[Congressional Record Volume 141, Number 108 (Thursday, June 29, 1995)]
[Senate]
[Pages S9422-S9465]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


            SUBMISSION OF CONCURRENT AND SENATE RESOLUTIONS

  The following concurrent resolutions and Senate resolutions were 
read, and referred (or acted upon), as indicated:

           By Mr. DASCHLE (for himself, Mr. Dole, Mr. Ford, Mr. 
             Lott, Mr. Byrd, Mr. Thurmond, Mr. Abraham, Mr. Akaka, 
             Mr. Ashcroft, Mr. Baucus, Mr. Bennett, Mr. Biden, Mr. 
             Bingaman, Mr. Bond, Mrs. Boxer, Mr. Bradley, Mr. 
             Breaux, Mr. Brown, Mr. Bryan, Mr. Bumpers, Mr. Burns, 
             Mr. Campbell, Mr. Chafee, Mr. Coats, Mr. Cochran, Mr. 
             Cohen, Mr. Conrad, Mr. Coverdell, Mr. Craig, Mr. 
             D'Amato, Mr. DeWine, Mr. Dodd, Mr. Domenici, Mr. 
             Dorgan, Mr. Exon, Mr. Faircloth, Mr. Feingold, Mrs. 
             Feinstein, Mr. Frist, Mr. Glenn, Mr. Gorton, Mr. 
             Graham, Mr. Gramm, Mr. Grams, Mr. Grassley, Mr. 
             Gregg, Mr. Harkin, Mr. Hatch, Mr. Hatfield, Mr. 
             Heflin, Mr. Helms, Mr. Hollings, Mrs. Hutchison, Mr. 
             Inhofe, Mr. Inouye, Mr. Jeffords, Mr. Johnston, Mrs. 
             Kassebaum, Mr. Kempthorne, Mr. Kennedy, Mr. Kerrey, 
             Mr. Kerry, Mr. Kohl, Mr. Kyl, Mr. Lautenberg, Mr. 
             Leahy, Mr. Levin, Mr. Lieberman, Mr. Lugar, Mr. Mack, 
             Mr. McCain, Mr. McConnell, Ms. Mikulski, Ms. Moseley-
             Braun, Mr. Moynihan, Mr. Murkowski, Mrs. Murray, Mr. 
             Nickles, Mr. Nunn, Mr. Packwood, Mr. Pell, Mr. 
             Pressler, Mr. Pryor, Mr. Reid, Mr. Robb, Mr. 
             Rockefeller, Mr. Roth, Mr. Santorum, Mr. Sarbanes, 
             Mr. Shelby, Mr. Simon, Mr. Simpson, Mr. Smith, Ms. 
             Snowe, Mr. Specter, Mr. Stevens, Mr. Thomas, Mr. 
             Thompson, Mr. Warner, and Mr. Wellstone):
       S. Res. 143. A resolution commending C. Abbot Saffold 
     (Abby) for her long, faithful, and exemplary service to the 
     U.S. Senate; considered and agreed to.
           By Mr. WELLSTONE (for himself and Mr. Feingold):
       S. Res. 144. A resolution to express the sense of the 
     Senate that, by the end of the 104th Congress, the Senate 
     should pass health care legislation to provide all Americans 
     with coverage that is at least as good as the Senate provides 
     for itself; to the Committee on Labor and Human Resources.
           By Mr. DASCHLE:
       S. Res. 145. A resolution to elect Martin P. Paone 
     secretary for the minority; considered and agreed to.
           By Mr. DOLE:
       S. Con. Res. 20. A concurrent resolution providing for a 
     conditional recess or adjournment of the Senate on Thursday, 
     June 29, 1995, or Friday, June 30, 1995, until Monday, July 
     10, 1995, and a conditional adjournment of the House on the 
     legislative day of Friday, June 30, 1995, until Monday, July 
     10, 1995; considered and agreed to.


          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. KYL (for himself, Mr. Leahy, and Mr. Grassley):
  S. 982. A bill to protect the national information infrastructure, 
and for other purposes; to the Committee on the Judiciary.


     THE NATIONAL INFORMATION INFRASTRUCTURE PROTECTION ACT OF 1995

 Mr. KYL. Mr. President, I introduce the Kyl-Leahy National 
Information Infrastructure Protection Act of 1995. I thank Senator 
Leahy for his sponsorship of this bill, and his leadership in combating 
computer crime. I am pleased to introduce this bill, which will 
strengthen current public law on computer crime and protect the 
national information infrastructure. My fear is that our national 
infrastructure--the information that bonds all Americans--is not 
adequately protected. I addressed this issue in the terrorism bill and 
I offer this bill as a protection to one of America's greatest 
commodities--information.
  Although there has never been an accurate nationwide reporting system 
for computer crime, specific reports suggest that computer crime is 
rising. For example, the computer emergency and response team [CERT] a 
Carnegie-Mellon University reports that computer intrusions have 
increased from 132 in 1989 to 2,341 last year. A June 14 Wall Street 
Journal article stated that a Rand Corp. study reported 1,172 hacking 
incidents occurred during the first 6 months of last year. A report 
commissioned last year by the Department of Defense and the CIA stated 
that ``[a]ttacks against information systems are becoming more 
aggressive, not only seeking access to confidential information, but 
also stealing and degrading service and destroying data.'' Clearly 
there is a need to reform the current criminal statutes covering 
computers.
  Many computer offenses have found their origin in our new 
technologies. For example, the horrific damage caused by inserting a 
virus into a global computer network cannot be prosecuted adequately by 
relying on common law criminal mischief statutes. The need to reevalute 
our computer statues on a continual basis is inevitable; and protecting 
our nation's information is vital. I, therefore, introduce the National 
Information Infrastructure Protection of 1995.
  Mr. President, the Internet is a worldwide system of computers and 
computer networks that enables users to communicate and share 
information. The system is comparable to the worldwide telephone 
network. According to a Time magazine article, the Internet connects 
over 4.8 million host systems, including educational institutions, 
government facilities, military bases, and commercial businesses. 
Millions of private individuals are connected to the Internet through 
their personal computers and modems.
  Computer criminals have quickly recognized the Internet as a haven 
for criminal possibilities. During the 1980's, the development and 
broadbased appeal of the personal computer sparked a period of dramatic 
technological growth. This has raised the stakes in the battle over 
control of the Internet and all computer systems. Computer criminals 
know all the ways to exploit the Internet's easy access, open nature, 
and global scope. From the safety of a telephone in a discrete 
location, the computer criminal can anonymously access personal, 
business, and government files. And because these criminals can easily 
gain access without disclosing their identities, it is extremely 
difficult to apprehend and prosecute them successfully.
  Prosecution of computer criminals is complicated further by 
continually changing technology, lack of precedence, and weak or 
nonexistent State and Federal laws. And the costs are passed on to 
service providers, the judicial system, and most importantly--the 
victims.
  Because computers are the nerve centers of the world's information 
and communication system, there are catastrophic possibilities. Imagine 
an international terrorist penetrating the Federal Reserve System and 
bringing 

[[Page S 9423]]
to a halt every Federal financial transaction. Or worse yet, imagine a 
terrorist who gains access to the Department of Defense, and gains 
control over NORAD. The June 14 Wall Street Journal article reported 
that security experts were used to hack into 12,000 Defense Department 
computer systems connected to the Internet. The results are astounding. 
The experts hacked their way into 88 percent of the systems, and 4 
percent of the attacks went undetected.
  An example of the pending threat is illustrated in the Wednesday, May 
10 headline from the Hill entitled ``Hired Hackers Crack House 
Computers.'' Auditors from Price Waterhouse managed to break into House 
Members' computer systems. According to the article, the auditors' 
report stated that they could have changed documents, passwords, and 
other sensitive information in those systems. What is to stop 
international terrorists from gaining similar access, and obtaining 
secret information relating to our national security?
  In a September 1994 Los Angeles Times article about computer 
intrusion, Scott Charney, chief of the computer crime unit for the U.S. 
Department of Justice, stated, ``the threat is an increasing threat,'' 
and ``[i]t could be a 16-year-old kid out for fun or it could be 
someone who is actively working to get information from the United 
States.''
  He added, there is a ``growing new breed of digital outlaws who 
threaten national security and public safety.'' For example, the Lo 
Angeles Times article reported that, in Los Angeles alone, there are at 
least four outlaw computer hackers who, in recent years, have 
demonstrated they can seize control of telephones and break into 
government computers.
  The article also mentioned that government reports further reveal 
that foreign intelligence agencies and mercenary computer hackers have 
been breaking into military computers. For example, a hacker is 
awaiting trial in San Francisco on espionage charges for cracking an 
Army computer system and accessing files on an FBI investigation of 
former Philippine President Ferdinand Marcos. According to the 1993 
Department of Defense report, such a threat is very real: ``The nature 
of this changing motivation makes computer intruders' skills high-
interest targets for criminal elements and hostile adversaries.''
  Mr. President, the September 1993 Department of Defense report added 
that, if hired by terrorists, these hackers could cripple the Nation's 
telephone system, ``create significant public health and safety 
problems, and cause serious economic shocks.'' The hackers could bring 
an entire city to a standstill. The report states that, as the world 
becomes wired for computer networks, there is a greater threat the 
networks will be used for spying and terrorism. In a 1992 report, the 
President's National Security Telecommunications Advisory Committee 
warned, ``known individuals in the hacker community have ties with 
adversary organizations. Hackers frequently have international ties.''
  A 1991 Chicago Tribune article detailed the criminal activity of a 
group of Dutch teenagers who were able to hack into Defense Department 
computers which contained sensitive national security information, 
including one system which directly supported Operation Desert Storm. 
According to the article, Jack L. Brock, former Director of Government 
Information for the General Accounting Office, said that ``this type of 
information could be very useful to a foreign intelligence operation.''
  These startling examples illustrate the necessity for action. Mr. 
President, that is why I am here today--to take action. I would, at 
this time, like to highlight a few provisions of the bill. This bill 
strengthens the language currently in section 1030 of title 18 of the 
United States Code. I would eliminate the ambiguity surrounding the 
definition of ``trespassing'' in a government computer. This bill 
toughens penalties in current law to ensure that felony level sanctions 
apply when unauthorized use of the computer is significant. Current law 
does not adequately address the act of trespassing into a computer. But 
a breach of a computer security system alone can have a significant 
impact. For example, an intruder may trespass into a computer system 
and view information
 --without stealing or destroying it. The administrator of the system 
will spend time, money, and resources to restore security to the 
system. Damage occurs simply by trespassing. We can no longer accept 
mere trespass into computers, and regard these intrusions as 
incidental.

  This bill redefines a protected computer to include those computers 
used in foreign communications. The best known international case of 
computer intrusion is detailed in the book, ``The Cuckoo's Egg.'' In 
March 1989, West German authorities arrested computer hackers and 
charged them with a series of intrusions into United States computer 
systems through the University of California at Berkeley. Eastern bloc 
intelligence agencies had sponsored the activities of the hackers 
beginning in May 1986. The only punishment the hackers were given was 
probation.
  This bill deters criminal activity by strengthening the penalties on 
computer crime. It will elevate to felony status, the reckless damage 
of computer trespassers and it will criminalize computer trespassers 
who cause negligent damage. A new subsection is added in section 1030 
of title 18, United States Code to respond to the interstate 
transmission of threats directed against computers and computer 
networks. In certain cases, according to the Department of Justice, 
individuals have threatened to crash a computer system unless they are 
granted access to the system and given an account. The provision will 
protect the data and programs of computers and computer networks 
against any interstate or international transmission of threats. The 
statutory language will be changed to ensure that anyone who is 
convicted twice of committing a computer offense will be subject to 
enhanced penalties. This bill will make the criminals think twice 
before illegally accessing computer files.
  Everybody recognizes that it is wrong for an intruder to enter a home 
and wander around; it doesn't make sense to view a criminal who breaks 
into a computer system differently. We have a national antistalking law 
to protect citizens on the street, but it doesn't cover stalking on the 
communications network. We should not treat these criminals differently 
simply because they possess new weapons.
  These new technologies, which so many Americans enjoy, were developed 
over many years. I understand that policy can't catch up with 
technology overnight, but we can start filling in the gaps created by 
these tremendous advancements. We cannot allow complicated technology 
to paralyze us into inactivity. It is vital that we protect the 
information and infrastructure of this country.
  Because not everyone is computer literate, there is a tendency to 
view those who are computer literate as somewhat magical and that the 
normal rules don't apply. Hackers have developed a cult following with 
their computer antics, which are regarded with awe. These criminals 
disregard computer security and authority. In 1990, a hacker cracked 
the NASA computer system and gained access to 68 computer systems 
linked by the Space Analysis Network. He even came across the log on 
screen for the U.S. Controller of the Currency. After being caught, the 
hacker's comment about NASA officials was, ``I still think they're 
bozos,'' and he added ``[i]f they had done a halfway competent job, 
this wouldn't have happened.''
  Mr. President, the Kyl-Leahy National Information Infrastructure 
Protection Act of 1995 will deter criminal activity and protect our 
Nation's infrastructure. I urge my colleagues to support this 
bill.
  Mr. LEAHY. Mr. President, I am pleased to introduce with Senators Kyl 
and Grassley the ``National Information Infrastructure Protection Act 
of 1995'' [NIIPA]. This bill will increase protection for both 
government and private computers, and the information on those 
computers, from the growing threat of computer crime.
  We increasingly depend on the availability, integrity, and 
confidentiality of computer systems and information to conduct our 
business, communicate with our friends and families, and even to be 
entertained. With a modem and a 

