appreciate his cooperation.
  This legislation will promote good government in an efficient and 
effective manner. The Congressional Budget Office [CBO] has prepared a 
report which estimates the legislation can save as much as $22 million 
a year in as few as 5 years. These are the types of savings the 
American people expect and deserve.
  Since the reorganization of the Federal administrative law judges 
into a unified corps is expected to save the U.S. taxpayer substantial 
dollars, and in consultation with Senator Hank Brown of Colorado, a 
provision offered by Senator Brown is included in this legislation 
ensuring that agencies will reduce their budgets to reflect the 
projected savings from the removal of ALJ's from their agencies and 
report to Congress on their efforts.
  The establishment of a unified corps of administrative law judges is 
not a unique concept. In fact, this type of legislation was first 
implemented in a number of States, and has been very successful. The 
individual States have been leaders in adapting and streamlining the 
administrative process to meet the changing needs of the American 
public. The adoption of similar Federal legislation merely builds upon 
the successful experiences of the States.
  A final consideration which argues in favor of independence for ALJ's 
is the issue of public perception. For individuals who face the 
daunting prospect of being accused by a Federal agency of illegal 
activities, the fact that an administrative law judge who is an 
employee of that agency is hearing their case is hardly reassuring. The 
realities of the everyday world indicate that the key to public 
satisfaction and confidence in judicial decisionmaking is the issue of 
decisional independence. The creation of a unified corps of 
administrative law judges is likely to have the beneficial effect of 
greater public satisfaction with the administrative law system.
  This legislation which I introduce today responds to concerns 
expressed by executive branch agencies, particularly the Department of 
Justice. This legislation is truly a reorganization of Federal 
administrative adjudication functions and not a radical departure from 
the principles of administrative law, which has concerned some members 
in the past. To the contrary, the substitute insures that the rule of 
law will prevail in administrative adjudications without impermissible 
influence.
  The legislation specifically states that an agency's policymaking 
authority will not be changed nor will the administrative law judge's 
adjudicatory authority. The reorganization preserves the existing 
powers of both agency managers and the administrative law judges, while 
removing the tension that naturally arises between those two functions. 
The bill provides that enactment of the bill will effect no change in 
an agency's rulemaking, interpretative or policymaking authority in 
carrying out statutory responsibilities vested in the agency or agency 
head.
  The bill clarifies that the reorganization of administrative law 
judges in a corps will give the new corps no policymaking authority for 
the agency, a past concern expressed by some members. In preserving the 
status quo of the present administrative system, the agency and its 
head retain the authority to review decisions of administrative law 
judges under any applicable provision of law. The policymaking role of 
ALJ's is not enlarged by enactment of the bill nor is their 
adjudicatory authority changed from current status. An agency head or 
secretary retains final authority to reverse ALJ decisions as provided 
by statute and makes the final decisions for the agency.
  I look forward to working for passage of this reform legislation here 
in the Senate, and I hope my colleagues in the House of Representatives 
will likewise favorably consider and act on it, so that President 
Clinton can sign it into law before the end of the year.
  Mr. President, I ask unanimous consent that the bill in its entirety 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 486

       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 ``Reorganization of the 
     Federal Administrative Judiciary Act''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) in order to promote efficiency, productivity, the 
     reduction of administrative functions, and to provide 
     economies of scale and better public service and public trust 
     in the administrative resolution of disputes, Federal 
     administrative law judges should be organized in a unified 
     corps;
       (2) the dispersal of administrative law judges appointed 
     under section 3105 of title 5, United States Code, in every 
     Federal agency that requires hearings to be conducted by 
     administrative law judges, underutilizes the potential of 
     administrative law judges to serve the public and assist the 
     Federal courts as special masters and finders of fact in 
     specific instances to help reduce the backlog of cases in 
     Federal courts;
       (3) the organization of administrative law judges in a 
     corps will best promote their assignment to Federal agency 
     needs as demand requires;
       (4) a unified administrative law judge corps will better 
     promote the use of information technology in serving the 
     public; and
       (5) an administrative law judge corps will, through 
     consolidation, eliminate unnecessary offices and reduce 
     travel and other related costs.

     SEC. 3. ESTABLISHMENT OF ADMINISTRATIVE LAW JUDGE CORPS.

       (a) In General.--Chapter 5 of title 5, United States Code, 
     is amended by adding at the end thereof the following new 
     subchapter:

            ``SUBCHAPTER VI--ADMINISTRATIVE LAW JUDGE CORPS

     ``Sec. 597. Definitions

       ``For the purposes of this subchapter--
       ``(1) `agency' means an authority referred to in section 
     551(1);
       ``(2) `Corps' means the Administrative Law Judge Corps of 
     the United States established under section 598;
       ``(3) `administrative law judge' means an administrative 
     law judge appointed under section 3105 on or before the 
     effective date of the Reorganization of the Federal 
     Administrative Judiciary Act or under section 599c after such 
     effective date;
       ``(4) `chief judge' means the chief administrative law 
     judge appointed and serving under section 599;
       ``(5) `Council' means the Council of the Administrative Law 
     Judge Corps established under section 599b;
       ``(6) `Board', unless otherwise indicated, means the 
     Complaints Resolution Board established under section 599e; 
     and
     [[Page S3397]]   ``(7) `division chief judge' means the chief 
     administrative law judge of a division appointed and serving 
     under section 599a.

     ``Sec. 598. Establishment; membership

       ``(a) Establishment.--There is established an 
     Administrative Law Judge Corps consisting of all 
     administrative law judges, in accordance with the provisions 
     of subsection (b). Such Corps shall be administered in 
     Washington, D.C.
       ``(b) Membership.--An administrative law judge serving as 
     such on the date of the commencement of the operation of the 
     Corps shall be transferred to the Corps as of that date. An 
     administrative law judge who is appointed on or after the 
     date of the commencement of the operation of the Corps shall 
     be a member of the Corps as of the date of such appointment.

     ``Sec. 599. Chief administrative law judge

       ``(a) Appointment; Term.--The chief administrative law 
     judge shall be the chief administrative officer of the Corps 
     and shall be the presiding judge of the Corps. The chief 
     judge shall be appointed by the President, by and with the 
     advice and consent of the Senate. The chief judge shall be 
     learned in the law. The chief judge shall serve for a term of 
     five years or until a successor is appointed and qualifies to 
     serve. A chief judge may be reappointed upon the expiration 
     of the term of such judge, by and with the advice and consent 
     of the Senate.
       ``(b) Vacancies.--(1) If the office of chief judge is 
     vacant, the division chief judge who is senior in length of 
     service as a member of the Council shall serve as acting 
     chief judge until such vacancy is filled.
       ``(2) If 2 or more division chief judges have the same 
     length of service as members of the Council, the division 
     chief judge who is senior in length of service as an 
     administrative law judge shall serve as such acting chief 
     judge.
       ``(c) Special Functions of Chief Judge.--(1) In addition to 
     other duties conferred on the chief judge, the chief judge 
     shall be responsible for developing programs and practices, 
     in coordination with agencies using administrative law 
     judges, which foster economy and efficiency in the processing 
     of cases heard by administrative law judges. These programs 
     and practices shall include--
       ``(A) training of judges in more than one subject area;
       ``(B) employment of computers and software and other 
     information technology for automated decision preparation, 
     case docketing, and research;
       ``(C) consolidating hearing facilities and law libraries; 
     and
       ``(D) programs and practices to foster overall efficient 
     use of staff, personnel, equipment, and facilities.
       ``(2) In order to minimize costs--
       ``(A) all administrative law judges and support personnel 
     shall, for at least 1 year after the date of the commencement 
     of the operation of the Corps, continue to use the office 
     space and facilities, at the agencies using such judges and 
     personnel, available before such date, and
       ``(B) the chief judge shall phase in transfers of 
     administrative law judges and support personnel to other 
     facilities so that the cost of providing facilities for the 
     Corps shall not exceed the cost of maintaining such judges 
     and personnel in equivalent space available at agencies using 
     the Corps.
       ``(d) Reports.--The chief judge shall, within 90 days after 
     the end of each fiscal year, make a written report to the 
     President and the Congress concerning the business of the 
     Corps during the preceding fiscal year. The report shall 
     include information and recommendations of the Council 
     concerning the future personnel requirements of the Corps.
       ``(e) Service After Term Expires.--After serving as chief 
     judge, an individual may continue to serve as an 
     administrative law judge unless such individual has been 
     removed from office in accordance with section 599e.

     ``Sec. 599a. Divisions of the Corps; division chief judges

       ``(a) Assignment to Divisions.--Each judge of the Corps 
     shall be assigned to a division by the Council, pursuant to 
     section 599b. The assignment of a judge who was an 
     administrative law judge on the date of commencement of the 
     operation of the Corps shall be made after consideration of 
     the areas of specialization in which the judge has served. 
     Each division shall be headed by a division chief judge who 
     shall exercise administrative supervision over such division.
       ``(b) Divisions.--The divisions of the Corps shall be as 
     follows:
       ``(1) Division of Communications, Public Utility, and 
     Transportation Regulation.
       ``(2) Division of Safety and Environmental Regulation.
       ``(3) Division of Labor.
       ``(4) Division of Labor Relations.
       ``(5) Division of Health and Human Services Programs.
       ``(6) Division of Securities, Commodities, and Trade 
     Regulation.
       ``(7) Division of General Programs.
       ``(8) Division of Financial Services Institutions.
       ``(c) Appointment of Division Chief Judges.--(1) The 
     division chief judge of each division set forth in subsection 
     (b) shall be appointed by the President, by and with the 
     advice and consent of the Senate, and shall be learned in the 
     law.
       ``(2) Division chief judges shall be appointed for 5-year 
     terms, except that of those division chief judges first 
     appointed, the President shall designate 2 such individuals 
     to be appointed for 5-year terms, 3 for 4-year terms, and 2 
     for 3-year terms.
       ``(3) Any division chief judge appointed to fill an 
     unexpired term shall be appointed only for the remainder of 
     such predecessor's term, but may be reappointed as provided 
     in paragraph (4).
       ``(4) Any division chief judge may be reappointed upon the 
     expiration of his or her term.
       ``(5) Any judge, after serving as division chief judge, may 
     continue to serve as an administrative law judge unless such 
     individual has been removed from office in accordance with 
     section 599e.

     ``Sec. 599b. Council of the Corps

       ``(a) In General.--The policymaking body of the Corps shall 
     be the Council of the Corps. The chief judge and the division 
     chief judges shall constitute the Council. The chief judge 
     shall preside over the Council. If the chief judge is unable 
     to be present at a meeting of the Council, the division chief 
     judge who is senior in length of service as a member of such 
     Council shall preside at the meeting.
       ``(b) Quorum; Voting.--One half of all of the members of 
     the Council shall constitute a quorum for the purpose of 
     transacting business. The affirmative vote by a majority of 
     all the members of the Council shall be required to approve a 
     matter on behalf of the Council. Each member of the Council 
     shall have one vote.
       ``(c) Meetings.--Meetings of the Council shall be held at 
     least once a month at the call of the chief judge or by the 
     call of one-third or more of the members of the Council.
       ``(d) Powers.--The Council is authorized--
       ``(1) to assign judges to divisions and transfer or 
     reassign judges from one division to another, subject to the 
     provisions of section 599c;
       ``(2) to appoint persons as administrative law judges under 
     section 599c;
       ``(3) to file charges seeking adverse action against an 
     administrative law judge under section 599e;
       ``(4) to prescribe, after providing an opportunity for 
     notice and comment, the rules of practice and procedure for 
     the conduct of proceedings before the Corps, except that, 
     with respect to a category of proceedings adjudicated by an 
     agency before the effective date of the Reorganization of the 
     Federal Administrative Judiciary Act, the Council may not 
     amend or revise the rules of practice and procedure 
     prescribed by that agency during the 2 years following such 
     effective date without the approval of that agency, and any 
     amendments or revisions made to such rules shall not affect 
     or be applied to any pending action;
       ``(5) to issue such rules and regulations as may be 
     appropriate for the efficient conduct of the business of the 
     Corps and the implementation of this subchapter, including 
     the assignment of cases to administrative law judges;
       ``(6) subject to the civil service and classification laws 
     and regulations--
       ``(A) to select, appoint, employ, and fix the compensation 
     of the employees (other than administrative law judges) that 
     the Council deems necessary to carry out the functions, 
     powers, and duties of the Corps; and
       ``(B) to prescribe the authority and duties of such 
     employees;
       ``(7) to establish, abolish, alter, consolidate, and 
     maintain such regional, district, and other field offices as 
     are necessary to carry out the functions, powers, and duties 
     of the Corps and to assign and reassign employees to such 
     field offices;
       ``(8) to procure temporary and intermittent services under 
     section 3109;
       ``(9) to enter into, to the extent or in such amounts as 
     are authorized in appropriation Acts, without regard to 
     section 3709 of the Revised Statutes of the United States (41 
     U.S.C. 5), contracts, leases, cooperative agreements, or 
     other transactions that may be necessary to conduct the 
     business of the Corps;
       ``(10) to delegate any of the chief judge's functions or 
     powers with the consent of the chief judge, or whenever the 
     office of such chief judge is vacant, to one or more division 
     chief judges or other employees of the Corps, and to 
     authorize the redelegation of any of those functions or 
     powers;
       ``(11) to establish, after consulting with an agency, 
     initial and continuing educational programs to assure that 
     each administrative law judge assigned to hear cases of that 
     agency has the necessary training in the specialized field of 
     law of that agency;
       ``(12) to make suitable arrangements for continuing 
     education and training of other employees of the Corps, so 
     that the level of expertise in the divisions of the Corps 
     will be maintained and enhanced; and
       ``(13) to determine all other matters of general policy of 
     the Corps.
       ``(e) Official Seal.--The Council shall select an official 
     seal for the Corps which shall be judicially noticed.

     ``Sec. 599c. Appointment and transfer of administrative law 
       judges

       ``(a) Appointment.--After the initial establishment of the 
     Corps, the Council shall appoint new or additional judges as 
     may be necessary for the efficient and expeditious conduct of 
     the business of the Corps. Appointments shall be made from a 
     register maintained by the Office of Personnel Management 
     under subchapter I of chapter 33 of this title. Upon request 
     by the chief judge, the Office of Personnel Management shall 
     certify enough names from the top of such 
     [[Page S3398]] register to enable the Council to consider 
     five names for each vacancy. Notwithstanding section 3318, a 
     vacancy in the Corps may be filled from the highest five 
     eligible individuals available for appointment on the 
     certificate furnished by the Office of Personnel Management.
       ``(b) Limitation on Judge's Duties.--A judge of the Corps 
     may not perform or be assigned to perform duties inconsistent 
     with the duties and responsibilities of an administrative law 
     judge.
       ``(c) Reassignments; Details.--A judge or staff member of 
     the Corps on the date of commencement of the operation of the 
     Corps, and all new judges and staff members appointed by the 
     Council, may not thereafter be involuntarily reassigned to a 
     new permanent duty station if such station is beyond the 
     commuting area of the duty station which is the judge's or 
     staff member's permanent duty station on that date. A judge 
     or staff member of the Corps may be temporarily detailed, 
     once in a 24-month period, to a new duty station at any 
     location, for a period of not more than 120 days.

     ``Sec. 599d. Jurisdiction

       ``(a) In General.--Any case, claim, action, or proceeding 
     authorized to be heard before an administrative law judge on 
     the day before the effective date of the Reorganization of 
     the Federal Administrative Judiciary Act shall, on or after 
     such date, be referred to the Corps for adjudication on the 
     record after an opportunity for a hearing.
       ``(b) Types of Cases.--An administrative law judge who is a 
     member of the Corps shall hear and render a decision upon--
       ``(1) every case of adjudication subject to the provisions 
     of section 553, 554, or 556;
       ``(2) every case in which hearings are required by law to 
     be held in accordance with sections 553, 554, or section 556;
       ``(3) every other case referred to the Corps by an agency 
     in which a determination is to be made on the record after an 
     opportunity for a hearing; and
       ``(4) every case referred to the Corps by a court for an 
     administrative law judge to act as a special master or to 
     otherwise making findings of fact on behalf of the referring 
     court, which shall continue to have exclusive and 
     undiminished jurisdiction over the case.
       ``(c) Referral of Cases.--When a case under subsection (b) 
     arises, it shall be referred to the Corps. Under regulations 
     issued by the Council, the case shall be assigned to a 
     division. The appropriate division chief shall assign cases 
     to judges, taking into consideration specialization, 
     training, workload, and conflicts of interest.
       ``(d) Referrals by Agencies and Courts.--Courts are 
     authorized to refer, subject to the approval of the majority 
     of the Council and the parties in the court proceeding, those 
     cases, or portions thereof, in which they seek an 
     administrative law judge to act as a special master pursuant 
     to the provisions of Rule 53(a) of the Federal Rules of Civil 
     Procedure which shall continue to have exclusive and 
     undiminished jurisdiction over the case. When a court has 
     referred a case to an administrative law judge, the 
     recommendations, rulings, and findings of fact of the 
     administrative law judge are subject to de novo review by the 
     referring court.
       ``(e) Satisfaction of Other Procedural Requirements.--
     Compliance with this subchapter shall satisfy all 
     requirements imposed under section 916 of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989.
       ``(f) Application of Agency Policy.--The provisions of this 
     subchapter shall effect no change in--
       ``(1) an agency's rulemaking, interpretative, or 
     policymaking authority in carrying out the statutory 
     responsibilities vested in the agency or agency head;
       ``(2) the adjudicatory authority of administrative law 
     judges; or
       ``(3) the authority of an agency to review decisions of 
     administrative law judges under any applicable provision of 
     law.

     ``Sec. 599e. Removal and discipline

       ``(a) In General.--(1) Except as provided under paragraph 
     (2), an administrative law judge may not be removed, 
     suspended, reprimanded, or disciplined except for misconduct 
     or neglect of duty, but may be removed for physical or mental 
     disability (consistent with prohibitions on discrimination 
     otherwise imposed by law).
       ``(2) Paragraph (1) shall not apply to an action initiated 
     under section 1215.
       ``(b) Rules of Judicial Conduct.--No later than 180 days 
     after the appointment and confirmation of the Council, the 
     Council shall adopt and issue rules of judicial conduct for 
     administrative law judges. Such code shall be enforced by the 
     Council and shall include standards governing--
       ``(1) judicial conduct and extra-judicial activities to 
     avoid actual, or the appearance of, improprieties or 
     conflicts of interest;
       ``(2) the performance of judicial duties impartially and 
     diligently;
       ``(3) avoidance of bias or prejudice with respect to all 
     parties; and
       ``(4) efficiency and management of cases so as to reduce 
     dilatory practices and unnecessary costs.
       ``(c) Disciplinary Action by the Council.--An 
     administrative law judge may be subject to disciplinary 
     action by the Council under subsection (j). An administrative 
     law judge may be removed only after the Council has filed 
     with the Merit Systems Protection Board a notice of removal 
     and the Merit Systems Protection Board has determined on the 
     record, after an opportunity for a hearing before the Merit 
     Systems Protection Board, that there is good cause to take 
     the action of removal.
       ``(d) Complaints Resolution Board.--Under regulations 
     issued by the Council, a Complaints Resolution Board shall be 
     established within the Corps to consider and to recommend 
     appropriate action to be taken when a complaint is made 
     concerning conduct of a judge of the Corps. Such complaint 
     may be made by any interested person, including parties, 
     practitioners, the chief judge, administrative law judges, 
     and agencies.
       ``(e) Composition of the Board.--(1) The Board shall 
     consist of--
       ``(A) 2 judges from each division of the Corps, who shall 
     be appointed by the Council; and
       ``(B) 16 attorneys who shall be appointed in accordance 
     with the provisions of paragraph (2).
       ``(2) The Council shall request a list of candidates to be 
     members of the Board from the American Bar Association. Such 
     list may not include any individual who is an administrative 
     law judge or former administrative law judge.
       ``(3) The chief judge and the division chief judges may not 
     serve on the Board.
       ``(4) No individual may serve 2 successive terms on the 
     Board.
       ``(5)(A) Except as provided under subparagraph (B), all 
     terms on the Board shall be 2 years.
       ``(B) In making the original appointments to the Board, the 
     Council shall designate one-half of the appointments made 
     under paragraph (1)(A) and one-half of the appointments made 
     under paragraph (1)(B), as a term of 1 year.
       ``(6)(A) Each member of the Board who is not an officer or 
     employee of the Federal Government shall be compensated at a 
     rate equal to the daily equivalent of the annual rate of 
     basic pay prescribed for a position at the level of AL-3, 
     rate C under section 5372 of this title for each day 
     (including traveltime) during which such member is engaged in 
     the performance of the duties of the Board. All members of 
     the Board who are administrative law judges shall serve 
     without compensation in addition to that received for their 
     services as officers or employees of the United States.
       ``(B) The members of the Board shall be allowed travel 
     expenses, including per diem in lieu of subsistence, at rates 
     authorized for employees of agencies under subchapter I of 
     chapter 57 of title 5, United States Code, while away from 
     their homes or regular places of business in the performance 
     of services for the Board.
       ``(f) Filing and Referral of Complaint.--(1) A complaint 
     concerning the official conduct of an administrative law 
     judge shall be made in writing. The complaint shall be filed 
     with the chief judge, or it may be originated by the chief 
     judge on his own motion. The chief judge shall refer the 
     complaint to a 5-member panel designated by the Council--
       ``(A) consisting of 3 administrative law judges appointed 
     under subsection (e)(1)(A), none of whom may be serving in 
     the same division as the administrative law judge who is the 
     subject of the complaint; and
       ``(B) two members appointed under subsection (e)(1)(B), 
     none of whom regularly practice before the division to which 
     the administrative law judge, who is the subject of the 
     complaint is assigned.
       ``(2) Any individual chosen to serve on the panel who has a 
     personal or financial conflict of interest involving the 
     administrative law judge who is the subject of the complaint 
     shall be disqualified by the Council from serving on the 
     panel. The Council shall replace any disqualified individual 
     or vacancy with another member of the Board who is eligible 
     to serve on the panel.
       ``(g) Chief Judge Action.--(1) After expeditiously 
     reviewing a complaint, the chief judge, by written order 
     stating his reason, may--
       ``(A) dismiss the complaint, if the chief judge finds the 
     complaint to be--
       ``(i) directly related to the merits of a decision or 
     procedural ruling; or
       ``(ii) frivolous;
       ``(B) conclude the proceeding if the chief judge finds that 
     appropriate corrective action has been taken or that action 
     on the complaint is no longer necessary because of 
     intervening events; or
       ``(C) refer the complaint to the Complaint Resolution Board 
     in accordance with subsection (f).
       ``(2) The chief judge shall transmit copies of the written 
     order to the complainant and to the administrative law judge 
     who is the subject of the complaint.
       ``(h) Notice of the Complaint.--The administrative law 
     judge and the complainant shall be given notice of receipt of 
     the complaint and notice of referral of the complaint to the 
     panel.
       ``(i) Inquiry and Report by Panel.--(1) The panel shall 
     inquire into the complaint and have authority to conduct a 
     full investigation of the complaint, including authority to 
     hold hearings and issue subpoenas, examine witnesses, and 
     receive evidence. All proceedings of the Complaint Resolution 
     Board shall be confidential. The administrative law judge who 
     is the subject of the complaint shall have the right to be 
     represented by counsel and shall have an opportunity to 
     appear before the panel. The complainant shall be afforded an 
     opportunity to appear at the proceedings conducted by the 
     investigating panel, if the panel concludes that the 
     [[Page S3399]] complainant could offer substantial 
     information.
       ``(2) In determining whether misconduct has occurred, the 
     panel shall apply a preponderance of evidence standard of 
     proof to its proceedings.
       ``(3)(A) Within 90 days after the referral of the 
     complaint, the panel shall report to the Council on its 
     findings of fact and recommendations for appropriate 
     disciplinary action, if any, that should be taken against the 
     administrative law judge.
       ``(B) If the panel has not completed its inquiry within 90 
     days after receiving the complaint, the panel shall request 
     an extension of time from the Council to complete its 
     inquiry.
       ``(C) A copy of the report shall be provided concurrently 
     to the Council, the administrative law judge who is the 
     subject of the complaint, and the complainant. The Council 
     shall retain all reports filed under this section and such 
     reports shall be confidential, except that a recommendation 
     for disciplinary action shall be made available to the 
     public.
       ``(4) The recommendations of the panel shall include one of 
     the following:
       ``(A) Dismissal of all or part of the complaint.
       ``(B) Direct informal reprimand.
       ``(C) Direct formal reprimand.
       ``(D) Suspension.
       ``(E) Automatic referral to the Merit Systems Protection 
     Board on recommendations of removal.
       ``(5) The recommendations of the panel are binding on the 
     Council, unless the administrative law judge appeals to the 
     Merit Systems Protection Board.
       ``(j) Disciplinary Action.--Except as provided in 
     subsection (a)(2), the Council shall take appropriate 
     disciplinary action against the administrative law judge 
     based upon the report of the panel within 30 days after 
     receiving the report of the panel. Such disciplinary action 
     shall be enforced by the Council and shall be final unless 
     the administrative law judge files an appeal with the Merit 
     Systems Protection Board within 30 days after receiving 
     notice of such disciplinary action.
       ``(k) Recommendation for Relief to Agency, Department, or 
     Commission.--Based upon a finding of judicial misconduct by 
     an administrative law judge, the Council shall have authority 
     to recommend to the head of an agency, department or 
     commission that action may be taken to provide relief to 
     aggrieved individuals due to the judicial misconduct by an 
     administrative law judge.''.
       (b) Appointments of Division Chief Judges.--It is the sense 
     of the Congress that the President should appoint as division 
     chief judges under section 599a(c) of title 5, United States 
     Code (as added by subsection (a) of this section), 
     individuals who have served as an administrative law judge 
     for at least 5 years.
       (c) Administrative Provision.--Except as provided under 
     subchapter VI of chapter 5 of title 5, United States Code, 
     the chief administrative law judge and the division chief 
     judges appointed under such subchapter shall be deemed 
     administrative law judges appointed under section 3105.
       (d) Technical and Conforming Amendment.--The table of 
     sections for chapter 5 of title 5, United States Code, is 
     amended by adding at the end thereof the following:

            ``SUBCHAPTER VI--ADMINISTRATIVE LAW JUDGE CORPS
``Sec.
``597. Definitions.
``598. Establishment; membership.
``599. Chief administrative law judge.
``599a. Divisions of the Corps; division chief judges.
``599b. Council of the Corps.
``599c. Appointment and transfer of administrative law judges.
``599d. Jurisdiction.
``599e. Removal and discipline.''.
     SEC. 4. AGENCY REVIEW STUDY AND REPORT.

       (a) Study.--The chief administrative law judge of the 
     Administrative Law Judge Corps of the United States shall 
     conduct a study of the various types and levels of agency 
     review to which decisions of administrative law judges are 
     subject. A separate study shall be conducted for each 
     division of the Corps. The studies shall include monitoring 
     and evaluating data and shall be conducted in consultation 
     with the division chief judges, the Chairman of the 
     Administrative Conference of the United States, and the 
     agencies that review the decisions of administrative law 
     judges.
       (b) Report.--(1) Not later than 2 years after the effective 
     date of this Act, the Council shall report to the President 
     and the Congress on the findings and recommendations 
     resulting from the studies conducted under subsection (a).
       (2) The report under paragraph (1) shall include 
     recommendations, including recommendations for new 
     legislation, for any reforms that may be appropriate to make 
     review of administrative law judges' decisions more efficient 
     and meaningful and to accord greater finality to such 
     decisions, except that all decisions subject, before the 
     effective date of this Act, to review pursuant to section 
     205(g) of the Social Security Act (42 U.S.C. 405(g)) shall 
     continue to be subject to such review pursuant to such 
     section.
       (3) The report under paragraph (1) shall also include 
     recommendations for using staff more efficiently to decrease 
     backlogs, especially in the area of social security 
     disability cases.

     SEC. 5. TRANSITION AND SAVINGS PROVISIONS.

       (a) Transfer of Functions.--There are transferred to the 
     administrative law judges of the Administrative Law Judge 
     Corps established by section 598 of title 5, United States 
     Code (as added by section 3 of this Act), all functions 
     authorized to be performed on the day before the effective 
     date of this Act by the administrative law judges appointed 
     under section 3105 of such title before the effective date of 
     this Act.
       (b) Use of Agency Facilities and Personnel.--With the 
     consent of the agencies concerned, the Administrative Law 
     Judge Corps of the United States may use the facilities and 
     the services of officers, employees, and other personnel of 
     agencies from which functions and duties are transferred to 
     the Corps for so long as may be needed to facilitate the 
     orderly transfer of those functions and duties under this 
     Act.
       (c) Incidental Transfers.--The personnel, assets, 
     liabilities, contracts, property, records, and unexpended 
     balances of appropriations, authorizations, allocations, and 
     other funds employed, held, used, arising from, available or 
     to be made available, in connection with the functions 
     transferred by this Act, are, subject to section 1531 of 
     title 31, United States Code, transferred to the Corps for 
     appropriate allocation.
       (d) Pay of Transferred Personnel.--The transfer of 
     personnel pursuant to subsection (b) or (c) shall be without 
     reduction in pay or classification for 5 years after such 
     transfer.
       (e) Authorities of Director of OMB.--The Director of the 
     Office of Management and Budget, at such time or times as the 
     Director shall provide, may make such determinations as may 
     be necessary with regard to the functions transferred by this 
     Act, and to make such additional incidental dispositions of 
     personnel, assets, liabilities, grants, contracts, property, 
     records, and unexpended balances of appropriations, 
     authorizations, allocations, and other funds held, used, 
     arising from, available to, or to be made available in 
     connection with such functions, as may be necessary to carry 
     out the provisions of this Act.
       (f) Continued Effectiveness of Prior Actions.--All orders, 
     determinations, rules, regulations, permits, contracts, 
     collective bargaining agreements, recognition of labor 
     organizations, certificates, licenses, and privileges which 
     have been issued, made, granted, or allowed to become 
     effective in the exercise of any duties, powers, or functions 
     which are transferred under this Act and are in effect at the 
     time this Act becomes effective shall continue in effect 
     according to their terms until modified, terminated, 
     superseded, set aside, or repealed by the Administrative Law 
     Judge Corps of the United States or a judge thereof in the 
     exercise of authority vested in the Corps or its members by 
     this Act, by a court of competent jurisdiction, or by 
     operation of law.
       (g) Pending Proceedings.--(1) Except as provided in 
     subsections (d)(5) and (e) of section 599b of title 5, United 
     States Code, this Act shall not affect any proceeding before 
     any department or agency or component thereof which is 
     pending at the time this Act takes effect. Such a proceeding 
     shall be continued before the Administrative Law Judge Corps 
     of the United States or a judge thereof, or, to the extent 
     the proceeding does not relate to functions so transferred, 
     shall be continued before the agency in which it was pending 
     on the effective date of this Act.
       (2) No suit, action, or other proceeding commenced before 
     the effective date of this Act shall abate by reason of the 
     enactment of this Act.
       (h) Reports by Office of Management and Budget.--The 
     Director of the Office of Management and Budget shall monitor 
     and report to the Congress--
       (1) 60 days after the effective date of this Act, on the 
     amount of all funds expended in fiscal year 1995 by each 
     agency on the functions transferred under this Act and the 
     amendments made by this Act;
       (2) no later than October 1, 1995, on the amount of 
     unexpended balances of appropriations, authorizations, 
     allocations, and other funds transferred by all agencies to 
     the Administrative Law Judge Corps under this Act and the 
     amendments made by this Act; and
       (3) 1 year after the effective date of this Act, and each 
     of the next 2 years thereafter on--
       (A) whether the expenditure of each agency that transfers 
     functions and duties under this Act and the amendments made 
     by this Act are reduced by the amount of savings resulting 
     from the transfer of such functions and duties; and
       (B) the Government savings resulting from transfer of such 
     functions to the Administrative Law Judge Corps and 
     recommendations to the Congress on how to achieve additional 
     savings.

     SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated for each of fiscal 
     years 1996, 1997, 1998, 1999, and 2000 to carry out the 
     provisions of this Act and subchapter VI of title 5, United 
     States Code (as added by section 3 of this Act) such amounts 
     as may be necessary, not to exceed in any such fiscal year 
     the total amount expended by all agencies in fiscal year 1995 
     in performing all functions transferred under this Act and 
     the amendments made by this Act.

     SEC. 7. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Title 5, United States Code.--Title 5, United States 
     Code, is amended as follows:
       (1) Section 593(b) is amended--
     [[Page S3400]]   (A) by redesignating paragraphs (4), (5), 
     and (6) as paragraphs (5), (6), and (7), respectively, and
       (B) by inserting the following after paragraph (3):
       ``(4) the chief administrative law judge of the 
     Administrative Law Judge Corps of the United States;''.
       (2) Section 3105 is amended to read as follows:

     ``Sec.  3105. Appointment of administrative law judges

       ``Administrative law judges shall be appointed by the 
     Council of the Administrative Law Judge Corps pursuant to 
     sections 596 and 599c of this title.''.
       (3) Section 3344, and the item relating to section 3344 in 
     the table of sections for chapter 33, are repealed.
       (4) Subchapter III of chapter 75, and the items relating to 
     subchapter III and section 7521 in the table of sections at 
     the beginning of chapter 75, are repealed.
       (5) Section 559 is amended--
       (A) in the first sentence by striking ``chapter 7'' and all 
     that follows through ``7521'' and inserting ``subchapter VI 
     of this chapter, chapter 7, and sections 1305, 3105, 
     4301(2)(E), and 5372''; and
       (B) in the last sentence by striking ``chapter 7'' and all 
     that follows through ``7521'' and inserting ``subchapter VI 
     of this chapter, chapter 7, section 1305, 3105, 4301(2)(E), 
     or 5372''.
       (6) Section 1305 is amended--
       (A) by striking ``section 3105, 3344,'' and inserting 
     ``sections 3105,''; and
       (B) by striking ``, and for the purpose of section 7521 of 
     this title, the Merit Systems Protection Board may''.
       (7) Section 5514(a)(2) is amended in the fourth sentence by 
     striking ``, except that'' and all that follows through 
     ``administrative law judge''.
       (8) Section 7105 is amended--
       (A) in subsection (d) by striking ``, administrative law 
     judges under section 3105 of this title,''; and
       (B) in subsection (e)(2) by striking ``under subsection (d) 
     of this section'' and inserting ``under section 3105 of this 
     title''.
       (9) Section 7132(a) is amended by striking ``appointed by 
     the Authority under section 3105 of this title'' and 
     inserting ``appointed under section 3105 of this title who is 
     conducting hearings under this chapter''.
       (10) Section 7502 is amended by striking ``7521 or''.
       (11) Section 7512(E) is amended by striking ``or 7521''.
       (b) Other Provisions of Law.--
       (1) Section 6(c) of the Commodity Exchange Act is amended--
       (A) in the second sentence (7 U.S.C. 9)--
       (i) by striking ``Administrative Law Judge designated by 
     the Commission'' and inserting ``administrative law judge of 
     the Administrative Law Judge Corps''; and
       (ii) by striking ``Administrative Law Judge'' and inserting 
     ``administrative law judge''; and
       (B) by striking ``Administrative Law Judge'' each 
     subsequent place it appears (7 U.S.C. 15) and inserting 
     ``administrative law judge of the Administrative Law Judge 
     Corps''.
       (2) Section 12(b) of the Commodity Exchange Act (7 U.S.C. 
     16(b)) is amended by striking ``Administrative Law Judges,''.
       (3) Section 274B(e)(2) of the Immigration and Nationality 
     Act (8 U.S.C. 1324b(e)(2)) is amended by striking ``are 
     specially designated by the Attorney General as having'' and 
     inserting ``have''.
       (4) Section 1416(a) of the Interstate Land Sales Full 
     Disclosure Act (15 U.S.C. 1715(a)) is amended--
       (A) in the first sentence by inserting ``, subject to 
     section 599d of title 5, United States Code,'' after ``who 
     may'';
       (B) by striking the second sentence; and
       (C) in the third sentence by striking ``his administrative 
     law judges to other administrative law judges or'' and 
     inserting ``administrative law judges carrying out functions 
     under this title''.
       (5) Section 488A(b) of the Higher Education Act of 1965 (20 
     U.S.C. 1095a(b)) is amended in the third sentence by striking 
     ``, except that'' and all that follows through 
     ``administrative law judge''.
       (6) Section 509(1) of title 28, United States Code, is 
     amended--
       (A) by striking ``subchapter II'' and inserting 
     ``subchapters II and VI''; and
       (B) by striking ``employed by the Department of Justice''.
       (7) Section 12 of the Occupational Safety and Health Act of 
     1970 (29 U.S.C. 661) is amended--
       (A) in subsection (e)--
       (i) by striking ``administrative law judges and other''; 
     and
       (ii) by striking ``: Provided'' and all that follows 
     through the end of the subsection and inserting a period;
       (B) in subsection (j) in the first sentence by striking 
     ``A'' and all that follows through ``Commission,'' and 
     inserting ``An administrative law judge to whom is assigned 
     any proceeding instituted before the Commission shall hear 
     and make a determination upon the proceeding and any motion 
     in connection with such proceeding,''; and
       (C) by striking subsection (k).
       (8) Section 502(e)(1) of the Rehabilitation Act of 1973 (29 
     U.S.C. 792(e)(1)) is amended by striking the second and third 
     sentences and inserting the following: ``Proceedings required 
     to be conducted under this section shall be presided over by 
     administrative law judges appointed under subchapter VI of 
     chapter 5 of title 5, United States Code.''.
       (9) Section 166 of the Job Training Partnership Act (29 
     U.S.C. 1576(a)) is amended in the first sentence by striking 
     ``of the Department of Labor''.
       (10) Section 5(e) of the Federal Mine Safety and Health Act 
     of 1977 (30 U.S.C. 804(e)) is amended to read as follows:
       ``(e) Proceedings required to be conducted in accordance 
     with the provisions of this Act shall be presided over by 
     administrative law judges appointed under subchapter VI of 
     chapter 5 of title 5, United States Code.''.
       (11) Section 113 of the Federal Mine Safety and Health Act 
     of 1977 (30 U.S.C. 823) is amended--
       (A) in subsection (b)(2) by striking all that follows the 
     second sentence;
       (B) in subsection (d)(1) in the first sentence by striking 
     ``appointed by the Commission'' and all that follows through 
     ``by the Commission,'' and inserting ``to whom is assigned 
     any proceeding instituted before the Commission shall hear 
     and make a determination upon the proceeding and any motion 
     in connection with the proceeding,''; and
       (C) in subsection (e) in the first sentence by striking 
     ``its'' each place it appears.
       (12) Section 428(b) of the Black Lung Benefits Act (30 
     U.S.C. 938(b)) is amended by striking the seventh sentence.
       (13) Section 321(c)(1) of title 31, United States Code, is 
     amended--
       (A) by striking ``subchapter II'' and inserting 
     ``subchapters II and VI''; and
       (B) by striking ``employed by the Secretary''.
       (14) Section 3801(a)(7)(A) of title 31, United States Code, 
     is amended by striking ``appointed in the authority'' and all 
     that follows through ``such title;'' and inserting ``of the 
     Administrative Law Judge Corps;''.
       (15) Section 19(d) of the Longshore and Harbor Workers' 
     Compensation Act (33 U.S.C. 919(d)) is amended by amending 
     the second sentence to read as follows: ``Any such hearing 
     shall be conducted by an administrative law judge qualified 
     under subchapter VI of chapter 5 of that title.''.
       (16) Section 21(b)(5) of the Longshore and Harbor Workers' 
     Compensation Act (33 U.S.C. 921(b)(5)) is amended by striking 
     the first sentence.
       (17) Section 7101(b)(2)(B) of title 38, United States Code, 
     is amended by striking ``7521'' and inserting ``599e''.
       (18) Section 8(b)(1) of the Contract Disputes Act of 1978 
     (41 U.S.C. 607(b)(1)) is amended in the first sentence by 
     striking ``hearing examiners appointed pursuant to section 
     3105 of title 5, United States Code'' and inserting 
     ``administrative law judges appointed under section 3105 of 
     title 5, United States Code (as in effect on the day before 
     the effective date of the Reorganization of the Federal 
     Administrative Judiciary Act)''.
       (19) Section 705(a) of the Civil Rights Act of 1964 (42 
     U.S.C. 2000e-4(a)) is amended--
       (A) by striking ``administrative law judges,''; and
       (B) by striking ``: Provided'' and all that follows through 
     the end of the subsection and inserting a period.
       (20) Section 808(c) of the Act of April 11, 1968 (42 U.S.C. 
     3608(c)), is amended--
       (A) in the first sentence by inserting ``, subject to 
     section 599d of title 5, United States Code,'' after ``The 
     Secretary may'';
       (B) by striking the second sentence; and
       (C) in the last sentence by striking ``his hearing 
     examiners to other hearing examiners or'' and inserting 
     ``administrative law judges carrying out functions under this 
     title''.
       (21) Section 806 of the Omnibus Crime Control and Safe 
     Streets Act of 1968 (42 U.S.C. 3787) is amended--
       (A) in the first sentence by striking ``appoint such 
     hearing examiners'' and all that follows through ``United 
     States Code,'' and inserting ``, subject to section 599d of 
     title 5, United States Code, request the use of such 
     administrative law judges''; and
       (B) in the second sentence by striking ``hearing examiner 
     or administrative law judge assigned to or employed thereby'' 
     and inserting ``such administrative law judge''.
       (22) Section 401(c) of the Department of Energy 
     Organization Act (42 U.S.C. 7171(c)) is amended by striking 
     ``appointment and employment of hearing examiners in 
     accordance with the provisions of title 5,'' and inserting 
     ``referral of cases to the Administrative Law Judge Corps in 
     accordance with subchapter VI of chapter 5 of title 5,''.
       (23) Section 303(c)(3) of the Independent Safety Board Act 
     of 1974 (49 U.S.C. App. 1902(c)(3)) is amended by striking 
     ``, attorneys, and administrative law judges'' and inserting 
     ``and attorneys''.
       (24) Section 304(b)(1) of the Independent Safety Board Act 
     of 1974 (49 U.S.C. App. 1903(b)(1)) is amended in the first 
     sentence by striking ``employed by or''.
       (c) References in Other Laws.--Reference in any other 
     Federal law to an administrative law judge or hearing 
     examiner or to an administrative law judge, hearing examiner, 
     or employee appointed under section 3105 of title 5, United 
     States Code, shall be deemed to refer to an administrative 
     law judge of the Administrative Law Judge Corps established 
     by section 598 of title 5, United States Code.

     SEC. 8. OPERATION OF THE CORPS.

       Operation of the Corps shall commence on the date the first 
     chief administrative law judge of the Corps takes office.

     SEC. 9. CONTRACT DISPUTES ACT.

       Nothing in this Act or the amendments made by this Act 
     shall be deemed to affect 
     [[Page S3401]] any agency board established pursuant to the 
     Contract Disputes Act (41 U.S.C. 601 and following), or any 
     other person designated to resolve claims or disputes 
     pursuant to such Act.

     SEC. 10. PAYMENT BY CERTAIN AGENCIES FOR ADMINISTRATIVE LAW 
                   JUDGE SALARIES AND EXPENSES.

       Any agency which before the effective date of this Act paid 
     the salaries and expenses of administrative law judges from 
     fees charged by such agency shall on and after the effective 
     date of this Act pay from such fees to the chief judge of the 
     Administrative Law Judge Corps, or the designee of the chief 
     judge, an amount necessary to reimburse the salaries and 
     expenses of the Corps for services provided by the Corps to 
     such agency.

     SEC. 11. EFFECTIVE DATE.

       Except as otherwise provided, this Act and the amendments 
     made by this Act shall take effect 120 days after the date of 
     the enactment of this Act.
                                 ______

      By Mr. McCAIN (for himself and Mr. Inouye):
  S. 487. A bill to amend the Indian Gaming Regulatory Act, and for 
other purposes; to the Committee on Indian Affairs.


        the indian gaming regulatory act amendments act of 1995

 Mr. McCAIN. Mr. President, I am pleased to join today with the 
vice chairman of the Committee on Indian Affairs, Senator Inouye, as 
the sponsor of the Indian Gaming Regulatory Act Amendments Act of 1995. 
I want to associate myself with Senator Inouye's remarks regarding this 
legislation and the issue of Indian gaming. I commend Senator Inouye 
for his outstanding leadership over the years on this complex issue.
  The bill we are introducing today would provide for a major overhaul 
of the Indian Gaming Regulatory Act of 1988. It will provide for 
minimum Federal standards in the regulation and licensing of class II 
and class III gaming as well as all of the contractors, suppliers, and 
industries associated with such gaming. This will be accomplished 
through the Federal Indian Gaming Regulatory Commission which will be 
funded through assessments on Indian gaming revenues and fees imposed 
on license applicants. The bill also provides a new process for the 
negotiation of class III compacts which authorizes the Secretary of the 
Department of the Interior to negotiate compacts with Indian tribes in 
those instances where a State chooses not to participate in compact 
negotiations or where an Indian tribe and a State cannot reach an 
agreement on a compact. This process is consistent with recent Federal 
court decisions.
  In addition, the bill is consistent with the 1987 decision of the 
U.S. Supreme Court in the case of California versus Cabazon Band of 
Mission Indians in that it neither expands for further restricts the 
scope of Indian Gaming. The laws of each State would continue to be the 
basis for determining what gaming activities may be available to an 
Indian tribe located in that State.
  Since the enactment of the Indian Gaming Regulatory Act in 1988, 
there has been a dramatic increase in the amount of gaming activity 
among the Indian tribes. In 1993, Indian gaming was estimated to yield 
gross revenues of about $4 billion per year and net revenues were 
estimated at $750 million. Today, there are about 160 class II bingo 
and card games in operation and there are now over 110 tribal/State 
compacts governing class III gaming in 21 States. Indian gaming 
comprises about 3 percent of all gaming in the United States. Gaming 
activities operated by State governments
 comprise about 36 percent of all gaming and the private sector 
accounts for the balance of the gaming activity in the Nation.

  Indian gaming has become the single largest source of economic 
activity for Indian tribes. Annual revenues derived from Indian 
agricultural resources have been estimated at $550 million and have 
historically been the leading source of income for Indian tribes and 
individuals. Annual revenues from oil, gas, and minerals are about $230 
million and Indian forestry resources revenues are estimated at $61 
million. The estimated annual earnings on gaming now equal or exceed 
all of the revenues derived from Indian natural resources. In addition, 
Indian gaming has generated tens of thousands of new jobs for Indians 
and non-Indians. On many reservations gaming has meant the end of 
unemployment rates of 90 or 100 percent and the beginning of an era of 
full employment.
  Under the Indian Gaming Regulatory Act of 1988, Indian tribes are 
required to expend the profits from gaming activities to fund tribal 
government operations or programs and to promote tribal economic 
development. Profits may only be distributed directly to the members of 
an Indian tribe under a plan which has been approved by the Secretary 
of the Interior. Only a few such plans have been approved. Virtually 
all of the proceeds from Indian gaming activities are used to fund the 
social welfare, education, and health needs of the Indian tribes. 
Schools, health facilities, roads, and other vital infrastructure is 
being built by the Indian tribes with the proceeds from Indian gaming.
  In the years before the enactment of the Indian Gaming Regulatory Act 
and in the years since its enactment we have heard concerns about the 
possibility for organized criminal elements to penetrate Indian gaming. 
Both the Department of Justice and the FBI have repeatedly testified 
before the Committee on Indian Affairs and have indicated that there is 
not any substantial criminal activity of any kind associated with 
Indian gaming. Some of our colleagues have suggested that no one would 
know if there is criminal activity because not enough people are 
looking for it. I believe that this point of view overlooks the fact 
that the act provides for a very substantial regulatory and law 
enforcement role by the States and Indian tribes in class III gaming 
and by the Federal Government in class II gaming. The record clearly 
shows that in the few instances of known criminal activity in class III 
gaming, the Indian tribes have discovered the activity and have sought 
Federal assistance in law enforcement.
  Nevertheless, the record before the Committee on Indian Affairs also 
shows that the absence of minimum Federal standards for the regulation 
and licensing of Indian gaming has allowed a void to develop which will 
become more and more attractive to criminal elements as Indian gaming 
continues to generate increased revenues. The legislation we are 
introducing today provides for the development of strict minimum 
Federal standards based on the recommendations of Federal, State and 
tribal officials. While Indian tribes or States, or both, will continue 
to exercise primary regulatory authority, their regulatory standards 
must meet or exceed the minimum Federal standards. In the event that 
the Federal Indian Gaming Regulatory Commission determines that the 
minimum Federal standards are not being met, then the Commission may 
directly regulate the gaming activity until such time as the Federal 
standards are met. In addition, the Commission is vested with authority 
to issue and revoke licenses as well as to impose civil fines, close 
Indian gaming facilities or seek enforcement of the act through the 
Federal courts.
  As many of our colleagues know, one of the areas which has caused the 
greatest controversy under the current law relates to what has come to 
be known as the scope of gaming. A related issue is the refusal of some 
States to enter into negotiations for a class III compact and their 
assertion of sovereign immunity under the 11th amendment to the 
Constitution when an Indian tribe seeks judicial relief as provided by 
the act. The bill we are introducing incorporates the explicit 
standards of the Cabazon decision to guide all parties in determining 
the permissible gaming activities under the laws of any State. State 
laws will continue to govern this issue. We have not proposed the 
preemption of the gaming laws of any State. In most States, the issue 
of scope of gaming has now been settled through negotiation or 
litigation. In a few States this issue remains unresolved, but appears 
headed toward resolution by the courts.
  In the course of our work on the gaming issue in the 103d Congress, 
Senator Inouye and I advanced various formal and informal proposals for 
Federal legislation to resolve the scope of gaming issue. In addition 
proposals were developed by State and tribal officials. However, we 
were never able to develop a consensus on any one proposal. While the 
Committee on Indian Affairs remains open to suggestions on this issue, 
it is apparent that obtaining a consensus may not be possible. This 
[[Page S3402]] may be an area of the law best left to resolution 
through the courts.
  With regard to the issue of the refusal of some States to negotiate 
and their assertion that the 1988 act violates the 11th amendment, the 
U.S. Supreme Court recently agreed to hear a case which raises that 
issue. As I noted earlier, the bill we are introducing today seeks to 
resolve this issue on terms that are consistent with recent decisions 
of the Federal courts.
  Mr. President, I am sure that we will find many things to change in 
this legislation as it moves through the Senate. However, I believe 
that it provides a good foundation for our further consideration of 
this important issue. I want to emphasize that this bill is intended to 
stimulate discussion. I am looking forward to hearing from all 
interested parties with regard to their constructive suggestions for 
ways to improve the bill and move it forward.
  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. 487

       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 ``Indian Gaming Regulatory Act 
     Amendments Act of 1995''.

     SEC. 2. AMENDMENTS TO THE INDIAN GAMING REGULATORY ACT.

       The Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.) 
     is amended--
       (1) by striking the first section and inserting the 
     following new section:
     ``SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

``Sec. 1. Short title; table of contents.
``Sec. 2. Congressional findings.
``Sec. 3. Purposes.
``Sec. 4. Definitions.
``Sec. 5. Establishment of the Federal Indian Gaming Regulatory 
              Commission.
``Sec. 6. Powers of the Chairperson.
``Sec. 7. Powers and authority of the Commission.
``Sec. 8. Regulatory framework.
``Sec. 9. Advisory Committee on Minimum Regulatory Requirements and 
              Licensing Standards.
``Sec. 10. Licensing.
``Sec. 11. Requirements for the conduct of class I and class II gaming 
              on Indian lands.
``Sec. 12. Class III gaming on Indian lands.
``Sec. 13. Review of contracts.
``Sec. 14. Review of existing contracts; interim authority.
``Sec. 15. Civil penalties.
``Sec. 16. Judicial review.
``Sec. 17. Commission funding.
``Sec. 18. Authorization of appropriations.
``Sec. 19. Miscellaneous.
``Sec. 20. Dissemination of information.
``Sec. 21. Severability.
``Sec. 22. Criminal penalties.
``Sec. 23. Conforming amendment.
``Sec. 24. Definition of financial institutions.'';

       (2) by striking sections 2 through 19 and inserting the 
     following new sections:

     ``SEC. 2. CONGRESSIONAL FINDINGS.

       ``The Congress finds that--
       ``(1) Indian tribes are--
       ``(A) engaged in the operation of gaming activities on 
     Indian lands as a means of generating tribal governmental 
     revenue; and
       ``(B) licensing such activities;
       ``(2) clear Federal standards and regulations for the 
     conduct of gaming on Indian lands will assist tribal 
     governments in assuring the integrity of gaming activities 
     conducted on Indian lands;
       ``(3) a principal goal of Federal Indian policy is to 
     promote tribal economic development, tribal self-sufficiency, 
     and strong tribal government;
       ``(4) while Indian tribes have the right to regulate the 
     operation of gaming activities on Indian lands if such gaming 
     activities are--
       ``(A) not specifically prohibited by Federal law; and
       ``(B) conducted within a State that as a matter of public 
     policy permits such gaming activities,
     Congress has the authority to regulate the privilege of doing 
     business with Indian tribes in Indian country (as defined in 
     section 1151 of title 18, United States Code);
       ``(5) systems for the regulation of gaming activities on 
     Indian lands should meet or exceed federally established 
     minimum regulatory requirements;
       ``(6) the operation of gaming activities on Indian lands 
     has had a significant impact on commerce with foreign 
     nations, among the several States and with the Indian tribes; 
     and
       ``(7) the Constitution vests the Congress with the powers 
     to regulate Commerce with foreign Nations, and among the 
     several States, and with the Indian Tribes, and this Act is 
     enacted in the exercise of those powers.

     ``SEC. 3. PURPOSES.

       ``The purposes of this Act are--
       ``(1) to ensure the right of Indian tribes to conduct 
     gaming activities on Indian lands in a manner consistent with 
     the decision of the Supreme Court in California et al. v. 
     Cabazon Band of Mission Indians et al. (480 U.S. 202, 107 S. 
     Ct. 1083, 94 L. Ed. 2d 244 (1987)), involving the Cabazon and 
     Morongo Bands of Mission Indians;
       ``(2) to provide a statutory basis for the conduct of 
     gaming activities on Indian lands as a means of promoting 
     tribal economic development, self-sufficiency, and strong 
     Indian tribal governments;
       ``(3) to provide a statutory basis for the regulation of 
     gaming activities on Indian lands by an Indian tribe adequate 
     to shield such activities from organized crime and other 
     corrupting influences, to ensure that an Indian tribal 
     government is the primary beneficiary of the operation of 
     gaming activities, and to ensure that gaming is conducted 
     fairly and honestly by both the operator and players; and
       ``(4) to declare that the establishment of independent 
     Federal regulatory authority for the conduct of gaming 
     activities on Indian lands and the establishment of Federal 
     minimum regulatory requirements for the conduct of gaming 
     activities on Indian lands are necessary to protect such 
     gaming.

     ``SEC. 4. DEFINITIONS.

       ``For purposes of this Act, the following definitions shall 
     apply:
       ``(1) Applicant.--The term `applicant' means any person who 
     applies for a license pursuant to this Act, including persons 
     applying for a renewal of a license.
       ``(2) Advisory committee.--The term `Advisory Committee' 
     means the Advisory Committee on Minimum Regulatory 
     Requirements and Licensing Standards established under 
     section 9(a).
       ``(3) Attorney general.--The term `Attorney General' means 
     the Attorney General of the United States.
       ``(4) Chairperson.--The term `Chairperson' means the 
     Chairperson of the Federal Indian Gaming Regulatory 
     Commission established under section 5.
       ``(5) Class i gaming.--The term `class I gaming' means 
     social games played solely for prizes of minimal value or 
     traditional forms of Indian gaming engaged in by individuals 
     as a part of, or in connection with, tribal ceremonies or 
     celebrations.
       ``(6) Class ii gaming.--
       ``(A) In general.--The term `class II gaming' means--
       ``(i) the game of chance commonly known as bingo or lotto 
     including, if played in the same location, pull-tabs, punch 
     boards, tip jars, instant bingo, and other games similar to 
     bingo (whether or not electronic, computer, or other 
     technologic aids are used in connection therewith)--

       ``(I) which is played for prizes, including monetary 
     prizes, with cards bearing numbers or other designations;
       ``(II) in which the holder of the card covers such numbers 
     or designations when objects, similarly numbered or 
     designated, are drawn or electronically determined; and
       ``(III) in which the game is won by the first person 
     covering a previously designated arrangement of numbers or 
     designations on such cards; and

       ``(ii) card games that--

       ``(I) are explicitly authorized by the laws of a State; or
       ``(II) are not explicitly prohibited by the laws of a State 
     and are played at any location in the State, but only if such 
     card games are played in conformity with any such laws 
     (including regulations) of the State regarding hours or 
     periods of operation of such card games or limitations on 
     wagers or pot sizes in such card games.

       ``(B) Exclusions.--The term `class II gaming' does not 
     include--
       ``(i) any banking card games, including baccarat, chemin de 
     fer, or blackjack (21); or
       ``(ii) gambling devices, as defined in paragraph (11), 
     except for any class II game that is played under 
     subparagraph (A)(i) with technologic aid that has been 
     approved by the Commission.
       ``(C) Treatment of certain games.--Notwithstanding any 
     other provision of this paragraph, the term `class II gaming' 
     includes those card games played in the State of Michigan, 
     the State of North Dakota, the State of South Dakota, or the 
     State of Washington, that, on or before May 1, 1988, were 
     actually operated in such State by an Indian tribe, but only 
     to the extent of the nature and scope of the card games that 
     were actually operated by an Indian tribe in such State on or 
     before such date, as determined by the Commission (as defined 
     in paragraph (8)).
       ``(7) Class iii gaming.--The term `class III gaming' means 
     all forms of gaming that are not class I gaming or class II 
     gaming.
       ``(8) Commission.--The term `Commission' means the Federal 
     Indian Gaming Regulatory Commission established under section 
     5.
       ``(9) Compact.--The term `compact' means an agreement 
     relating to the operation of class III gaming on Indian lands 
     entered into by an Indian tribe and a State, that is approved 
     by the Secretary, or an agreement relating to the operation 
     of class III gaming that is negotiated by an Indian tribe and 
     the Secretary, and approved by the Secretary.
       ``(10) Electronic, computer, or other technologic aid.--The 
     term `electronic, 
     [[Page S3403]] computer, or other technologic aid', in 
     connection with class II gaming, means a device, such as a 
     computer, telephone, cable, television, satellite, or bingo 
     blower, that, when used--
       ``(A) is not a game of chance or a gambling device;
       ``(B) merely assists a player or the playing of a game; and
       ``(C) is operated according to applicable Federal 
     communications law.
       ``(11) Electronic or electromechanical facsimile.--The term 
     `electronic or electromechanical facsimile' means any 
     gambling device, as defined in paragraph (12).
       ``(12) Gambling device.--The term `gambling device' means--
       ``(A) any gambling device, as defined in section 1(a) of 
     the Act of January 2, 1951 (commonly referred to as the 
     `Gambling Devices Transportation Act') (64 Stat. 1134, 
     chapter 1194; 15 U.S.C. 1171(a)), including any electronic or 
     electromechanical facsimile; and
       ``(B) does not include a technological aid to class II 
     gaming that is approved by the Commission.
       ``(13) Gaming-related contract.--The term `gaming-related 
     contract' means any agreement for an amount of more than 
     $50,000 per year--
       ``(A) under which an Indian tribe or an agent of any Indian 
     tribe procures gaming materials, supplies, equipment, or 
     services that are used in the conduct of a class II or class 
     III gaming activity, or
       ``(B) financing contracts or agreements for any facility in 
     which a gaming activity is to be conducted.
       ``(14) Gaming-related contractor.--The term `gaming-related 
     contractor' means any person who enters into a gaming-related 
     contract with an Indian tribe or an agent of an Indian tribe, 
     including any person with a financial interest in such 
     contract.
       ``(15) Gaming service industry.--The term `gaming service 
     industry' means any form of enterprise that provides goods or 
     services that are used in conjunction with any class II or 
     class III gaming activity, in any case in which--
       ``(A) the proposed agreement between the enterprise and a 
     class II or class III gaming operation, or the aggregate of 
     such agreements is for an amount of not less than $100,000 
     per year; or
       ``(B) the amount of business conducted by such enterprise 
     with any gaming operation in the 1-year period preceding the 
     effective date of such agreement was not less than $250,000.
       ``(16) Indian lands.--The term `Indian lands' means--
       ``(A) all lands within the limits of any Indian 
     reservation; and
       ``(B) any lands--
       ``(i) the title to which is held in trust by the United 
     States for the benefit of any Indian tribe; or
       ``(ii) the title to which is--

       ``(I) held by an Indian tribe subject to a restriction by 
     the United States against alienation;
       ``(II) held by the United States for the benefit of an 
     individual Indian; or
       ``(III) held by an individual subject to restriction by the 
     United States against alienation; and

       ``(iii) over which an Indian tribe exercises governmental 
     power.
       ``(17) Indian tribe.--The term `Indian tribe' means any 
     Indian tribe, band, nation, or other organized group or 
     community of Indians that--
       ``(A) is recognized as eligible by the Secretary for the 
     special programs and services provided by the United States 
     to Indians because of their status as Indians; and
       ``(B) is recognized as possessing powers of self-
     government.
       ``(18) Key employee.--The term `key employee' means any 
     individual employed in a gaming operation licensed pursuant 
     to this Act in a supervisory capacity or empowered to make 
     any discretionary decision with regard to the gaming 
     operation, including any pit boss, shift boss, credit 
     executive, cashier supervisor, gaming facility manager or 
     assistant manager, or manager or supervisor of security 
     employees.
       ``(19) Management contract.--The term `management contract' 
     means any contract or collateral agreement between an Indian 
     tribe and a contractor, if such contract or agreement 
     provides for the management of all or part of a gaming 
     operation.
       ``(20) Management contractor.--The term `management 
     contractor' means any person entering into a management 
     contract with an Indian tribe or an agent of the Indian tribe 
     for the management of a gaming operation, including any 
     person with a financial interest in such contract.
       ``(21) Material control.--The term `material control' means 
     the exercise of authority or supervision or the power to make 
     or cause to be made any discretionary decision with regard to 
     matters which have a substantial effect on the financial or 
     management aspects of a gaming operation.
       ``(22) Net revenues.--The term `net revenues' means the 
     gross revenues of an Indian gaming activity reduced by the 
     sum of--
       ``(A) any amounts paid out or paid for as prizes; and
       ``(B) the total operating expenses associated with the 
     gaming activity, excluding management fees.
       ``(23) Person.--The term `person' means an individual, 
     firm, corporation, association, partnership, trust, 
     consortium, joint venture, entity, or gaming operation.
       ``(24) Secretary.--The term `Secretary' means the Secretary 
     of the Interior.

     ``SEC. 5. ESTABLISHMENT OF THE FEDERAL INDIAN GAMING 
                   REGULATORY COMMISSION.