[[Page S 9424]]
computer, a business person can communicate with his or her office, a 
student can access an on-line encyclopedia at home, or researcher can 
get weather information from Australia over the Internet. 
Unfortunately, computer criminals can also use this technology to pry 
into our secrets, steal confidential Government information, and damage 
important telecommunications systems. With the advances in global 
communication, these criminals can do this virtually anywhere in the 
world.
  The facts speak for themselves--computer crime is on the rise. The 
computer emergency and response team at Carnegie-Mellon University 
reports that, since 1991, there has been a 498 percent increase in the 
number of computer intrusions, and a 702 percent rise in the number of 
sites affected. About 40,000 Internet computers were attacked in 2,460 
incidents in 1994 alone. We need to increase protection for this vital 
information infrastructure to stem the online crime epidemic.
  The NII Protection Act seeks to improve the Computer Fraud and Abuse 
Act by providing more protection to computerized information and 
systems, by designating new computer crimes, and by extending 
protection to computer systems used in foreign or interstate commerce 
or communications. The bill closes a number of gaps in our current laws 
to strengthen law enforcement's hands in fighting crimes targeted at 
computers, computer systems, and computer information.
  First, the bill would bring the protection for classified national 
defense or foreign relations information maintained on computers in 
line with our other espionage laws. While existing espionage laws 
prohibit the theft and peddling of Government secrets to foreign 
agents, the bill would specifically target those persons who 
deliberately break into a computer to obtain the Government secrets 
that they then try to peddle.
  Second, the bill would increase protection for the privacy and 
confidentiality of computer information. Recently, computer hackers 
have accessed sensitive data regarding Operation Desert
 Storm, penetrated NASA computers, and broken into Federal courthouse 
computer systems containing confidential records. Others have abused 
their privileges on Government computers by snooping through 
confidential tax returns, or selling confidential criminal history 
information from the National Crime Information Center.

  The bill would criminalize these activities by making all those who 
misuse computers to obtain Government information and, where 
appropriate, information held by the private sector, subject to 
prosecution. The harshest penalties would be reserved for those who 
obtain classified information that could be used to injur the United 
States or assist a foreign state. Those who break into a computer 
system, or insiders who intentionally abuse their computer access 
privileges, to secret information off a computer system for commercial 
advantage, private financial gain or to commit any criminal or tortious 
act would also be subject to felony prosecution. Individuals who 
intentionally break into, or abuse their authority to use, a computer 
and thereby obtain information of minimal value, would be subject to a 
misdemeanor penalty.
  Third, the bill would protect against damage to computers caused by 
either outside hackers or malicious insiders. Computer crime does not 
just put information is at risk, but also the computer networks 
themselves. Hackers, or malicious insiders, can destroy crucial 
information with a carefully placed code or command. Hackers, like 
Robert Morris, can bring the Internet to its knees with computer 
``viruses'' or ``worms.'' This bill would protect our Nation's computer 
systems from such intentional damage, regardless of whether the 
perpetrator was an insider or outside hacker.
  Under the bill, insiders, who are authorized to access a computer, 
face criminal liability only if they intend to cause damage to the 
computer, not for recklessly or negligently causing damage. By 
contrast, hackers who break into a computer could be punished for any 
intentional, reckless, or negligent damages they cause by their 
trespass.
  Fourth, the bill would expand the protection of the Computer Fraud 
and Abuse Act to cover those computers used in interstate or foreign 
commerce or communications. The law already gives special protection to 
the computer systems of financial institutions and consumer reporting 
agencies, because of their significance to the economy of our Nation 
and the privacy of our citizens. Yet, increasingly computer systems 
provide the vital backbone to many other industries, such as the 
telecommunications network.
  Current law falls short of protecting this infrastructure. Generally, 
hacker intrusions that do not cross State lines are not Federal 
offenses. The NII Protection Act would change that limitation and 
extend Federal protection to computers or computer systems used in 
interstate or foreign commerce or communications.
  Fifth, this bill addresses a new and emerging problem of computer-age 
blackmail. In a recent case, an individual threatened to crash a 
computer system unless he was granted access to the system and given an 
account. The bill adds a new provision to the law that would ensure law 
enforcement's ability to prosecute these modern day blackmailers, who 
threaten to harm or shut down computer networks unless their 
extortionate demands are met.
  Finally, the statutory scheme provided in this bill will provide a 
better understanding of the computer crime problem. By consolidating 
computer crimes in one section of title 18, reliable crime statistics 
can be generated. Moreover, by centralizing computer crimes under one 
statute, we may better measure existing harms, anticipate trends, and 
determine the need for legislative reform. Additionally, as new 
computer technologies are introduced, and new computer crimes follow, 
reformers need only look to section 1030 to update our criminal laws, 
without parsing through the entire United States Code.
  The Kyl-Leahy NII Protection Act would provide much needed protection 
for our Nation's important information infrastructure. It will help 
ensure the confidentiality of sensitive information and protect 
computer networks from those who would seek to damage these networks.
  I commend the Department of Justice for their diligent work on this 
bill, and their continued assistance in addressing this critical area 
of our criminal law. I look forward to working with my colleagues on 
refining and improving this bill, as necessary.
  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:
National Information Infrastructure Protection Act of 1995--Section-by-
                            Section Analysis

       The National Information Infrastructure Protection Act of 
     1995 amends the Computer Fraud and Abuse Act, 18 U.S.C. 
     Sec. 1030, to increase protection for the confidentiality, 
     integrity and security of computer systems and the 
     information on such systems.
       Sec. 1. Short Title. The Act may be cited as the ``National 
     Information Infrastructure Protection Act of 1995.''
       Sec. 2. Computer Crime. (1) The bill amends five of the 
     prohibited acts in, and adds a new prohibited act to, 18 
     U.S.C. Sec. 1030(a).
       (A) Subsection 1030(a)(1)--Protection of Classified 
     Government Information.
       The bill amends 18 U.S.C. Sec. 1030(a)(1) to increase 
     protection for computerized classified data. The statute 
     currently provides that anyone who knowingly accesses a 
     computer without, or in excess of, authorization and obtains 
     classified information ``with the intent or reason to believe 
     that such information so obtained is to be used to the injury 
     of the United States, or to the advantage of any foreign 
     nation'' is subject to a fine or a maximum of ten years' 
     imprisonment. The amendment would modify the scienter 
     requirement to conform to the knowledge requirement in 18 
     U.S.C. Sec. 793(e), which provides a maximum penalty of ten 
     years' imprisonment for obtaining from any source information 
     connected with the national defense. Unlike Sec. 793(e), 
     however, Sec. 1030(a)(1) would require proof that the 
     individual knowingly used a computer without, or in excess 
     of, authority in obtaining the classified information.
       As amended, Sec. 1030(a)(1) would prohibit anyone from 
     knowingly accessing a computer, without, or in excess of, 
     authorization, and obtaining classified national defense, 
     foreign relations information, or restricted data under the 
     Atomic Energy Act, with reason to believe the information 
     could be used to the injury of the United States or the 
     advantage of a foreign country, and willfully communicating, 
     delivering or transmitting, or causing the same, or willfully 
     retaining the information and failing to deliver it 

[[Page S 9425]]
     to the appropriate government agent. The amendment specifically covers 
     the conduct of a person who deliberately breaks into a 
     computer without authority, or an insider who exceeds 
     authorized access, and thereby obtains classified information 
     and then communicates the information to another person, or 
     retains it without delivering it to the proper authorities.
       (B) Subsection 1030(a)(2)--Protection of Financial, 
     Government and Other Computer Information.
       The bill amends 18 U.S.C. Sec. 1030(a)(2) to further 
     protect the confidentiality of computer data by extending the 
     protection for computerized financial records in current law 
     to protecting information from any department and agency of 
     the United States and on computers subject to unauthorized 
     access involving interstate or foreign communications.
       This amendment is designed to protect against the 
     interstate or foreign theft of information by computer. This 
     provision is necessary in light of United States v. Brown, 
     925 F.2d 1301, 1308 (10th Cir. 1991), where the court held 
     that purely intangible intellectual property, such as 
     computer programs, cannot constitute goods, wares, 
     merchandise, securities, or monies which have been stolen, 
     converted, or taken within the meaning of 18 U.S.C. 
     Sec. 2314.
       The seriousness of a breach in confidentiality depends on 
     the value of the information taken or on what is planned for 
     the information after it is obtained. The statutory penalties 
     are structured to reflect these considerations. Specifically, 
     first-time offenses for obtaining, without or in excess of 
     authorization, information of minimal value from government 
     or protected computers is a misdemeanor. The crime becomes a 
     felony, subject to a fine and up to five years' imprisonment, 
     if the offense was committed for purposes of commercial 
     advantage or private financial gain, for the purpose of 
     committing any criminal or tortious act in violation of the 
     Constitution or laws of the United States or of any State, or 
     if the value of the information obtained exceeds $5,000.
       (C) Subsection 1030(a)(3)--Protection for Government 
     Computer Systems.
       The bill would make two changes to Sec. 1030(a)(3), which 
     currently prohibits intentionally accessing, without 
     authorization, computers used by or for any department or 
     agency of the United States and thereby ``adversely'' 
     affecting ``the use of the Government's operation of such 
     computer.'' First, the amendment would delete the word 
     ``adversely'' since this term suggests, inappropriately, that 
     trespassing in a government computer may be benign. Second, 
     the amendment would replace the phrase ``the use of the 
     Government's operation of such computer'' with the term 
     ``that use by or for the Government.'' When a computer is 
     used for the government, the government is not necessarily 
     the operator, and the old phrase may lead to confusion. The 
     amendment would make a similar change to the definition of 
     ``protected computer'' in Sec. 1030(e)(2)(A).
       (D) Subsection 1030(a)(4)--Increased Penalties for 
     Significant Unauthorized Use of Computers.
       The bill amends 18 U.S.C. Sec. 1030(a)(4) to insure that 
     felony level sanctions apply when the fraudulent use of a 
     computer without, or in excess of, authority is significant. 
     The current statute penalizes, with fines and up to five 
     years' imprisonment, knowingly and with intent to defraud, 
     accessing a computer without, or in excess of, authorization 
     to further the fraud or obtain anything of value, unless the 
     object of the fraud and the thing obtained is only the use of 
     the computer. The blanket exception for computer use is too 
     broad since trespassing in a computer and using computer time 
     may cause large expense to the victim. Hackers, for example, 
     have broken into Cray supercomputers for the purpose of 
     running password cracking programs, sometimes amassing 
     computer
      time worth far more than $5,000. The amendment would 
     restrict the exception for trespassing, in which only 
     computer use is obtained, to cases involving less than 
     $5,000 during any one-year period.
       (E) Subsection 1030(a)(5)--Protection from Damage to 
     Computers.
       The bill amends 18 U.S.C. Sec. 1030(a)(5) to further 
     protect computers and computer systems covered by the statute 
     from damage both by outsiders, who gain access to a computer 
     without authorization, and by insiders, who intentionally 
     damage a computer. Subsection 1030(a)(5)(A) of the bill would 
     penalize with a fine and up to five years' imprisonment 
     anyone who knowingly causes the transmission of a program, 
     information, code or command and intentionally causes damage 
     without authorization to a protected computer. This would 
     cover anyone who intentionally damages a computer, regardless 
     of whether they were authorized to access the computer.
       Subsection 1030(a)(5)(B) of the bill would penalize with a 
     fine and up to five years' imprisonment anyone who 
     intentionally accesses a protected computer without 
     authorization and, as a result of that trespass, recklessly 
     causes damage.
       Finally, subsection 1030(a)(5)(C) of the bill would impose 
     a misdemeanor penalty of a fine and no more than one year 
     imprisonment for intentionally accessing a protected computer 
     without authorization and, as a result of that trespass, 
     causing damage.
       The bill would punish anyone who knowingly invades a 
     computer system without authority and causes significant 
     losses to the victim, even when the damage caused is not 
     intentional. In such cases, it is the intentional act of 
     computer trespass that makes the conduct criminal. Otherwise, 
     hackers could break into computers or computer systems, safe 
     in the knowledge that no matter how much damage they cause, 
     it is no crime unless the damage was intentional or reckless. 
     By contrast, persons who are authorized to access the 
     computer are criminally liable only if they intend to cause 
     damage to the computer without authority, not for recklessly 
     or negligently causing damage.
       As discussed more fully below, the bill adds a definition 
     of ``damage'' to encompass significant financial loss of more 
     than $5,000 during any one year period, potential impact on 
     medical treatment, physical injury to any person, and threats 
     to public health and safety.
       (F) Subsection 1030(a)(7)--Protection from Threats Directed 
     Against Computers.
       The bill adds a new section to 18 U.S.C. Sec. 1030(a) to 
     provide penalties for the interstate transmission of threats 
     directed against computers and computer systems. It is not 
     clear that such threats would be covered under existing laws, 
     such as the Hobbs Act, 18 U.S.C. Sec. 1951 (interference with 
     commerce by extortion), or
      18 U.S.C. Sec. 875(d) (interstate communication of threat to 
     injure the property of another). The ``property'' 
     protected under these statutes does not clearly include 
     the operation of a computer, the data or programs stored 
     in a computer or its peripheral equipment, or the decoding 
     keys to encrypted data.
       The new subsection (a)(7) covers any interstate or 
     international transmission of threats against computers, 
     computer systems, and their data and programs, whether the 
     threat is received by mail, telephone, electronic mail, or 
     through a computerized messaging service. Unlawful threats 
     could include interference in any way with the normal 
     operation of the computer or system in question, such as 
     denying access to authorized users, erasing or corrupting 
     data or programs, slowing down the operation of the computer 
     or system, or encrypting data and then demanding money for 
     the key.
       (2) Subsection 1030(c)--Increased Penalties for Recidivists 
     and Other Sentencing Changes. The bill amends 18 U.S.C. 
     1030(c) to increase penalties for those who have previously 
     violated any subsection of Sec. 1030. The current statute 
     subjects recidivists to enhanced penalties only if they 
     violated the same subsection twice. For example, a person who 
     violates the current statute by committing fraud by computer 
     under Sec. 1030(a)(4) and later commits another computer 
     crime offense by intentionally destroying medical records 
     under Sec. 1030(a)(5), is not treated as a recidivist because 
     his conduct violated two separate subsections of Sec. 1030. 
     The amendment would provide that anyone who is convicted 
     twice of committing a computer offense under Sec. 1030 would 
     be subjected to enhanced penalties.
       The penalty provisions in Sec. 1030(c) are also changed to 
     reflect modifications to the prohibited acts, as discussed 
     above.
       (3) Subsection 1030(d)--Jurisdiction of Secret Service. The 
     bill amends 18 U.S.C. Sec. 1030(d) to grant the United States 
     Secret Service authority to investigate offenses only under 
     subsections (a)(2) (A) and (B), (a)(3), (a)(4), (a)(5) and 
     (a)(6). The current statute grants the Secret Service 
     authority to investigate any offense under Sec. 1030, subject 
     to agreement between the Attorney General and the Secretary 
     of the Treasury. The new crimes proposed in the bill, 
     however, do not fall under the Secret Service's traditional 
     jurisdiction. Specifically, proposed Sec. 1030(a)(2)(C) 
     addresses gaps in 18 U.S.C. Sec. 2314 (interstate 
     transportation of stolen property), and proposed 
     Sec. 1030(a)(7) addresses gaps in 18 U.S.C. Sec. Sec. 1951 
     (the Hobbs Act) and 875 (interstate threats). These statutes 
     are within the jurisdiction of the FBI, which should retain 
     exclusive jurisdiction over these types of offenses, even 
     when they are committed by computer.
       (4) Subsection 1030(e)--Definitions. The bill contains 
     three new definitions for ``protected computer,'' ``damage,'' 
     and ``government entity.''
       The term ``protected computer'' would replace the term 
     ``federal interest computer'' used currently in Sec. 1030. 
     The new definition of ``protected computer'' would slightly 
     modify the current description in Sec. 1030(e)(2)(A) of 
     computers used by financial institutions or the United States 
     Government, to make it clear that if the computers are not 
     exclusively used by those entities, the computers are 
     protected if the offending conduct affects the use by or for 
     a financial institution or the Government.
       The new definition of ``protected computer'' would also 
     replace the current description in Sec. 1030(e)(2)(B) of a 
     covered computer being ``one of two or more computers used in 
     committing the offense, not all of which are located in the 
     same State.'' Instead, ``protected computer'' would include 
     computers ``in interstate or foreign commerce or 
     communication.'' Thus, hackers who attack computers in their 
     own State would be subject to this law, if the requisite 
     damage threshold is met and the computer is used in 
     interstate commerce or foreign commerce or communications.
       The tern ``damage,'' as used in new Sec. 1030(a)(5), would 
     mean any impairment to the integrity or availability of data, 
     information, program or system which (A) causes loss of more 
     than $5,000 during any one-year period; (B) modifies or 
     impairs the medical examination, diagnosis or treatment of a 

[[Page S 9426]]
     person; (C) causes physical injury to any person; or (D) threatens the 
     public health or safety. Computers are increasingly being 
     used for access to critical services, such as emergency 
     response systems and air traffic control. ``Damage'' is 
     therefore broadly defined to encompass the types of harms 
     against which people should be protected from any computer 
     hacker or those insiders who intentionally cause harm.
       The term ``government entity,'' as used in new 
     Sec. 1030(a)(7), would be defined to include the United 
     States government, any State or political subdivision 
     thereof, any foreign country, and any state, provincial, 
     municipal or other political subdivision of a foreign 
     country.
       (5) Subsection 1030(g)--Civil Actions. The bill amends the 
     civil penalty provision in Sec. 1030(g) to reflect the 
     proposed changes in Sec. 1030(a)(5). The 1994 amendments to 
     the Act authorized victims of certain computer abuse to 
     maintain civil actions against violators to obtain 
     compensatory damages, injunctive relief, or other equitable 
     relief, with damages limited to economic damages, unless the 
     violator modified or impaired the medical examination, 
     diagnosis or treatment of a person.
       Under the bill, damages recoverable in civil actions would 
     be limited to economic losses for violations causing losses 
     of $5,000 or more during any one-year period. No limit on 
     damages would be imposed for violations that modified or 
     impaired the medical examination, diagnosis or treatment of a 
     person; caused physical injury to any person; or threatened 
     the public health or safety.
                                 ______

      By Mr. FEINGOLD (for himself and Mr. McCain):
  S. 983. A bill to reduce the number of executive branch political 
appointees; to the Committee on Governmental Affairs.


           executive branch political appointees legislation

  Mr. FEINGOLD. Mr. President, along with my good friend the senior 
Senator from Arizona [Mr. McCain], I am introducing legislation today 
to reduce the number of political employees who are appointed by the 
President. Specifically, the bill caps the number of political 
appointees at 2,000. The Congressional Budget Office [CBO] estimates 
the current number averages 2,800. Thus an estimated 800 of these 
positions would be saved. The measure, based on one of the options 
outlined by the CBO in its publication ``Reducing the Deficit: Spending 
and Revenue Options,'' is estimated to save $363 million over the next 
5 years. The savings for fiscal year 1996 is estimated to be $45 
million.
  Mr. President, this proposal is consistent with the recommendations 
of the Vice President's National Performance Review, which called for 
reduction in the number of Federal managers and supervisors, arguing 
that ``over-control and micromanagement'' not only ``stifle the 
creativity of line managers and workers, they consume billions per year 
in salary, benefits, and administrative costs.''
  That argument may be particularly true will respect to political 
appointees, whose numbers grew by over 17 percent between 1980 and 
1992, over three times as fast as the total number of executive branch 
employees. And if we look back further, to 1960, the growth is even 
more dramatic. In his recently published book, ``Thickening Government: 
Federal Government and the Diffusion of Accountability,'' author Paul 
Light reports a startling 430-percent increase in the number of 
political appointees and senior executives in Federal Government 
between 1960 and 1992.
  The sentiments expressed in the National Performance Review were also 
reflected in the 1989 report of the National Commission on the Public 
Service, chaired by former Federal Reserve Board Chairman Paul Volcker. 
Arguing that the growing number of Presidential appointees may 
``actually undermine effective Presidential control of the executive 
branch,'' the Volcker Commission recommended limiting the number of 
political appointees to 2,000, as this legislation does. Mr. President, 
it is essential that any administration be able to implement the 
policies that brought it into office in the first place. Government 
must be responsive to the priorities of the electorate. But as the 
Volcker Commission noted, the great increase in the number of political 
appointees in recent years has not made Government more effective or 
more responsive to political leadership.
  The Commission report cited three reasons. First, it noted that the 
large number of Presidential appointees simply cannot be managed 
effectively by any President or White House. This lack of control is 
aggravated by the often competing political agendas and constituencies 
that some appointees might bring with them to their new positions. 
Altogether, the Commission argued that this lack of control and 
political focus ``may actually dilute the President's ability to 
develop and enforce a coherent,
 coordinated program and to hold cabinet secretaries accountable.''

  Second, the report argued that the excessive number of appointees are 
a barrier to critical expertise, distancing the President and his 
principal assistants from the most experienced career officials. Though 
bureaucracies can certainly impede needed reforms, they can also be a 
source of unbiased analysis. Adding organizational layers of political 
appointees can restrict access to important resources, while doing 
nothing to reduce bureaucratic impediments.
  Author Paul Light says, ``As this sediment has thickened over the 
decades, presidents have grown increasingly distant from the lines of 
government, and the front lines from them.'' Light adds that 
``Presidential leadership, therefore, may reside in stripping 
government of the barriers to doing its job effectively . . .''
  Finally, the Volcker Commission asserted that this thickening barrier 
of temporary appointees between the President and career officials can 
undermine development of a proficient civil service by discouraging 
talented individuals from remaining in Government service or even 
pursuing a career in Government in the first place.
   Mr. President, former Attorney General Elliot Richardson put it well 
when he noted:

       But a White House personnel assistant sees the position of 
     deputy assistant secretary as a fourth-echelon slot. In his 
     eyes that makes it an ideal reward for a fourth-echelon 
     political type--a campaign advance man, or a regional 
     political organizer. For a senior civil servant, it's irksome 
     to see a position one has spent 20 or 30 years preparing for 
     preempted by an outsider who doesn't know the difference 
     between an audit exception and an authorizing bill.

   Mr. President, many will recall the difficulties the current 
administration has had in filling even some of the more visible 
political appointments.
  A story in the National Journal in November 1993, focusing upon the 
delays in the Clinton administration in filling political positions, 
noted that in Great Britain, the transition to a new government is 
finished a week after it begins, once 40 or so political appointments 
are made. That certainly is not the case in the United States, 
recognizing, of course, that we have a quite different system of 
government from the British Parliament form of government.
  Nevertheless, there is little doubt that the vast number of political 
appointments that are currently made creates a somewhat cumbersome 
process, even in the best of circumstances. The long delays and logjams 
created in filling these positions under the Clinton administration 
simply illustrates another reason why the number of positions should be 
cut back.
  The consequences of having so many critical positions unfilled when 
an administration changes can be serious. In
 the first 2 years of the Clinton administration, there were a number 
of stories of problems created by delays in making these appointments. 
From strained relationships with foreign allies over failures to make 
ambassadorship appointments to the 2-year vacancy at the top of the 
National Archives, the record is replete with examples of agencies left 
drifting while a political appointment was delayed. Obviously, there 
are a number of situations were the delays were caused by circumstances 
beyond control of the administration. The current case involving the 
position of Surgeon General of the United States is a clear example.