       ``(a) Establishment.--There is established as an 
     independent agency of the United States, a Commission to be 
     known as the Federal Indian Gaming Regulatory Commission. 
     Such Commission shall be an independent establishment, as 
     defined in section 104 of title 5, United States Code.
       ``(b) Composition of the Commission.--
       ``(1) In general.--The Commission shall be composed of 3 
     full-time members, who shall be appointed by the President, 
     by and with the advice and consent of the Senate.
       ``(2) Citizenship of members.--Each member of the 
     Commission shall be a citizen of the United States.
       ``(3) Requirements for members.--No member of the 
     Commission may--
       ``(A) pursue any other business or occupation or hold any 
     other office;
       ``(B) be actively engaged in or, other than through 
     distribution of gaming revenues as a member of an Indian 
     tribe, have any direct pecuniary interest in gaming 
     activities;
       ``(C) other than through distribution of gaming revenues as 
     a member of an Indian tribe, have any pecuniary interest in 
     any business or organization that holds a gaming license 
     under this Act or that does business with any person or 
     organization licensed under this Act;
       ``(D) have been convicted of a felony or gaming offense; or
       ``(E) have any financial interest in, or management 
     responsibility for, any gaming-related contract or any other 
     contract approved pursuant to this Act.
       ``(4) Political affiliation.--
       ``(A) In general.--Not more than 2 members of the 
     Commission shall be members of the same political party. In 
     making appointments to the Commission, the President shall 
     appoint members of different political parties, to the extent 
     practicable.
       ``(B) Tribal membership.--At least 2 members of the 
     Commission shall each be a member of a federally recognized 
     Indian tribe. No 2 members appointed under this subparagraph 
     shall be members of the same Indian tribe.
       ``(5) Additional requirements.--The Commission shall be 
     composed of the most qualified individuals available, subject 
     to the following conditions:
       ``(A) Certified public accountant representation.--One 
     member of the Commission shall be a certified public 
     accountant with not less than 5 years of progressively 
     responsible experience in accounting and auditing, and a 
     comprehensive knowledge of the principles and practices of 
     corporate finance.
       ``(B) Law enforcement representation.--One member of the 
     Commission shall be selected with special reference to 
     training and experience in the fields of investigation or law 
     enforcement.
       ``(6) Background investigations.--The Attorney General 
     shall conduct a background investigation concerning any 
     individual under consideration for appointment to the 
     Commission, with particular regard to the financial 
     stability, integrity, responsibility, and reputation for good 
     character, honesty, and integrity of the nominee.
       ``(c) Chairperson.--The President shall select a 
     Chairperson from among the members appointed to the 
     Commission.
       ``(d) Vice Chairperson.--The Commission shall select, by 
     majority vote, one of the members of the Commission to serve 
     as Vice Chairperson. The Vice Chairperson shall--
       ``(1) serve as Chairperson of the Commission in the absence 
     of the Chairperson; and
       ``(2) exercise such other powers as may be delegated by the 
     Chairperson.
       ``(e) Terms of Office.--
       ``(1) In general.--Each member of the Commission shall hold 
     office for a term of 5 years.
       ``(2) Initial appointments.--Initial appointments to the 
     Commission shall be made for the following terms:
       ``(A) The Chairperson shall be appointed for a term of 5 
     years.
       ``(B) One member shall be appointed for a term of 4 years.
       ``(C) One member shall be appointed for a term of 3 years.
       ``(3) Limitation.--No member shall serve for more than 2 
     terms of 5 years each.
       ``(f) Vacancies.--
       ``(1) In general.--Each individual appointed by the 
     President to serve as Chairperson and each member of the 
     Commission shall, unless removed for cause under paragraph 
     (2), serve in the capacity for which such individual is 
     appointed until the expiration of the term of such individual 
     or until a successor is duly appointed and qualified.
       ``(2) Removal from office.--The Chairperson or any member 
     of the Commission may only be removed from office before the 
     expiration of the term of office by the President for neglect 
     of duty, malfeasance in office, or for other good cause 
     shown.
       ``(3) Term to fill vacancies.--The term of any member 
     appointed to fill a vacancy on the Commission shall be for 
     the unexpired term of the member.
       ``(g) Quorum.--Two members of the Commission shall 
     constitute a quorum.
       ``(h) Meetings.--
       ``(1) In general.--The Commission shall meet at the call of 
     the Chairperson or a majority of the members of the 
     Commission.
     [[Page S3404]]   ``(2) Majority of members determine 
     action.--A majority of the members of the Commission shall 
     determine any action of the Commission.
       ``(i) Compensation.--
       ``(1) Chairperson.--The Chairperson shall be paid at a rate 
     equal to that of level IV of the Executive Schedule under 
     section 5316 of title 5, United States Code.
       ``(2) Other members.--Each other member of the Commission 
     shall be paid at a rate equal to that of level V of the 
     Executive Schedule under section 5316 of title 5, United 
     States Code.
       ``(3) Travel.--All members of the Commission shall be 
     reimbursed in accordance with title 5, United States Code, 
     for travel, subsistence, and other necessary expenses 
     incurred by them in the performance of their duties.
       ``(j) Administrative Support Services.--The Administrator 
     of General Services shall provide to the Commission on a 
     reimbursable basis such administrative support services as 
     the Commission may request.

     ``SEC. 6. POWERS OF THE CHAIRPERSON.

       ``(a) Chief Executive Officer.--The Chairperson shall serve 
     as the chief executive officer of the Commission.
       ``(b) Administration of the Commission.--
       ``(1) In general.--Subject to subsection (c), the 
     Chairperson--
       ``(A) shall employ and supervise such personnel as the 
     Chairperson considers necessary to carry out the functions of 
     the Commission, and assign work among such personnel;
       ``(B) shall appoint a General Counsel to the Commission who 
     shall be paid at the annual rate of basic pay payable for ES-
     6 of the Senior Executive Service Schedule under section 5382 
     of title 5, United States Code;
       ``(C) shall appoint and supervise other staff of the 
     Commission without regard to the provisions of title 5, 
     United States Code, governing appointments in the competitive 
     service;
       ``(D) may procure temporary and intermittent services under 
     section 3109(b) of title 5, United States Code, but at rates 
     for individuals not to exceed the daily equivalent of the 
     maximum annual rate of basic pay payable for ES-6 of the 
     Senior Executive Service Schedule;
       ``(E) may request the head of any Federal agency to detail 
     any personnel of such agency to the Commission to assist the 
     Commission in carrying out the duties of the Commission under 
     this Act, unless otherwise prohibited by law;
       ``(F) shall use and expend Federal funds and funds 
     collected pursuant to section 17; and
       ``(G) may contract for the services of such other 
     professional, technical, and operational personnel and 
     consultants as may be necessary to the performance of the 
     Commission's responsibilities under this Act.
       ``(2) Compensation of staff.--The staff referred to in 
     paragraph (1)(C) shall be paid without regard to the 
     provisions of chapter 51 and subchapters III and VIII of 
     chapter 53 of title 5, United States Code, relating to 
     classification and General Schedule and Senior Executive 
     Service Schedule pay rates, except that no individual so 
     appointed may receive pay in excess of the annual rate of 
     basic pay payable for ES-5 of the Senior Executive Service 
     Schedule under section 5382 of title 5, United States Code.
       ``(c) Applicable Policies.--In carrying out any of the 
     functions under this section, the Chairperson shall be 
     governed by the general policies of the Commission and by 
     such regulatory decisions, findings, and determinations as 
     the Commission may by law be authorized to make.

     ``SEC. 7. POWERS AND AUTHORITY OF THE COMMISSION.

       ``(a) General Powers.--
       ``(1) In general.--The Commission shall have the power to--
       ``(A) approve the annual budget of the Commission;
       ``(B) promulgate regulations to carry out this Act;
       ``(C) establish a rate of fees and assessments, as provided 
     in section 17;
       ``(D) conduct investigations, including background 
     investigations;
       ``(E) issue a temporary order closing the operation of 
     gaming activities;
       ``(F) after a hearing, make permanent a temporary order 
     closing the operation of gaming activities, as provided in 
     section 15;
       ``(G) grant, deny, limit, condition, restrict, revoke, or 
     suspend any license issued under any licensing authority 
     conferred upon the Commission pursuant to this Act or fine 
     any person licensed pursuant to this Act for violation of any 
     of the conditions of licensure under this Act;
       ``(H) inspect and examine all premises in which class II or 
     class III gaming is conducted on Indian lands;
       ``(I) demand access to and inspect, examine, photocopy, and 
     audit all papers, books, and records of class II and class 
     III gaming activities conducted on Indian lands and any other 
     matters necessary to carry out the duties of the Commission 
     under this Act;
       ``(J) use the United States mail in the same manner and 
     under the same conditions as any department or agency of the 
     United States;
       ``(K) procure supplies, services, and property by contract 
     in accordance with applicable Federal laws;
       ``(L) enter into contracts with Federal, State, tribal, and 
     private entities for activities necessary to the discharge of 
     the duties of the Commission;
       ``(M) serve or cause to be served process or notices of the 
     Commission in a manner provided for by the Commission or in a 
     manner provided for the service of process and notice in 
     civil actions in accordance with the applicable rules of a 
     tribal, State, or Federal court;
       ``(N) propound written interrogatories and appoint hearing 
     examiners, to whom may be delegated the power and authority 
     to administer oaths, issue subpoenas, propound written 
     interrogatories, and require testimony under oath;
       ``(O) conduct all administrative hearings pertaining to 
     civil violations of this Act (including any civil violation 
     of a regulation promulgated under this Act);
       ``(P) collect all fees and assessments authorized by this 
     Act and the regulations promulgated pursuant to this Act;
       ``(Q) assess penalties for violations of the provisions of 
     this Act and the regulations promulgated pursuant to this 
     Act;
       ``(R) provide training and technical assistance to Indian 
     tribes with respect to all aspects of the conduct and 
     regulation of gaming activities;
       ``(S) monitor and, as specifically authorized by this Act, 
     regulate class II and class III gaming;
       ``(T) approve all management-related and gaming-related 
     contracts; and
       ``(U) in addition to the authorities otherwise specified in 
     this Act, delegate, by published order or rule, any of the 
     functions of the Commission (including functions with respect 
     to hearing, determining, ordering, certifying, reporting, or 
     otherwise acting on the part of the Commission concerning any 
     work, business, or matter) to a division of the Commission, 
     an individual member of the Commission, an administrative law 
     judge, or an employee of the Commission.
       ``(2) Statutory construction.--Nothing in this section may 
     be construed to authorize the delegation of the function of 
     rulemaking, as described in subchapter II of chapter 5 of 
     title 5, United States Code, with respect to general rules 
     (as distinguished from rules of particular applicability), or 
     the promulgation of any other rule.
       ``(b) Right To Review Delegated Functions.--
       ``(1) In general.--With respect to the delegation of any of 
     the functions of the Commission, the Commission shall retain 
     a discretionary right to review the action of any division of 
     the Commission, individual member of the Commission, 
     administrative law judge, or employee of the Commission, upon 
     the initiative of the Commission.
       ``(2) Vote needed for review.--The vote of one member of 
     the Commission shall be sufficient to bring an action 
     referred to in paragraph (1) before the Commission for 
     review, and the Commission shall ratify, revise, or reject 
     the action under review not later than the last day of the 
     applicable period specified in regulations promulgated by the 
     Commission.
       ``(3) Failure to conduct review.--If the Commission 
     declines to exercise the right to such review or fails to 
     exercise such right within the applicable period specified in 
     regulations promulgated by the Commission, the action of any 
     such division of the Commission, individual member of the 
     Commission, administrative law judge, or employee, shall, for 
     all purposes, including any appeal or review of such action, 
     be deemed an action of the Commission.
       ``(c) Minimum Requirements.--Pursuant to the procedures 
     described in section 9(d), after receiving recommendations 
     from the Advisory Committee, the Commission shall establish 
     minimum Federal standards--
       ``(1) for background investigations, licensing of persons, 
     and licensing of gaming operations associated with the 
     conduct or regulation of class II and class III gaming on 
     Indian lands by tribal governments; and
       ``(2) for the operation of class II and class III gaming 
     activities on Indian lands, including--
       ``(A) surveillance and security personnel and systems 
     capable of monitoring all gaming activities, including the 
     conduct of games, cashiers' cages, change booths, count 
     rooms, movements of cash and chips, entrances and exits to 
     gaming facilities, and other critical areas of any gaming 
     facility;
       ``(B) procedures for the protection of the integrity of the 
     rules for the play of games and controls related to such 
     rules;
       ``(C) credit and debit collection controls;
       ``(D) controls over gambling devices and equipment; and
       ``(E) accounting and auditing.
       ``(d) Commission Access to Information.--
       ``(1) In general.--The Commission may secure from any 
     department or agency of the United States information 
     necessary to enable the Commission to carry out this Act. 
     Unless otherwise prohibited by law, upon request of the 
     Chairperson, the head of such department or agency shall 
     furnish such information to the Commission.
       ``(2) Information transfer.--The Commission may secure from 
     any law enforcement or gaming regulatory agency of any State, 
     Indian tribe, or foreign nation information necessary to 
     enable the Commission to carry out this Act. Unless otherwise 
     prohibited by law, upon request of the Chairperson, the head 
     of any State or tribal law enforcement agency shall furnish 
     such information to the Commission.
       ``(3) Privileged information.--Notwithstanding sections 552 
     and 552a of title 5, United States Code, the Commission shall 
     protect from disclosure information provided by 
     [[Page S3405]] Federal, State, tribal, or international law 
     enforcement or gaming regulatory agencies.
       ``(4) Law enforcement agency.--For purposes of this 
     subsection, the Commission shall be considered a law 
     enforcement agency.
       ``(e) Investigations and Actions.--
       ``(1) In general.--
       ``(A) Possible violations.--The Commission may, at the 
     discretion of the Commission, and as specifically authorized 
     by this Act, conduct such investigations as the Commission 
     considers necessary to determine whether any person has 
     violated, is violating, or is conspiring to violate any 
     provision of this Act (including any rule or regulation 
     promulgated under this Act). The Commission may require or 
     permit any person to file with the Commission a statement in 
     writing, under oath, or otherwise as the Commission may 
     determine, concerning all of the relevant facts and 
     circumstances regarding the matter under investigation by the 
     Commission pursuant to this subsection.
       ``(B) Administrative investigations.--The Commission is 
     authorized, at the discretion of the Commission, and as 
     specifically authorized by this Act, to investigate such 
     facts, conditions, practices, or matters as the Commission 
     considers necessary or proper to aid in--
       ``(i) the enforcement of any provision of this Act;
       ``(ii) prescribing rules and regulations under this Act; or
       ``(iii) securing information to serve as a basis for 
     recommending further legislation concerning the matters to 
     which this Act relates.
       ``(2) Administrative authorities.--
       ``(A) In general.--For the purpose of any investigation or 
     any other proceeding conducted under this Act, any member of 
     the Commission or any officer designated by the Commission is 
     empowered to administer oaths and affirmations, subpoena 
     witnesses, compel their attendance, take evidence, and 
     require the production of any books, papers, correspondence, 
     memoranda, or other records that the Commission considers 
     relevant or material to the inquiry. The attendance of such 
     witnesses and the production of any such records may be 
     required from any place in the United States at any 
     designated place of hearing.
       ``(B) Requiring appearances or testimony.--In case of 
     contumacy by, or refusal to obey any subpoena issued to, any 
     person, the Commission may invoke the jurisdiction of any 
     court of the United States within the jurisdiction of which 
     an investigation or proceeding is carried on, or where such 
     person resides or carries on business, in requiring the 
     attendance and testimony of witnesses and the production of 
     books, papers, correspondence, memoranda, and other records.
       ``(C) Court orders.--Any such court may issue an order 
     requiring such person to appear before the Commission or 
     member of the Commission or officer designated by the 
     Commission, there to produce records, if so ordered, or to 
     give testimony touching the matter under investigation or in 
     question, and any failure to obey such order of the court may 
     be punished by such court as a contempt of such court.
       ``(3) Enforcement.--
       ``(A) In general.--If the Commission determines that any 
     person is engaged, has engaged, or is conspiring to engage, 
     in any act or practice constituting a violation of any 
     provision of this Act (including any rule or regulation 
     promulgated under this Act), the Commission may--
       ``(i) bring an action in the appropriate district court of 
     the United States or the United States District Court for the 
     District of Columbia to enjoin such act or practice, and upon 
     a proper showing, the court shall grant, without bond, a 
     permanent or temporary injunction or restraining order; or
       ``(ii) transmit such evidence as may be available 
     concerning such act or practice as may constitute a violation 
     of any Federal criminal law to the Attorney General, who may 
     institute the necessary criminal proceedings.
       ``(B) Statutory construction.--The authority of the 
     Commission to conduct investigations and take actions may not 
     be construed to affect in any way the authority of any other 
     agency or department of the United States to carry out 
     statutory responsibilities of such agency or department.
       ``(4) Writs, injunctions, and orders.--Upon application of 
     the Commission, each district court of the United States 
     shall have jurisdiction to issue writs of mandamus, 
     injunctions, and orders commanding any person to comply with 
     the provisions of this Act (including any rules and 
     regulations promulgated under this Act).

     ``SEC. 8. REGULATORY FRAMEWORK.

       ``(a) Class II Gaming.--For class II gaming, Indian tribes 
     shall retain the right of such tribes to, in a manner that 
     meets or exceeds minimum Federal standards established by the 
     Commission pursuant to section 7(c)--
       ``(1) monitor and regulate such gaming; and
       ``(2) conduct background investigations and issue licenses 
     to persons who are required to obtain a license under section 
     10(a).
       ``(b) Class III Gaming Conducted Under a Tribal-State 
     Compact.--For class III gaming conducted under the authority 
     of a tribal-State compact entered into pursuant to section 
     12, an Indian tribe or a State, or both, as provided in a 
     compact or by tribal ordinance or resolution, shall, in a 
     manner that meets or exceeds minimum Federal standards 
     established by the Commission pursuant to section 7(c)--
       ``(1) monitor and regulate gaming;
       ``(2) conduct background investigations and issue licenses 
     to persons who are required to obtain a license pursuant to 
     section 10(a); and
       ``(3) establish and regulate internal control systems.
       ``(c) Certain Other Compacts.--For class III gaming 
     conducted under the authority of a compact negotiated with 
     the Secretary pursuant to section 12(a)(2), such compact 
     shall provide that the Indian tribes or other appropriate 
     entity shall, in a manner that meets or exceeds minimum 
     Federal standards established by the Commission pursuant to 
     section 7(c)--
       ``(1) monitor and regulate such gaming;
       ``(2) conduct background investigations and issue licenses 
     to persons who are required to obtain a license pursuant to 
     section 10(a); and
       ``(3) establish and regulate internal control systems.
       ``(d) Violations of Minimum Federal Standards.--
       ``(1) Class ii gaming.--In any case in which an Indian 
     tribe that conducts class II gaming substantially fails to 
     meet minimum Federal standards for class II gaming, after 
     providing the Indian tribe notice and opportunity to cure 
     violations and to be heard, and after the exhaustion of other 
     authorized remedies and sanctions, the Commission shall have 
     the authority to conduct background investigations, issue 
     licenses, and establish and regulate internal control 
     systems. Such authority of the Commission may be exclusive 
     until such time as the regulatory and internal control 
     systems of the Indian tribe meet or exceed the minimum 
     Federal standards concerning regulatory, licensing, or 
     internal control requirements established by the Commission.
       ``(2) Class iii gaming.--In any case in which an Indian 
     tribe or a State (or both) that regulates class III gaming 
     fails to meet or exceed minimum Federal standards for class 
     III gaming, after providing notice and opportunity to cure 
     violations and be heard, and after the exhaustion of other 
     authorized remedies and sanctions, the Commission shall have 
     the authority to conduct background investigations, issue 
     licenses, and establish and regulate internal control 
     systems. Such authority of the Commission may be exclusive 
     until such time as the regulatory or internal control systems 
     of the Indian tribe or a State, or both, meet or exceed the 
     minimum regulatory, licensing, or internal control 
     requirements established by the Commission.

     ``SEC. 9. ADVISORY COMMITTEE ON MINIMUM REGULATORY 
                   REQUIREMENTS AND LICENSING STANDARDS.

       ``(a) Establishment.--The President shall establish an 
     advisory committee to be known as the `Advisory Committee on 
     Minimum Regulatory Requirements and Licensing Standards'.
       ``(b) Members.--The Advisory Committee shall be composed of 
     7 members who shall be appointed by the President, of which--
       ``(1) 3 members, selected from a list of recommendations 
     submitted to the President by the Chairperson and Vice 
     Chairperson of the Committee on Indian Affairs of the Senate 
     and the Chairperson and ranking minority member of the 
     Subcommittee on Native American and Insular Affairs of the 
     Committee on Resources of the House of Representatives, shall 
     be members of federally recognized Indian tribes involved in 
     gaming covered under this Act;
       ``(2) 2 members, selected from a list of recommendations 
     submitted to the President by the Majority Leader and the 
     Minority Leader of the Senate and the Speaker and the 
     Minority Leader of the House of Representatives, shall 
     represent State governments; and
       ``(3) 2 members shall each be an employee of the Department 
     of Justice.
       ``(c) Recommendations for Minimum Federal Standards.--
       ``(1) In general.--Not later than 180 days after the date 
     on which the Advisory Committee is fully constituted, the 
     Advisory Committee shall develop and submit to the entities 
     referred to in paragraph (2) recommendations for minimum 
     Federal standards for the conduct of background 
     investigations and the establishment of internal control 
     systems and licensing standards.
       ``(2) Recipients of recommendations.--The Advisory 
     Committee shall submit the recommendations described in 
     paragraph (1) to the Committee on Indian Affairs of the 
     Senate, the Subcommittee on Native American and Insular 
     Affairs of the Committee on Resources of the House of 
     Representatives, the Commission, and to each federally 
     recognized Indian tribe.
       ``(3) Factors for consideration.--While the minimum 
     standards established pursuant to this section may be 
     developed in light of existing industry standards, the 
     Advisory Committee, and Commission in promulgating standards 
     pursuant to subsection (d), shall give equal weight to--
       ``(A) the unique nature of tribal gaming as compared to 
     non-Indian commercial, governmental, and charitable gaming;
       ``(B) the broad variations in the scope and size of tribal 
     gaming activity;
       ``(C) the inherent sovereign right of Indian tribes to 
     regulate their own affairs; and
       ``(D) the findings and purposes set forth in sections 2 and 
     3.
     [[Page S3406]]   ``(d) Regulations.--Upon receipt of the 
     recommendations of the Advisory Committee, the Commission 
     shall hold public hearings on the recommendations. After the 
     conclusion of the hearings, the Commission shall promulgate 
     regulations establishing minimum regulatory requirements and 
     licensing standards.
       ``(e) Travel.--Members of the Advisory Committee appointed 
     under paragraphs (1) and (2) of subsection (b) shall be 
     reimbursed for travel and per diem in lieu of subsistence 
     expenses during the performance of duties of the Advisory 
     Committee while away from home or their regular place of 
     business, in accordance with subchapter I of chapter 57 of 
     title 5, United States Code.
       ``(f) Termination.--The Advisory Committee shall cease to 
     exist on the date that is 60 days after the date on which the 
     Advisory Committee submits the recommendations under 
     subsection (c).
       ``(g) Exemption From Federal Advisory Committee Act.--All 
     activities of the Advisory Committee shall be exempt from the 
     Federal Advisory Committee Act (5 U.S.C. App.).

     ``SEC. 10. LICENSING.

       ``(a) In General.--A license issued under this Act shall be 
     required of--
       ``(1) gaming operations;
       ``(2) key employees of a gaming operation;
       ``(3) management- and gaming-related contractors;
       ``(4) any gaming service industry; and
       ``(5) any person who has material control, either directly 
     or indirectly, over a licensed gaming operation.
       ``(b) Certain Licenses for Management Contractors and 
     Gaming Operations.--Notwithstanding any other provision of 
     law relating to licenses issued by an Indian tribe or a State 
     (or both) pursuant to this Act, the Commission may require 
     licenses of--
       ``(1) management contractors; and
       ``(2) gaming operations.
       ``(c) Statement of Compliance.--
       ``(1) In general.--The Commission may issue a statement of 
     compliance to an applicant for any license or for 
     qualification status under this Act at any time that the 
     Commission is satisfied that one or more eligibility criteria 
     for the license have been satisfied by an applicant.
       ``(2) Contents of statement.--A statement issued under 
     subparagraph (A) shall specify the eligibility criterion 
     satisfied, the date of such satisfaction, and a reservation 
     by the Commission permitting the Commission to revoke the 
     statement of compliance at any time on the basis of a change 
     of circumstances affecting such compliance.
       ``(d) Gaming Operation License.--
       ``(1) In general.--No gaming operation shall operate unless 
     all required licenses and approvals for the gaming operation 
     have been obtained in accordance with this Act.
       ``(2) Written agreements.--
       ``(A) Filing.--Prior to the operation of any gaming 
     facility or activity, each management contract for the gaming 
     operation shall be in writing and filed with the Commission 
     pursuant to section 13.
       ``(B) Express approval required.--No such agreement shall 
     be effective unless the Commission expressly approves the 
     agreement.
       ``(C) Requirement of additional provisions.--The Commission 
     may require that an agreement referred to in subparagraph (A) 
     includes any provisions that are reasonably necessary to meet 
     the requirements of this Act.
       ``(D) Ineligibility or exemption.--Any applicant who does 
     not have the ability to exercise any significant control over 
     a licensed gaming operation may be determined by the 
     Commission to be ineligible to hold a license or may exempt 
     such applicant from being required to hold a license.
       ``(e) Denial of License.--The Commission, in the exercise 
     of the specific licensure power conferred upon the Commission 
     by this Act, shall deny a license to any applicant who is 
     disqualified on the basis of a failure to meet any of the 
     minimum Federal standards promulgated by the Commission 
     pursuant to section 7(c).
       ``(f) Application for License.--
       ``(1) In general.--Upon the filing of the materials 
     specified in paragraph (2), the Commission shall conduct an 
     investigation into the qualifications of an applicant. The 
     Commission may conduct a nonpublic hearing on such 
     investigation concerning the qualifications of the applicant 
     in accordance with regulations promulgated by the Commission.
       ``(2) Filing of materials.--The Commission shall carry out 
     paragraph (1) upon the filing of--
       ``(A) an application for a license that the Commission is 
     specifically authorized to issue pursuant to this Act; and
       ``(B) such supplemental information as the Commission may 
     require.
       ``(3) Timing of final action.--After an application is 
     submitted to the Commission, the Commission shall take final 
     action not later than 90 days after--
       ``(A) completing all hearings and investigations concerning 
     the application; and
       ``(B) receiving all information required to be submitted to 
     the Commission.
       ``(4) Deadline for hearings and investigations.--Not later 
     than 90 days after receiving the information described in 
     paragraph (3)(B), the Commission shall complete the hearings 
     and investigations described in paragraph (3)(A).
       ``(5) Action by commission.--Following the completion of an 
     investigation and hearing, the Commission shall either deny 
     or grant a license to an applicant.
       ``(6) Denials.--
       ``(A) In general.--The Commission may deny any application 
     pursuant to this Act.
       ``(B) Order of denial.--If the Commission denies an 
     application submitted under this section, the Commission 
     shall prepare an order denying such application. In addition, 
     if an applicant requests a statement of the reasons for the 
     denial, the Commission shall prepare such statement and 
     provide the statement to the applicant. The statement shall 
     include specific findings of fact.
       ``(7) Issuance of licenses.--If the Commission is satisfied 
     that an applicant is qualified to receive a license, the 
     Commission shall issue a license to the applicant upon tender 
     of--
       ``(A) all license fees and assessments as required by this 
     Act (including regulations promulgated by the Commission 
     under this Act); and
       ``(B) such bonds as the Commission may require for the 
     faithful performance of all requirements imposed by this Act 
     (including regulations promulgated under this Act).
       ``(8) Bonds.--
       ``(A) Amounts.--The Commission shall, by rules of uniform 
     application, fix the amount of each bond that the Commission 
     requires under this section in such amount as the Commission 
     considers appropriate.
       ``(B) Use of bonds.--The bonds furnished to the Commission 
     under this paragraph may be applied by the Commission to the 
     payment of any unpaid liability of the licensee under this 
     Act.
       ``(C) Terms.--Each bond required in accordance with this 
     section shall be furnished--
       ``(i) in cash or negotiable securities;
       ``(ii) by a surety bond guaranteed by a satisfactory 
     guarantor; or
       ``(iii) by an irrevocable letter of credit issued by a 
     banking institution acceptable to the Commission.
       ``(D) Treatment of principal and income.--If a bond is 
     furnished in cash or negotiable securities, the principal 
     shall be placed without restriction at the disposal of the 
     Commission, but any income shall inure to the benefit of the 
     licensee.
       ``(g) Renewal of License.--
       ``(1) In general.--
       ``(A) Renewals.--Subject to the power of the Commission to 
     deny, revoke, or suspend licenses, any license issued under 
     this section and in force shall be renewed by the Commission 
     for the next succeeding license period upon proper 
     application for renewal and payment of license fees and 
     assessments, as required by applicable law (including 
     regulations of the Commission).
       ``(B) Renewal term.--Subject to subparagraph (C), the term 
     of a renewal period for a license issued under this section 
     shall be for a period of not more than--
       ``(i) 2 years, for each of the first 2 renewal periods 
     succeeding the initial issuance of a license pursuant to 
     subsection (f); and
       ``(ii) 3 years, for each succeeding renewal period.
       ``(C) Reopening hearings.--The Commission may reopen 
     licensing hearings at any time after the Commission has 
     issued or renewed a license.
       ``(2) Transition.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subsection, the Commission shall, for the purpose of 
     facilitating the administration of this Act, renew a license 
     for an activity covered under subsection (a) that is held by 
     a person on the date of enactment of the Indian Gaming 
     Regulatory Act Amendments Act of 1995 for a renewal period of 
     18 months.
       ``(B) Action before expiration.--The Commission shall act 
     upon any license renewal application that is filed in a 
     timely manner prior to the date of expiration of the then 
     current license.
       ``(3) Filing requirement.--Each application for renewal 
     shall be filed with the Commission not later than 90 days 
     prior to the expiration of the then current license. All 
     license fees and assessments that are required by law shall 
     be paid to the Commission on or before the date of expiration 
     of the then current license.
       ``(4) Renewal certificate.--Upon renewal of a license, the 
     Commission shall issue an appropriate renewal certificate, 
     validating device, or sticker, which shall be attached to the 
     license.
       ``(h) Hearings.--
       ``(1) In general.--The Commission shall establish 
     procedures for the conduct of hearings associated with 
     licensing, including procedures for denying, limiting, 
     conditioning, restricting, revoking, or suspending any such 
     license.
       ``(2) Action by commission.--Following a hearing conducted 
     for any of the purposes authorized in this section, the 
     Commission shall--
       ``(A) render a decision of the Commission;
       ``(B) issue an order; and
       ``(C) serve such decision and order upon the affected 
     parties.
       ``(3) Rehearing.--
       ``(A) In general.--The Commission may, upon a motion made 
     not later than 10 days after the service of a decision and 
     order, order a rehearing before the Commission on such terms 
     and conditions as the Commission considers just and proper if 
     the Commission finds cause to believe that the decision and 
     order should be reconsidered in view of 
     [[Page S3407]] the legal, policy, or factual matters that 
     are--
       ``(i) advanced by the party that makes the motion; or
       ``(ii) raised by the Commission on a motion made by the 
     Commission.
       ``(B) Action after rehearing.--Following a rehearing 
     conducted by the Commission, the Commission shall--
       ``(i) render a decision of the Commission;
       ``(ii) issue an order; and
       ``(iii) serve such decision and order upon the affected 
     parties.
       ``(C) Final agency action.--A decision and order made by 
     the Commission under paragraph (2) (if no motion for a 
     rehearing is made), or a decision and order made by the 
     Commission upon rehearing shall constitute final agency 
     action for purposes of judicial review.
       ``(4) Jurisdiction.--The United States Court of Appeals for 
     the District of Columbia Circuit shall have jurisdiction to 
     review the licensing decisions and orders of the Commission.
       ``(i) License Registry.--The Commission shall--
       ``(1) maintain a registry of all licenses that are granted 
     or denied pursuant to this Act; and
       ``(2) make the information contained in the registry 
     available to Indian tribes to assist the licensure and 
     regulatory activities of Indian tribes.