  Nonetheless, it is clear that with a reduced number of political 
appointments to fill, the process of selecting and appointing 
individuals to key positions in a new administration is likely to be 
enhanced.
  Mr. President, let me also stress that the problem is not simply the 
initial filling of a political appointment, but keeping someone in that 
position over time. In a report released last year, the General 
Accounting Office reviewed a portion of these positions for the period 
of 1981 to 1991, and found high levels of turnover--7 appointees in 10 

[[Page S 9427]]
years for one position--as well as delays, usually of months but 
sometimes years, in filling vacancies.
  Mr. President, I recognize that this legislative proposal is not 
likely to be popular with many people, both within this administration 
and perhaps among members of the other party who hope to win back the 
White House in the next election.
  I want to stress that I do not view efforts to reduce the number of 
political appointees to be a partisan issue. Indeed, I think it adds to 
the credibility and merits of this proposal that a Democratic Senator 
is proposing to cut back these appointments at a time when there is a 
Democratic administration in place.
  The legislation has been drafted to take effect as of October 1, 
1995. It provides for reduction in force procedures to accomplish this 
goal. In other words, this administration would be required to reduce 
the number of political appointees to comply with this legislation. It 
would obviously apply to any further administration as well.
  The sacrifices that deficit reduction efforts require must be spread 
among all of us. This measure requires us to bite the bullet and impose 
limitations upon political appointments that both parties may well wish 
to retain. The test of commitment to deficit reduction, however, is not 
simply to propose measures that impact someone else.
  As we move forward to implement the NPR recommendations to reduce the 
number of Government employees, streamline agencies, and make 
Government more responsive, we should also right size the number of 
political appointees, ensuring a sufficient number to implement the 
policies of any administration without burdening the Federal budget 
with unnecessary, possibly counterproductive political jobs.
  Mr. President, when I ran for the U.S. Senate in 1992, I developed an 
82-point plan to reduce the Federal deficit and achieve a balanced 
budget. Since that time, I have continued to work toward enactment of 
many of the provisions of that plan and have added new provisions on a 
regular basis.
  The legislation I am introducing today reflects one of the points 
included on the original 82-point plan calling for streamlining various 
Federal agencies and reducing agency overhead costs. I am pleased to 
have this opportunity to continue to work toward implementation of the 
elements of the deficit reduction plan.
  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. 983

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

     SECTION 1. REDUCTION IN NUMBER OF POLITICAL APPOINTEES.

       (a) Definition.--For purposes of this section the term 
     ``political appointee'' means any individual who--
       (1) is employed in a position on the executive schedule 
     under sections 5312 through 5316 of title 5, United States 
     Code;
       (2) is a limited term appointee, limited emergency 
     appointee, or noncareer appointee in the senior executive 
     service as defined under section 3232(a) (5), (6), and (7) of 
     title 5, United States Code, respectively; or
       (3) is employed in a position in the executive branch of 
     the Government of a confidential or policy-determining 
     cheracter under Schedule C of subpart C of part 213 of title 
     5 of the Code of Federal Regulations.
       (b) Limitation.--The President, acting through the Office 
     of Management and Budget and the Office of Personnel 
     Management, shall take such actions as necessary (including 
     reduction in force actions under procedures established under 
     section 3595 of title 5, United States Code) to ensure that 
     the total number of political appointees shall not exceed 
     2,000.
       (c) Effective Date.--This section shall take effect on 
     October 1, 1995.
                                 ______

      By Mr. GRASSLEY (for himself, Mr. Lott, Mr. Helms, and Mr. 
        Cochran):
  S. 984. A bill to protect the fundamental right of a parent to direct 
the upbringing of a child, and for other purposes; to the Committee on 
the Judiciary.


          THE PARENTAL RIGHTS AND RESPONSIBILITIES ACT OF 1995

  Mr. GRASSLEY. Mr. President, today I am introducing the Parental 
Rights and Responsibilities Act of 1995 to reaffirm the right of 
parents to direct the upbringing of their children. While most parents 
assume this right is protected, some lower courts and Government 
bureaucrats have acted to limit this basic freedom. The bill I am 
introducing will protect the family from unwarranted intrusions by the 
Government. Congressmen Steve Largent and Mike Parker have joined me to 
pursue this initiative.
  While the Constitution does not explicitly address the parent-child 
relationship, the Supreme Court clearly regards the right of parents to 
direct the upbringing of their children as a fundamental right under 
the 14th amendment to the Constitution. Fundamental rights, such as 
freedom of speech and religion receive the highest legal protection.
  Two cases in the 1920's affirmed the Court's high regard for the 
integrity of the parent-child relationship. In Meyer versus Nebraska, 
the Court declared that the 14th amendment,

       [W]ithout doubt, . . . denotes not merely freedom from 
     bodily restraint but also the right of the individual to . . 
     . marry, establish a home and bring up children, to worship 
     God according to the dictates of his own conscience. . . .

  The second important case was Pierce versus. Society of Sisters. In 
this case, the Court declared that:

       [In] this day and under our civilization, the child of man 
     is his parent's child and not the state's . . . It is not 
     seriously debatable that the parental right to guide one's 
     child intellectually and religiously is a most substantial 
     part of the liberty and freedom of the parent.

  The Court went on to hold that parents are chiefly responsible for 
the education and upbringing of their children.
  While the Supreme Court's intent to protect parental rights is 
unquestionable, lower courts have not always followed this high 
standard to protect the parent-child relationship. The recent lower 
court assault on the rights of parents to direct their children's 
education, health care decisions, and discipline is unprecedented.
  Several examples of lower court cases will demonstrate the need for 
this bill. A group of parents in Chelmsford, MA, sued when their 
children were required to sit through a 90-minute AIDS awareness 
presentation by ``Hot, Sexy, and Safer Productions, Inc.'' In this so-
called group sexual experience students were instructed to engage in 
activities which some parents considered outrageous and pornographic. 
When the parents challenged the propriety of the school's actions, the 
court held that the parents, who were never told about the 
presentation, did not have a right to know and consent to this sexually 
explicit program before their children were required to attend.
  The Washington State Supreme Court ruled that it was not a violation 
of parents' rights to remove an eighth-grade child from her family 
because she objected to the ground rules established in the home. The 
parents in this case grounded their daughter because she wanted to 
smoke marijuana and sleep with her boyfriend. She objected, and the 
courts removed her from the home. Most parents would consider these 
rules imminently reasonable. But the court held that although the 
family structure is a fundamental institution of our society, and 
parental prerogatives are entitled to considerable legal deference, 
they are not absolute and must yield to fundamental rights of the child 
or important interests of the state.
  Recent news accounts reported of a father who was accused of child 
abuse because he publicly spanked his 4-year-old daughter. When she 
deliberately slammed the car door on her brother's hand, her father 
acted promptly to discipline her by a reasonably administered spanking. 
A passer-by called the police and the father had to defend against the 
charge of child abuse. While the father won his case, it is amazing to 
most parents that they could be dragged into court against their will 
to defend against such an outrageous charge as child abuse for 
disciplining their child for open rebellion.
  Unfortunately, these cases are only a few of the many examples of 
parents' rights being violated when trying to direct the training and 
nurturing of their children. Recent public debate has also contributed 
to the movement to violate parental rights.

[[Page S 9428]]

  Dr. Jack Westman of the University of Wisconsin-Madison proposes that 
the State license parents as a means of conveying the seriousness of 
the parental responsibility. While there is no question of the awesome 
responsibility to raise and nurture a child, the proposal to have the 
State license potential parents for the right to have children raises 
many serious questions. Who will decide what will be the appropriate 
standards for parenthood? These and other questions stretch the 
imagination of freedom loving American parents.
  With recent lower court cases and the flow of public debate around 
``Parental licensing'', it is easy to see the need for the Parental 
Rights Act of 1995.
  The goal of the PRA is to reaffirm the parental right to direct the 
upbringing of their children in four major areas: First, Directing or 
providing for the education of the child; two, making health care 
decisions for the child; three, disciplining the child, including 
reasonable corporal discipline; and four, directing or providing for 
the religious teaching of the child.
  The PRA accomplishes this goal by simply clarifying for lower courts 
and administrative tribunals that the proper standard to use in 
disputes between the Government and parents is the highest legal 
standard available. This standard, known as ``The Compelling Interest 
Standard'' means that before the Government can interfere in the 
parent-child relationship, it must demonstrate that there is a 
compelling interest to protect and that the means the Government is 
using to protect this interest is the least restrictive means 
available.
  Practically speaking, this means that the law in question is not so 
broad in application that it sweeps in more than is necessary to 
protect the interest in question.
  An example will help to clarify this point. Unfortunately, there are 
parents who abuse and neglect their children. Clearly, protecting 
children from abuse and neglect would fit into any reasonable person's 
definition of a compelling interest of the State. One of the stated 
purposes of the PRA is to protect children from abuse and neglect.
  Another stated goal is to recognize that protecting children in these 
circumstances is a compelling Government interest. Abusing or 
neglecting your child has never been considered a protected parental 
right.
  Using the least restrictive means available to protect children from 
abuse and neglect means that a parents who are appropriately meeting 
their child's needs could not fall victim to an overzealous State law. 
The law would be written in such a way that it would cover parents who 
are abusing or neglecting their children but it would not cover parents 
who are not.
  If the law is written so poorly that even good, loving parents could 
be accused of child abuse, it would not pass the test of being the 
least restrictive means available and would have to be modified.
  You might ask, ``How is the PRA going to work?'' It uses the 
traditional four-step process to evaluate fundamental rights which 
balances the interests of parents, children and the Government. First, 
parents are required to demonstrate that the actions being questioned 
are within their fundamental right to direct the upbringing of their 
child.
  Second, they must show that the Government interfered with this 
right. If the parents are able to prove these two things, then the 
burden shifts to the Government to show that the interference was 
essential to accomplish a compelling Government interest and that the 
Government's method of interfering was the least restrictive means to 
accomplish its goal.
  In these cases, the court would balance the parents' right to make 
decisions on behalf of their children against the Government's right to 
intervene in the family relationship and decide what was the proper 
balance.
  While it would be better if lower courts and administrative agencies 
would use the appropriate legal standard outlined by the Supreme Court 
without Congress having to clarify the standard, the history shows this 
is not likely to occur. My bill will clarify this standard with 
finality.
  Two specific concerns were raised that I want to address. The first 
is from child abuse prosecutors and advocates. As we moved through 
discussions on the early drafts of this bill, I made clear that I 
firmly believed child abuse and neglect is a compelling Government 
interest.
  With this in mind, I incorporated suggestions from prosecutors and 
advocates on this issue. I am comfortable that the changes made address 
their concerns.
  The second issue was infanticide and abortion. The National Right to 
Life Committee was concerned that the bill would overturn the baby doe 
laws protecting handicapped children after birth. After consultation 
with other attorneys who agreed that this was a concern, I changed my 
draft to clarify that the PRA could not be used in this way.
  The second point that NRL raised was that the PRA would somehow 
empower parents to coerce a young woman to have an abortion against her 
wishes. This is because the PRA allows parents to make health care 
decisions for their child unless the parents' neglect or refusal to act 
will risk the life of the child or risk serious physical injury to the 
child. I have consulted with other pro-life organizations and advocates 
who do not share this concern and have endorsed the bill.
  I urge my colleagues to support this bill. It is critical to the 
proper balance of parents' rights against the Government's actions. 
Without the PRA, lower courts, Government bureaucrats, and 
administrative tribunals will continue to interfere needlessly in the 
parent-child relationship.
                                 ______

      By Mr. CAMPBELL (for himself and Mr. Brown):
  S. 985. A bill to provide for the exchange of certain lands in Gilpin 
County, CO; to the Committee on Energy and Natural Resources.


                      the gilpin land exchange act

 Mr. CAMPBELL. Mr. President, I, and my colleague, Senator 
Brown, are introducing legislation to exchange approximately 300 acres 
of fragmented Bureau of Land Management lands near Black Hawk, CO, for 
approximately 4,000 acres that will be added to Rocky Mountain National 
Park and to other Department of the Interior holdings in Colorado, 
while dedicating any remaining equalization funds to the purchase of 
land and water rights for the Blanca Wetlands Management Area near 
Alamosa, CO.
  This legislation is supported by local governments, environmental 
groups, and land developers in Colorado. More specifically, the bill: 
Will enable Rocky Mountain National Park to obtain an adjacent 40-acre 
parcel known as the Circle C Ranch. The Park Service has long sought to 
acquire the ranch to avoid its subdivision and development; will result 
in the public acquisition of approximately 4,000 acres of elk winter 
range and other important wildlife habitat at the headwaters of La Jara 
Canyon and Fox Creek, approximately 10 miles from Antonito, CO; and 
will create a fund from cash equalization moneys that may be paid to 
the United States as a result of the exchange, with the fund to be used 
to augment fish and wildlife habitat in the BLM's Blanca Wetlands 
Management Area. The BLM has wanted funds for these purposes for many 
years.
  In exchange for picking up over 4,000 acres of land, 130 parcels of 
highly fragmented BLM land totalling about 300 acres will be made 
available for private acquisition. Of these 130 parcels, 88 are less 
than 1 acre in size. The BLM, through its established land use planning 
process, has already identified these lands as appropriate for 
disposal.
  I hope my colleagues will support this effort, and I ask unanimous 
consent that the text of the bill, along with letters of support from 
the city of Central, the city of Blackhawk, the Gilpin County Board of 
County Commissioners, and the Huerfano County Board of County 
Commissioners be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 985

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

     SECTION 1. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) certain scattered parcels of Federal land in Gilpin 
     County, Colorado, are administered by the Secretary of the 
     Interior as 

[[Page S 9429]]
     part of the Royal Gorge Resource Area, Canon City District, Bureau of 
     Land Management;
       (2) these land parcels, which comprises approximately 133 
     separate tracts of land, and range in size from approximately 
     38 acres to much less than an acre have been identified as 
     suitable for disposal by the Bureau of Land Management 
     through its resource management planning process and are 
     appropriate for disposal; and
       (3) even though the Federal land parcels in Gilpin County, 
     Colorado, are scattered and small in size, they nevertheless 
     by virtue of their proximity to existing communities appear 
     to have a fair market value which may be used by the Federal 
     Government to exchange for lands which will better lend 
     themselves to Federal management and have higher values for 
     future public access, use and enjoyment, recreation, the 
     protection and enhancement of fish and wildlife and fish and 
     wildlife habitat, and the protection of riparian lands, 
     wetlands, scenic beauty and other public values.
       (b) Purpose.--It is the purpose of this Act to authorize, 
     direct, facilitate and expedite the land exchange set forth 
     herein in order to further the public interest by disposing 
     of Federal lands with limited public utility and acquire in 
     exchange therefor lands with important values for permanent 
     public management and protection.

     SEC. 2. LAND EXCHANGE.

       (a) In General.--The exchange directed by this Act shall be 
     consummated if within 90 days after enactment of this Act, 
     Lake Gulch, Inc., a Colorado Corporation (as defined in 
     section 4 of this Act) offers to transfer to the United 
     States pursuant to the provisions of this Act the offered 
     lands or interests in land described herein.
       (b) Conveyance by Lake Gulch.--Subject to the provisions of 
     section 3 of this Act, Lake Gulch shall convey to the 
     Secretary of the Interior all right, title, and interest in 
     and to the following offered lands--
       (1) certain lands comprising approximately 40 acres with 
     improvements thereon located in Larimer County, Colorado, and 
     lying within the boundaries of Rocky Mountain National Park 
     as generally depicted on a map entitled ``Circle C Church 
     Camp'', dated August 1994, which shall upon their acquisition 
     by the United States and without further action by the 
     Secretary of the Interior be incorporated into Rocky Mountain 
     National Park and thereafter be administered in accordance 
     with the laws, rules and regulations generally applicable to 
     the National Park System and Rocky Mountain National Park;
       (2) certain lands located within and adjacent to the United 
     States Bureau of Land Management San Luis Resource Area in 
     Conejos County, Colorado, which comprise approximately 3,993 
     acres and are generally depicted on a map entitled ``Quinlan 
     Ranches Tract'', dated August 1994; and
       (3) certain lands located within the United States Bureau 
     of Land Management Royal Gorge Resource Area in Huerfano 
     County, Colorado, which comprise approximately 4,700 acres 
     and are generally depicted on a map entitled ``Bonham Ranch-
     Cucharas Canyon'', dated June 1995: Provided, however, That 
     it is the intention of Congress that such lands may remain 
     available for the grazing of livestock as determined 
     appropriate by the Secretary in accordance with applicable 
     laws, rules, and regulations: Provided further, That if the 
     Secretary determines that certain of the lands acquired 
     adjacent to Cucharas Canyon hereunder are not needed for 
     public purposes they may be sold in accordance with the 
     provisions of section 203 of the Federal Land Policy and 
     Management Act of 1976 and other applicable law.
       (c) Substitution of Lands.--If one or more of the precise 
     offered land parcels identified above is unable to be 
     conveyed to the United States due to appraisal or other 
     problems, Lake Gulch and the Secretary may mutually
      agree to substitute therefor alternative offered lands 
     acceptable to the Secretary.
       (d) Conveyance by the United States.--(1) Upon receipt of 
     title to the lands identified in subsection (a) the Secretary 
     shall simultaneously convey to Lake Gulch all right, title, 
     and interest of the United States, subject to valid existing 
     rights, in and to the following selected lands--
       (A) certain surveyed lands located in Gilpin County, 
     Colorado, Township 3 South, Range 72 West, Sixth Principal 
     Meridian, Section 18, Lots 118-220, which comprise 
     approximately 195 acres and are intended to include all 
     federally owned lands in section 18, as generally depicted on 
     a map entitled ``Lake Gulch Selected Lands'', dated July 
     1994;
       (B) certain surveyed lands located in Gilpin County, 
     Colorado, Township 3 South, Range 72 West, Sixth Principal 
     Meridian, Section 17, Lots 37, 38, 39, 40, 52, 53, and 54, 
     which comprise approximately 96 acres, as generally depicted 
     on a map entitled ``Lake Gulch Selected Lands'', dated July 
     1994; and
       (C) certain unsurveyed lands located in Gilpin County, 
     Colorado, Township 3 South, Range 73 West, Sixth Principal 
     Meridian, Section 13, which comprise approximately 11 acres, 
     and are generally depicted as parcels 302-304, 306, and 308-
     326 on a map entitled ``Lake Gulch Selected Lands'', dated 
     July 1994: Provided, however, That a parcel or parcels of 
     land in section 13 shall not be transferred to Lake Gulch if 
     at the time of the proposed transfer the parcel or parcels 
     are under formal application for transfer to a qualified unit 
     of local government. Due to the small and unsurveyed nature 
     of such parcels proposed for transfer to Lake Gulch in 
     section 13, and the high cost of surveying such small 
     parcels, the Secretary is authorized to transfer such section 
     13 lands to Lake Gulch without survey based on such legal or 
     other description as the Secretary determines appropriate to 
     carry out the basic intent of the map cited in this 
     subparagraph.
       (2) If the Secretary and Lake Gulch mutually agree, and the 
     Secretary determines it is in the public interest, the 
     Secretary may utilize the authority and direction of this Act 
     to transfer to Lake Gulch lands in sections 17 and 13 that 
     are in addition to those precise selected lands shown on the 
     map cited herein, and which are not under formal application 
     for transfer to a qualified unit of local government, upon 
     transfer to the Secretary of additional offered lands 
     acceptable to the Secretary or upon payment to the Secretary 
     by Lake Gulch of cash equalization money amounting to the 
     full appraised fair market value of any such additional 
     lands. If any such additional lands are located in section 13 
     they may be transferred to Lake Gulch without survey based on 
     such legal or other description as the Secretary determines 
     appropriate as long as the Secretary determines that the 
     boundaries of any adjacent lands not owned by Lake Gulch can 
     be properly identified so as to avoid possible future 
     boundary conflicts or disputes. If the Secretary determines 
     surveys are necessary to convey any such additional lands to 
     Lake Gulch, the costs of such surveys shall be paid by Lake 
     Gulch but shall not be eligible for any adjustment in the 
     value of such additional lands pursuant to section 206(f)(2) 
     of the Federal Land Policy and Management Act of 1976 (as 
     amended by the Federal Land Exchange Facilitation Act of 
     1988) (43 U.S.C. 1716(f)(2)).
       (3) Prior to transferring out of public ownership pursuant 
     to this Act or other authority of law any lands which are 
     contiguous to North Clear Creek southeast of the City of 
     Black Hawk, Colorado in the County of Gilpin, Colorado, the 
     Secretary shall notify and consult with the County and City 
     and afford such units of local government an opportunity to 
     acquire or reserve pursuant to the Federal Land Policy and 
     Management Act of 1976 or other applicable law, such 
     easements or rights-of-way parallel to North Clear Creek as 
     may be necessary to serve public utility line or recreation 
     path needs: Provided, however, That any survey or other costs 
     associated with the acquisition or reservation of such 
     easements or rights-of-way shall be paid for by the unit or 
     units of local government concerned.

     SEC. 3. TERMS AND CONDITIONS OF EXCHANGE.

       (a) Equalization of Values.--(1) The values of the lands to 
     be exchanged pursuant to this Act shall be equal as 
     determined by the Secretary of the Interior utilizing 
     nationally recognized appraisal standards, including, to the 
     extent appropriate, the Uniform Standards for Federal Land 
     Acquisition, the Uniform Standards of Professional Appraisal 
     Practice, the provisions of section 206(d) of the Federal 
     Land Policy and Management Act of 1976 (43 U.S.C. 1716(d)), 
     and other applicable law.
       (2) In the event any cash equalization or land sale moneys 
     are received by the United States pursuant to this Act, any 
     such moneys shall be retained by the Secretary of the 
     Interior and may be utilized by the Secretary until fully 
     expended to purchase from willing sellers land or water 
     rights, or a combination thereof, to augment wildlife habitat 
     and protect and restore wetlands in the Bureau
      of Land Management's Blanca Wetlands, Alamosa County, 
     Colorado.
       (3) Any water rights acquired by the United States pursuant 
     to this section shall be obtained by the Secretary of the 
     Interior in accordance with all applicable provisions of 
     Colorado law, including the requirement to change the time, 
     place, and type of use of said water rights through the 
     appropriate State legal proceedings, and to comply with any 
     terms, conditions, or other provisions contained in an 
     applicable decree of the Colorado Water Court. The use of any 
     water rights acquired pursuant to this section shall be 
     limited to water that can be used or exchanged for water that 
     can be used on the Blanca Wetlands. Any requirement or 
     proposal to utilize facilities of the San Luis Valley 
     Project, Closed Basin Diversion, in order to effectuate the 
     use of any such water rights shall be subject to prior 
     approval of the Rio Grande Water Conservation District.
       (b) Restrictions on Selected Lands.--(1) Conveyance of the 
     selected lands to Lake Gulch pursuant to this Act shall be 
     contingent upon Lake Gulch executing an agreement with the 
     United States prior to such conveyance, the terms of which 
     are acceptable to the Secretary of the Interior, and which--
       (A) grant the United States a covenant that none of the 
     selected lands (which currently lie outside the legally 
     approved gaming area) shall ever be used for purposes of 
     gaming should the current legal gaming area ever be expanded 
     by the State of Colorado; and
       (B) permanently hold the United States harmless for 
     liability and indemnify the United States against all costs 
     arising from any activities, operations (including the 
     storing, handling, and dumping of hazardous materials or 
     substances) or other acts conducted by Lake Gulch or its 
     employees, agents, successors or assigns on the selected 
     lands after their transfer to Lake Gulch: Provided, however, 
     That nothing in this Act shall be construed as either 
     diminishing or increasing any responsibility or liability of 
     the 

[[Page S 9430]]
     United States based on the condition of the selected lands prior to or 
     on the date of their transfer to Lake Gulch.
       (2) Conveyance of the selected lands to Lake Gulch pursuant 
     to this Act shall be subject to the existing easement for 
     Gilpin County Road 6.
       (3) The above terms and restrictions of this subsection 
     shall not be considered in determining, or result in any 
     diminution in, the fair market value of the selected land for 
     purposes of the appraisals of the selected land required 
     pursuant to section 3 of this Act.
       (c) Revocation of Withdrawal.--The public Water Reserve 
     established by Executive order dated April 17, 1926 (Public 
     Water Reserve 107), Serial Number Colorado 17321, is hereby 
     revoked insofar as it affects the NW\1/4\SW\1/4\ of Section 
     17, Township 3 South, Range 72 West, Sixth Principal 
     Meridian, which covers a portion of the selected lands 
     identified in this Act.

     SEC. 4. MISCELLANEOUS PROVISIONS.