     ``SEC. 11. REQUIREMENTS FOR THE CONDUCT OF CLASS I AND CLASS 
                   II GAMING ON INDIAN LANDS.

       ``(a) Class I Gaming.--Class I gaming on Indian lands shall 
     be within the exclusive jurisdiction of the Indian tribes and 
     shall not be subject to the provisions of this Act.
       ``(b) Class II Gaming.--
       ``(1) In general.--Any class II gaming on Indian lands 
     shall be within the jurisdiction of the Indian tribes, but 
     shall be subject to the provisions of this Act.
       ``(2) Legal activities.--An Indian tribe may engage in, and 
     license and regulate, class II gaming on Indian lands within 
     the jurisdiction of such tribe, if--
       ``(A) such Indian gaming is located within a State that 
     permits such gaming for any purpose by any person; and
       ``(B) the class II gaming operation meets or exceeds the 
     requirements of sections 7(c) and 10.
       ``(3) Requirements for class ii gaming operations.--
       ``(A) In general.--The Commission shall ensure that with 
     regard to any class II gaming operation on Indian lands--
       ``(i) a separate license is issued by the Indian tribe for 
     each place, facility, or location on Indian lands at which 
     class II gaming is conducted;
       ``(ii) the Indian tribe has or will have the sole 
     proprietary interest and responsibility for the conduct of 
     any class II gaming activity, unless the conditions of clause 
     (ix) apply;
       ``(iii) the net revenues from any class II gaming activity 
     may only be used--

       ``(I) to fund tribal government operations or programs;
       ``(II) to provide for the general welfare of the Indian 
     tribe and the members of the Indian tribe;
       ``(III) to promote tribal economic development;
       ``(IV) to donate to charitable organizations;
       ``(V) to help fund operations of local government agencies; 
     or
       ``(VI) to comply with the provisions of section 17;

       ``(iv) the Indian tribe shall provide to the Commission 
     annual outside audits of the class II gaming operation of the 
     Indian tribe, which may be encompassed within existing 
     independent tribal audit systems;
       ``(v) all contracts for supplies, services, or concessions 
     for a contract amount equal to more than $50,000 per year, 
     other than contracts for professional legal or accounting 
     services, relating to such gaming shall be subject to such 
     independent audits and any audit conducted by the Commission;
       ``(vi) the construction and maintenance of a class II 
     gaming facility and the operation of class II gaming shall be 
     conducted in a manner that adequately protects the 
     environment and public health and safety;
       ``(vii) there shall be instituted an adequate system that--

       ``(I) ensures that--

       ``(aa) background investigations are conducted on primary 
     management officials, key employees, and persons having 
     material control, either directly or indirectly, in a 
     licensed class II gaming operation, and gaming-related 
     contractors associated with a licensed class II gaming 
     operation; and
       ``(bb) oversight of such officials and the management by 
     such officials is conducted on an ongoing basis; and

       ``(II) includes--

       ``(aa) tribal licenses for persons involved in class II 
     gaming operations, issued in accordance with sections 7(c) 
     and 10;
       ``(bb) a standard whereby any person whose prior 
     activities, criminal record, if any, or reputation, habits, 
     and associations pose a threat to the public interest or to 
     the effective regulation of gaming, or create or enhance the 
     dangers of unsuitable, unfair, or illegal practices and 
     methods and activities in the conduct of gaming shall not be 
     eligible for employment or licensure; and
       ``(cc) notification by the Indian tribe to the Commission 
     of the results of such background investigation before the 
     issuance of any such license;
       ``(viii) net revenues from any class II gaming activities 
     conducted or licensed by any Indian tribal government may be 
     used to make per capita payments to members of the Indian 
     tribe only if--

       ``(I) the Indian tribe has prepared a plan to allocate 
     revenues to uses authorized by clause (iii);
       ``(II) the Secretary determines that the plan is adequate, 
     particularly with respect to uses described in subclause (I) 
     or (III) of clause (iii);
       ``(III) the interests of minors and other legally 
     incompetent persons who are entitled to receive any of the 
     per capita payments are protected and preserved;
       ``(IV) the per capita payments to minors and other legally 
     incompetent persons are disbursed to the parents or legal 
     guardians of such minors or legally incompetent persons in 
     such amounts as may be necessary for the health, education, 
     or welfare of each such minor or legally incompetent person 
     under a plan approved by the Secretary and the governing body 
     of the Indian tribe; and
       ``(V) the per capita payments are subject to Federal income 
     taxation and Indian tribes withhold such taxes when such 
     payments are made.

       ``(ix) a separate license shall be issued by the Indian 
     tribe for any class II gaming operation owned by any person 
     or entity other than the Indian tribe and conducted on Indian 
     lands, that includes--

       ``(I) requirements set forth in subparagraph (C); and
       ``(II) requirements that are at least as restrictive as 
     those established by State law governing similar gaming 
     within the jurisdiction of the State within which such Indian 
     lands are located; and

       ``(x) no person or entity, other than the Indian tribe, 
     shall be eligible to receive a tribal license to own a class 
     II gaming operation conducted on Indian lands within the 
     jurisdiction of the Indian tribe if such person or entity 
     would not be eligible to receive a State license to conduct 
     the same activity within the jurisdiction of the State.
       ``(B) Transition.--
       ``(i) In general.--Clauses (ii), (iii), and (ix) shall not 
     bar the continued operation of an individually owned class II 
     gaming operation that was operating on September 1, 1986, 
     if--

       ``(I) such gaming operation is licensed and regulated by an 
     Indian tribe;
       ``(II) income to the Indian tribe from such gaming is used 
     only for the purposes described in subparagraph (A)(iii);
       ``(III) not less than 60 percent of the net revenues from 
     such gaming operation is income to the licensing Indian 
     tribe; and
       ``(IV) the owner of such gaming operation pays an 
     appropriate assessment to the Commission pursuant to section 
     17 for the regulation of such gaming.

       ``(ii) Limitations on exemption.--The exemption from 
     application provided under clause (i) may not be transferred 
     to any person or entity and shall remain in effect only 
     during such period as the gaming operation remains within the 
     same nature and scope as such gaming operation was actually 
     operated on October 17, 1988.
       ``(C) List.--The Commission shall--
       ``(i) maintain a list of each individually owned gaming 
     operation that is subject to subparagraph (A)(x); and
       ``(ii) publish such list in the Federal Register.
       ``(c) Petition for Certificate of Self-Regulation.--
       ``(1) In general.--Any Indian tribe that operates, directly 
     or with a management contract, a class II gaming activity may 
     petition the Commission for a certificate of self-regulation 
     if that Indian tribe--
       ``(A) has continuously conducted such activity for a period 
     of not less than 3 years, including a period of at least 1 
     year after the date of the enactment of the Indian Gaming 
     Regulatory Act Amendments Act of 1995; and
       ``(B) has otherwise complied with the provisions of this 
     Act.
       ``(2) Issuance of certificate of self-regulation.--The 
     Commission shall issue a certificate of self-regulation if 
     the Commission determines on the basis of available 
     information, and after a hearing if requested by the tribe, 
     that the Indian tribe has--
       ``(A) conducted its gaming activity in a manner which has--
       ``(i) resulted in an effective and honest accounting of all 
     revenues;
       ``(ii) resulted in a reputation for safe, fair, and honest 
     operation of the activity; and
       ``(iii) been generally free of evidence of criminal or 
     dishonest activity;
       ``(B) adopted and implemented adequate systems for--
       ``(i) accounting for all revenues from the activity;
       ``(ii) investigation, licensing, and monitoring of all 
     employees of the gaming activity; and
       ``(iii) investigation, enforcement, and prosecution of 
     violations of its gaming ordinance and regulations;
       ``(C) conducted the operation on a fiscally and 
     economically sound basis; and
       ``(D) paid all fees and assessments that the tribe is 
     required to pay to the Commission under this Act.
       ``(3) Effect of certificate of self-regulation.--During the 
     period in which a certificate of self-regulation issued under 
     this paragraph is in effect with respect to a gaming activity 
     conducted by an Indian tribe--
       ``(A) the tribe shall--
       ``(i) continue to submit an annual independent audit as 
     required by subsection (b)(3)(A)(iv); and
     [[Page S3408]]   ``(ii) submit to the Commission a complete 
     resume of each employee hired and licensed by the tribe 
     subsequent to the issuance of a certificate of self-
     regulation; and
       ``(B) the Commission may not assess a fee on such activity 
     pursuant to section 17 in excess of \1/4\ of 1 percent of the 
     gross revenue from such activity.
       ``(4) Rescission.--The Commission may, for just cause and 
     after an opportunity for a hearing, rescind a certificate of 
     self-regulation by majority vote of the members of the 
     Commission.
       ``(d) License Revocation.--If, after the issuance of any 
     license by an Indian tribe under this section, the Indian 
     tribe receives reliable information from the Commission 
     indicating that a licensee does not meet any standard 
     established under section 7(c) or 10, or any other applicable 
     regulation promulgated by the Commission, the Indian tribe--
       ``(1) shall suspend such license; and
       ``(2) after notice and hearing under procedures established 
     pursuant to applicable tribal law, may revoke such license.

     ``SEC. 12. CLASS III GAMING ON INDIAN LANDS.

       ``(a) Requirements for the Conduct of Class III Gaming on 
     Indian Lands.--
       ``(1) In general.--Class III gaming activities shall be 
     lawful on Indian lands only if such activities are--
       ``(A) authorized by a compact that--
       ``(i) is approved pursuant to tribal law by the governing 
     body of the Indian tribe having jurisdiction over such lands;
       ``(ii) meets the requirements of section 11(b)(3) for the 
     conduct of class II gaming; and
       ``(iii) is approved by the Secretary;
       ``(B) located in a State that permits such gaming for any 
     purpose by any person; and
       ``(C) conducted in conformance with a tribal-State compact 
     that--
       ``(i) is in effect; and
       ``(ii) is--

       ``(I) entered into by an Indian tribe and a State and 
     approved by the Secretary under paragraph (2); or
       ``(II) issued by the Secretary under paragraph (2).

       ``(2) Compact negotiations.--
       ``(A) In general.--
       ``(i) Compact negotiations.--Any Indian tribe having 
     jurisdiction over the lands upon which a class III gaming 
     activity is to be conducted may request the State in which 
     such lands are located to enter into negotiations for the 
     purpose of entering into a tribal-State compact governing the 
     conduct of class III gaming activities.
       ``(ii) Requirements for request for negotiations.--A 
     request for negotiations under clause (i) shall be in writing 
     and shall specify each gaming activity that the Indian tribe 
     proposes for inclusion in the compact. Not later than 30 days 
     after receipt of such written request, the State shall 
     respond to the Indian tribe.
       ``(iii) Commencement of compact negotiations.--Compact 
     negotiations conducted under this paragraph shall commence 
     not later than 30 days after the date on which a response by 
     a State is due to the Indian tribe, and shall be completed 
     not later than 120 days after the initiation of compact 
     negotiations, unless the State and the Indian tribe agree to 
     a different period of time for the completion of compact 
     negotiations.
       ``(iv) Inability to meet deadlines for negotiations.--

       ``(I) Notification.--If the State and the Indian tribe find 
     that the State and Indian tribe are unable to commence or 
     complete compact negotiations within the applicable time 
     periods provided in this subsection, the Indian tribe shall 
     notify the Secretary.
       ``(II) Presentation of positions.--Upon receipt of a notice 
     under subclause (I), the Secretary shall request that the 
     tribe and the State present their respective positions, not 
     later than 60 days after such request, regarding--

       ``(aa) the gaming activities that the tribe seeks to 
     conduct that are permissible under this Act;
       ``(bb) the framework for regulation of tribal gaming; and
       ``(cc) such other matters as the Secretary may consider 
     appropriate.
       ``(B) Approval of compact.--Not later than 90 days after 
     the date of expiration of the 60-day period specified in 
     subparagraph (A), the Secretary shall approve a compact that 
     meets the requirements of this section, and shall publish the 
     compact in the Federal Register. The compact shall--
       ``(i) include provisions--

       ``(I) that best meet the objectives of this Act; and
       ``(II) for background investigations, internal controls, 
     and licensing that are consistent with this Act (including 
     regulations promulgated by the Commission pursuant to section 
     7(c)); and

       ``(ii) not violate--

       ``(I) any provision of this Act (including regulations 
     promulgated by the Commission pursuant to this Act);
       ``(II) any other provision of Federal law; or
       ``(III) the trust obligation of the United States to 
     Indians.

       ``(C) Mandatory disapproval.--Notwithstanding any other 
     provision of this Act, the Secretary shall not have the 
     authority to approve a compact if the compact requires State 
     regulation of Indian gaming absent the consent of the State 
     or the Indian tribe.
       ``(D) Effect of publication of compact.--Except for an 
     appeal conducted under subchapter II of chapter 5 of title 5, 
     United States Code, by an Indian tribe or a State associated 
     with the publication of the compact, the publication of a 
     compact pursuant to subparagraph (B) that permits a form of 
     class III gaming shall, for the purposes of this Act, be 
     conclusive evidence that such class III gaming is an activity 
     subject to negotiations under the laws of the State where the 
     gaming is to be conducted, in any matter under consideration 
     by the Commission or a Federal court.
       ``(E) Effective date of compact.--Any compact negotiated 
     under this subsection shall become effective upon the 
     publication of the compact in the Federal Register by the 
     Secretary.
       ``(F) Duties of commission.--Consistent with the provisions 
     of sections 7(c), 8, and 10, the Commission shall monitor 
     and, if specifically authorized, regulate and license class 
     III gaming with respect to any compact that is approved by 
     the Secretary under this subsection and published in the 
     Federal Register.
       ``(3) Provisions of compacts.--
       ``(A) In general.--A compact negotiated under this 
     subsection may include provisions relating to--
       ``(i) the application of the criminal and civil laws 
     (including regulations) of the Indian tribe or the State that 
     are directly related to, and necessary for, the licensing and 
     regulation of such activity in a manner consistent with 
     sections 7(c), 8, and 10;
       ``(ii) the allocation of criminal and civil jurisdiction 
     between the State and the Indian tribe necessary for the 
     enforcement of such laws (including regulations);
       ``(iii) the assessment by the State of the costs associated 
     with such activities in such amounts as are necessary to 
     defray the costs of regulating such activity;
       ``(iv) taxation by the Indian tribe of such activity in 
     amounts comparable to amounts assessed by the State for 
     comparable activities;
       ``(v) remedies for breach of compact provisions;
       ``(vi) standards for the operation of such activity and 
     maintenance of the gaming facility, including licensing, in a 
     manner consistent with sections 7(c), 8, and 10; and
       ``(vii) any other subject that is directly related to the 
     operation of gaming activities and the impact of gaming on 
     tribal, State, and local governments.
       ``(B) Statutory construction with respect to assessments.--
     Except for any assessments for services agreed to by an 
     Indian tribe in compact negotiations, nothing in this section 
     may be construed as conferring upon a State or any political 
     subdivision thereof the authority to impose any tax, fee, 
     charge, or other assessment upon an Indian tribe, an Indian 
     gaming operation or the value generated by the gaming 
     operation, or any person or entity authorized by an Indian 
     tribe to engage in a class III gaming activity in conformance 
     with this Act.
       ``(4) Statutory construction with respect to certain rights 
     of indian tribes.--Nothing in this subsection impairs the 
     right of an Indian tribe to regulate class III gaming on the 
     Indian lands of the Indian tribe concurrently with a State 
     and the Commission, except to the extent that such regulation 
     is inconsistent with, or less stringent than, this Act or any 
     laws (including regulations) made applicable by any compact 
     entered into by the Indian tribe under this subsection that 
     is in effect.
       ``(5) Exemption.--The provisions of section 2 of the Act of 
     January 2, 1951 (commonly referred to as the `Gambling 
     Devices Transportation Act') (64 Stat. 1134, chapter 1194, 15 
     U.S.C. 1175) shall not apply to any class II gaming activity 
     or any gaming activity conducted pursuant to a compact 
     entered into after the date of enactment of this Act, but in 
     no event shall this paragraph be construed as invalidating 
     any exemption from the provisions of such section 2 for any 
     compact entered into prior to the date of enactment of this 
     Act.
       ``(b) Jurisdiction of United States District Court for the 
     District of Columbia.--The United States District Court for 
     the District of Columbia shall have jurisdiction over any 
     action initiated by the Secretary, the Commission, a State, 
     or an Indian tribe to enforce any provision of a compact 
     entered into under subsection (a) or to enjoin a class III 
     gaming activity located on Indian lands and conducted in 
     violation of any compact that is in effect and that was 
     entered into under subsection (a).
       ``(c) Approval of Compacts.--
       ``(1) In general.--The Secretary is authorized to approve 
     any compact between an Indian tribe and a State governing the 
     conduct of class III gaming on Indian lands of such Indian 
     tribe entered into under subsection (a).
       ``(2) Reasons for disapproval by secretary.--The Secretary 
     may disapprove a compact entered into under subsection (a) 
     only if such compact violates any--
       ``(A) provision of this Act or any regulation promulgated 
     by the Commission pursuant to this Act;
       ``(B) other provision of Federal law; or
       ``(C) trust obligation of the United States to Indians.
       ``(3) Effect of failure to act on compact.--If the 
     Secretary fails to approve or disapprove a compact entered 
     into under subsection (a) before the date that is 45 days 
     after the date on which the compact is submitted to the 
     Secretary for approval, the 
     [[Page S3409]] compact shall be considered to have been 
     approved by the Secretary, but only to the extent the compact 
     is consistent with the provisions of this Act and the 
     regulations promulgated by the Commission pursuant to this 
     Act.
       ``(4) Notification.--The Secretary shall publish in the 
     Federal Register notice of any compact that is approved, or 
     considered to have been approved, under this subsection.
       ``(d) Revocation of Ordinance.--
       ``(1) In general.--The governing body of an Indian tribe, 
     in its sole discretion, may adopt an ordinance or resolution 
     revoking any prior ordinance or resolution that authorized 
     class III gaming on the Indian lands of the Indian tribe. 
     Such revocation shall render class III gaming illegal on the 
     Indian lands of such Indian tribe.
       ``(2) Publication of revocation.--An Indian tribe shall 
     submit any revocation ordinance or resolution described in 
     paragraph (1) to the Commission. The Commission shall publish 
     such ordinance or resolution in the Federal Register. The 
     revocation provided by such ordinance or resolution shall 
     take effect on the date of such publication.
       ``(3) Conditional operation.--Notwithstanding any other 
     provision of this subsection--
       ``(A) any person or entity operating a class III gaming 
     activity pursuant to this paragraph on the date on which an 
     ordinance or resolution described in paragraph (1) that 
     revokes authorization for such class III gaming activity is 
     published in the Federal Register may, during the 1-year 
     period beginning on the date on which such revocation, 
     ordinance, or resolution is published under paragraph (2), 
     continue to operate such activity in conformance with an 
     applicable compact entered into under subsection (a) that is 
     in effect; and
       ``(B) any civil action that arises before, and any crime 
     that is committed before, the termination of such 1-year 
     period shall not be affected by such revocation ordinance, or 
     resolution.
       ``(e) Certain Class III Gaming Activities.--
       ``(1) Compacts entered into before the date of enactment of 
     the indian gaming regulatory act amendments act of 1995.--
     Class III gaming activities that are authorized under a 
     compact approved or issued by the Secretary under the 
     authority of this Act prior to the date of enactment of the 
     Indian Gaming Regulatory Act Amendments Act of 1995 shall, 
     during such period as the compact is in effect, remain lawful 
     for the purposes of this Act, notwithstanding the Indian 
     Gaming Regulatory Act Amendments Act of 1995 and the 
     amendments made by such Act or any change in State law 
     enacted after the approval or issuance of the compact.
       ``(2) Compact entered into after the date of enactment of 
     the indian gaming regulatory act amendments act of 1995.--Any 
     compact entered into under subsection (a) after the date 
     specified in paragraph (1) shall remain lawful for the 
     purposes of this Act, notwithstanding any change in State law 
     enacted after the approval or issuance of the compact.

     ``SEC. 13. REVIEW OF CONTRACTS.

       ``(a) Contracts Included.--The Commission shall review and 
     approve or disapprove--
       ``(1) any management contract for the operation and 
     management of any gaming activity that an Indian tribe may 
     engage in under this Act; and
       ``(2) unless licensed by an Indian tribe consistent with 
     the minimum Federal standards adopted pursuant to section 
     7(c), any gaming-related contract.
       ``(b) Management Contract Requirements.--The Commission 
     shall approve any management contract between an Indian tribe 
     and a person licensed by an Indian tribe or the Commission 
     that is entered into pursuant to this Act only if the 
     Commission determines that the contract provides for--
       ``(1) adequate accounting procedures that are maintained, 
     and verifiable financial reports that are prepared by or for, 
     the governing body of the Indian tribe on a monthly basis;
       ``(2) access to the daily gaming operations by appropriate 
     officials of the Indian tribe who shall have the right to 
     verify the daily gross revenues and income derived from any 
     gaming activity;
       ``(3) a minimum guaranteed payment to the Indian tribe that 
     has preference over the retirement of any development and 
     construction costs;
       ``(4) an agreed upon ceiling for the repayment of any 
     development and construction costs;
       ``(5) a contract term of not to exceed 5 years, except 
     that, upon the request of an Indian tribe, the Commission may 
     authorize a contract term that exceeds 5 years but does not 
     exceed 7 years, if the Commission is satisfied that the 
     capital investment required, and the income projections for 
     the particular gaming activity, require the additional time; 
     and
       ``(6) grounds and mechanisms for the termination of the 
     contract, but any such termination shall not require the 
     approval of the Commission.
       ``(c) Management Fee Based on Percentage of Net Revenues.--
       ``(1) Percentage fee.--The Commission may approve a 
     management contract that provides for a fee that is based on 
     a percentage of the net revenues of a tribal gaming activity 
     if the Commission determines that such percentage fee is 
     reasonable, taking into consideration surrounding 
     circumstances.
       ``(2) Fee amount.--Except as provided in paragraph (3), a 
     fee described in paragraph (1) shall not exceed an amount 
     equal to 30 percent of the net revenues described in such 
     paragraph.
       ``(3) Exception.--Upon the request of an Indian tribe, if 
     the Commission is satisfied that the capital investment 
     required, and income projections for, a tribal gaming 
     activity, necessitate a fee in excess of the amount specified 
     in paragraph (2), the Commission may approve a management 
     contract that provides for a fee described in paragraph (1) 
     in an amount in excess of the amount specified in paragraph 
     (2), but not to exceed 40 percent of the net revenues 
     described in paragraph (1).
       ``(d) Gaming-Related Contract Requirements.--The Commission 
     shall approve a gaming-related contract covered under 
     subsection (a)(2) that is entered into pursuant to this Act 
     only if the Commission determines that the contract provides 
     for--
       ``(1) grounds and mechanisms for termination of the 
     contract, but such termination shall not require the approval 
     of the Commission; and
       ``(2) such other provisions as the Commission may be 
     empowered to impose by this Act.
       ``(e) Time Period for Review.--
       ``(1) In general.--Except as provided in paragraph (2), not 
     later than 90 days after the date on which a management 
     contract or other gaming-related contract is submitted to the 
     Commission for approval, the Commission shall approve or 
     disapprove such contract on the merits of the contract. The 
     Commission may extend the 90-day period for an additional 
     period of not more than 45 days if the Commission notifies 
     the Indian tribe in writing of the reason for the extension 
     of the period. The Indian tribe may bring an action in the 
     United States District Court for the District of Columbia to 
     compel action by the Commission if a contract has not been 
     approved or disapproved by the termination date of an 
     applicable period under this subsection.
       ``(2) Effect of failure of commission to act on certain 
     gaming-related contract.--Any gaming-related contract for an 
     amount less than or equal to $100,000 that is submitted to 
     the Commission pursuant to paragraph (1) by a person who 
     holds a valid license that is in effect under this Act shall 
     be deemed to be approved, if by the date that is 90 days 
     after the contract is submitted to the Commission, the 
     Commission fails to approve or disapprove the contract.
       ``(f) Contract Modifications and Void Contracts.--The 
     Commission, after providing notice and hearing--
       ``(1) shall have the authority to require appropriate 
     contract modifications to ensure compliance with the 
     provisions of this Act; or
       ``(2) may void any contract regulated by the Commission 
     under this Act if the Commission determines that any of the 
     provisions of this Act have been violated by the terms of the 
     contract.
       ``(g) Interests in Real Property.--No contract regulated by 
     this Act may transfer or, in any other manner, convey any 
     interest in land or other real property, unless specific 
     statutory authority exists, all necessary approvals for such 
     transfer or conveyance have been obtained, and such transfer 
     or conveyance is clearly specified in the contract.
       ``(h) Authority of the Secretary.--The authority of the 
     Secretary under section 2103 of the Revised Statutes (25 
     U.S.C. 81) shall not extend to any contract or agreement that 
     is regulated pursuant to this Act.
       ``(i) Disapproval of Contracts.--The Commission may not 
     approve a contract if the Commission determines that--
       ``(1) any person having a direct financial interest in, or 
     management responsibility for, such contract, and, in the 
     case of a corporation, any individual who serves on the board 
     of directors of such corporation, and any of the stockholders 
     who hold (directly or indirectly) 10 percent or more of its 
     issued and outstanding stock--
       ``(A) is an elected member of the governing body of the 
     Indian tribe which is a party to the contract;
       ``(B) has been convicted of any felony or gaming offense;
       ``(C) has knowingly and willfully provided materially 
     important false statements or information to the Commission 
     or the Indian tribe pursuant to this Act or has refused to 
     respond to questions propounded by the Commission; or
       ``(D) has been determined to be a person whose prior 
     activities, criminal record, if any, or reputation, habits, 
     and associations pose a threat to the public interest or to 
     the effective regulation and control of gaming, or create or 
     enhance the dangers of unsuitable, unfair, or illegal 
     practices, methods, and activities in the conduct of gaming 
     or the carrying on of the business and financial arrangements 
     incidental thereto;
       ``(2) the contractor--
       ``(A) has unduly interfered or influenced for its gain or 
     advantage any decision or process of tribal government 
     relating to the gaming activity; or
       ``(B) has attempted to interfere or influence a decision 
     pursuant to subparagraph (A);
       ``(3) the contractor has deliberately or substantially 
     failed to comply with the terms of the contract; or
       ``(4) a trustee, exercising the skill and diligence that a 
     trustee is commonly held to, would not approve the contract.
     [[Page S3410]] ``SEC. 14. REVIEW OF EXISTING CONTRACTS; 
                   INTERIM AUTHORITY.

       ``(a) Review of Existing Contracts.--
       ``(1) In general.--At any time after the Commission is 
     sworn in and has promulgated regulations for the 
     implementation of this Act, the Commission shall notify each 
     Indian tribe and management contractor who, prior to the 
     enactment of the Indian Gaming Regulatory Act Amendments Act 
     of 1995, entered into a management contract that was approved 
     by the Secretary, that the Indian tribe is required to submit 
     to the Commission such contract, including all collateral 
     agreements relating to the gaming activity, for review by the 
     Commission not later than 60 days after such notification. 
     Any such contract shall be valid under this Act, unless the 
     contract is disapproved by the Commission under this section.
       ``(2) Review.--
       ``(A) In general.--Not later than 180 days after the 
     submission of a management contract, including all collateral 
     agreements, to the Commission pursuant to this section, the 
     Commission shall review the contract to determine whether the 
     contract meets the requirements of section 13 and was entered 
     into in accordance with the procedures under such section.
       ``(B) Approval of contract.--The Commission shall approve a 
     management contract submitted for review under subsection (a) 
     if the Commission determines that--
       ``(i) the management contract meets the requirements of 
     section 13; and
       ``(ii) the management contractor has obtained all of the 
     licenses that the contractor is required to obtain under this 
     Act.
       ``(C) Notification of necessary modifications.--If the 
     Commission determines that a contract submitted under this 
     section does not meet the requirements of section 13, the 
     Commission shall provide written notification to the parties 
     to such contract of the necessary modifications and the 
     parties shall have 180 days to make the modifications.
       ``(b) Interim Authority of the National Indian Gaming 
     Commission.--
       ``(1) In general.--Notwithstanding any other provision of 
     this Act, the Chairperson and the associate members of the 
     National Indian Gaming Commission who are holding office on 
     the date of enactment of this Act shall exercise those 
     authorities vested in the Federal Indian Gaming Regulatory 
     Commission by this Act until such time as the members of the 
     Federal Indian Gaming Regulatory Commission are sworn into 
     office.
       ``(2) Transition.--Notwithstanding any other provision of 
     law, the Commission shall exercise the authority conferred on 
     the Commission by this Act, and until such time as the 
     Commission promulgates revised regulations after the date of 
     enactment of the Indian Gaming Regulatory Act Amendments Act 
     of 1995, the regulations issued under this Act, as in effect 
     on the day before such date of enactment, shall apply.

     ``SEC. 15. CIVIL PENALTIES.

       ``(a) Amount.--Any person who commits any act or causes to 
     be done any act that violates any provision of this Act or 
     the rules or regulations promulgated under this Act, or who 
     fails to carry out any act or causes the failure to carry out 
     any act that is required by any such provision of law shall 
     be subject to a civil penalty in an amount equal to not more 
     than $50,000 per day for each such violation.
       ``(b) Assessment and Collection.--
       ``(1) In general.--Each civil penalty assessed under this 
     section shall be assessed by the Commission and collected in 
     a civil action brought by the Attorney General on behalf of 
     the United States. Before the Commission refers civil penalty 
     claims to the Attorney General, the Commission may compromise 
     the civil penalty after affording the person charged with a 
     violation referred to in subsection (a), an opportunity to 
     present views and evidence in support of such action by the 
     Commission to establish that the alleged violation did not 
     occur.
       ``(2) Penalty amount.--In determining the amount of a civil 
     penalty assessed under this section, the Commission shall 
     take into account--
       ``(A) the nature, circumstances, extent, and gravity of the 
     violation committed;
       ``(B) with respect to the person found to have committed 
     such violation, the degree of culpability, any history of 
     prior violations, ability to pay, the effect on ability to 
     continue to do business; and
       ``(C) such other matters as justice may require.
       ``(c) Temporary Closures.--
       ``(1) In general.--The Commission may order the temporary 
     closure of all or part of an Indian gaming operation for a 
     substantial violation of any provision of law referred to in 
     subsection (a).
       ``(2) Hearing on order of temporary closure.--
       ``(A) In general.--Not later than 30 days after the 
     issuance of an order of temporary closure, the Indian tribe 
     or the individual owner of a gaming operation shall have the 
     right to request a hearing before the Commission to determine 
     whether such order should be made permanent or dissolved.
       ``(B) Deadlines relating to hearing.--Not later than 30 
     days after a request for a hearing is made, the Commission 
     shall conduct such hearing. Not later than 30 days after the 
     termination of the hearing, the Commission shall render a 
     final decision on the closure.

     ``SEC. 16. JUDICIAL REVIEW.

       ``A decision made by the Commission pursuant to sections 7, 
     8, 10, 13, 14, and 15 shall constitute final agency decisions 
     for purposes of appeal to the United States District Court 
     for the District of Columbia pursuant to chapter 7 of title 
     5, United States Code.

     ``SEC. 17. COMMISSION FUNDING.