       (a) Definitions.--As used in this Act:
       (1) The term ``Secretary'' means the Secretary of the 
     Interior.
       (2) The term ``Lake Gulch'' means Lake Gulch, Inc., a 
     Colorado corporation, or its successors, heirs or assigns.
       (3) The term ``offered land'' means lands to be conveyed to 
     the United States pursuant to this Act.
       (4) The term ``selected land'' means lands to be 
     transferred to Lake Gulch, Inc., or its successors, heirs or 
     assigns pursuant to this Act.
       (5) The term ``Blanca Wetlands'' means an area of land 
     comprising approximately 9,290 acres, as generally depicted 
     on a map entitled ``Blanca Wetlands'', dated August 1994, or 
     such land as the Secretary may add thereto by purchase from 
     willing sellers after the date of enactment of this Act 
     utilizing funds provided by this Act or such other moneys as 
     Congress may appropriate.
       (b) Time Requirement for Completing Transfer.--It is the 
     intent of Congress that unless the Secretary and Lake Gulch 
     mutually agree otherwise the exchange of lands authorized and 
     directed by this Act shall be completed not later than 6 
     months after the date of enactment of this Act. In the event 
     the exchange cannot be consummated within such 6-month-time 
     period, the Secretary, upon application by Lake Gulch, is 
     directed to sell to Lake Gulch at appraised fair market value 
     any or all of the parcels (comprising a total of 
     approximately 11 acres) identified in section 2(d)(1)(C) of 
     this Act as long as the parcel or parcels applied for are not 
     under formal application for transfer to a qualified unit of 
     local government.
       (c) Administration of Lands Acquired by United States.--In 
     accordance with the provisions of section 206(c) of the 
     Federal Land Policy and Management Act of 1976 (43 U.S.C. 
     1716(c)), all lands acquired by the United States pursuant to 
     this Act shall upon acceptance of title by the United States 
     and without further action by the Secretary concerned become 
     part of and be managed as part of the administrative unit or 
     area within which they are located.
                                                                    ____

                                       City of Black Hawk, CO.

                                                     May 24, 1995.
     Senator Ben Nighthorse Campbell,
     Russell State Office Building,
     Washington, DC.
       Dear Senator Campbell: This letter is to reaffirm the City 
     of Black Hawk's support for the land exchange proposal 
     between Lake Gulch, Inc. and the U.S. Bureau of Land 
     Management which you sponsored last year. We support the 
     proposal and hope that you will see fit to seek its 
     reintroduction before the Congress.
       As our letter to you last August indicated, the lands which 
     Lake Gulch Inc. is seeking to acquire through the exchange 
     are scattered parcels ranging from 38 acres in size to as 
     little as one-one hundredth of an acre. Because they are 
     mostly interspersed with private lands which are owned or 
     under option to Lake Gulch and its affiliates, it is our 
     belief that there is little rationale for the BLM to retain 
     them, but common sense logic supporting Lake Gulch's 
     acquisition.
       We feel the proposed acquisition by Lake Gulch will benefit 
     our area by consolidating land that can be used for future 
     residential and non-gaming purposes. As you may be aware, 
     real estate prices within our existing city limits have 
     escalated so rapidly since the advent of gaming that little 
     land is realistically available at the present time for uses 
     other than gaming and its ancillary facilities such as 
     parking, lodging and restaurants. Therefore, we view it is 
     highly desirable to see additional land consolidation into 
     private ownership in our community so that there will be 
     increased opportunities for the location of affordable 
     housing, stores, gas stations, and other needed services.
       We finally note that the legislation which you sponsored 
     last year contained a provision in Section 2(d)(3) giving us 
     the right to acquire easements or rights-of-way through the 
     lands to be conveyed to Lake Gulch as might be necessary to 
     serve future utility line or recreation path needs. We would 
     request that this provision be included in the legislation 
     again this year.
       Thank you for your sponsorship of the legislation last 
     year. We hope you will be able to lend your assistance again 
     this year.
           Sincerely,
                                                   Kathryn Eccker,
     Mayor.
                                                                    ____



                                              City of Central,

                                   Central City, CO., May 25, 1995
     Senator Ben Nighthorse Campbell,
     Russell Senate Office Building,
     Washington, DC.
       Dear Senator Nighthorse Campbell: I am writing to reaffirm 
     the City of Central's support, as first expressed to you in 
     our letter of August 5, 1994, for the proposed Gilpin County 
     land exchanged as embodied in bills S. 2470 and H.R. 5016 
     introduced in Congress last year. It is our understanding 
     that Lake Gulch Inc. and its associates will be seeking 
     reintroduction of the legislation this year, and we are 
     supportive of their efforts provided that the legislation 
     contains, as it did last year, a provision prohibiting the 
     transfer to Lake Gulch of any lands in Section 13 for which 
     we have submitted a formal transfer application.
       We have re-examined the proposed land exchange boundaries 
     with representatives of Lake Gulch Inc. and have reached 
     agreement with them that the proposal will exclude the lands 
     known as parcels 310, 305, and 307. The City of Central is 
     currently seeking a land use permit and possible future 
     purchase for those three tracts. With this exclusion, there 
     should be no overlap between their proposal and our current 
     application.
       Please let us know if we can provide any assistance in this 
     matter. We hope that the legislation can be reintroduced and 
     moved forward expeditiously.
           Yours Truly,
                                                    David C. Stahl
     Interim City Manager
                                                                    ____

                                    Board of County Commissioners,


                                                Gilpin County,

                                  Central City, CO., June 6, 1995.
     Senator Hank Brown,
     Hart Senate Office Building,
     Senator Ben Nighthorse Campbell,
     Russell Senate Office Building,
     Congressman Scott McInnis,
     Cannon House Office Bldg.,
     Congressman David Skaggs,
     Longworth House Office Bldg.,
     Washington, D.C.
       Dear Congressmen and Senators: Last August we contacted 
     your offices indicating the County's support of the proposed 
     land exchange between the U.S. Bureau of Land Management and 
     the Lake Gulch Organization, provided that the conveyance of 
     the BLM lands to Lake Gulch would be subject to the existing 
     easement for Gilpin County Road 6. We understand that the 
     legislation failed due to Congress' adjournment last fall, 
     but that Lake Gulch will be requesting its reintroduction in 
     this Congress.
       As we indicated last year, Gilpin County is supportive of 
     the idea of taking any steps that would allow consolidation 
     into private ownership of the land holdings involved in this 
     land exchange. Given the extremely scattered nature of the 
     BLM lands, we do not believe any purpose is served by their 
     continued public ownership under BLM control whereas our 
     County has the need for additional private land near the 
     rapidly expanding communities in Black Hawk and Central City. 
     Lake Gulch and its affiliates have represented that they own 
     or control most of the private land surrounding the land they 
     are seeking to acquire from the BLM, hence the requested land 
     consolidation appears logical.
       While we have no detailed knowledge of the principals, 
     resources or objectives associated with Lake Gulch, we agree 
     with the idea of taking any steps that would allow 
     consolidation of land holdings in this area, including the 
     transfer of BLM lands to Lake Gulch or some other entity that 
     could demonstrate an ability to assemble a significant amount 
     of privately held tracts in this area. Without knowing more 
     about the company or its principals, we cannot say whether 
     Lake Gulch is or is not the best entity to accomplish this 
     goal.
       Although the proposed bill reserves a right-of-way for 
     County Rd. 6, which now runs through this area, no width is 
     specified. We would expect the recipients of the public lands 
     to recognize a no less than 60 foot right-of-way for County 
     Road 6, in an alignment acceptable to the county.
       While the county believes that the type of transfer 
     contemplated in the proposed legislation is appropriate for 
     the BLM lands in question, we also feel that other BLM lands 
     in Gilpin County should be investigated for possible transfer 
     to the county or other public or quasi-public entities for 
     preservation and other uses which could directly benefit the 
     residents of the county and surrounding areas. We look 
     forward to a continuation of the ongoing discussion with BLM 
     representatives on this matter.
       Thanking you in advance for your attention to this 
     important matter. Please do not hesitate to contact us if we 
     can be of any assistance to you in your deliberations.
           Sincerely,
                                                   Ralph H. Knull,
                                                          Chairman
     
[[Page S 9431]]

                                          Huerfano County Board of


                                         County Commissioners,

                                    Walsenburg, CO., June 7, 1995.
     Senator Ben Nighthorse Campbell,
     Russell Senate Office Building,
     Washington, D.C.
       Dear Senator Campbell: We understand that you may shortly 
     be considering a land exchange proposal which would involve 
     up to 4700 acres of land in Huerfano County currently 
     belonging to Mr. Orville Bonham being exchanged to the Bureau 
     of Land Management.
       Our Board is familiar with the land in question and is 
     aware of BLM's ongoing interest in acquiring all or a portion 
     of Mr. Bonham's land to protect Cucharas Canyon for future 
     public uses such as hunting, fishing and other outdoor 
     recreation. We are also aware that Mr. Bonham is willing to 
     sell or exchange his lands to BLM. We, therefore, believe 
     that public interest, as well as the interests of our County, 
     would be well served by making such an exchange in Cucharas 
     Canyon.
       Thank you for your attention to this matter. Cucharas 
     Canyon is a beautiful place where land ownership 
     consolidation is logical to round out BLM's existing 
     holdings.
           Sincerely,
     William Reinets,
       Chairman.
     Xavier E. Sandoval,
       Commissioner.
     Neal J. Cocco,
       Commissioner.
                                 ______

      By Mr. D'AMATO (for himself, Mr. Moynihan, Mr. Nickles, and Mr. 
        Inhofe):
  S. 986. A bill to amend the Internal Revenue Code of 1986 to provide 
that the Federal income tax shall not apply to United States citizens 
who are killed in terroristic actions directed at the United States or 
to parents of children who are killed in those terroristic actions; to 
the Committee on Finance.


              the terrorism victims tax relief act of 1995

 Mr. D'AMATO. Mr. President, today I am introducing the 
Terrorism Victims Tax Relief Act of 1995, a bill that was prompted by 
the recent Oklahoma City bombing, and the 1993 World Trade Center 
bombing. I am pleased that my distinguished colleagues, Senators 
Moynihan, Inhofe, and Nickles join me in introducing legislation that 
we believe will provide some relief to families of Americans who fall 
victim to domestic terrorism directed against the U.S. Government.
   Mr. President, of February 26, 1993, Americans were shocked when we 
experienced the most dramatic terrorist attack in our history. On that 
fateful day, the bombing of the World Trade Center brought 
international terrorism to this country. It was a heinous act that 
killed 6 people and injured over 1,000. This bombing was, in part, 
responsible for legislation recently passed that will provide our 
Federal law enforcement officials with more effective ways of fighting 
both domestic and international terrorism.
  A little more than 2 years later, on April 19, 1995, in America's 
heartland, Oklahoma City was the scene of something far more heinous 
and devastating, the bombing of the Alfred P. Murrah Federal Building. 
This cold and calculated act ultimately killed 168 Americans, including 
19 innocent children. The images of that day will remain with us 
forever, but most of all, the lives of family members will be forever 
changed.
  Mr. President, it is for this reason that we introduce this 
legislation today. We believe it is our duty to do what we can, no 
matter how small, to lessen the emotional and financial burden on the 
families of the victims of these two horrible tragedies. This 
legislation would amend Internal Revenue Code section 692(c), which 
exempts from taxation the wages of military and civilian employees of 
the United States who die as a result of wounds or injury incurred 
outside the United States in a terroristic or military action.
  This proposed legislation would amend the law to extend the 
provisions of section 692(c) to U.S. citizens, including the parents of 
children, who fall victim to either domestic or international 
terrorism. To take into consideration those American who died in the 
World Trade Center bombing, the effective date of this legislation 
would be for tax years beginning after December 31, 1992.
  Mr. President, although we in Congress can do nothing to fill the 
void left by these tragedies, it is our belief that this legislation 
will help relieve the heavy burden felt by those who lost their 
husbands, wives and children. I hope that our colleagues on both sides 
of the aisle will join us in sponsoring this important legislation.
  I ask unanimous consent that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 986

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

     SECTION 1. INCOME TAX NOT TO APPLY TO UNITED 
                   STATES CITIZENS KILLED BY TERRORISTIC ACTIONS 
                   AGAINST THE UNITED STATES OR THEIR PARENTS IN 
                   THE CASE OF MINOR CHILDREN.