       ``(a) Annual Fees.--
       ``(1) In general.--The Commission shall establish a 
     schedule of fees to be paid to the Commission annually by 
     gaming operations for each class II and class III gaming 
     activity that is regulated by this Act.
       ``(2) Limitation on fee rates.--
       ``(A) In general.--For each gaming operation regulated 
     under this Act, the rate of the fees imposed under the 
     schedule established under paragraph (1) shall not exceed 2 
     percent of the net revenues of such gaming operation.
       ``(B) Total amount of fees.--The total amount of all fees 
     imposed during any fiscal year under the schedule established 
     under paragraph (1) shall equal not more than $25,000,000.
       ``(3) Annual fee rate.--The Commission, by a vote of a 
     majority of the members of the Commission, shall annually 
     adopt the rate of the fees authorized by this section. Such 
     fees shall be payable to the Commission on a monthly basis.
       ``(4) Adjustment of fees.--The fees paid by a gaming 
     operation may be adjusted by the Commission to reduce the 
     amount of the fees by an amount that takes into account that 
     regulatory functions are performed by an Indian tribe, or the 
     Indian tribe and a State, pursuant to regulations promulgated 
     by the Commission.
       ``(5) Consequences of failure to pay fees.--Failure to pay 
     the fees imposed under the schedule established under 
     paragraph (1) shall, subject to regulations promulgated by 
     the Commission, be grounds for revocation of the approval of 
     the Commission of any license required under this Act for the 
     operation of gaming activities.
       ``(6) Surplus funds.--To the extent that revenue derived 
     from fees imposed under the schedule established under 
     paragraph (1) exceed the limitation in paragraph (2)(B) or 
     are not expended or committed at the close of any fiscal 
     year, such surplus funds shall be credited to each gaming 
     activity that is the subject of the fees on a pro rata basis 
     against such fees imposed for the succeeding year.
       ``(b) Reimbursement of Costs.--The Commission is authorized 
     to assess any applicant, except the governing body of an 
     Indian tribe, for any license required pursuant to this Act. 
     Such assessment shall be an amount equal to the actual costs 
     of conducting all reviews and investigations necessary for 
     the Commission to determine whether a license should be 
     granted or denied to the applicant.
       ``(c) Annual Budget.--
       ``(1) In general.--For the first full fiscal year beginning 
     after the date of enactment of the Indian Gaming Regulatory 
     Act Amendments Act of 1995, and each fiscal year thereafter, 
     the Commission shall adopt an annual budget for the expenses 
     and operation of the Commission.
       ``(2) Request for appropriations.--The budget of the 
     Commission may include a request for appropriations 
     authorized under section 18.
       ``(3) Submission to congress.--Notwithstanding any other 
     provision of law, a request for appropriations made pursuant 
     to paragraph (2) shall be submitted by the Commission 
     directly to the Congress beginning with the request for the 
     first full fiscal year beginning after the date of enactment 
     of this Act, and shall include the proposed annual budget of 
     the Commission and the estimated revenues to be derived from 
     fees.

     ``SEC. 18. AUTHORIZATION OF APPROPRIATIONS.

       ``Subject to section 17, there are authorized to be 
     appropriated $5,000,000 to provide for the operation of the 
     Commission for each of fiscal years 1997, 1998, and 1999, to 
     remain available until expended.

     ``SEC. 19. MISCELLANEOUS.

       ``(a) Gaming Proscribed on Lands Acquired in Trust.--
       ``(1) In general.--Except as provided in paragraph (2), 
     gaming regulated by this Act shall not be conducted on lands 
     acquired by the Secretary in trust for the benefit of an 
     Indian tribe after the date of enactment of this Act, 
     unless--
       ``(A) such lands are located within or contiguous to the 
     boundaries of the reservation of the Indian tribe on the date 
     of enactment of this Act;
       ``(B) the Indian tribe has no reservation on the date of 
     enactment of this Act and such lands are located in the State 
     of Oklahoma and--
       ``(i) are within the boundaries of the former reservation 
     of the Indian tribe, as defined by the Secretary; or
       ``(ii) are contiguous to other land held in trust or 
     restricted status by the United States for the Indian tribe 
     in the State of Oklahoma; or
       ``(C) such lands are located in a State other than the 
     State of Oklahoma and are within the last recognized 
     reservation of the Indian tribe within the State within which 
     the Indian tribe is presently located.
       ``(2) Exemption for certain trust lands.--Paragraph (1) 
     does not apply in any case in which--
       ``(A) the Secretary, after consultation with the Indian 
     tribe and a review of the recommendations, if any, of the 
     Governor of the State in which such lands are located, and 
     any other State and local officials, including 
     [[Page S3411]] officials of other nearby Indian tribes, 
     determines that a gaming establishment on newly acquired 
     lands--
       ``(i) would be in the best interest of the Indian tribe and 
     the members of the Indian tribe; and
       ``(ii) would not be detrimental to the surrounding 
     community;
       ``(B) lands are taken into trust as part of a settlement of 
     a land claim;
       ``(C) the initial reservation of an Indian tribe is 
     acknowledged by the Secretary under the Federal 
     acknowledgment process or by an Act of Congress; or
       ``(D) lands are restored for an Indian tribe that is 
     restored to Federal recognition.
       ``(3) Exemption.--Paragraph (1) shall not apply to--
       ``(A) any lands involved in the trust petition of the St. 
     Croix Chippewa Indians of Wisconsin that is the subject of 
     the action filed in the United States District Court for the 
     District of Columbia entitled St. Croix Chippewa Indians of 
     Wisconsin v. United States, Civ. No. 86-2278; or
       ``(B) the interests of the Miccosukee Tribe of Indians of 
     Florida in approximately 25 contiguous acres of land, more or 
     less, in Dade County, Florida, located within 1 mile of the 
     intersection of State road numbered 27 (also known as Krome 
     Avenue) and the Tamiami Trail.
       ``(4) Authority of the secretary.--Nothing in this section 
     may affect or diminish the authority and responsibility of 
     the Secretary to take land into trust.
       ``(b) Application of the Internal Revenue Code of 1986.--
       ``(1) In general.--The provisions of the Internal Revenue 
     Code of 1986 (including sections 1441, 3402(q), 6041, and 
     chapter 35 of such Code) concerning the reporting and 
     withholding of taxes with respect to the winnings from gaming 
     or wagering operations shall apply to Indian gaming 
     operations conducted pursuant to this Act, or under a compact 
     entered into under section 12 that is in effect, in the same 
     manner as such provisions apply to State gaming and wagering 
     operations. Any exemptions to States with respect to taxation 
     of such gaming or wagering operations shall be allowed to 
     Indian tribes.
       ``(2) Exemption.--The provisions of section 6050I of the 
     Internal Revenue Code of 1986 shall apply to an Indian gaming 
     establishment that is not designated by the Secretary of the 
     Treasury as a financial institution pursuant to chapter 53 of 
     title 31, United States Code.
       ``(3) Statutory construction.--This subsection shall apply 
     notwithstanding any other provision of law enacted before the 
     date of enactment of this Act unless such other provision of 
     law specifically cites this subsection.
       ``(c) Access to Information by State and Tribal 
     Governments.--Subject to section 7(d), upon the request of a 
     State or the governing body of an Indian tribe, the 
     Commission shall make available any law enforcement 
     information which it has obtained pursuant to such section, 
     unless otherwise prohibited by law, in order to enable the 
     State or the Indian tribe to carry out its responsibilities 
     under this Act or any compact approved by the Secretary.'';
       (3) by striking section 20;
       (4) by redesignating sections 21 through 24 as sections 20 
     through 23, respectively; and
       (5) by adding at the end the following new section:

     ``SEC. 24. DEFINITION OF FINANCIAL INSTITUTIONS.

       ``Section 5312(a)(2) of title 31, United States Code, is 
     amended--
       ``(1) by redesignating subparagraphs (X) and (Y) as 
     subparagraphs (Y) and (Z), respectively; and
       ``(2) by inserting after subparagraph (W) the following new 
     subparagraph:
       ``(X) an Indian gaming establishment;''.

     SEC. 3. CONFORMING AMENDMENTS.

       (a) Title 10.--Section 2323a(e)(1) of title 10, United 
     States Code, is amended by striking ``section 4(4) of the 
     Indian Gaming Regulatory Act (102 Stat. 2468; 25 U.S.C. 
     2703(4))'' and inserting ``section 4(16) of the Indian Gaming 
     Regulatory Act''.
       (b) Title 18.--Title 18, United States Code, is amended--
       (1) in subsections (c) and (d) of section 1166, by striking 
     ``section 11(d)(8) of the Indian Gaming Regulatory Act'' each 
     place it appears and inserting ``section 12(a)(2)(B) of the 
     Indian Gaming Regulatory Act'';
       (2) in section 1167--
       (A) in subsection (a), by striking ``National Indian Gaming 
     Commission'' and inserting ``Federal Indian Gaming Regulatory 
     Commission established under section 5 of the Indian Gaming 
     Regulatory Act''; and
       (B) in subsection (b), by striking ``National Indian Gaming 
     Commission'' and inserting ``Federal Indian Gaming Regulatory 
     Commission''; and
       (3) in section 1168--
       (A) in subsection (a), by striking ``National Indian Gaming 
     Commission'' and inserting ``Federal Indian Gaming Regulatory 
     Commission established under section 5 of the Indian Gaming 
     Regulatory Act''; and
       (B) in subsection (b), by striking ``National Indian Gaming 
     Commission'' and inserting ``Federal Indian Gaming Regulatory 
     Commission''.
       (c) Internal Revenue Code of 1986.--Section 
     168(j)(4)(A)(iv) of the Internal Revenue Code of 1986 is 
     amended by striking ``Indian Regulatory Act'' and inserting 
     ``Indian Gaming Regulatory Act''.
       (d) Title 28.--Title 28, United States Code, is amended--
       (1) in section 3701(2)--
       (A) by striking ``section 4(5) of the Indian Gaming 
     Regulatory Act (25 U.S.C. 2703(5))'' and inserting ``section 
     4(17) of the Indian Gaming Regulatory Act''; and
       (B) by striking ``section 4(4) of such Act (25 U.S.C. 
     2703(4))'' and inserting ``section 4(16) of such Act''; and
       (2) in section 3704(b), by striking ``section 4(4) of the 
     Indian Gaming Regulatory Act'' and inserting ``section 4(16) 
     of the Indian Gaming Regulatory Act''.
                                                                    ____

    Section-by-Section Summary of the Indian Gaming Regulatory Act 
                         Amendments Act of 1995

       Section 1. Short Title. This section provides that this Act 
     may be cited as the ``Indian Gaming Regulatory Act Amendments 
     Act of 1995''.
       Section 2. Amendment to the Indian Gaming Regulatory Act. 
     This section provides that the Indian Gaming Regulatory Act 
     (25 U.S.C. 2701 et seq.) is amended by striking sections 2 
     through 19 and inserting the following new sections:
       Section 1. Short Title; Table of Contents. Subsection (a) 
     provides that this Act may be cited as the ``Indian Gaming 
     Regulatory Act''.
       Subsection (b) sets forth the table of contents for the 
     Act.
       Section 2. Congressional Findings. This section contains 
     seven separate findings, including the following: Indian 
     tribes are engaged in the licensing and operation of gaming 
     activities as a means of generating tribal governmental 
     revenue; clear Federal standards and regulations for the 
     conduct of Indian gaming will assist tribal governments in 
     assuring the integrity of gaming activities; a principal goal 
     of Federal Indian policy is to promote tribal economic 
     development, self-sufficiency and strong tribal government; 
     Indian tribes have the right to regulate gaming activities on 
     Indian lands if such activities are not prohibited by Federal 
     law and are conducted within a state that permits such gaming 
     activities and the Congress has the authority to regulate the 
     privilege of doing business with Indian tribes in Indian 
     country; the regulation of Indian gaming activities should 
     meet or exceed federally established minimum regulatory 
     requirements; gaming activities on Indian lands has had a 
     substantial impact on commerce with foreign nations, among 
     the several states and with the Indian tribes; and the 
     Constitution vests the Congress with the power to regulate 
     commerce with foreign nations, among the several states and 
     with the Indian tribes and this Act is enacted in the 
     exercise of those powers.
       Section 3. Purposes. This section sets forth four purposes 
     of the Act, including the following: to ensure the right of 
     Indian tribes to conduct gaming operations on Indian lands 
     consistent with the U.S. Supreme Court decision in the case 
     of California v. Cabazon Band of Mission Indians; to provide 
     a statutory basis for the conduct of gaming activities on 
     Indian lands as a means of promoting tribal economic 
     development and strong tribal governments; to provide an 
     adequate statutory basis for the regulation of Indian gaming 
     by tribal governments to shield the gaming from organized 
     crime; ensure that the Indian tribe is the primary 
     beneficiary of the gaming activities and to ensure that the 
     gaming activities are conducted fairly by both the operator 
     and the patrons; and to declare that the establishment of 
     independent Federal regulatory authority and minimum 
     regulatory standards for the conduct of gaming activities on 
     Indian lands are necessary to protect such gaming.
       Section 4. Definitions. This section contains definitions 
     for the following terms: ``applicant'', ``Advisory 
     Committee'', ``Attorney General'', ``Chairperson'', ``Class I 
     Gaming'', ``Class II Gaming'', ``Class III Gaming'', 
     ``Commission'', ``Compact'', ``Electronic, Computer, and 
     Other Technologic Aid'', ``Electronic or Electromechanical 
     Facsimile'', ``Gambling Device'', ``Gaming-Related 
     Contract'', ``Gaming Related Contractor'', ``Gaming Service 
     Industry'', ``Indian Lands'', ``Indian Tribe'', ``Key 
     Employee'', ``Management Contract'', ``Management 
     Contractor'', ``Material Control'', ``Net Revenues'', 
     ``Person'', and ``Secretary''.
       Section 5. Establishment of the Federal Indian Gaming 
     Regulatory Commission. Subsection (a) of this section 
     provides for the establishment of the Federal Indian Gaming 
     Regulatory Commission as an independent agency of the United 
     States.
       Subsection b. provides that the Commission shall be 
     composed of 3 full-time members who are appointed by the
      President and confirmed by the Senate. Commission members 
     are prohibited from pursuing any other business or 
     occupation or holding any other office. Other than through 
     distribution of gaming revenues as a member of an Indian 
     tribe, Commission members are prohibited from engaging in 
     or having a pecuniary interest in a gaming activity or in 
     any business or organization that has a license under this 
     Act or that does business with any person or organization 
     under this Act. Persons who have been convicted or a 
     felony or a gaming offense cannot serve as Commissioners. 
     In addition, persons who have any financial interest in or 
     management responsibility for any gaming contract or 
     other 
     [[Page S3412]] contract approved pursuant to this Act are 
     also ineligible to serve as Commissioners.
       Subsection (b) also provides that not more than 2 members 
     of the Commission shall be members of the same political 
     party and at least two members of the Commission shall be 
     members of federally recognized Indian tribes. One member of 
     the Commission must be a certified public accountant with at 
     least 5 years of experience in accounting and auditing as 
     well as a comprehensive knowledge of the principles and 
     practices of corporate finance. One member of the Commission 
     must have training and experience in the fields of 
     investigation or law enforcement. Any person under 
     consideration for appointment to the Commission shall be the 
     subject of a background investigation conducted by the 
     Attorney General with particular emphasis on the person's 
     financial stability, integrity, responsibility and reputation 
     for good character and honesty.
       Subparagraph (c) provides that the President shall select a 
     Chairperson from among the members appointed to the 
     Commission.
       Subparagraph (d) provides that the Commission shall select 
     a Vice Chairperson by majority vote. The Vice Chairperson 
     shall serve as the Chairperson in the absence of the 
     Chairperson and shall exercise such other powers as may be 
     delegated by the Chairperson.
       Subparagraph (e) provides that each member of the 
     Commission shall hold office for a term of 5 years and no 
     member can serve more than two terms of 5 years each. The 
     initial appointments to the Commission will be made for 
     staggered terms, with the Chairperson serving a full 5 year 
     term.
       Subparagraph (f) provides that Commissioners shall serve 
     until the expiration of their term or until their successor 
     is duly appointed and qualified, unless a Commissioner is 
     removed for cause. A Commissioner can only be removed by the 
     President for neglect of duty, malfeasance in office or for 
     other good cause. Any member appointed to fill a vacancy 
     shall serve for the unexpired term of the vacancy.
       Subparagraph (g) provides that two members of the 
     Commission shall constitute a quorum.
       Subparagraph (h) provides that the Commission shall meet at 
     the call of the Chairperson or a majority of the members of 
     the Commission. A majority of the members of the Commission 
     shall determine any action of the Commission.
       Subparagraph (i) provides that the Chairperson shall be 
     compensated at level IV of the Executive Schedule and other 
     members shall be compensated at level V. All members of the 
     Commission shall be reimbursed for travel, subsistence and 
     other necessary expenses.
       Subparagraph (j) requires the Administrator of General 
     Services to provide to the Commission on a reimbursable basis 
     such administrative support services as the Commission may 
     request.
       Section 6. Powers of the Chairperson. Subsection (a) 
     provides that the Chairperson is the chief executive officer 
     of the Commission.
       Subsection (b) provides that the Chairperson can employ and 
     supervise such personnel as may be necessary to carry out the 
     functions of the Commission, without regard to the 
     requirements of title 5 of the United States Code relating to 
     appointments in the competitive service. The Chairperson is 
     required to appoint a
      General Counsel and may procure temporary and intermittent 
     services or request the head of any federal agency to 
     detail any personnel of such agency to the Commission to 
     assist in carrying out the duties of the Commission under 
     this Act. The Chairperson is also authorized to use and 
     expend federal funds and fees collected pursuant to this 
     Act and to contract for such professional, technical and 
     operational personnel as may be necessary to carry out 
     this Act. Staff of the Commission are to be paid without 
     regard to the requirements of title 5 of the United States 
     Code related to classification and pay rates.
       Subsection (c) provides that the Chairperson shall be 
     governed by the general policies of the Commission and by 
     such regulatory decisions and determinations as the 
     Commission is authorized to make.
       Section 7. Powers and Authority of the Commission. 
     Subsection (a) provides that the Commission shall have the 
     power to approve the annual budget of the Commission; 
     promulgate regulations to carry out this Act; establish fees 
     and assessments; conduct investigations; issue temporary and 
     permanent orders closing gaming operations; grant, deny or 
     condition or suspend any license issued under any authority 
     conferred on the Commission by this Act; fine any person 
     licensed pursuant to this Act for violation of any of the 
     conditions of licensure under this Act; inspect the premises 
     where Class II and III gaming operations are located; inspect 
     and audit all books and records of Class II and III gaming 
     operations; use the U.S. mail in the same manner as any 
     agency of the U.S.; procure supplies and services by 
     contract; contract with state, tribal and private entities to 
     assist in the discharge of the Commission's duties; serve or 
     cause to be served process or notices of the Commission; 
     propound written interrogatories and appoint hearing 
     examiners who are empowered to administer oaths; conduct 
     hearings pertaining to violations of this Act; collect the 
     fees and assessments authorized by this Act; assess penalties 
     for violations of the Act; provide training and technical 
     assistance to Indian tribes with respect to the conduct and 
     regulation of gaming activities; monitor and regulate Class 
     II and III gaming; approve all management-related and gaming-
     related contracts; delegate any of the functions of the 
     Commission, except for rulemaking, to a division of the 
     Commission or a Commissioner, employee or administrative law 
     judge.
       Subsection (b) provides that the Commission reserves the 
     right to review any action taken pursuant to a delegation of 
     its authority. The vote of one Commissioner is sufficient to 
     bring a delegated action before the full Commission for 
     review. If the Commission declines to exercise the right of 
     review, then the delegated action shall be deemed an action 
     of the Commission.
       Subsection (c) provides that after receiving 
     recommendations from the Advisory Committee pursuant to this 
     Act, the Commission shall establish minimum Federal standards 
     for: background investigations; licensing; the operation of 
     Class II and III gaming activities, including surveillance, 
     security and systems for monitoring all gaming activity, 
     protection of the integrity of the rules for play of games, 
     cash counting and control, controls over gambling devices and 
     accounting and auditing.
       Subsection (d) provides that the Commission may secure from 
     any department or agency of the Untied States information 
     necessary to enable the Commission to carry out the Act. The 
     Commission may also secure from any law enforcement or gaming 
     regulatory agency of any State, Indian tribe or foreign 
     nation information necessary to enable the Commission to 
     carry out this Act. All such information obtained by the 
     Commission shall be protected from disclosure by the 
     Commission. For purposes of this subsection, the Commission 
     shall be considered to be a law enforcement agency.
       Subsection (e) authorizes the Commission to conduct such 
     investigations as the Commission considers necessary to 
     determine whether any person has violated, is violating or is 
     conspiring to violate any provision of this Act. In addition, 
     the Commission is authorized to investigate such facts, 
     conditions, practices, or matters as the Commission considers 
     necessary or proper to aid in the enforcement, implementation 
     or amendment of the Act.
      Any member of the Commission or any officer designated by 
     the Commission is empowered to administer oaths and to 
     subpoena witnesses and evidence from any place in the 
     United States at any designated place of hearing. The 
     Commission is authorized to invoke the jurisdiction of any 
     Federal court to require the attendance and testimony of 
     witnesses and the production of records. The failure of 
     any person to obey an order of a Federal court to appear 
     and testify or to produce records is punishable as a 
     contempt of such court. If the Commission determines that 
     any person is engaged, has engaged or is conspiring to 
     engage in any act or practice which constitutes a 
     violation of this Act, the Commission may bring an action 
     in the Federal District Court for the District of Columbia 
     to enjoin such act or practice or refer the matter to the 
     Attorney General for the initiation of criminal 
     proceedings. At the request of the Commission, each 
     Federal district court shall have jurisdiction to issue 
     writs of mandamus, injunctions and orders commanding any 
     person to comply with this Act and any rules or 
     regulations promulgated pursuant to the Act.
       Section 8. Regulatory Framework. Subsection (a) provides 
     that for Class II gaming Indian tribes shall retain the right 
     to monitor and regulate such gaming, conduct background 
     investigations, and issue licenses in a manner which meets or 
     exceeds minimum Federal standards established by the 
     Commission pursuant to section 7(c) of this Act.
       Subparagraph (b) provides that for Class III gaming which 
     is conducted pursuant to a tribal/state compact, an Indian 
     tribe or a state or both shall monitor and regulate such 
     gaming, conduct background investigations, issue licenses and 
     establish and regulate internal control systems in a manner 
     which meets or exceeds minimum Federal standards established 
     by the Commission pursuant to section 7(c) of this Act.
       Subparagraph (c) provides that for Class III gaming 
     conducted under the authority of a compact negotiated with 
     the Secretary, such compact shall provide that the Indian 
     tribe or other appropriate entity shall monitor and regulate 
     such gaming, conduct background investigations, issue 
     licenses and establish and regulate internal control systems 
     in a manner which meets or exceeds minimum Federal standards 
     established by the Commission pursuant to section 7(c).
       Subsection (d) provides that in any case in which an Indian 
     tribe conducts Class II gaming in a manner which 
     substantially fails to meet the minimum federal standards for 
     Class II gaming, then the Commission shall have the authority 
     to conduct background investigations, issue licenses and 
     establish and regulate internal control systems after 
     providing the Indian tribe an opportunity to cure violations 
     and to be heard. The authority of the Commission may be 
     exclusive and may continue until such time as the regulatory 
     and internal control systems of the Indian tribe meet or 
     exceed the minimum Federal standards established by the 
     Commission.
       Subsection (d) also provides that in the case of Class III 
     gaming, if an Indian tribe or a state, or both, fail to meet 
     or exceed minimum Federal standards for Class III gaming 
     [[Page S3413]] then the Commission shall have the authority 
     to conduct background investigations, issue licenses and 
     establish and regulate internal control systems after 
     providing notice and an opportunity to cure problems and be 
     heard. The authority of the Commission may be exclusive and 
     may continue until such time as the regulatory and internal 
     control systems of an Indian tribe or a state, or both, meet 
     or exceed the minimum Federal standards established by the 
     Commission.
       Section 9. Advisory Committee on Minimum Regulatory 
     Requirements and Licensing Standards. Subsection (a) 
     authorizes the President to establish an Advisory Committee 
     on Minimum Regulatory Requirements and Licensing Standards.
       Subsection (b) provides that the advisory committee shall 
     be composed of 7 members who shall be appointed by the 
     President. Three members shall be members of federally 
     recognized Indian tribes which are engaged in gaming under 
     this Act and shall be selected from a list of recommendations 
     submitted to the President by the Chairman and Vice Chairman 
     of the Senate Committee on
      Indian Affairs and the Chairman and ranking minority member 
     of the Subcommittee on Native American and Insular Affairs 
     of the Committee on Resources of the House of 
     Representatives. Two members shall represent state 
     governments and shall be selected from a list of 
     recommendations submitted to the President by the Majority 
     Leader and the Minority Leader of the Senate and the 
     Speaker and Minority Leader of the House of 
     Representatives. Two members shall be employees of the 
     Department of Justice.
       Subsection (c) provides that 180 days after the date on 
     which the Advisory Committee is fully constituted it shall 
     develop recommendations for minimum Federal standards for the 
     conduct of background investigations, internal control 
     systems and licensing standards. The committee's 
     recommendations shall be submitted to the Committee on Indian 
     Affairs of the Senate, the Subcommittee on Native American 
     and Insular Affairs of the Committee on Resources of the 
     House of Representatives, the Commission and to each 
     federally recognized Indian tribe. The Commission and the 
     Advisory Committee are required to give equal weight to 
     existing industry standards, the unique nature of tribal 
     gaming, the broad variations in the scope and size of tribal 
     gaming activity, the inherent sovereign right of Indian 
     tribes to regulate their own affairs and the Findings and 
     Purposes set forth in sections 2 and 3 of this Act.
       Subsection (d) provides that the Commission shall hold 
     public hearings on the Advisory Committee's recommendations 
     after they are received. At the conclusion of the hearings, 
     the Commission shall promulgate regulations establishing 
     minimum regulatory requirements and licensing standards.
       Subsection (e) provides that the members of the Advisory 
     Committee who are representatives of Indian tribes and states 
     shall be reimbursed for travel and per diem during the 
     performance of the duties of the Advisory Committee and while 
     away from home or their regular place of business.
       Subsection (f) provides that the Advisory Committee shall 
     cease to exist 60 days after it submits its recommendations 
     to the Commission.
       Subsection (g) provides that the activities of the Advisory 
     Committee are exempt from the Federal Advisory Committee Act.
       Section 10. Licensing. Subsection (a) provides that 
     licenses shall be required of gaming operations, key 
     employees of a gaming operation, management- and gaming-
     related contractors, any gaming service industry, and any 
     person who has material control over a licensed gaming 
     operation.
       Subsection (b) provides that the Commission may require 
     licenses of management contractors and gaming operations 
     notwithstanding any other provision of law relating to the 
     issuance of licenses by an Indian tribe or a state, or both.
       Subsection (c) provides that the Commission may issue a 
     statement of compliance to an applicant for a license under 
     this Act at any time that the Commission is satisfied that 
     one or more eligibility criteria for the license has been 
     satisfied by the applicant.
       Subsection (d) provides that no gaming operation shall 
     operate unless all required licenses and approvals have been 
     obtained in accordance with this Act. Each management 
     contract for a gaming operation must be in writing and filed 
     with and approved by the Commission. The Commission may 
     require that a management contract include any provisions 
     that are reasonably necessary to meet the requirements of 
     this Act. Any applicant for a license who does not have the 
     ability to exercise any significant control over a licensed 
     gaming operation may be determined by the Commission to be 
     ineligible to hold a license or to be exempt from being 
     required to hold a license.
       Subsection (e) provides that the Commission shall deny a 
     license to any applicant who is disqualified for failure to 
     meet any of the minimum Federal standards promulgated by the 
     Commission pursuant to section 7(c).
       Subsection (f) provides that the Commission shall conduct 
     an investigation into the qualifications of the applicant and 
     may conduct a non-public hearing concerning the applicant's 
     qualifications. After an application is filed with the 
     Commission final action will be taken by the Commission to 
     grant or deny the application not later than 90 days after 
     completing all hearings and investigations and receiving all 
     information required to be submitted. If an application is 
     denied by the Commission, the applicant can request a 
     statement of the reasons, including specific findings of 
     fact. If the Commission is satisfied that the applicant is 
     qualified to receive a license, then the Commission shall 
     issue a license upon the tender of all license fees and 
     assessments required by this Act and such bonds as the 
     Commission may require for the faithful performance of all 
     requirements imposed by this Act. The Commission is 
     authorized to fix the amount of any bond it requires. Bonds 
     furnished to the Commission may be applied by the Commission 
     to any unpaid liability of the licensee. Bonds shall be 
     furnished in cash or negotiable securities, by a surety or 
     through an irrevocable letter of credit.
       Subsection (g) provides that the Commission shall renew any 
     license issued under this Act, subject to its power to deny, 
     revoke or suspend licenses, upon proper application for 
     renewal and the receipt of license fees and assessments. 
     Licenses can be renewed for up to two years for each of the 
     first 2 renewal periods and three years for each succeeding 
     renewal period. A licensing hearing can be reopened by the 
     Commission at any time. Any licenses in existence on the date 
     of enactment of this Act may be renewed for a period of 18 
     months. Any application for renewal must be filed with the 
     Commission not later than 90 days prior to the expiration of 
     the current license. Upon renewal of a license, the 
     Commission shall issue an appropriate renewal certificate.
       Subsection (h) provides that the Commission shall establish 
     procedures for the conduct of hearings associated with 
     licensing including procedures for denying, limiting, 
     conditioning, revoking or suspending any such license. After 
     the completion of a licensing hearing the Commission shall 
     render a decision and issue and serve an order on the 
     affected parties. The Commission may order a rehearing on a 
     decision on a motion made by a party or the Commission not 
     later than 10 days after the services of a decision and 
     order. Following a rehearing, the Commission shall render a 
     decision, issue an order and serve it on the affected 
     parties. Any licensing decision or order made by the 
     Commission shall be final agency action for the purposes of 
     judicial review. The United States Court of Appeals for the 
     District of Columbia has jurisdiction to review the licensing 
     decisions and orders of the Commission.
       Subsection (i) provides that the Commission shall maintain 
     a registry of all licenses granted or denied and shall make 
     the information contained in the registry available to Indian 
     tribes to assist them in the licensing and regulation of 
     gaming activities.
       Section 11. Requirements for the Conduct of Class I and 
     Class II Gaming on Indian Lands. Subsection (a) provides that 
     Class I gaming shall be within the exclusive jurisdiction of 
     the Indian tribes and shall not be subject to the provisions 
     of this Act.
       Subsection (b) provides that Class II gaming shall be 
     within the jurisdiction of the Indian tribes, but shall be 
     subject to the provisions of this Act. An Indian tribe may 
     engage in and license and regulate Class II gaming on the 
     lands within the jurisdiction of the tribe if: the gaming is 
     located within a State that permits such gaming for any 
     purpose by any person; such gaming is not otherwise 
     specifically prohibited on Indian lands by Federal law; and 
     the Class II gaming operation meets or exceeds the 
     requirements of section 7(c) and 10. With regard to any Class 
     II gaming operation, the Commission shall ensure that: the 
     Indian tribe has issued a separate license for each place, 
     facility or location at which Class II gaming is conducted; 
     the Indian tribe has or will have the sole proprietary 
     interest and responsibility for the conduct of any Class II 
     gaming activity, except as provided elsewhere in the Act with 
     regard to gaming operations by Indian individuals; and the 
     net revenues from Class II gaming may only be used to
      fund tribal government operations or programs, to provide 
     for the general welfare of the Indian tribe and its 
     members, to promote tribal economic development, to donate 
     to charitable organizations, to help fund operations of 
     local government agencies or to comply with section 17 of 
     this Act. The Indian tribe is required to provide the 
     Commission with annual outside audits of its Class II 
     gaming operation. Such audits shall include a review of 
     all contracts for supplies and services equal to or more 
     than $50,000 annually, except for contracts for legal and 
     accounting services.
       Subsection (b) further provides that the Commission shall 
     ensure that the construction and maintenance of a Class I 
     gaming facility and the operation of the gaming shall be 
     conducted in a manner that adequately protects the 
     environment and public health and safety. The Commission must 
     also ensure that there is an adequate system for background 
     investigations on all persons who are required to be licensed 
     in accordance with sections 7(c) and 10 and notice to the 
     Commission by the Indian tribe of the results of the 
     background investigation before the issuance of any license. 
     No license may be granted to any person whose prior 
     activities, criminal record or reputation habits and 
     associations pose a threat to the public interest or the 
     effective regulation of gaming.
       With regard to per capita payments, subsection (b) provides 
     that such payments may 
     [[Page S3414]] only be made if: the Indian tribe has prepared 
     a plan to allocate revenues to the public, governmental, 
     economic development and social welfare purposes prescribed 
     by this Act and the Secretary determines that the plan is 
     adequate; the interests of minors and other legally 
     incompetent persons are protected and preserved and the 
     payments for such individuals are disbursed to their parents 
     or legal guardians under a plan approved by the Secretary and 
     the governing body of the Indian tribe; and the per capita 
     payments are subject to Federal income taxation and Indian 
     tribes withhold such tax.
       With regard to Class II gaming operations on Indian lands 
     which are owned by a person or entity other than the Indian 
     tribe, subsection (b) requires the issuance of a separate 
     license which includes the requirements of this section and 
     requirements that are at least as restrictive as those 
     established by state law governing similar gaming within the 
     jurisdiction of the state within which the Indian lands are 
     located. No person or entity, other than the Indian tribe 
     shall be eligible to receive a tribal license to own a Class 
     II gaming operation on Indian lands within the jurisdiction 
     of the Indian tribe if such person or entity would not be 
     eligible to receive a state license to conduct the same 
     activity within the jurisdiction of the state. Any 
     individually owned Class II gaming operation that was in 
     operation on September 1, 1986 shall not be barred by this 
     Act if: it is licensed by an Indian tribe; the income to the 
     Indian tribe from such gaming is not used for per capita 
     payments; not less than 60 percent of the net revenues from 
     the gaming operation is income to the Indian tribe; and the 
     owner of the gaming operation pays an assessment to the 
     Commission pursuant to section 17 for the regulation of such 
     gaming. This exemption for certain individually owned games 
     cannot be transferred to any person or entity and only 
     remains in effect so long as the gaming activity remains 
     within the same nature and scope as the gaming operation 
     which was operated on October 17, 1988. The Commission is 
     required to maintain and publish in the Federal Register a 
     list of individually owned gaming operations.
       Subsection (c) provides that any Indian tribe that operates 
     a Class II gaming activity may petition the Commission for a 
     certificate of self-regulation if that Indian tribe has 
     continuously conducted such gaming activity for a period of 
     not less than 3 years, including at least one year after the 
     date of enactment of this Act, and has otherwise complied 
     with the provisions of this Act. The Commission shall issue a 
     certificate of self-regulation if it determines that the 
     Indian tribe has: conducted its gaming activity in a manner 
     which has resulted in an effective and honest accounting of 
     all revenues; resulted in a reputation for safe, fair, and 
     honest operation of the activity; been generally free of 
     evidence of criminal or dishonest activity; and the Indian 
     tribe has adequate systems for accounting for revenues, 
     investigation and licensing of employees and contractors, 
     investigation and enforcement of its gaming
      laws and has conducted the gaming operation on a fiscally 
     sound basis. During any period in which a certificate of 
     self-regulation is in effect, the Indian tribe shall 
     continue to submit an annual independent audit to the 
     Commission and a complete resume of each employee and 
     contractor hired and licensed by the Indian tribe. The 
     Commission cannot assess a fee on a self-regulated 
     activity pursuant to section 17 in excess of one quarter 
     of 1 percent of the net revenue from such activity. The 
     Commission may rescind a certificate of self-regulation 
     for just cause and after an opportunity for a hearing.
       Subsection (d) provides that if the Commission notifies the 
     Indian tribe that any license which has been issued by the 
     tribe under this section does not meet any standards 
     established under sections 7(c) or 10, then the Indian tribe 
     shall immediately suspend the license and after notice and 
     hearing to the licensee in conformity with the laws of the 
     Indian tribe may revoke such license.
       Section 12. Class III Gaming on Indian Lands. Subsection 
     (a) provides that Class III gaming activities shall be lawful 
     on Indian lands only if such activities are authorized by a 
     compact that: is adopted by the governing body of the Indian 
     tribe having jurisdiction over such lands; meets the 
     requirements of section 11(b)(3) for the conduct of Class II 
     gaming; is approved by the Secretary; is located in a state 
     that permits such gaming for any purpose by any person; and 
     is conducted in conformity with the tribal/state compact that 
     is in effect. Any Indian tribe which has jurisdiction over 
     the lands upon which a Class III gaming activity is to be 
     conducted may request the state in which such lands are 
     located to enter into negotiations for the purpose of 
     entering into a compact to govern the conduct of Class III 
     gaming activities. A request for negotiations shall be in 
     writing and shall specify each gaming activity that the 
     Indian tribe proposes for inclusion in the compact. The state 
     shall respond to the request within 30 days of receipt. 
     Compact negotiations shall commence not later than 30 days 
     after the date on which a response by a state is due to the 
     Indian tribe and shall be completed not later than 120 days 
     after the initiation of negotiations unless the state and the 
     Indian tribe agree to a different time period. If the state 
     and the Indian tribe cannot commence or complete compact 
     negotiations within the time periods provided in this Act, 
     the Indian tribe shall notify the Secretary. After the 
     Secretary receives the notice from the Indian tribe, the 
     Secretary shall provide the state and the Indian tribe 60 
     days to present their positions on the gaming activities that 
     are permissible, the framework for the regulation of the 
     gaming, and such other matters as the Secretary may consider 
     appropriate. Not later than 90 days after the date of the 
     expiration of the 60 day period for the submission of the 
     positions of the state and the Indian tribe, the Secretary 
     shall approve a compact that meets the requirements of this 
     Act and publish it in the Federal Register. The Secretary 
     shall not approve a compact if the compact requires state 
     regulation of Indian gaming without the consent of the state 
     or the Indian tribe. The publication of a compact that 
     permits a form of Class III gaming shall be conclusive 
     evidence that such Class III gaming is an activity subject to 
     the laws of the state where the gaming is to be conducted. 
     Any compact negotiated under this subsection shall become 
     effective on its publication in the Federal Register. The 
     Commission shall monitor and, if authorized, regulate and 
     license Class III gaming with respect to any compact that is 
     approved by the Secretary.
       Subsection (a) also provides that a compact may include 
     provisions relating to the criminal and civil laws of the 
     Indian tribe or the state; the allocation of criminal and 
     civil jurisdiction between the state and the Indian tribe; 
     the assessment by the state of the costs associated with such 
     activities in such amounts as are necessary to defray the 
     costs of regulating such activity; taxation by the Indian 
     tribe of such activity in amounts comparable to the amounts 
     assessed by the state for similar activity; remedies for 
     breach of contract; standards for the operation of such 
     activity and maintenance of the gaming facility; and any 
     other subject that is directly related to the operation of 
     gaming activities and the impact of gaming on tribal, state 
     and local governments. Nothing in this Act may be construed 
     as conferring on a state or political subdivision of a state 
     the authority to impose any tax,
      fee, charge, or other assessment on an Indian tribe, an 
     Indian gaming operation or the value generated by the 
     gaming operation or any person or entity authorized by an 
     Indian tribe to engage in a Class III gaming activity in 
     conformity with this Act.
       Nothing in subsection (a) impairs the right of an Indian 
     tribe to regulate Class III gaming on the lands of the Indian 
     tribe concurrently with a state and the Commission, except to 
     the extent that such regulation is inconsistent with or less 
     stringent than this Act. The Gambling devices Transportation 
     Act shall not apply to any gaming activity conducted pursuant 
     to a compact entered into under this Act. The Federal 
     District Court for the District of Columbia shall have 
     jurisdiction over any action initiated by an Indian tribe, a 
     state, the Secretary or the Commission to enforce a compact 
     or to enjoin a Class III gaming activity located on Indian 
     lands and conducted in violation of any compact.
       Subsection (c) provides that the Secretary is authorized to 
     approve any compact between an Indian tribe and a state 
     governing the conduct of Class III gaming on the Indian lands 
     of such Indian tribe. The Secretary may disapprove a compact 
     entered into under this Act only if such compact violates any 
     provision of this Act or any regulation promulgated by the 
     Commission or any other Federal law or the trust obligation 
     of the United States to Indians. If the Secretary fails to 
     approve or disapprove a compact within 45 days after the 
     compact is presented to the Secretary for approval, then the 
     compact shall be considered to have been approved by the 
     Secretary, but only to the extent that it is consistent with 
     this Act and the regulations promulgated by the Commission. 
     The Secretary shall publish notice in the Federal Register of 
     any compact that is approved or considered to have been 
     approved.
       Subsection (d) provides that the governing body of an 
     Indian tribe may adopt an ordinance or resolution revoking 
     any prior ordinance or resolution that authorized Class III 
     gaming on the Indian lands of the Indian tribe. Such a 
     revocation shall render Class III gaming illegal on the 
     Indian lands of such Indian tribe. The Commission is required 
     to publish the revocation ordinance or resolution in the 
     Federal Register and it shall take effect upon such 
     publication. Any person or entity operating a Class III 
     gaming activity on the date of such revocation may continue 
     to operate such activity in conformity with a compact that is 
     in effect for one year from the date of publication of the 
     revocation.
       Subsection (e) provides that with regard to compacts 
     entered into and approved by the Secretary before the date of 
     enactment of this Act shall remain lawful during the period 
     such compact is in effect notwithstanding any amendments made 
     by this Act or any changes made in state law enacted after 
     the approval of the compact. Any compact entered into after 
     the date of enactment of this Act shall remain lawful under 
     this Act notwithstanding any change in state law enacted 
     after the approval of the compact.
       Section 13. Review of Contracts. Subsection (a) provides 
     that the Commission shall review and approve or disapprove 
     any management contracts for the management of any gaming 
     activity and any gaming-related contract unless such gaming 
     related contract is licensed by an Indian tribe consistent 
     with the minimum Federal standards promulgated pursuant to 
     section 7(c).
       [[Page S3415]] Subsection (b) provides that the Commission 
     shall only approve a management contract if it determines 
     that the contract provides for: adequate accounting 
     procedures that are maintained and for verifiable monthly 
     financial reports prepared by or for the governing body of 
     the Indian tribe; access to the gaming operations by tribal 
     officials who shall have the right to verify the daily gross 
     revenues and income derived from the gaming activity; a 
     minimum guaranteed payment to the Indian tribe that has 
     preference over the retirement of any development and 
     construction costs; an agreed upon ceiling for the repayment 
     of any development and construction costs; a contract term of 
     not more than 5 years unless the Commission determines that a 
     term of 7 years is appropriate based on the capital 
     investment required and the income projections for the gaming 
     activity; and grounds and mechanisms for the termination of 
     the contract.
       Subsection (c) provides that the Commission may approve a 
     management contract that provides for a fee of 30% of the net 
     revenues of a tribal gaming activity, unless the Indian tribe 
     requests a higher fee and the Commission determines that 
     based on the capital investment required and the income 
     projections a higher fee is justified. In no circumstance can 
     a management fee exceed 40%.
       Subsection (d) provides that the Commission shall approve a 
     gaming-related contract only if the Commission determines 
     that the contract provides for: grounds and mechanisms for 
     the termination of the contract and such other conditions as 
     the Commission may be empowered to impose under this Act.
       Subsection (e) provides that not later than 90 days after 
     the date on which a management contract or gaming-related 
     contract is submitted to the Commission for approval the 
     Commission shall either approve or disapprove the contract. 
     The 90 day period may be extended for 45 days if the 
     Commission notifies the tribe in writing of the reason for 
     the extension. The Indian tribe may bring an action in the 
     Federal District Court for the District of Columbia to compel 
     action by the Commission if it does not act in a timely 
     manner. Any gaming-related contract for an amount of $100,000 
     or less which is submitted to the Commission for approval by 
     a person who holds a valid license that is in effect under 
     this Act, shall be deemed to be approved if the Commission 
     has not acted to approve or disapprove it within 90 days of 
     its submission.
       Subsection (f) provides that after providing notice and 
     hearing, the Commission shall have the authority to require 
     appropriate contract modifications to ensure compliance with 
     this Act or may void any contract if the Commission 
     determines that it violates any of the provisions of this 
     Act.
       Subsection (g) provides that no contract regulated by this 
     Act may transfer or in any other manner convey any interest 
     in real property unless specific statutory authority exists, 
     all necessary approvals have been obtained and the conveyance 
     is clearly specified in the contract.
       Subsection (h) provides that the authority of the Secretary 
     under 25 U.S.C. 81 shall not extend to any contracts or 
     agreements which are regulated pursuant to this Act.
       Subsection (i) provides that the Commission may not approve 
     a contract if the Commission finds that: any person having a 
     direct financial interest in, or management responsibility 
     for such contract, and in the case of a corporation, any 
     member of the board of directors or any stockholders who hold 
     more than 10% of its issued stock is an elected member of the 
     governing body of the Indian tribe which is a party to the 
     contract; has been convicted of any felony or any gaming 
     offense; has knowingly and willfully provided materially 
     false statements to the Commission or the Indian tribe or has 
     refused to respond to questions propounded by the Commission; 
     or has been determined to be a person whose prior activities, 
     criminal record, reputation, habits or associations pose a 
     threat to the public interest or to the effective regulation 
     and control of gaming. The Commission may also disapprove any 
     contract if it finds that: the contractor has unduly 
     interfered or influenced for its gain any decision or process 
     of tribal government relating to the gaming activity; the 
     contractor has deliberately or substantially failed to comply 
     with the terms of the contract; or a trustee, exercising the 
     skill and diligence that a trustee is commonly held to, would 
     not approve the contract.
       Section 14. Review of Existing Contracts; Interim 
     Authority. Subsection (a) provides that at any time after the 
     Commission is sworn in and has promulgated regulations for 
     the implementation of this Act the Commission shall notify 
     each Indian tribe and management contractor who entered into 
     a contract prior to the enactment of this Act that the Indian 
     tribe is required to submit the contract to the Commission 
     within 60 days of such notice. Any such contract shall be 
     valid under this Act unless the Commission disapproves it 
     under this section. Not later than 180 days after the 
     submission of a contract for review, the Commission shall 
     review it to
      determine if it meets the requirements of section 13. The 
     Commission shall approve a contract if it determines that 
     the contract meets the requirements of section 13 and the 
     contractor has obtained all of the licenses required by 
     this Act. If the Commission determines that a contract 
     does not meet the requirements of section 13, the 
     Commission shall provide written notice to the parties of 
     the necessary modifications and the parties shall have 180 
     days to make the modifications.
       Subsection (b) provides that the Commissioners who are 
     holding office on the date of enactment of this Act shall 
     exercise the authorities vested in the Federal Indian Gaming 
     Regulatory Commission until such time as the members of that 
     Commission are sworn into office. Until such time as the 
     Federal Indian Gaming Regulatory Commission promulgates 
     regulations under this Act, the regulations promulgated under 
     the Indian Gaming Regulatory Act of 1988 shall apply.
       Section 15. Civil Penalties. Subsection (a) provides that 
     any person who violates this Act or the regulations 
     promulgated pursuant to this Act, either by an act or an 
     omission, shall be subject to a civil penalty of not more 
     than $50,000 per day for each violation.
       Subsection (b) provides that the Commission shall assess 
     the civil penalties authorized by this Act and the Attorney 
     General shall collect them in a civil action. The Commission 
     may seek to compromise any assessed civil penalty. In 
     determining the amount of a civil penalty, the Commission 
     shall take into account: the nature, circumstances, extent 
     and gravity of the violation; with regard to the person found 
     to have committed the violation, the degree of culpability, 
     any history of prior violations, ability to pay and the 
     effect on ability to continue to do business; and such other 
     matters as justice may require.
       Subparagraph (c) provides that the Commission may order the 
     temporary closure of all or part of an Indian gaming 
     operation for substantial violation of this Act and the 
     regulations promulgated by the Commission. Not later than 30 
     days after an order of temporary closure the Indian tribe or 
     the individual owner of the gaming operation may request a 
     hearing to determine whether the order should be made 
     permanent or dissolved. Not later than 30 days after a 
     request for a hearing, the Commission shall hold the hearing 
     and render a final decision within 30 days after the 
     completion of the hearing.
       Section 16. Judicial Review. Any decision made by the 
     Commission pursuant to sections 7, 8, 10, 14, and 15 shall 
     constitute final agency decisions for purposes of appeal to 
     the Federal District Court for the District of Columbia under 
     the Administrative Procedures Act.
       Section 17. Commission Funding. Subsection (a) provides 
     that the Commission shall establish an annual schedule of 
     fees to be paid to it by each Class II and III gaming 
     operation that is regulated by this Act. No gaming operation 
     may be assessed more than 2% of its net revenues and the 
     Commission cannot collect more than $25 million in fees in 
     any year. Fees are payable to the Commission on a monthly 
     basis. The fees paid by a gaming operation may be reduced by 
     the Commission to take into account that regulatory functions 
     are performed by an Indian tribe, or an Indian tribe and a 
     state. Failure to pay fees imposed by the Commission will be 
     grounds for revocation of any license required under this Act 
     for the operation of gaming activities. Any surplus 
     assessments in any given year will be credited pro rata 
     against such fees for the succeeding year.
       Subparagraph (b) provides that the Commission is authorized 
     to assess license applicants, except for Indian tribes, for 
     the actual cost of all reviews and investigations necessary 
     to determine whether a license should be granted or denied.
       Subparagraph (c) provides that the Commission shall adopt 
     an annual budget for each fiscal year. Any request for an 
     appropriation pursuant to section 18 shall be submitted 
     directly to the Congress.
       Section 18. Authorization of Appropriations. This section 
     authorizes an appropriation of $5 million for the operation 
     of the Commission for each of the fiscal years, 1997, 1998 
     and 1999, to remain available until expended.
       Section 19. Miscellaneous. Subsection (a) provides that in 
     general, gaming regulated by this Act shall not be conducted 
     on lands acquired by the Secretary in trust for the benefit 
     of an Indian tribe unless: such lands are located within or 
     are contiguous to the boundaries of the reservation of the 
     Indian tribe; the Indian tribe has no reservation and such 
     lands are located in the State of Oklahoma and are within the 
     boundaries of the former reservation of the Indian tribe or 
     are contiguous to other land held in trust by the United 
     States for the Indian tribe; or such lands are located in a 
     state other than Oklahoma and are within the last recognized 
     reservation of the Indian tribe within the state in which the 
     Indian tribe is presently located.
       Subsection (a) further provides that the general 
     prohibition on the use of lands taken into trust after the 
     date of enactment of this Act for gaming does not apply if 
     the Secretary, after consultation with the Indian tribe, 
     other Indian tribes, state and local officials and a review 
     of the recommendations of the Governor of the state in which 
     such lands are located, determines that gaming on the newly 
     acquired lands would be in the best interest of the Indian 
     tribe and would not be detrimental to the surrounding 
     community; or where lands are taken into trust as part of a 
     settlement of a land claim; or the initial reservation of an 
     Indian tribe is acknowledged by the Secretary under the 
     Federal acknowledgement process; or where lands are restored 
     for an Indian tribe that is restored to federal recognition.
       [[Page S3416]] Lastly, subsection (a) provides that nothing 
     in this section may affect or diminish the authority and 
     responsibility of the Secretary to take land into trust.
       Subsection (b) provides that the provisions of the Internal 
     Revenue Code with regard to reporting and withholding taxes 
     on winnings and the provisions of the Bank Secrecy Act 
     relating to the reporting requirements for cash transactions 
     of $10,000 or greater will apply to Indian gaming operations 
     which are regulated by this Act.
       Subsection (c) provides that the Commission shall make 
     available to a state or the governing body of an Indian tribe 
     any law enforcement information it has obtained pursuant to 
     section 7(d), unless otherwise prohibited by law, in order to 
     assist the state or Indian tribe to carry out its 
     responsibilities under this Act or any compact approved by 
     the Secretary.
       Section 24. Definition of Financial Institutions. This 
     section amends section 5312(a)(2) of title 31, United States 
     Code to include Indian gaming establishments.
       Section 3. Conforming Amendments. This section provides for 
     several amendments to titles 10, 18, 26 and 28 of the United 
     States Code to conform them to the provisions of this 
     Act.