       (a) Application to All United States Citizens and Parents 
     of Minor Children.--Section 692(c) of the Internal Revenue 
     Code of 1986 (relating to taxation of the United States 
     employees dying as a result of injuries sustained overseas) 
     is amended by redesignating paragraphs (2) and (3) as 
     paragraphs (3) and (4) and by inserting after paragraph (1) 
     the following new paragraph:
       ``(2) Extension to all citizens and parents of minor 
     children.--Paragraph (1) shall also apply to--
       ``(A) a citizen of the United States who dies as a result 
     of wounds or injury incurred in a terroristic action 
     described in paragraph (3)(A) in which the individual was not 
     a participant, and
       ``(B) if the individual described in subparagraph (A) has 
     not attained the age of 19 prior to death, the parent of the 
     individual, but only for the taxable year of the parent in 
     which the individual died and only if the parent is allowed a 
     deduction under section 151 for the individual for the 
     taxable year (without regard to this subsection).''
       (b) Extension to Actions Within the United 
     States.--Paragraph (1) of section 692(c) of the Internal 
     Revenue Code of 1986 (relating to taxation of United States 
     employees dying as a result of injuries sustained overseas) 
     is amended by striking ``outside the United States''.
       (c) Conforming Amendments.--
       (1) Paragraph (4) of section 692(c) of the Internal Revenue 
     Code of 1986, as redesignated by subsection (a), is amended 
     by striking ``paragraph (2)'' and inserting ``paragraph 
     (3)''.
       (2) The heading for section 692(c) of such Code is amended 
     to read as follows:
       ``(c) Certain Individuals Dying as a Result of Terroristic 
     or Military Actions.--''
       (d) Effective Date.--The amendments made by this section 
     shall apply to individuals dying after December 31, 
     1992.
                                 ______

      By Mr. HELMS (for himself and Mr. Faircloth):
  S. 987. A bill to provide for the full settlement of all claims of 
Swain County, NC, against the United States under the agreement dated 
July 30, 1943, and for other purposes; to the Committee on Energy and 
Natural Resources.


                the swain county settlement act of 1995

  Mr. HELMS. Mr. President, today I introduce the Swain County 
Settlement Act of 1995, fulfilling a promise I made to the people of 
tiny Swain County, NC, two decades ago when I promised that I would do 
everything in my power to require the Federal Government to keep a 
commitment it made in writing to them back in 1943, more than a half-
century ago.
  This is the third time this legislation has been introduced. On 
October 22, 1991, I introduced the Swain County Settlement Act of 1991, 
and on January 26, 1993, I reintroduced this legislation as the Swain 
County Settlement Act of 1993. Unfortunately, the Senate did not pass 
this legislation in the 102d and 103d Congresses.
  For those unfamiliar with this legislation, it merely directs the 
Secretary of the Interior and the Secretary of the Treasury to honor 
the 1943 contract between the people of western North Carolina and the 
Federal Government.
  Mr. President, at the outset I make this point: At issue here is 
whether the U.S. Government will keep its word, and live up to a very 
clear commitment it made in writing 52 years ago in exchange for the 
right to flood thousands of acres of Swain County to create the Fontana 
Lake. By what we do, or fail to do, the integrity of the Federal 
Government, and those of us who serve in Congress today, will be 
decided in the minds of people who have been waiting for 52 years.
  Specifically, the Helms legislation proposes three things: First, it 
orders the Secretary of the Interior to begin construction of the road 
promised by the Federal Government in 1943; second, it directs the 
Secretary of the Treasury to pay Swain County, North Carolina the sum 
of $16 million to compensate the county for the destruction of North 
Carolina Highway No. 288; and third, it orders the Park Service to 

[[Page S 9432]]
erect a historical marker at Soco Gap to honor the contributions of the 
Cherokee Nation to the people of North Carolina and to the United 
States.
  Senators should be aware of what happened 52 years ago to understand 
why I so vigorously support full settlement of this matter. In 1943, 
the Federal Government and the Tennessee Valley Authority decided that 
in order to generate hydroelectric power they needed to flood land 
taken from the farmers in Swain County. Literally thousands of Swain 
County residents packed up and left their homes because the Federal 
Government needed their land. The Government did not relocate them, nor 
did the Government give North Carolina families additional land. The 
Government merely offered a few dollars for the land, buy many Swain 
County citizens never received even one dime for their land.
  I don't have to remind Senators, Mr. President, that in 1943, World 
War II was raging in Europe and the Pacific. Many of the men from the 
Swain County area were overseas fighting for our freedom--at the very 
time their land back home was being seized by the Federal Government.
  When the Government took the 44,400 acres of land north of Fontana 
Lake, it agreed: First, to reimburse Swain County for an existing 
highway that was flooded in order to create Fontana Lake; and second, 
to build an around-the-park road to, among other things, provide access 
to gravesites left behind when the people were forced off the land.
  In case any Senator cares to see it, I have a copy of the North Shore 
Road contract signed by FDR's Interior Secretary Harold Ickes and North 
Carolina's Gov. J. Melville Broughton.
  In July 1943, shortly after the agreement was signed, a Tennessee 
Valley Authority supervisor wrote the families about gravesite removal. 
The letter stated:

       The construction of Fontana Dam necessitates the flooding 
     of the road leading to the Proctor Cemetery located in Swain 
     County, North Carolina, and to reach this cemetery in the 
     future [it] will be necessary to walk a considerable distance 
     until a road is constructed in the vicinity of the cemetery, 
     which is proposed to be completed after the war has ended. We 
     are informed that you are the nearest surviving relative of a 
     deceased who is buried in this cemetery.

  Because of the understanding mentioned in this letter--that the road 
would be completed shortly after the war--families in Swain County 
agreed to leave their deceased relatives on the land taken by the 
Federal Government.
  Mr. President, documents dating back to 1943 show that the Government 
did fulfill its promise to pay for Highway No. 288. In 1943 the 
Government paid to the State of North Carolina approximately $400,000, 
an amount which represents the principal which Swain County owed on 
outstanding bonds.
  According to my information, the Federal Government paid that amount 
to the State of North Carolina as trustee. A letter dated November 22, 
1943, from the Treasurer of the Tennessee Valley Authority to the 
Treasurer of the State of North Carolina confirms that payment was 
indeed made.
  The full payment never reached Swain County because it went into the 
State's general highway fund account and the Federal Government never 
fulfilled its obligation to build the road. There were a few false 
starts. In 1963, the Federal Government built 2.5 miles of the road; in 
1965, it built 2.1 miles; and in 1969 it built 1 additional mile and a 
1,200-foot tunnel. Then the environmentalists got into the act and the 
project was shut down.
  Now, Mr. President, you can visit one of western North Carolina's 
best-known sites, the ``Road to Nowhere.'' It is a travesty--a monument 
to a broken promise by the U.S. Government.
  The payment of $16 million to Swain County, which is to compensate 
the county for the destruction of North Carolina Highway No. 288 in 
1943, will certainly help this economically poor county. However, it 
will never be able to cover all the economic distress that Swain County 
and most of western North Carolina have suffered because of the 
increasing amount of land in western North Carolina being acquired by 
the Federal Government and taken off the tax rolls.
  Over the years, people in western North Carolina have watched the 
Federal Government seize their land for one purpose or another. They 
have very little industry. They have little tax base. The unemployment 
rate is high.
  No one can fully appreciate how the Government has crippled the 
economy in western North Carolina until he or she looks at how much 
land the Federal Government has already seized. In Swain County alone, 
out of 345,715 acres, the Federal Government has taken 276,577 acres. 
Nearby Graham County has the same problem. Of the 193,216 acres in that 
county, the Federal Government has taken 138,813 acres. Of the 353,452 
acres in Haywood County, the Federal Government has taken 131,111 
acres.
  I mention all this to emphasize the frustration in western North 
Carolina. Meanwhile, in the four Tennessee counties bordering the Great 
Smoky Mountains National Park for instance, the Federal Government owns 
less than two fifths of the land. I have no quarrel with our friends in 
Tennessee, but facts are facts.
  Although the Great Smoky Mountains National Park is the most visited 
national park in the country, few tourists who travel through the 
Smokies have a place to pause on the North Carolina side of the park. 
The road in Swain County, promised over 52 years ago, would change 
that. It would attract industry and tourists--not to the detriment of 
the scenic beauty of the Smokies but for the betterment of the citizens 
of western North Carolina. In fact, I would like the road to become a 
part of the Blue Ridge Parkway system.
  The Helms legislation takes care of Department of the Interior 
regulations and so-called environmental guidelines that would prevent 
the construction of the road because it orders, notwithstanding any 
other provision of law, the Secretary of the Interior to build the 
road.
  As Paul Harvey put it, ``Now you know the rest of the story.'' And as 
I stated at the outset, I made a commitment to the people of western 
North Carolina years ago. I promised to fight for their interests. If I 
lose, the Federal Government will lose the respect and confidence of 
thousands of North Carolinians.
  Mr. President, I ask unanimous consent that the full text of S. 987 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 987

       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 ``Swain County Settlement Act 
     of 1995''.

     SEC. 2. SETTLEMENT OF CLAIMS.

       (a) Findings.--Congress finds that--
       (1) Swain County, North Carolina, claims certain rights 
     acquired pursuant to an agreement dated July 30, 1943, 
     between the Secretary of the Interior, the State of North 
     Carolina, the Tennessee Valley Authority, and Swain County, 
     North Carolina (referred to in this Act as the ``1943 
     Agreement'');
       (2) the 1943 Agreement provided that the Department of the 
     Interior would construct a road along the north shore of the 
     Fontana Reservoir to replace a road flooded by the 
     construction of Fontana Dam and the filling of the reservoir; 
     and
       (3) the road has not been completed.
       (b) Purpose.--The purpose of this section is to settle and 
     quiet all claims arising out of the 1943 Agreement.
       (c) Settlement.--
       (1) Completion of road.--Notwithstanding any other 
     provision of law, the Secretary of the Interior shall 
     complete the road along the north shore of the Fontana 
     Reservoir according to the terms of the 1943 Agreement.
       (2) Payment to swain county.--
       (A) In general.--After completion of the road under 
     paragraph (1), the Secretary of the Treasury shall pay Swain 
     County, North Carolina, the sum of $16,000,000, which shall 
     be deposited in an account in accordance with the rules and 
     regulations established by the North Carolina Local 
     Government Commission.
       (B) Expenditure.--
       (i) Principal.--The principal of the sum may be expended by 
     Swain County only under a resolution approved by an 
     affirmative vote of two-thirds of the registered voters of 
     the county.
       (ii) Interest.--Interest earned on the unexpended principal 
     of the sum may be expended only by a majority vote of the 
     duly elected governing commission of Swain County.
       (d) Restriction on Use of Funds.--Money made available 
     pursuant to this section may not be paid to or received by an 
     agent or attorney on account of services rendered in 
     connection with the claims settled by this section.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated such 

[[Page S 9433]]
     sums as are necessary to carry out this section.

     SEC. 3. CHEROKEE HISTORICAL MARKER.

       The Secretary of the Interior shall allocate the funds and 
     personnel necessary to place a suitable historical marker at 
     or near the approach to the Cherokee Qualls Reservation at 
     Soco Gap, North Carolina, in recognition of the historical 
     importance of Soco Gap and the contribution of the Cherokee 
     Nation to the State of North Carolina and the United States.
                                 ______

      By Mr. HELMS:
  S. 988. A bill to direct the Secretary of the Interior to transfer 
administrative jurisdiction over certain land to the Secretary of the 
Army to facilitate construction of a jetty and sand transfer systems, 
and for other purposes; to the Committee on Environment and Public 
Works.