 Mr. INOUYE. Mr. President, I am pleased to join the esteemed 
chairman of the Committee on Indian Affairs today, in the introduction, 
for purposes of discussion, of a bill to amend the Indian Gaming 
Regulatory Act of 1988.
  Mr. President, the impetus for the amendment of the Indian Gaming 
Regulatory Act arose a little under 3 years ago when a number of 
Governors of the several States called upon the President and the 
Congress to address the rulings of Federal district courts interpreting 
the act within the context of various State laws. In response, Chairman 
McCain and I initiated a dialog involving Governors, attorneys general, 
and tribal leaders that we hoped would lead to a consensus with regard 
to the manner in which the act would be amended. Although the dialog 
did not yield that consensus, it did provide us with considerable 
guidance in formulating the amendments that we advance today for the 
consideration of all affected parties.
  In the interim, there have been a number of rulings from the circuit 
courts of appeal that have clarified what has become known as the 
scope-of-gaming issue, and the Supreme Court has granted certiorari in 
litigation raising the issues associated with the 11th amendment and 
the doctrine of Ex parte Young. Nonetheless, the Indian Gaming 
Regulatory Act Amendments Act sets forth a process that does not entail 
litigation between State and tribal governments. In an effort to 
address the 10th amendment concerns of the States, the bill we 
introduce today removes any requirement for good-faith negotiations and 
provides for tribal-State compacting only if a State elects to engage 
in negotiations leading to a compact.
  As Chairman McCain has indicated, the 1995 Amendments Act provides 
authority for the establishment of minimum Federal standards for the 
regulation of Indian gaming, including background investigations, 
internal control and licensing standards. The States and the tribes 
would participate in the development of recommendations of these 
standards through an advisory committee, and the Federal Indian Gaming 
Regulatory Commission would hold hearings on those recommendations and 
promulgate regulations. It is in the capacity of assuring compliance 
with minimum Federal standards that the Commission will have a greater 
role to play in the area of class III gaming.
  This is a matter that I believe bears some emphasis. Under existing 
law, the
 National Indian Gaming Commission's responsibilities lie primarily in 
the area of class II gaming. Class III gaming is regulated by the State 
and tribal governments. Thus, when comparisons are made by some between 
the regulatory capacity of Nevada or Atlantic City to the regulatory 
authority of the National Indian Gaming Commission, they are comparing 
two regulatory systems that oversee those activities that are typically 
associated with large casino operations with a regulatory system that 
is designed to monitor tribal regulation of bingo halls. I would hope 
that as the debate in the Congress on matters of Indian gaming 
proceeds, this stark disparity in the type of operation being regulated 
will not be lost.

  Finally, in an effort to address the constitutional concerns 
associated with the Interior Secretary's authority to take land into 
trust for gaming purposes, the bill authorizes the Secretary to consult 
with the Governor of the State in which the land is located.
  Chairman McCain and I wrote to all parties in December of last year 
to advise them of our intent to introduce a bill to amend the Indian 
Gaming Regulatory Act early in the 104th session of the Congress, and 
to request their comments on the substitute amendment to S. 2230, a 
bill we introduced in the 103d session of the Congress. The National 
Governors Association [NGA] requested that we delay introduction of a 
new measure, and we indicated that we would delay introduction until 
March. Unfortunately, at the scheduled time of introduction, the 
committee has not had the benefit of the Governors' views on these 
matters--and so the bill we introduce today is substantially lacking in 
that respect. However, as Chairman McCain has indicated, we look 
forward to working with all of the affected governments--Federal, 
State, and tribal--in the further refinement of this measure.
  In conclusion, I want to thank the chairman of the Committee on 
Indian Affairs for his kind comments, and to commend him on his 
leadership of the committee in the 104th session of the 
Congress.
                                 ______

      By Mr. SPECTER:
  S. 488. A bill to amend the Internal Revenue Code of 1986 to impose a 
flat tax only on the earned income of individuals and the business 
taxable income of corporations, and for other purposes; to the 
Committee on Finance.


                        the flat tax act of 1995

  Mr. SPECTER.
   Mr. President, I now turn to the introduction of the modified flat 
tax bill entitled the Flat Tax Act of 1995. This is a proposal which 
would simplify the filing of Federal tax returns, would provide for 
fairness among all taxpayers, and would stimulate economic growth in 
the United States. As these proceedings of the U.S. Senate are being 
watched on C-SPAN2, I am confident that thousands of Americans are 
sitting at their desks with an ear to television but an eye to their 
tax returns and they are poring over the complexities of the Federal 
tax laws.

  This bill would permit the American taxpayer to file his or her 
return on a small, 10-line postcard. It would do so because it retains 
the principles of a flat tax, which have long been discussed but not 
really considered in sufficient depth and not acted upon by the 
American Congress. This flat tax would be a 20-percent rate, with 
deductions limited to interest on home mortgages up to $100,000 in 
borrowing and charitable deductions up to $2,500.
  The entire return could be filled out on a simple 10-line postcard. 
This postcard would identify the taxpayer, specify the total amount of 
wages, salaries, pensions, and retirement benefits, list the deductions 
and exemptions, and allow taxpayers to compute their taxes on this 
simple postcard form.
  Beyond simplicity, and the simplicity is of great importance, we now 
have reliable estimates that Americans spend some $5.4 billion a year 
on their tax returns. The Internal Revenue Service regulations have 
grown from 744,000 words in 1955 to some 5,600,000 words at the present 
time. The Internal Revenue Service is a mammoth bureaucracy, with 
annual spending of $13 billion on the IRS bureaucracy alone, with 
110,000 employees in over 650 offices nationwide. The compliance costs 
to the American people are almost $200 billion a year.
  We all know that the greatest impediment in confidence between the 
American Government and the American citizen is concern with the 
Internal Revenue Service. How often have you and I received those 
automatic computer printouts from the IRS, written them a letter, 
written them a second letter or multiple letters, and finally had a 
conference to work out some bureaucratic computer error? And most of 
the time, no additional tax is needed.
  This legislation would liberate the American people to devote their 
time and energy to productive pursuits.
  A second major advantage to my flat tax bill is that there would be 
an enormous increase in growth. This growth would occur because this 
flat tax would not impose any tax burden on interest, on dividends, or 
capital gains because 
[[Page S3417]] all of those items of income would have been taxed at 
the source; that is, at the business level.
  Another benefit of the flat tax is the projected growth in the 
economy. From the point of view of growth, reliable estimates are that 
we would have an increase in the gross national product of some $2 
trillion during the course of a 7-year period--an increase of some 28 
percent.
  We would also benefit from increased savings, which would mean that 
the United States of America would be less dependent on borrowing from 
foreign sources. These increased savings would substantially change the 
great imbalance we have now, where we have massive interest payments on 
foreign debt flowing abroad.
  Additionally, in terms of fairness, there would be a lesser tax on 
those in the lower brackets by having an increase in the personal 
allowance for $16,500 for married couples filing jointly, $9,500 for 
single taxpayers, $14,000 for single head of households, and an 
exemption of $4,500 for each dependent. That would be substantially 
more than under the present code and would enable a family of four 
earning $25,500 to pay no taxes at all. A family of four earning up to 
$30,000 a year would pay very minimal or no taxes at all. The effective 
tax rate would be as low as 12.7 percent for an average projection of a 
family earning $100,000 a year.
  This proposal is revenue neutral based upon the computations made by 
Professor Hall and Professor Rabushka of Stanford's Hoover Institute. 
They have elaborately projected a national flat tax with no deductions 
and are calling for a rate of some 19 percent to have tax neutrality. 
This bill deviates from what Professors Hall and Rabushka have proposed 
by having the allowance of charitable contributions of up to $2,500 a 
year and the deduction for interest on home mortgages with a maximum 
borrowing of up to $100,000 a year.
  The computations provided by the Joint Tax Committee show that the 
cost will be $35 billion a year to the Government for the interest 
deduction on borrowings up to $100,000 a year, and $13 billion for the 
charitable contributions up to $2,500 a year. The computation is that 
the additional 1 percent in my flat tax above Hall and Rabushka would 
cover those deductions.
  I might say the computation is necessarily inexact because the model 
used by the Joint Tax Committee was on a national flat tax on 
individuals alone while this proposal is a national flat tax on both 
individuals and businesses. The Hall-Rabushka proposal is very similar 
to the proposal made by Congressman Armey last year with the 
differences being in the allowance here for interest and charitable 
contributions. Also, a difference between this plan and the flat tax 
plan of Congressman Armey is that Congressman Armey did not provide for 
automatic withholding.
  Mr. President, my interest in tax policy is longstanding, originating 
during my law school days. Some of my early practice of law included 
some tax work. And years ago, I published an article on the subject in 
the Villanova Law Review raising an issue of fairness as to the pension 
and profit sharing deductions for professional associations contrasted 
with corporations.
  This is a subject where I debated my former colleague, Senator John 
Heinz, almost 20 years ago in our contest for the Republican nomination 
to the U.S. Senate in 1976 based upon legislation which he had 
introduced in the House of Representatives where he had suggested very 
substantial cuts in a good many deductions.
  Mr. President, in offering this legislation, it is not cast in stone, 
but I think it is high time that the U.S. Senate consider in some 
detail the benefits of this national flat tax proposal or the modified 
Flat Tax Act which I am suggesting today.
  The benefits are very, very substantial in terms of simplicity, 
growth, and fairness.
  Mr. President, I ask unanimous consent that the full text of my 
statement be printed in the Record, as well as the text of the 
legislative proposal itself.
  Mr. President, as April 15 rapidly approaches--and as I present this 
floor statement--millions of Americans are spending their evenings 
poring over page after page of IRS instructions, going through their 
records looking for information and struggling to find and fill out all 
the appropriate forms on their Federal tax returns. At the same time, a 
patchwork quilt of deductions, credits, and special exceptions lets 
some Americans pay less than their fair share of taxes. Year after 
year, we continue to ask the same question--isn't there a better way?
  Today I am introducing legislation that provides that better way. I 
am introducing legislation which will fundamentally revise the present 
Tax Code, with its myriad rates, deductions, and instructions. Instead, 
the legislation I offer today would institute a simple, flat 20 percent 
tax rate for all individuals and businesses. It will allow all 
taxpayers to file their April 15 tax returns on a simple postcard. This 
legislation is a vital first step in simplifying our Nation's Tax Code 
and redirecting our collective energies toward productivity and growth. 
This proposal is not in stone, but is intended to move the debate 
forward as the first such legislation to be introduced this term in the 
Senate, by focusing attention on three key principles which are 
critical to an effective and equitable taxation system: simplicity, 
fairness, and economic growth.
  Over the years, I have devoted considerable time and attention to 
analyzing our Nation's Tax Code and the policies which underlie it. I 
began this study of the complexities of the Tax Code 40 years ago as a 
law student at Yale University. I included some tax law as part of my 
practice in my early years as an attorney in Philadelphia. In the 
spring of 1962, I published a law review article in the Villanova Law 
Review, ``Pension and Profit Sharing Plans: Coverage and Operation for 
Closely Held Corporations and Professional Associations,'' 7 Villanova 
L. Rev. 335, which in part focused on the inequity in making tax-exempt 
retirement benefits available to some kinds of businesses but not 
others. It was apparent then, as it is now, that the very complexities 
of the Internal Revenue Code could be used to give unfair advantage to 
some; and made the already unpleasant obligation of paying taxes a real 
nightmare for many Americans.
  I became interested many years ago in the practicality and simplicity 
of a flat tax as a way to reduce the burden on working Americans. My 
former Senate colleague, John Heinz, while he was in the House of 
Representatives, introduced H.R. 636, which would have eliminated 
numerous deductions, including the deductibility of home mortgage 
interest, charitable contributions, the investment tax credit, the oil 
depletion allowance and other exemptions, exclusions and deductions. 
Last fall, I had discussions with Congressmen Richard Armey, now the 
House majority leader, about his flat tax proposal, which he introduced 
as H.R. 4585. Since then, my staff and I have studied the flat tax at 
some length and have engaged in a host of discussions with economists 
and tax experts, including the staff of the Joint Committee on 
Taxation, to evaluate the economic impact and viability of a flat tax.
  Based on those discussions, and on the revenue estimates supplied to 
us, I have concluded that a simple flat tax at a rate of 20 percent on 
all business and personal income can be enacted without reducing 
Federal revenues, and I offer such a bill today.
  The flat tax will help reduce the size of Government and allow 
ordinary citizens to have more influence over how their money is spent 
because they will spend it and not the Government. With a simple 20-
percent flat tax rate in effect, the average person can easily see the 
impact of any additional Federal spending proposal on his or her own 
paycheck. By creating strong incentives for savings and investment, the 
flat tax will have the beneficial result of making available larger 
pools of capital for expansion of the private sector for the economy--
rather than more tax money for big Government. This will mean more jobs 
and, just as important, more better paying jobs.
  As a matter of Federal tax policy, there has been considerable 
controversy over whether tax breaks should be used to stimulate 
particular kinds of economic activity, or whether tax policy should be 
neutral, leaving people to do what they consider best from a purely 
economic point of view. Our current Tax Code attempts to use tax policy 
to direct economic activity, 
[[Page S3418]] but experience under that Code has demonstrated that so-
called tax breaks are inevitably used as the basis for tax shelters 
which have no real relation to solid economic purposes, or to the 
activities which the tax laws were meant to promote. Even when the 
Government responds to particular tax shelters with new and often 
complex revisions of the regulations, clever tax experts are able to 
stay one or two steps ahead of the IRS bureaucrats by changing the 
structure of their business transactions and then claiming some legal 
distinctions between the taxpayer's new approach and the revised IRS 
regulations and precedents.
  Under the massive complexity of the current IRS Code, the battle 
between $500-an-hour tax lawyers and IRS bureaucrats to open and close 
loopholes is a battle the Government can never win. Under the flat tax 
bill I offer today, there are no loopholes, and tax avoidance through 
manipulations will become a thing of the past.
  The basic model for this legislation comes from a plan created by 
Professors Robert Hall and Alvin Rabushka of the Hoover Institute at 
Stanford University. Their plan envisioned a flat tax with no 
deductions whatever. After considerable reflection, I have decided to 
include limited deductions for home mortgage interest on up to $100,000 
in borrowing and charitable contributions up to $2,500 in the 
legislation I offer today. While this modification undercuts the pure 
principle of the flat tax, and does continue the use of tax policy to 
promote homebuying and charitable contributions by retaining those 
deductions, I believe that those two deductions are so deeply ingrained 
in the financial planning of American families that they should be 
retained as a matter of fairness and public policy--and also political 
practicality. With those two deductions maintained, passage of a 
modified flat tax will be difficult; but without them, probably 
impossible.
  In my judgment, an indispensable prerequisite to enactment of a 
modified flat tax is revenue neutrality. Professor Hall advised that 
the revenue neutrality of the Hall-Rabushka proposal, which uses a 19-
percent rate, is based on a well documented model founded on reliable 
governmental statistics. The bill offered today raises that rate from 
19 to 20 percent to accommodate retaining limited home mortgage 
interest and charitable deductions. A preliminary estimate by the 
Committee on Joint Taxation places the annual cost of the home interest 
deduction at $35 billion, and the cost of the charitable deduction at 
$13 billion. While the revenue calculation is complicated because the 
Hall-Rabushka proposal encompasses significant revisions to business 
taxes as well as personal income taxes, there is a sound basis for 
concluding that the 1-percent increase in rate would pay for the two 
deductions. Revenue estimates for Tax Code revisions are difficult to 
obtain and are, at best, judgment calls based on projections from fact 
situations with a myriad of assumed variables. It is possible that some 
modification may be needed at a later date to guarantee revenue 
neutrality.
  This legislation offered today is quite similar to the bill 
introduced in the House by Congressman Armey, which was itself modeled 
after the Hall-Rabushka proposal and uses much of the same legislative 
language as the Armey bill. The flat tax offers great potential for 
enormous economic growth, in keeping with principles articulated so 
well by former Congressman Jack Kemp. This proposal taxes business 
revenues fully at their source, so that there is no personal taxation 
on interest, dividends and capital gains. Restructured in this way, the 
tax code can become a powerful incentive for savings and investment--
which translates into economic growth and expansion, more and better 
jobs, and a rising standard of living for all Americans.
  In this Congress, we have so far been concerned with the work of 
reducing the size and cost of Government, and this is work which is 
vitally important. But the work of downsizing Government is only one 
side of the coin; what we must do at the same time, and with as much 
energy and care, is to grow the private sector. As we reform the 
welfare programs and Government bureaucracies of past administrations, 
we must replace those programs with a prosperity that extends to all 
segments of American society through private investment and job 
creation--which can have the additional benefit of producing even lower 
taxes for Americans as economic expansion adds to Federal revenues. 
Just as Americans need a tax code that is fair and simple, they also 
are entitled to tax laws designed to foster rather than retard economic 
growth. The bill I offer today embodies those principles.
  Professors Hall and Rabushka have summarized the advantages of their 
proposals as follows:

       The tax on families is fair and progressive--the poor pay 
     no tax at all, and the fraction of income that a family pays 
     rises with income. The system is simple and easy to 
     understand. And the tax operates on the consumption-tax 
     principle [encourages savings; discourages consumption]--
     families are taxed on what they take out of the economy, not 
     what they put into it
       Our system rests on a basic administrative principle: 
     income should be taxed exactly once, as close as possible to 
     its source. Today's tax system violates this principle in all 
     kinds of ways. Some kinds of income--like fringe benefits--
     are never taxed at all. Other kinds, like dividends and 
     capital gains, are taxed twice. And interest income, which is 
     supposed to be taxed once, escapes taxation completely in all 
     too many cases, where clever taxpayers arrange to receive 
     interest beyond the reach of the IRS.
       Under our plan, all income is taxed at the same rate. 
     Equality of tax rates is a basic concept of the flat tax. Its 
     logic is much more profound than just the simplicity of 
     calculation with a single tax rate. Whenever different forms 
     of income are taxed at different rates or different taxpayers 
     face different rates, the public figures out how to take 
     advantage of the differential.
       Limiting the burden of taxes on the poor is a central 
     principle of tax reform. Some ideas for tax simplification 
     and reform flout this principle--neither a federal sales tax 
     nor a value-added tax is progressive. Instead, all citizens, 
     rich and poor alike, pay essentially the same fraction of 
     their spending in taxes. We reject sales and value-added 
     taxes for this reason. . . .
       Exempting the poor from taxes does not require graduated 
     tax rates rising to high levels for upper-income taxpayers. A 
     flat rate, applied to all income above a generous personal 
     allowance, provides progressivity without creating important 
     differences in tax rates. Graduated taxes automatically 
     create differences in tax rates among taxpayers, with all the 
     attendant opportunities for leakage. Because it is high-
     income taxpayers who have the biggest incentive and the best 
     opportunity to use special tricks to exploit tax-rate 
     differentials, applying the same tax rate to these taxpayers 
     for all of their income in all years is the most important 
     goal of flat-rate taxation. . . .
       We believe that the simplicity of our system is a central 
     feature. Complex tax forms and tax laws do more harm than 
     just deforesting America. Complicated taxes require expensive
      advisers for taxpayers and equally expensive reviews and 
     audits by the Government. A complex tax invites the 
     taxpayer to search for a special feature to exploit to the 
     disadvantage of the rest of us. And complex taxes diminish 
     confidence in government, inviting a breakdown in 
     cooperation with the tax system and the spread of outright 
     evasion.

  My plan, which like Representative Armey's is based on the Hall-
Rabushka analysis, differs from the legislation introduced by 
Representative Armey in four key respects: First, my bill contains a 
20-percent flat tax rate. Second, this bill would retain modified 
deductions for mortgage interest and charitable contributions, which 
will require a 1 percent higher tax rate than otherwise. Third, my bill 
would maintain the automatic withholding of taxes from an individual's 
paycheck. Lastly, my bill is designed to be revenue neutral, and thus 
will not undermine our vital efforts to balance the Nation's budget. 
The estimate of revenue neutrality is based on the Hall-Rabushka 
analysis together with preliminary projections supplied by the Joint 
Committee on Taxation on the modifications proposed in this bill
  The key advantages of this flat tax plan are threefold: First, it 
will dramatically simplify the payment of taxes. Second, it will remove 
much of the IRS regulatory morass now imposed on individual and 
corporate taxpayers, and allow those taxpayers to devote more of their 
energies to productive pursuits. Third, since it is a plan which 
rewards savings and investment, the flat tax will spur economic growth 
in all sectors of the economy as more money flows into investments and 
savings accounts, and as interest rates drop. By contrast, there will 
be a contraction of the IRS if this proposal is enacted.
  Under this tax plan, individuals would be taxed at a flat rate of 20 
percent on all income they earn from 
[[Page S3419]] wages, pensions, and salaries. Individuals would not be 
taxed on any capital gains, interest on savings, or dividends--since 
those items will have already been taxed as part of the flat tax on 
business revenue. The flat tax will also eliminate all but two of the 
deductions and exemptions currently contained within the Tax Code. 
Instead, taxpayers will be entitled to personal allowances for 
themselves and their children: $9,500 for a single taxpayer, $14,000 
for a single head of household and $16,500 for a married couple filing 
jointly; and $4,500 per child or dependent. These personal allowances 
would be adjusted annually for inflation.
  In order to ensure that this flat tax does not unfairly impact low 
income families, the personal allowances contained in my proposal are 
much higher than the standard deduction and personal exemptions allowed 
under the current Tax Code. For example, in 1994, the standard 
deduction is $3,800 for a single taxpayer, $5,600 for a head of 
household, and $6,350 for a married couple filing jointly, while the 
personal exemption for individuals and dependents is $2,450. Thus, 
under the current Tax Code, a family of four which does not itemize 
deductions would pay tax on all income over $16,500--personal 
exemptions of $9,800 and a standard deduction of $6,350. By contrast, 
under my flat tax bill, that same family would receive a personal 
exemption of $25,500, and would pay tax only on income over that 
amount.
  My legislation retains the provisions for the deductibility of 
charitable contributions up to a limit of $2,500 and home mortgage 
interest on up to $100,000 of borrowing. Retention of these key 
deductions will, I believe, enhance the political salability of this 
legislation and allow the debate on the flat tax to move forward. If a 
decision is made to eliminate these deductions, the revenue saved could 
be used to reduce the overall flat tax rate from 20 to 19 percent.
  With respect to businesses, the flat tax would also be a flat rate of 
20 percent. My legislation would eliminate the intricate scheme of 
complicated depreciation schedules, deductions, credits, and other 
complexities that go into business taxation in favor of a much-
simplified system that taxes all business revenue less only wages, 
direct expenses and purchases--a system with much less potential for 
fraud, ``creative accounting,'' and tax avoidance.
  Businesses would be allowed to expense 100 percent of the cost of 
capital formation, including purchases of capital equipment, structures 
and land, and to do so in the year in which the investments are made. 
The business tax would apply to all money not reinvested in the company 
in the form of employment or capital formation--thus fully taxing 
revenue at the business level and making it inappropriate to retax the 
same money when passed on to investors as dividends or capital gains.
  Professors Hall and Rabushka summarize the benefits from this kind of 
flat taxation of business revenue as follows:

       The business tax is a giant, comprehensive withholding tax 
     on all types of income other than wages, salaries, and 
     pensions. It is carefully designed to tax every bit of income 
     outside of wages, but to tax it only once. The business tax 
     does not have deductions for interest payments, dividends, or 
     any other type of payment to the owners of the business. As a 
     result, all income that people receive from business activity 
     has already been taxed. Because the tax has already been 
     paid, the tax system does not need to worry about what 
     happens to interest, dividends, or capital gains after these 
     types of income leave the firm. The resulting simplification 
     and improvement in the tax system is enormous. Today, the IRS 
     receives over a billion Form 1099s, which keep track of 
     interest and dividends, and must make an overwhelming effort 
     to match these forms to the 1040s filed by the recipients. 
     The only reason for a Form 1099 is track income as it makes 
     its way from the business where it originates to the ultimate 
     recipient. Not a single Form 1099 would be needed under a 
     flat tax with business income taxed at the source.

  Let me now turn to a more specific discussion of the advantages of 
the flat tax legislation I offer today.


                               simplicity

  The first major advantage to this flat tax is simplicity. According 
to reliable studies, Americans spend approximately 5.4 billion hours 
each year filling out tax forms. Much of this time is spent burrowing 
through IRS laws and regulations, which, according to the Tax 
Foundation, have grown from 744,000 words in 1955 to 5.6 million words 
in 1994. The Internal Revenue Code annotations alone have grown to 21 
volumes of mind-numbing detail and minutiae. Even those IRS forms which 
are intended to be simple are not--the instructions for the 1040EZ 
form--the so-called easy form--alone comprise 17 small-print pages.
  Whenever the Government gets involved in any aspect of our lives, it 
can covert the most simple goal or task into a tangled array of 
complexity, frustration and inefficiency. By way of example, most 
Americans have become familiar with the absurdities of the Government's 
military procurement programs. If these programs have taught us 
anything, it is how a simple purchase order for a hammer or a toilet 
seat can mushroom into thousands of words of regulations and 
restrictions when the government gets involved. The Internal Revenue 
Service is certainly no exception. Indeed, it has become a distressly 
common experience for taxpayers to receive computerized printouts 
claiming that additional taxes are due, which require repeated 
exchanges of correspondence or personal visits before it is determined, 
as it so often is, that the taxpayer was right in the first place.
  The plan offered today would eliminate these kinds of frustrations 
for millions of taxpayers. This flat tax would enable us to scrap the 
great majority of the IRS rules, regulations and instructions and 
delete literally millions of words from the Internal Revenue Code. 
Instead of tens of millions of hours of nonproductive time spent in 
compliance with--or avoidance of--the Tax Code, taxpayers would spend 
only the small amount of time necessary to fill out a postcard-sized 
form. Both business and individual taxpayers would thus find valuable 
hours freed up to engage in productive business activity, or for more 
time with their families, instead of poring over tax tables, schedules 
and regulations.
  The flat tax I have proposed can be calculated just by filling out a 
small postcard which would require a taxpayer only to answer a few easy 
questions. The postcard would ask for the following information:
                   Form 1--Individual Wage Tax, 1995

       Your first name and initial (if joint return, also give 
     spouse's name and initial):
       Your social security number:
       Home address (number and street including apartment number 
     or rural route):
       Spouse's social security number:
       City, town, or post office, state, and ZIP code:
       1. Wages, salary, pension and retirement benefits:
       2. Personal allowance (enter only one):
       $16,500 for married filing jointly
       $9,500 for single
       $14,000 for single head of household
       3. Number of dependents, not including spouse, multiplied 
     by $4,500:
       4. Mortgage interest on debt up to $100,000 for owner-
     occupied home:
       5. Cash or equivalent charitable contributions (up to 
     $2,500):
       6. Total allowances and deductions (lines 2, 3, 4, 5):
       7. Taxable compensation (line 1 less line 6, if positive; 
     otherwise zero):
       8. Tax (20% of line 7):
       9. Tax withheld by employer:
       10. Tax or refund due (difference between lines 8 and 9):

  Filing a tax return would become a manageable chore, not a seemingly 
endless nightmare, for most taxpayers.


                        cutting back government

  Along with the advantage of simplicity, enactment of this flat tax 
bill will help to remove the burden of costly and unnecessary 
government regulation, bureaucracy and redtape from our everyday lives. 
The heavy hand of government bureaucracy is particularly onerous in the 
case of the Internal Revenue Service, which has been able to extend its 
influence into so many aspects of our lives.
  In 1994, the IRS employed over 110,000 people, spread out over 650 
offices across the United States. Its budget was in excess of $13 
billion, with some $7.1 billion spent annually just to administer the 
tax laws, and another $4 billion for enforcement. By simplifying the 
Tax Code and eliminating most of the IRS' vast array of rules and 
regulations, the flat tax would enable us to cut a significant portion 
of the IRS budget, including the bulk of the funding now needed for 
enforcement and administration.

[[Page S3420]]

  In addition, a flat tax would allow taxpayers to redirect their time, 
energies, and money away from the yearly morass of tax compliance. 
According to the Tax Foundation, in 1994, businesses spent 
approximately $127 billion in compliance with the Federal tax laws, and 
individuals spent an additional $65 billion, for a total of $192 
billion. Moneys spent by businesses and investors in creating tax 
shelters and finding loopholes could be instead directed to productive 
and job-creating economic activity. With the adoption of a flat tax, 
the opportunities for fraud and cheating would also be vastly reduced, 
allowing the Government to collect, according to some estimates, over 
$120 billion annually.


                            economic growth

  The third major advantage to a flat tax is that it will be a 
tremendous spur to economic growth. Harvard economist Dale Jorgenson 
estimates adoption of a flat tax like the one offered today would 
increase future national wealth by over $2 trillion, in present value 
terms, over a 7-year period. The economic principles are fairly 
straightforward. Our current tax system is inefficient; it is biased 
toward too little savings and too much consumption. The flat tax 
creates substantial incentives for savings and investment by 
eliminating taxation on interest, dividends, and capital gains--and tax 
policies which promote capital formation and investment are the best 
vehicle for creation of new and high paying jobs, and for a greater 
prosperity for all Americans.
  It is well recognized that to promote future economic growth, we need 
not only to eliminate the Federal Government's reliance on deficits and 
borrowed money, but to restore and expand the base of private savings 
and investment that has been the real engine driving American 
prosperity throughout our history. These concepts are interrelated, for 
the Federal budget deficit soaks up much of what we have saved, leaving 
less for businesses to borrow for investments.
  It is the sum total of savings by all aspects of the U.S. economy 
that represented the pool of all capital available for investment--in 
training, education, research, machinery, physical plant, et cetera--
and that constitutes the real seed of future prosperity. The statistics 
here are daunting. In the 1960's the net U.S. national savings rate was 
8.2 percent, but it has fallen to a dismal 1.5 percent. In recent 
international comparisons, the United States has the lowest savings 
rate of any of the G-7 countries. We save at only one-tenth the rate of 
the Japanese, and only one-fifth the rate of the Germans, which is 
clearly reflected in the comparative growth rates of our economies over 
the last three decades.
  An analysis of the components of U.S. savings patterns shows that 
although the Federal budget deficit is the largest cause of dissavings, 
both personal and business savings rates have declined significantly 
over the past three decades. Thus, to recreate the pool of capital 
stock that is critical to future U.S. growth and prosperity, we have to 
do more than just get rid of the deficit. We have to very materially 
raise our levels of private savings and investment. And we have to do 
so in a way that will not cause additional deficits.
  The less money people save, the less money is available for business 
investment and growth. The current tax system discourages savings and 
investment, because it taxes the interest we earn from our savings 
accounts, the dividends we make from investing in the stock market, and 
the capital gains we make from successful investments in our homes and 
the financial markets. Indeed, under the current law these rewards for 
saving and investment are not only taxed, they are overtaxed--since 
gains due solely to inflation, which represent no real increase in 
value, are taxed as if they were really profit.
  With the limited exceptions of retirement plans and tax-free 
municipal bonds, our current Tax Code does virtually nothing to 
encourage personal savings and investment, or to reward it over 
consumption. As William Schreyer wrote recently in the Harvard Business 
Review, ``the budget deficit is only one part of a larger national 
problem: the U.S. saving deficit.''
  This bill will change this system, and address this problem. The 
proposed legislation reverses the current skewed incentives by 
promoting savings and investment by individuals and by businesses. 
Individuals would be able to invest and save their money tax-free and 
reap the benefits of the accumulated value of those investments without 
paying a capital gains tax upon the sale of these investments. 
Businesses would also invest more as the flat tax allowed them to 
expense fully all sums invested in new equipment and technology in the 
year the expense was incurred, rather than dragging out the tax 
benefits for these investments through complicated depreciation 
schedules. With greater investment and a larger pool of savings 
available, interest rates and the costs of investment would also drop, 
spurring even further economic growth.
  Critics of the flat tax have argued that we cannot afford the revenue 
losses associated with the tremendous savings and investment incentives 
the bill affords to businesses and individuals. Those critics are 
wrong. Not only is this bill carefully crafted to be revenue neutral, 
but historically we have seen that when taxes are cut, revenues 
actually increase, as more taxpayers work harder for a larger share of 
their take-home pay, and investors are more willing to take risks in 
pursuit of rewards that will not get eaten up in taxes. As one example, 
under President Kennedy individual tax rates were lowered, investment 
incentives including the investment tax credit were created and then 
expanded, depreciation rates were accelerated, and yet between 1962 and 
1967 gross annual Federal tax receipts went from $99.7 to $148 
billion--an increase of nearly 50 percent. More recently under 
President Reagan, after his tax cuts in the early 1980's, Government 
tax revenues rose from just under $600 billion in 1981 to nearly $1 
trillion in 1989. In fact, the Reagan tax cut program helped to bring 
about the longest peacetime expansion of the U.S. economy in history. 
There is every reason to believe that the flat tax proposed here can do 
the same--and by maintaining revenue neutrality in this flat tax 
proposal, as we have, we can avoid any increases in annual deficits and 
the national debt.
  In addition to increasing Federal revenues by fostering economic 
growth, the flat tax can also add to Federal revenues without 
increasing taxes by closing tax loopholes. The Congressional Research 
Service estimates that for fiscal year 1995, individuals will shelter 
more than $393 billion in tax revenue in legal loopholes, and 
corporations will shelter an additional $60 billion. There may well be 
additional moneys hidden in quasi-legal or even illegal tax shelters. 
Under a flat tax system, all tax shelters will disappear and all income 
will be subject to taxation.
  The larger pool of savings created by a flat tax will also help to 
reduce our dependence
 on foreign investors to finance both our Federal budget deficits and 
our private sector economic activity. Currently, of the publicly held 
Federal debt, that is, the portion was not held by various Federal 
trust funds like Social Security, nearly 20 percent is held by 
foreigners--the highest level in our history. By contrast, in 1965 less 
than 5 percent of publicly held national debt was foreign-owned. We are 
paying over $40 billion in annual interest to foreign governments and 
individuals, and this by itself accounts for roughly one-third of our 
whole international balance of payments deficit. These massive interest 
payments are one of the principal sources of American capital flowing 
abroad, a factor which then enables foreign investors to buy up 
American business. During the period 1980-91, the gross value of U.S. 
assets owned by foreign businesses and individuals rose 427 percent 
from $543 billion to $2.3 trillion.

  The substantial level of foreign ownership of our national debt 
creates both political and economic problems. On the political level, 
there is at least the potential that some foreign nation may assume a 
position where its level of investment in U.S. debt gives it 
disproportionate leverage over American policy. Economically, 
increasing foreign investment in Treasury debt furthers our national 
shift from a creditor to a debtor nation, weakening the dollar and 
undercutting our international trade position. A recent Congressional 
Research Service report put it succinctly: ``To pay for today's 
capital 
[[Page S3421]] inflows, tomorrow's economy will have to ship more 
abroad in exchange for fewer foreign products. These payments will be a 
consequence in part of heavy Federal borrowing since 1982.'' With a 
flat tax in place, America's own supply of capital can be replenished, 
and we can return to our historic position as an international creditor 
nation rather than a debtor.
  Professors Hall and Rabushka describe the pro-growth aspects of the 
flat tax in this way:

       Today's absurd system taxes entrepreneurial success at 60 
     percent while it actually subsidizes leveraged investment. 
     Our simple tax would put the same low rate on both 
     activities. A huge redirection of national effort would 
     follow. And the redirection could only be food for national 
     income. There is nothing wrong with shopping centers, 
     apartment buildings, airplanes, boxcars, medical equipment, 
     and cattle, but tax advantages have made us invest far too 
     much in them, and their contribution to income is 
     correspondingly low. Real growth will come when effort and 
     capital flow back into innovation and the development of new 
     business, the areas where confiscatory taxation has 
     discouraged investment. The contribution to income from new 
     resources will be correspondingly high.
       We project a 3 percent increase in output from increased 
     total work in the U.S. economy and an additional increment to 
     total output of 3 percent from added capital formation and 
     dramatically improved entrepreneurial incentives. The sum of 
     6 percent is our best estimate of the improvement in real 
     incomes after the economy has had seven years to assimilate 
     the changed economic conditions brought about by the simple 
     flat tax. Both the amount and the timing are conservative.
       Even this limited claim for economic improvement represents 
     enormous progress. By 2002, it would mean each American will 
     have an income about $1,900 higher, in 1995 dollars, as a 
     consequence of tax reform.

  As Professors Hall and Rabushka state it, the growth case for a flat 
tax is compelling. It is even more compelling in the case of a tax 
revision that is simple and demonstrably fair.


                                fairness

  By substantially increasing the personal allowances for taxpayers and 
their dependents, this flat tax proposal ensures that poorer taxpayers 
will pay no tax and that taxes will not be regressive for lower and 
middle income taxpayers. At the same time, by closing the hundreds of 
tax loopholes which are currently used by wealthier taxpayers to 
shelter their income and avoid taxes, this flat tax bill will also 
ensure that all Americans pay their fair share.
  A variety of specific cases illustrate the fairness and simplicity of 
this flat tax:
   Case No. 1.--Married couple with two children, rents home, yearly 
                             income $30,000

Under Current Law:
  Income.........................................................30,000
  Four personal exemptions........................................9,800
  Standard deduction..............................................6,350
  Taxable income.................................................13,850
    Tax due under current rates...................................2,081
                                                             __________

  Marginal rate (percent)..........................................15.0
  Effective tax rate (percent)......................................6.9
Under Flat Tax:
  Personal allowance.............................................16,500
  Two dependents..................................................9,000
  Taxable income..................................................4,500
    Tax due under flat tax..........................................900
                                                             __________

  Effective tax rate (percent)......................................3.0

                     * * * Savings of $1,181 * * *

   Case No. 2.--Single individual, rents home, yearly income $45,000

Under Current Law:
  Income.........................................................45,000
  One personal exemption..........................................2,450
  Standard deduction..............................................3,800
  Taxable income.................................................38,750
    Tax due under current rates...................................7,900
                                                             __________

  Marginal rate (percent)..........................................28.0
  Effective rate (percent).........................................17.6
Under Flat Tax:
  Personal allowance..............................................9,500
  Taxable income.................................................35,500
    Tax due under flat tax........................................7,100
  Effective rate (percent).........................................15.8

                      * * * Savings of $800 * * *

Case No. 3.--Married couple with no children, $140,000 mortgage at 9%, 
                         yearly income $70,000

Under Current Law:
  Income........................................................$70,000
  Two personal exemptions.........................................4,900
  Home mortgage deduction........................................12,600
  State and local taxes...........................................2,000
  Charitable deduction............................................1,400
  Taxable income.................................................49,100
    Tax due under current rates...................................8,815
                                                             __________

  Marginal rate (percent)........................................... 28
  Effective tax rate (percent).....................................12.6
Under Flat Tax:
  Personal allowance.............................................16,500
  Home mortgage deduction.........................................9,000
  Charitable deduction............................................1,400
  Taxable income.................................................43,100
    Tax due under flat tax........................................8,620
                                                             __________

  Effective tax rate (percent).....................................12.3

                      * * * Savings of $195 * * *

Case No. 4.--Married couple with two children, $240,000 mortgage at 9%, 
                         yearly income $120,000

Under Current Law:
  Income.......................................................$120,000
  Four personal exemptions........................................9,800
  Home mortgage deduction........................................21,600
  State and local taxes...........................................6,000
  Retirement fund deductions......................................6,000
  Charitable deductions...........................................2,500
  Taxable income.................................................74,100
    Tax due under current rates..................................15,815
                                                             __________

  Marginal rate (percent)........................................... 31
  Effective tax rate (percent).....................................13.2
Under Flat Tax:
  Personal allowance.............................................16,500
  Two dependents..................................................9,000
  Home mortgage deduction.........................................9,000
  Charitable deduction............................................2,500
  Taxable income.................................................78,500
  Tax due under flat tax.........................................15,700
                                                             __________

  Effective tax rate (percent).....................................13.1

                      * * * Savings of $115 * * *

  Case No. 5.--Married couple, no children, $1,000,000 mortgages at 9 
                  percent on 2 homes, $500,000 income

Under Current Law:
  Income.......................................................$500,000
  Personal exemptions at this level.................................  0
  Home mortgage deductions.......................................90,000
  State and local taxes..........................................50,000
  Retirement deductions..........................................40,000
  Charitable deductions..........................................30,000
  Taxable income................................................290,000
    Tax due under current rates..................................91,144
                                                             __________

  Marginal rate (percent)..........................................39.6
  Effective tax rate (percent).....................................18.2
Under Flat Tax:
  Personal allowance.............................................16,500
  Mortgage deduction..............................................9,000
  Charitable deduction............................................2,500
  Taxable income................................................472,000
    Tax due under flat tax.......................................94,400
                                                             __________

  Effective tax rate (percent).....................................18.9

                    * * * $3,256 higher taxes * * *

  The flat tax legislation that I am offering will retain the element 
of progressivity that Americans view as essential to fairness in an 
income tax system. Because of the lower end income exclusions, and the 
capped deductions for home mortgage interest and charitable 
contributions, the effective tax rates under my bill will range from 0 
percent for families with incomes under about $30,000 to roughly 20 
percent for the highest income groups:

   ANNUAL TAXES UNDER 20 PERCENT FLAT TAX FOR MARRIED COUPLE WITH TWO   
                         CHILDREN FILING JOINTLY                        
------------------------------------------------------------------------
                                                               Effective
                      Income                          Taxes      rate   
                                                      owed     (percent)
------------------------------------------------------------------------
$25,500...........................................      None           0
$30,000...........................................      None           0
$40,000...........................................    $1,300         3.3
$50,000...........................................     2,900         5.8
$60,000...........................................     4,860         8.1
$70,000...........................................     6,820         9.7
$80,000...........................................     8,780          11
$90,000...........................................    10,740        11.9
$100,000..........................................    12,700        12.7
$125,000..........................................    17,600        14.1
$150,000..........................................    22,600        15.1
$200,000..........................................    32,600        16.3
$250,000..........................................    42,600        17.0
$500,000..........................................    92,600        18.5
$1,000,000........................................   192,600        19.3
------------------------------------------------------------------------
Note: Assumes home mortgage of twice annual income at a rate of 9       
  percent and charitable contributions up to 2 percent of annual income.

  My proposed legislation demonstrably retains the fairness that must 
be an essential component of the American tax system.


                               conclusion

  The proposal that I make today is dramatic, but so are its 
advantages: a taxation system that is simple, fair and designed to 
maximize prosperity for all Americans. A summary of the key advantages 
are:
  Simplicity: A 10-line postcard filing would replace the myriad forms 
and attachments currently required, thus saving Americans up to 5.4 
billion hours they currently spend every year in tax compliance.
  Cuts Government: The flat tax would eliminate the lion's share of IRS 
rules, regulations, and requirements, which have grown from 744,000 
words in 1955 to 5.6 million words in 1994. It would also allow us to 
slash the mammoth IRS bureaucracy of 110,000 employees spread out over 
650 offices nationwide.
  Promotes economic growth: Economists estimate a growth of over $2 
trillion in national wealth over 7 years, representing an increase of 
$1,900 in personal income for every man, woman, and child in America.
  Increases efficiency: Investment decisions would be made on the basis 
of productivity rather than simply for tax avoidance, thus leading to 
even greater economic expansion.
  [[Page S3422]] Reduces interest rates: Economic forecasts indicate 
that interest rates would fall substantially, by as much as two points, 
as the flat tax removes many of the current disincentives to savings.
  Lowers compliance costs: Americans would be able to save up to $192 
billion they currently spend every year in tax compliance.
  Decreases fraud: As tax loopholes are eliminated and the Tax Code is 
simplified, there will be far less opportunity for tax avoidance and 
fraud, which now amounts to over $120 billion in uncollected revenue 
annually.
  Reduces IRS costs: Simplification of the Tax Code will allow us to 
save significantly on the $13 billion annual budget currently allocated 
to the Internal Revenue Service.
  Professors Hall and Rabushka have projected that within 7 years of 
enactment, this type of a flat tax would produce a 6-percent increase 
in output from increased total work in the U.S. economy and increased 
capital formation. The economic growth would mean a $1,900 increase in 
the personal income of all Americans.
  No one likes to pay taxes. But Americans will be much more willing to 
pay their taxes under a system that they believe is fair, a system that 
they can understand, and a system that they recognize promotes rather 
than prevents growth and prosperity. The legislation I introduce today 
will afford Americans such a tax system.
                                 ______

      By Mr. CAMPBELL (for himself and Mr. Brown):
  S. 489. A bill to authorize the Secretary of the Interior to enter 
into an appropriate form of agreement with, the town of Grand Lake, CO, 
authorizing the town to maintain permanently a cemetery in the Rocky 
Mountain National Park; to the Committee on Energy and Natural 
Resources.


    THE ROCKY MOUNTAIN NATIONAL PARK GRAND LAKE CEMETERY ACT OF 1995

  Mr. CAMPBELL. Mr. President, on January 26, 1915, Congress passed 
legislation creating a 265,726-acre Rocky Mountain National Park. In 
1892, long before the park was created, the town of Grand Lake 
established a small, less than 5-acre community cemetery that lies 
barely 1,000 feet inside the western edge of the park. Apparently, in 
the early 1950's, the National Park Service took notice of the cemetery 
and issued the town a formal special use permit, which has been renewed 
over the years. In 1991, Rocky Mountain National Park apparently 
informed the town of Grand Lake that it would issue one final 5-year 
special use permit.
  This 103-year-old cemetery has become part of the community's 
heritage. Grand Lake residents have very strong emotional and personal 
attachments to it and need to be assured of its continued use and 
designation as a cemetery. The current permit is due to expire in 1996. 
All parties have agreed that a more permanent solution was needed to 
meet the needs of the community and the resource preservation and 
protection intended by the establishment of the park.
  Existing measures available to the National Park Service, including 
special use permit authority, do not provide for a permanent solution 
that satisfies both the park and the community. In addition, special 
uses apparently can only be permitted for a maximum period of 5 years. 
Given that the town and park agree that the small cemetery is a 
permanent use, continued renewal of a 5-year permit is not a realistic 
solution.
  In an effort to avoid future difficulties, park and town 
representatives have agreed that this legislation would offer the best 
solution to this problem. Authorizing the continued existence of the 
cemetery with specific size and boundaries within the park also 
protects park resources. The community has expressed a strong 
willingness and desire to assume responsibility for permanent 
management of the cemetery. This legislation would authorize the 
development of an agreement to turn maintenance responsibilities for 
the cemetery and road over to the town, resulting in a financial 
savings to the park. It also recognizes the cultural significance of 
the cemetery and its strong ties with the history of the Grand Lake 
area, which includes the story of Rocky Mountain National Park.
  This legislation would negate the need for repeated negotiations 
between the community and the National Park Service, and the chance for 
misunderstandings. The National Park Service and Grand Lake 
representatives have worked long and hard on developing this proposal. 
Enactment of this legislation would go a long way in maintaining and 
enhancing the spirit of cooperation and goodwill between park and 
community that has been achieved during the development of this 
resolution.
                                 ______

      By Mr. GRASSLEY:
  S. 490. A bill to amend the Clean Air Act to exempt agriculture-
related facilities from certain permitting requirements, and for other 
purposes; to the Committee on Environment and Public Works.


                the clean air act amendment act of 1995

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

                                 S. 490

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

     SECTION 1. DEFINITION OF POTENTIAL TO EMIT.

       Section 302(j) of the Clean Air Act (42 U.S.C. 7602(j)) is 
     amended--
       (1) by striking ``(j) Except as otherwise'' and inserting 
     the following:
       ``(j) Major Stationary Source and Major Emitting 
     Facility.--
       ``(1) In general.--Except as otherwise''; and
       (2) by adding at the end the following:
       ``(2) Agriculture-related facility.--In this subsection, 
     with respect to an agriculture-related facility, such as a 
     grain elevator, a grain, feed, or rice mill, or a grain 
     processing facility;
       (A) Air pollutant.--With respect to particulate emissions, 
     the term `air pollutant' shall include only particulate 
     matter less than or equal to 10 microns in size.
       ``(B) Potential to emit.--
       ``(i) In general.--The term `potential to emit' means the 
     potential of a facility to emit during a 1-year period under 
     maximum realistic operation of the facility.
       `(ii) Maximum realistic operation.--In determining the 
     maximum realistic operation of an agriculture-related 
     facility, the Administrator shall consider--
       ``(I) the cyclical or seasonal nature of the facility; and
       ``(II) in the case of a facility in operation on the date 
     of the determination, the maximum hours of operation of the 
     facility that actually occurred during any of the preceding 5 
     years.
       ``(iii) Equipment, techniques, and procedures.--The 
     Administrator shall consider the effect of control equipment, 
     techniques, and procedures in lowering the potential to emit 
     of an agriculture-related facility.''.

     SEC. 2. EXEMPTION FROM PERMITTING REQUIREMENTS.

       Section 502 of the Clean Air Act (42 U.S.C. 7661a) is 
     amended--
       (1) in the first sentence of subsection (a), by striking 
     ``any other source (including an area source) subject to 
     standards or regulations under section 111 or 112,''; and
       (2) by adding at the end the following:
       ``(j) Exemption.--A source shall not be subject to any 
     regulation or requirement under this section if the source 
     is--
       ``(1) not a major source; and
       ``(2) subject to section 111 or 112.''.
                                 ______

      By Mr. BREAUX (for himself, Mr. Hollings, Mr. Inouye, Mr. 
        Cochran, and Mr. Chafee):
  S. 491. A bill to amend title XVIII of the Social Security Act to 
provide coverage of outpatient self-management training services under 
part B of the Medicare Program for individuals with diabetes; to the 
Committee on Finance.


 the medicare diabetes outpatients self-management training act of 1995

 Mr. BREAUX. Mr. President, diabetes is the third leading cause 
of death from disease in the United States. It is the leading cause of 
blindness in people aged 25 to 74 and the most frequent cause of 
nontraumatic lower limb amputations. Diabetes also greatly increases an 
individual's chances of succumbing to stroke or heart disease.
  What is such a shame, Mr. President, is that diabetes is a condition 
that can generally be treated so that major complications do not occur. 
In some cases it can even be prevented. While there is no known cure 
for diabetes, individuals with the disease can lead completely normal 
lives--even extraordinarily productive lives--if they know how to 
balance their diet, get enough exercise, and manage their disease.
  [[Page S3423]] People with diabetes learn to take care of themselves 
through self-maintenance and education programs. Generally, classes are 
taken when an individual is diagnosed with the disease and periodically 
thereafter in order to keep up with the changes in their condition and 
to get the most up-to-date treatments available.
  Appropriate preventive education services for those with diabetes 
have the potential to save a great deal of money that would otherwise 
go for hospitalizations and other acute care costs. Education also 
saves these individuals from a great deal of unnecessary pain and 
suffering. Studies by the American Diabetes Association and others have 
shown that the Medicare program could save $2 to $3 for every $1 spent 
on diabetes education.
  Medicare currently covers these services in inpatient or 
hospitalbased settings and in limited outpatient settings--specifically 
hospital outpatient departments or rural health clinics. Unfortunately, 
Medicare does not currently cover education services if they are given 
in any other outpatient setting, such as a doctor's office. Even the 
limited coverage of outpatient settings that is currently permitted 
under Medicare is subject to State-by-State variation according to 
interpretation by the program's fiscal intermediaries.
  The Medicare Diabetes Outpatient Self-Management Training Act of 
1995, which I am reintroducing today along with Senators Chafee, 
Cochran, Inouye, and Hollings, would provide for Medicare coverage for 
outpatient diabetes education on a consistent basis throughout the 
country. The bill would extend Medicare coverage of outpatient programs 
beyond hospital-based programs and rural health clinics. It would 
direct the Secretary of Health and Human Services to guarantee that 
coverage be available only for those services delivered through 
programs that meet stringent quality standards. Uniform payment would 
be achieved through implementation of new working guidelines.
  This legislation is all about preventive medicine and is a sensible 
approach that should show savings for the Medicare Program in the long 
run. I hope that my colleagues will join me as cosponsors.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 491

       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 ``Medicare Diabetes Outpatient 
     Self-Management Training Act of 1995''.

     SEC. 2. MEDICARE COVERAGE OF DIABETES OUTPATIENT SELF-
                   MANAGEMENT TRAINING SERVICES.

       (a) In General.--Section 1861(s)(2) of the Social Security 
     Act (42 U.S.C. 1395x(s)(2)) is amended--
       (1) by striking ``and'' at the end of subparagraph (O) (as 
     redesignated by section 147(f)(6)(B)(iii)(II) of the Social 
     Security Act Amendments of 1994 (Pub. Law 103-432)); and
       (2) by inserting after subparagraph (O) the following new 
     subparagraph:
       ``(P) diabetes outpatient self-management training services 
     (as defined in subsection (oo)); and.''.
       (b) Definition.--Section 1861 of the Social Security Act 
     (42 U.S.C. 1395x) is amended by adding at the end the 
     following new subsection:

        ``Diabetes Outpatient Self-Management Training Services

       ``(oo)(1) The term `diabetes outpatient self-management 
     training services' means educational and training services 
     furnished to an individual with diabetes by or under 
     arrangements with a certified provider (as described in 
     paragraph (2)(A)) if--
       ``(A) the services are furnished in an outpatient setting 
     by an individual or entity meeting the quality standards 
     described in paragraph (2)(B); and
       ``(B) the physician who is managing the individual's 
     diabetic condition certifies that the services are needed 
     under a comprehensive plan of care related to the 
     individual's diabetic condition to provide the individual 
     with necessary skills and knowledge (including skills related 
     to the self-administration of injectable drugs) to 
     participate in the management of the individual's condition.
       ``(2) In paragraph (1)--
       ``(A) a `certified provider' is an individual or entity 
     that, in addition to furnishing diabetes outpatient self-
     management training services, provides other items or 
     services for which payment may be made under this title; and
       ``(B) an individual or entity meets the quality standards 
     described in this paragraph if the individual or entity--
       ``(i) meets quality standards established by the Secretary;
       ``(ii) meets applicable standards developed by the National 
     Diabetes Advisory Board, including any revision of such 
     standards by the organizations that participated in the 
     original development of the applicable standards; or
       ``(iii) is recognized by the American Diabetes Association 
     as being qualified to furnish the services.''.
       (c) Consultation With Organizations in Establishing Payment 
     Amounts for Services Provided by Physicians.--In establishing 
     payment amounts under section 1848(a) of the Social Security 
     Act for physicians' services consisting of diabetes 
     outpatient self-management training services, the Secretary 
     of Health and Human Services shall consult with appropriate 
     organizations, including the American Diabetes Association, 
     in determining the relative value for such services under 
     section 1848(c)(2) of such Act.
       (d) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after January 1, 
     1996.
                                 ______

      By Mr. CHAFEE:
  S. 492. A bill to authorize the Secretary of Transportation to issue 
a certificate of documentation for the vessel Intrepid, to the 
Committee on Commerce, Science, and Transportation.


                      jones act waiver legislation

 Mr. CHAFEE. Mr. President, today I am introducing legislation 
to issue a certificate of documentation for the vessel Intrepid under 
title 46, United States Code.
  The Intrepid has a long and proud history in sailing, including 
representing the United States in the America's Cup and winning in 1967 
and 1971. It is currently U.S.-owned and is the Flagship of the 
America's Cup Hall of Fame.
  The Intrepid is a 12 meter yacht, 65 feet in length that was built at 
the Minneford Boat Yard in City Island, NY in 1967. At the time of its 
construction, the vessel employed the breakthrough technology of noted 
boat designer Olin Stephen. In a departure from the past, its design 
separated the keel and rudder, and added a trim tab on the trailing 
edge of the keel. Variations of this technology are still being used 
today.
  Because the Intrepid was at one point sold to non-U.S. owners and 
thus became ineligible to participate in U.S. coastwise trade, the 
owners seek a waiver of the Jones Act. They plan to use the vessel only 
in limited commercial ventures, and the vessel's use will not adversely 
affect the coastwise trade in U.S. waters. If granted this waiver, 
Intrepid's owners intend to fully comply with U.S. documentation and 
safety requirements.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 492

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

     SECTION 1. AUTHORIZATION OF CERTIFICATE OF DOCUMENTATION.

       Notwithstanding sections 12106, 12107, and 12108 of title 
     46, United States Code, and section 27 of the Merchant Marine 
     Act, 1920 (46 App. U.S.C. 883), as applicable on the date of 
     enactment of this Act, the Secretary of Transportation may 
     issue a certificate of documentation for the vessel INTREPID, 
     United States official number 508185.
                                 ______

      By Mr. CHAFEE:
  S. 493. A bill to authorize the Secretary of Transportation to issue 
a certificate of documentation for the vessel Consortium; to the 
Committee on Commerce, Science, and Transportation.


                      JONES ACT WAIVER LEGISLATION

 Mr. CHAFEE. Mr. President, today I am introducing legislation 
to issue a certificate of documentation for the vessel Consortium under 
title 46, United States Code.
  A recently formed Rhode Island corporation, Marine Consortium, Inc., 
has purchased the 102-foot Camper and Nicholson motoryacht, Consortium. 
It is a U.S. documented vessel homeported in Newport, RI, and is 
ideally suited for charter operation.
  Because Consortium has a foreign built--British--hull, it cannot 
undertake charters in U.S. waters. Its owners seek a waiver of this 
Jones Act prohibition so that they may engage in 
[[Page S3424]] charter operations this summer and in the future.
  Operation of the Consortium would build upon the economic vitality of 
Newport County. Its owners have also offered to make the vessel 
available at no cost to the Newport Preservation Society, the Museum of 
Yachting, and the Save the Bay Foundation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 493

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

     SECTION 1. AUTHORIZATION OF CERTIFICATE OF DOCUMENTATION.

       Notwithstanding sections 12106, 12107, and 12108 of title 
     46, United States Code, and section 27 of the Merchant Marine 
     Act, 1920 (46 App. U.S.C. 883), as applicable on the date of 
     enactment of this Act, the Secretary of Transportation may 
     issue a certificate of documentation for the vessel 
     CONSORTIUM, United States official number 1029192.
                                 ______

      By Mr. JEFFORDS (for himself, Mr. Leahy, Ms. Snowe, Mr. Kennedy, 
        Mr. Cohen, Mr. Gregg, Mr. Dodd, Mr. Smith, Mr. Chafee, Mr. 
        Kerry, Mr. Lieberman, and Mr. Pell):
  S.J. Res. 28. A joint resolution to grant consent of Congress to the 
Northeast Interstate Dairy Compact; read the first time.


                   northeast interstate dairy compact

  Mr. JEFFORDS. Mr. President, I rise today to strongly support the 
introduction of a joint resolution to grant the consent of Congress to 
the northeast interstate dairy compact. Congress is simply being asked 
to ratify a completed piece of legislation--legislation that passed 
overwhelmingly in each of the six New England States that the compact 
represents.
  Mr. President, a great deal of time and effort has gone into creating 
the dairy compact, over 6 years in fact. The dairy compact represents a 
cooperative effort of six States working collectively to restore the 
traditional Federal-State balance to milk regulation. The compact has 
been carefully designed so that it will not adversely affect any other 
region of the country. Provisions have been set forth in the compact to 
protect the interests of farmers and processors outside the compact 
region. In addition, there is no cost to the Federal Government.
  Mr. President, the dairy compact simply complements the Federal Milk 
Marketing Program. It would not supplant or replace Federal law. The 
compact regulates only fluid milk, which is milk for beverage use. Milk 
for manufacturing purposes such as cheese and ice cream would be 
absolutely exempt from the compact. We are talking about a very small 
amount of milk in a local market.
  Just since 1984, almost a third of the 3,170 farms then operating in 
Vermont have shut down. In 1994 alone, Vermont lost 148 farms and if 
the downward trend of milk prices continues we will lose more this 
year. Vermont dairy farmers are receiving milk prices well below the 
cost of production. Current milk prices for farmers are as low as they 
were 10 years ago, yet the cost of production and price to the consumer 
has increased. Farmers and consumers would both benefit from the 
compact's ability to establish a more stable price structure for the 
milk they produce and purchase, removing the fluctuations in fluid milk 
prices, assuring the region a viable supply of locally produced milk.
  The dairy compact is a unique partnership of the region's governments 
and the dairy industry supported by a broad coalition of organizations 
and people committed to maintaining the vitality of the region's dairy 
industry.
  The joint resolution being introduced today, has strong support from 
both sides of the isle. All 12 Senators from the New England 
delegation, representing producing and consuming States have come 
together to cosponsor this joint resolution.
  Mr. President, I can say with certainty, support for the dairy 
compact in New England is impressive. During the New England Governors' 
Conference winter meeting, all six New England Governors urged Congress 
to approve the dairy compact. A resolution of the New England 
Governors' Conference in support of congressional enactment of the 
northeast dairy compact was approved and signed by the chair of the New 
England Governors, Governor Steve Merrill of New Hampshire.
  The Governors of the compact region speak for not only the farmers 
and consumers but for the States themselves and the rights of the 
States. Mr. President, the message to Congress from Governors 
nationwide has been clear. ``Increase the flexibility of states and 
support legislation that promotes state and regional policy 
initiatives.''
  Well Mr. President, this thoroughly thought out compact provides the 
opportunity for a partnership between Congress and the States to 
strengthen this fundamental federalism movement. It maintains that the 
States' constitutional authority, resources, and competence of the 
people to govern, is recognized and protected.
  Mr. President, I am certain that my colleagues will agree with me 
that dairy farmers deserve a fair price for their product. What does it 
say about our values when some of the hardest working people. our 
farmers, are underpaid and unappreciated? The people of New England 
have a right and deserve the chance to help themselves. The joint 
resolution that I am introducing today, along with Senator Leahy and my 
colleagues from New England gives the region the tools to face the 
challenges of improving and stabilizing farm prices.
  I urge my colleagues to respect this interstate cooperation and 
ratify the dairy compact.
  Mr. President, I ask unanimous consent that this one page fact sheet 
that explains and addresses the compact appear in the Record.
  Mr. President, I unanimous consent ask to have printed in the Record 
the resolution of the New England Governors' Conference.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                            New England Governors'


                                             Conference, Inc.,

                                    Boston, MA, February 13, 1995.
     Hon. James M. Jeffords,
     Washington, DC.
       Dear Senator Jeffords: I understand the Northeast 
     Interstate Dairy Compact awaits action by the full Senate. On 
     behalf of the New England Governors' Conference, Inc., I 
     write to ask your help in moving the Compact bill forward as 
     quickly as possible.
       The attached Resolution of the New England Governors' 
     Conference, Inc. was adopted unanimously at our recent 
     meeting in Washington, D.C.
       The Dairy Compact has been enacted into law by the six New 
     England states. We hope you will support this unique 
     experiment in cooperative federalism. This Compact is a bi-
     partisan, state-sponsored, regional response to the chronic 
     problem of low dairy farm prices. If successfully 
     implemented, the Compact will stabilize our region's dairy 
     industry and reinvigorate this crucial segment of our rural 
     economy, without cost to the federal government or adverse 
     impact on the national industry.
       Thank you for your consideration of this matter.
           Very truly yours,
                                                William A. Gildea,
     Executive Director.
                                                                    ____

                resolution 127--northeast dairy compact

       A Resolution of the New England Governors' Conference, Inc. 
     in support of congressional enactment of the Northeast Dairy 
     Compact.
       Whereas, the six New England states have enacted the 
     Northeast Interstate Dairy Compact to address the alarming 
     loss of dairy farms in the region; and
       Whereas, the Compact is a unique partnership of the 
     region's governments and the dairy industry supported by a 
     broad and active coalition of organizations and people 
     committed to maintaining the vitality of the region's dairy 
     industry, including consumers, processors, bankers, equipment 
     dealers, veterinarians, the tourist and travel industry, 
     environmentalists, land conservationists and recreational 
     users of open land; and
       Whereas, the Compact would not harm but instead complement 
     the existing federal structure for milk pricing, nor 
     adversely affect the competitive position of any dairy 
     farmer, processor or other market participant in the nation's 
     dairy industry; and
       Whereas, the limited and relatively isolated market 
     position of the New England dairy industry makes it an 
     appropriate locality in which to access the effectiveness of 
     regional regulation of milk pricing, and
       Whereas, the Constitution of the United States expressly 
     authorizes states to enter into interstate compacts with the 
     approval of Congress and government at all levels 
     increasingly recognizes the need to promote cooperative, 
     federalist solutions to local and regional problems; and
        [[Page S3425]] Whereas, the Northeast Interstate Dairy 
     Compact has been submitted to Congress for approval as 
     required by the Constitution;
       Now therefore be it resolved That the New England 
     Governors' Conference, Inc. requests that Congress approve 
     the Northeast Interstate Dairy Compact; and
       Be it further resolved that, a copy of this resolution be 
     sent to the leadership of the Senate and the House of 
     Representatives, the Chairs of the appropriate legislative 
     committees, and the Secretary of the United States Department 
     of Agriculture.
       Adoption certified by the New England Governors' 
     Conference, Inc. on January 31, 1995.
                                                  Stephen Merrill,
     Governor of New Hampshire Chairman.
                                                                    ____



                 the northeast interstate dairy compact

       Was adopted with near-unanimous support by the six New 
     England state legislatures. It is backed by the New England 
     Governors Conference, the region's consumer groups, dairy 
     farmers and processors.
       Establishes an interstate commission authorized to regulate 
     New England dairy farm prices. The commission would help 
     stabilize fluid milk prices for both consumers and farmers by 
     establishing a pricing structure which would remove the price 
     fluctuations that currently exist.
       Assures control by the region's consumer states. Four of 
     the six compact states, Massachusetts, Connecticut, Rhode 
     Island and New Hampshire, are milk importing states. They 
     joined the Compact because it promotes as well as protects 
     the consumer interest.
       Complements the federal milk marketing program. It would 
     not supplant or replace federal law.
       Does not discriminate against out-of-region farmers or 
     processors. Milk will flow into and from the Compact region 
     in exactly the same manner as occurs under federal law. Any 
     farmer or processor, regardless of their location, may market 
     milk in the compact region without competitive disadvantage.
       Benefits out-of-region farmers equally with New England 
     farmers. Thirty percent of New England's milk supply is 
     produced by New York farmers. These farmers will receive the 
     same Compact benefits as New England farmers.
       Is strictly local in effect. The Compact regulates only 
     fluid milk. Processors purchasing milk for manufacturing 
     purposes such as cheese and ice cream would be absolutely 
     exempt from the Compact.
       Protects against the production of surplus milk. Provisions 
     in the Compact and the Congressional enabling legislation 
     ensure this result.
       Was given a zero score by the Congressional Budget Office. 
     It will operate without cost to the federal government.

  Mr. LEAHY. Mr. President, I rise along with my good friend from 
Vermont, Senator Jeffords, and in fact the entire New England 
delegation. We rise to introduce a resolution to approve the Northeast 
Interstate Dairy Compact.
  The compact is an agreement among the six New England States that has 
been approved by each of our States' legislatures. It needs approval, 
under the Constitution, of the Congress to take effect. Its intent is 
simple. It would rationalize the pricing of fluid milk in the New 
England States so our farmers can receive a fair price and so the 
consumers themselves can play a role in stabilizing these milk prices.
  In fact, the roots of this compact are in the country's strong 
tradition of federalism. On January 27, 1995, this body overwhelmingly 
approved the unfunded mandates bill, which is currently in the House-
Senate conference committee.
  Now, throughout that debate, I heard Senator after Senator talk about 
giving more power back to our States. They said the Federal Government 
should not dictate to the States what they are supposed to do without 
providing the money. They said the States should have constraints 
lifted so they could take care of their own concerns.
  The New England States are concerned about the dairy farmers in our 
area. They want to take more control of pricing fluid milk as a minimum 
price that is now set by a very complicated system of Federal milk 
marketing orders.
  So, here is a chance for the Senate to show its support of the 
federalist principles it espoused in the unfunded mandates bill. This 
measure was approved last year by the Senate Judiciary Committee with 
the strong support of Senator Kennedy, and Senator Cohen, but it ended 
in a filibuster at the end of last year.
  All we are saying from New England, is that we have gotten the 
Governors together, Republicans and Democrats; the Senators together, 
Republicans and Democrats; legislatures made up of Republicans and 
Democrats all came together to agree on a procedure that affects only 
the New England States in the pricing and sale of fluid milk. We have 
done all this. We now come, as the Constitution requires, to the 
Congress to ask for the imprimatur of the Congress, the blessing of the 
Congress. We can go forward and handle our own affairs without the 
Federal Government telling us what to do.
  The New England States want to improve the way milk is priced and the 
compact is the way to do it. Farmers are struggling as they receive 
prices at or below their cost of production. While farmers struggle 
with low prices, the consumers have not seen any benefit. While farm 
prices have declined 5 to 10 percent for the last decade, retail milk 
prices have increased nearly 30 percent. A recent USDA study shows that 
stable prices will help consumers.
  The compact would create a commission made up of both farmers and 
consumers that would have the authority to adjust and stabilize fluid 
milk prices. The commission could raise prices so farmers receive a 
fair return for their work, but there are also strong consumer 
safeguards. Consumers are represented from each State and it would take 
four of the six New England States to approve any price increase. Any 
State could drop out of the compact after 1 year.
  The compact is designed to work in conjunction with the New England 
Federal milk marketing order. The compact would work just as the 
Federal order does with all farmers supplying the market benefitting 
from any price increase. Milk would move into and out of the region 
just as it does now.
  This compact is a model of cooperation--it is a partnership between 
the States and the Federal Government, between dairy cooperatives and 
milk processors and most importantly, between farmers and consumers.
  In addition to the New England Governors Association, the National 
Association of State Departments of Agriculture, the National Grange, 
the National Farmers Organization, and dairy cooperatives from many 
regions in the country support this compact.
  The New England States are asking for nothing from this body nor the 
Federal treasury--just the opportunity to act in concert for their 
common good. In the spirit of federalism I urge my colleagues to give 
this opportunity to the New England States and approve this compact.
 Ms. SNOWE. Mr. President, I am pleased to join my colleagues 
from New England in introducing this resolution to grant the consent of 
Congress to the Northeast Interstate Dairy Compact. The survival of 
many family dairy farms in Maine and the other New England States 
depends on prompt passage of this legislation.
  As in many other rural regions of the country, agriculture is a 
cornerstone of Maine's economy. Within the agricultural sector, dairy 
farming usually ranks second or third in cash receipts every year. The 
dairy industry provides not only jobs for the farmers themselves, but 
for the people who sell farm machinery, service the machinery, sell 
fuel and feed, and provide other goods and services. Dairy farms also 
account for large shares of the municipal tax base throughout rural 
Maine, making them critical contributors to local schools and essential 
town services.
  Unfortunately, all is not well in the Maine dairy industry. In 1978, 
Maine had 1,133 dairy farms. By 1988, that number had declined to 800. 
In 1991, there were 680. And by 1994, the number dwindled further to 
606.
  This precipitous decline in the number of dairy farms can be 
attributed to several factors, most notably to the fact that dairy 
prices are very low while costs remain high, and these same 
circumstances are driving farmers in other New England States out of 
business as well. In Maine, the average cost of producing milk is $17 
per 100 pounds. The June 1994 Federal order price in the Northeast was 
$16.23 per hundred. For August of 1994, the market order price declined 
to $14.49. In 1993, the average milk price in the Northeast declined by 
54 cents per hundred.
  Milk prices simply have not increased in concert with production. 
Whereas the retail price for a gallon of milk in 1991 was $2.20 a 
gallon, that same gallon still retailed for $2.20 a 
[[Page S3426]] gallon in 1994--without adjusting for inflation.
  Another contributing factor in the loss of dairy farms is price 
volatility. Prices can decline by $2 per hundred in less than 3 months. 
These price swings add serious uncertainty to a farmer's daily 
existence, making it difficult for the farmer to plan strategically or 
to raise capital when needed.
  The State of Maine attempted to address this serious problem by 
establishing a dairy vendor's fee that stabilized the price that 
farmers in Maine received for their milk. The vendor's fee enjoyed the 
strong support of both farmers and consumers in Maine, but a Federal 
court struck it down in 1994 as a violation of interstate commerce. 
According to the Maine Department of Agriculture, the inevitable result 
of the court's action will be an accelerating decline in family dairy 
farms.
  Faced with similar problems throughout the region, the six New 
England States banded together to develop a joint regional solution. 
They negotiated an interstate dairy compact that will ensure a more 
reasonable and stable price for dairy farmers in the region. But it is 
a pricing program that also protects the interests of consumers in the 
region. As evidence of the balance and fairness achieved by the 
compact, both the net-producing and net-consuming States in the region 
all approved it with strong support.
  The compact creates a regional commission which has the authority to 
set minimum prices paid to farmers for fluid, or class I milk. 
Delegations from each State comprise the voting membership of the 
commission, and these delegations in turn will include both farmer and 
consumer representatives. The minimum price established by the 
commission is the Federal market order price plus a small over-order 
differential that would be paid by milk processing plants. This over-
order price is capped in the compact, and a two-thirds voting majority 
of the commission is required before any over-order price can be 
instituted.
  Mr. President, until the court struck down the Maine dairy vendor's 
fee, milk in my State was priced by a mechanism that is similar to that 
which could be utilized by the compact commission. Maine's experience 
was uniformly positive. Farm prices were stable, and they were higher, 
but only modestly higher. No farmers got rich on the minimal adjustment 
provided by the over-order price under the vendor's fee program. It 
helped them keep their heads above water. Dairy processors and vendors 
maintained their business, and consumers did not see any significant 
increases in the price of milk. It was a win-win proposition for 
everyone in Maine, and I am confident that the compact will achieve the 
same success throughout New England without violating the 
Constitution's interstate commerce clause.
  Although the compact affects only the participating States, the 
cosponsors decided to remove any doubt by including language in the 
resolution that provides explicit assurances to farmers and processors 
in States outside the region. These assurances further specify that the 
over-order price can only be established for class I fluid milk, that 
no new States can join the compact without the formal approval of both 
Houses of Congress, that out-of-region farmers who sell milk in the 
compact region will get the same price as farmers in the region, that 
the commission's pricing authority is strictly limited, and that the 
commission must develop a plan to ensure that over-order prices do not 
lead to increases in production.
  In the debates held so far in this Congress, and surely in the 
debates to come, we have heard and will hear many Members argue that 
the States are often best-positioned to solve their own problems, and 
that they should be allowed to do so without interference from 
Washington. I couldn't agree more.
  With the Northeast Interstate Dairy Compact bill being introduced 
today, Senators will have an opportunity to match words on this concept 
with deeds. The compact represents a regional response to a regional 
problem. It affects only those States that belong to the compact. Why 
should the Federal Government deny the States an opportunity to solve 
their own problems? The answer is that we shouldn't. We should praise 
the States for their self-reliance and ingenuity. I hope that Senators 
will recognize the value in this kind of State-based problem-solving, 
and support the compact when it comes to the floor for a vote.


                          ____________________