                the oregon inlet protection act of 1995

  Mr. HELMS. Mr. President, in offering the Oregon Inlet Protection Act 
of 1995, I would emphasize that this is legislation of vital importance 
to thousands of citizens of both North Carolina and other States and 
especially the citizens of the Outer Banks along the northeastern coast 
of my State. The commercial and recreational fishermen who risk their 
lives each day attempting to navigate the hazardous waters of Oregon 
Inlet have been pleading for this legislation for decades. It is, in 
fact, a matter of life or death for them.
  On December 30, 1992, a 31-foot commercial fishing vessel sank in 
Oregon Inlet--the 20th ship to go down in those waters since 1961. 
Fortunately, both crewmen were rescued, but the Coast Guard has never 
found the wreckage. At last count, 20 fisherman have lost their lives 
in Oregon Inlet in the past 30 years.
  This legislation proposes to spend no money, nor authorize new 
expenditures nor new projects. It requires the Secretary of the 
Interior to transfer two small parcels of Interior Department land to 
the Department of the Army so that the Corps of Engineers may begin 
work on a too long-delayed project authorized by the Congress in 1970, 
25 years ago.
  This legislation transfers 100 acres of land, adjacent to Oregon 
Inlet in Dare County, NC, to the Department of Army.
  Mr. President, in October 1992, then Interior Secretary Manuel Lujan 
issued conditional permits for the Corps of Engineers to begin the 
construction process. However, the Clinton administration revoked those 
permits. The bill I am offering today serves notice to the self-
proclaimed environmentalists who have stalled this project that I will 
continue to do everything I can to protect the lives and livelihoods of 
the countless commercial and recreational fisherman who have been 
denied greater economic opportunities because of the obstinacy of the 
federal government.
  A brief review of the history of this problem may be in order:
  In 1970, Congress authorized the stabilization of a 400-foot wide, 
20-foot deep channel through Oregon Inlet, and the installation of a 
system of jetties with a sand-by-pass system. The U.S. Army Corps of 
Engineers was authorized to design and build the jetties.
  Ever since 1970, however, the project has been repeatedly and 
deliberately delayed by bureaucratic roadblocks contrived by the fringe 
elements of the environmental movement. As a result, many lives and 
livelihoods have been lost. North Carolina's once thriving fishing 
industry has deteriorated, and access to the Pea Island National 
Wildlife Refuge and the Cape Hatteras National Seashore has been 
threatened.
  Throughout the past 25 years critics of this project have claimed 
more studies were needed and more time was essential to determine the 
impact the jetties will have on the Outer Banks. Pure stalling tactics, 
Mr. President, while men died and livelihoods were lost. Twenty-five 
years of studies. Is this not enough of bureaucratic stalling?
  Mr. President, the proposed Oregon Inlet project surely is the most 
over-studied project in the history of the Corps of Engineers and the 
Department of the Interior. Since 1969, the Federal Government has 
conducted 97 major studies and three full blown environmental impact 
statements but, of course, the environmentalists demand more. As for 
the cost/benefit factor, the Office of Management and Budget found--as 
recently as March 14, 1991--the project to be economically justified. 
Then, in December 1991, a joint committee of the Corps of Engineers and 
the Department of the Interior recommended to then Interior Secretary 
Lujan and then Assistant Secretary of the Army for Civil Works Page 
that the jetties be built. But the people of the Outer Banks, NC are 
still waiting.
  The time has come to get off the dime. Too many lives have been lost 
and the very existence of the Outer Banks is now in question because 
nothing has been done to manage the flow of sand from one end of the 
coastal islands to the other. If very much more time is wasted, the 
environmentalists won't have to worry about turtles or birds on Cape 
Hatteras, because a few short years hence, Oregon Inlet will have 
disappeared.
  To understand why this project has become one of the Interior 
Department's most studied and controversial and to see how out of touch 
these environmental extremists are, the October 1992, edition of the 
Smithsonian magazine is highly instructive. In an article entitled, 
``The beach boy sings a song developers don't want to hear,'' the 
magazine chronicles the adventures of a professor at a major North 
Carolina university who has made his living organizing opposition to 
all coastal engineering projects on the Outer Banks--
 Oregon Inlet in particular. The article further relates how, when 
confronted by an angry Oregon Inlet fisherman--a man who works for a 
living made more hazardous by the failure to keep a safe channel at 
Oregon Inlet open--this professor retorted that he and his radical 
friends will not be satisfied until ``all the houses are taken off the 
shore to leave it the way it was before.''

  Mr. President, this from a professor whose home occupies a large plot 
of land 200 miles west in the middle of North Carolina. Yet, the 
professor is all too ready to deprive other North Carolinians of their 
rights to live and prosper.
  That is not environmental activism. It is environmental hypocrisy.
  As the poet said, ``that does not even make good nonsense''.
  Mr. President, the issue is clear. The time for delay is over. It is 
time to put these long-neglected citizens of North Carolina first. This 
legislation should mark the beginning of the end of the jetty debate on 
the Outer Banks.
  Mr. President, I ask unanimous consent that the full text of S. 988, 
the Oregon Inlet Protection Act of 1995 be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 988

       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 ``Oregon Inlet Protection Act 
     of 1995''.

     SEC. 2. FLOOD CONTROL IMPROVEMENTS.

       (a) In General.--
       (1) Joint designation.--Not later than 60 days after the 
     date of enactment of this Act, the
      Secretary of the Interior and the Secretary of the Army, 
     acting through the Chief of Engineers of the Army Corps of 
     Engineers, shall jointly designate the tracts of land for 
     the jetty and sand transfer system for the Oregon Inlet on 
     the Coast of North Carolina, approximately 85 miles south 
     of Cape Henry and 45 miles north of Cape Hatteras (as 
     described on page 12 of the Report of the House of 
     Representatives numbered 91-1665), authorized under the 
     River and Harbor Act of 1970 and the Flood Control Act of 
     1970 (Public Law 91-611; 84 Stat. 1818), and the Secretary 
     of the Interior shall transfer administrative jurisdiction 
     over those tracts to the Secretary of the Army.
       (2) Failure to jointly designate.--If the Secretary of the 
     Interior and the Secretary of the Army fail to jointly 
     designate the tracts of land by the date that is 60 days 
     after the date of enactment of this Act, the Secretary of the 
     Army shall designate the tracts of land pursuant to a 
     description prepared by the Secretary of the Army, in 
     consultation with the Chief of Engineers, and shall notify 
     the Secretary of the Interior of the designation, who shall 
     transfer administrative jurisdiction over those tracts to the 
     Secretary of the Army.
       (b) Size.--
       (1) Limits.--Except as provided in paragraph (2), the 
     quantity of acreage in the tracts referred to in subsection 
     (a) shall not exceed--
       (A) with respect to the tract in the Cape Hatteras National 
     Seashore Recreational Area, 65 acres; and
       (B) with respect to the tract in the Pea Island National 
     Wildlife Refuge, 35 acres.
       (2) Exception.--If the Secretary of the Army and the 
     Secretary of the Interior 

[[Page S 9434]]
     jointly designate the tracts of land pursuant to subsection (a)(1), the 
     area of each tract may exceed the acreage specified for the 
     tract in paragraph (1).
       (c) Modification.--Notwithstanding subsection (b)(1), if, 
     after designating the tracts of land pursuant to subsection 
     (a)(2), the Secretary of the Army determines that any tract 
     is inadequate for the construction, operation, and 
     maintenance of a jetty and sand transfer system for the 
     Oregon Inlet, the Secretary of the Army may designate, not 
     earlier than 60 days after providing notice of a designation 
     to the Secretary of the Interior under subsection (a)(2), an 
     additional tract of land adjacent to the inadequate tract.
                                 ______

      By Mrs. KASSEBAUM (for herself, Mr. Coats, Mr. Gorton, and Mr. 
        Hatch):
  S. 989. A bill to limit funding of an Executive order that would 
prohibit Federal contractors from hiring permanent replacements for 
lawfully striking employees, and for other purposes; to the Committee 
on Labor and Human Services.


                    STRIKER REPLACEMENT LEGISLATION

  Mrs. KASSEBAUM. Mr. President, I rise today to introduce, along with 
Senators Coats, Gorton, and Hatch, the Fairness in Federal Contracting 
Act, a bill to prohibit the administration from using any appropriated 
funds to administer its striker replacement Executive order. I 
encourage my colleagues to join with me in supporting this important 
legislation.
  Mr. President, I have been involved with this issue for the last 4 
years. Quite frankly, I had hoped that this whole matter of hiring 
permanent replacements for striking workers had been put to rest. 
Apparently, I was mistaken.
  As my colleagues may know, for over 60 years, Federal labor law has 
permitted workers to strike and employers to continue to operate during 
a strike, if necessary with the assistance of permanent replacements. 
During the 102d and 103d Congresses, the Senate debated whether to 
prohibit permanent striker replacements. Ultimately, however, we did 
not amend Federal labor law.
  Members may disagree on whether we made the right decision over the 
last two sessions of Congress, but everyone will agree that the matter 
was properly before us. The Congress of the United States should decide 
important matters of national labor policy.
  That changed on March 8, 1995, when the President issued an Executive 
order permitting the administration to cancel Federal contracts with 
companies that have hired permanent striker replacements. Through the 
Executive order, the President attempted to change our Federal labor 
laws.
  Mr. President, we cannot allow our system of Government to be 
undermined. The Congress makes the laws, and the executive branch 
enforces them.
  The legislation I propose today will reassert congressional authority 
over Federal labor policy by the only means that we now have, which is 
the power of the purse. This bill will prohibit the administration from 
spending any appropriated funds to implement or enforce the striker 
replacement executive order.
  I hope that my colleagues, whatever their view of the striker 
replacement issue, will recognize the fundamental, constitutional 
principle at stake here and will support this legislation.
  I ask unanimous consent that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 989

       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 ``Fairness in Federal 
     Contracting Act of 1995''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Fundings.--Congress finds that--
       (1) it is the role of Congress, as the representative body 
     of the people, to decide the policy of the United States with 
     respect to relations between management and labor; and
       (2) the executive branch should not use the Federal 
     procurement process to initiate major changes in the labor-
     management relations of the United States.
       (b) Purpose.--The purpose of this Act is to ensure that the 
     Congress decides important labor-management relations policy 
     by prohibiting the executive branch from spending any 
     appropriated funds for the purpose of implementing an 
     executive order that would debar or in any way limit the 
     right of Federal contractors under common law to use 
     permanent replacements for lawfully striking employees.

     SEC. 3. LIMIT ON APPROPRIATED FUNDS.

       None of the funds made available under any appropriations 
     Act for fiscal year 1995 may be used to issue, implement, 
     administer, or enforce any executive order, or other rule, 
     regulation, or order, that limits, restricts, or otherwise 
     affects the ability of any existing or potential Federal 
     contractor, subcontractor, or vendor to hire permanent 
     replacements for lawfully striking employees.
                                 ______

      By Mr. DOLE (for himself and Mr. Inouye):
  S. 990. A bill to expand the availability of qualified organizations 
for frail elderly community projects (Program of All-inclusive Care for 
the Elderly) [PACE], to allow such organizations, following a trial 
period, to become eligible to be providers under applicable titles of 
the Social Security Act, and for other purposes; to the Committee on 
Finance.


                     the pace provider act of 1995

  Mr. DOLE. Mr. President, I am pleased to introduce today, along with 
the distinguished Senator from Hawaii, Senator Inouye, the PACE 
Provider Act of 1995. PACE--the Program of All-inclusive Care for the 
Elderly--is a cost-effective managed care system pioneered by On Lok 
Senior Health Services in San Francisco.
  PACE programs provide a comprehensive package of primary acute and 
long-term care services. All services, including primary and specialty 
medical care, adult day care, home care, nursing, social work services, 
physical and occupational therapies, prescription drugs, hospital and 
nursing home care are coordinated and administered by PACE program 
staff.
  Mr. President, PACE programs are cost effective in that they are 
reimbursed on a capitated basis, at rates that provide payers savings 
relative to their expenditures in the traditional Medicare, Medicaid, 
and private pay systems.
  The PACE Provider Act does not expand the number of individuals 
eligible for benefits in any way. Rather, it makes available to 
individuals already eligible for nursing home care, because of their 
poor health status, a preferable, and less costly alternative.
  Specifically, the act would increase the number of PACE programs 
authorized from 15 to 30 in 1995; to 40 in 1996; to 50 in 1997; and to 
an unlimited number in 1998.
  Mr. President, today, 11 PACE programs provide services to 2,200 
individuals in eight States--California, Colorado, Massachusetts, New 
York, Oregon, South Carolina, Texas, and Wisconsin. At least 45 other 
organizations are actively working to develop PACE in many other 
States.
  By expanding the availability of community-based long-term care 
services, On Lok's success of providing high quality care with an 
emphasis on preventive and supportive services, can be replicated 
throughout the country. PACE programs have substantially reduced 
utilization of high-cost inpatient services. In turn, dollars that 
would have been spent on hospital and nursing home services are used to 
expand the availability of community-based long-term care.
  Mr. President, analyses of costs for individuals enrolled in PACE 
show a 5- to 15-percent reduction in Medicare and Medicaid spending 
relative to a comparably frail population in the traditional Medicare 
and Medicaid systems.
  States have voluntarily joined together with community organizations 
to develop PACE programs out of their commitment to developing viable 
alternatives to institutionalization. This is particularly relevant as 
the demand and responsibility for long-term care expands.
  Mr. President, as our population ages, we must continue to place a 
high priority on long-term care services. Giving our seniors 
alternatives to nursing home care and expanding the choices available, 
is not only cost effective, but will also improve the quality of life 
for older Americans.
  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. 990

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
     
[[Page S 9435]]


     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``PACE Provider Act of 1995''.
     SEC. 2. WAIVER AUTHORITY AND PROVIDER ELIGIBILITY FOR PACE 
                   PROJECTS.

       (a) Trial Periods.--
       (1) In general.--The Secretary of Health and Human Services 
     (hereafter for purposes of this Act referred to as the 
     `Secretary') shall grant waivers of certain requirements of 
     titles XVIII and XIX of the Social Security Act (42 U.S.C. 
     1395 et seq., 42 U.S.C. 1396 et seq.), or of any other 
     applicable title of such Act, to public or nonprofit 
     community-based organizations for a trial period to enable 
     such organizations to demonstrate their capacity to provide 
     comprehensive health care services of proper quality on a 
     cost-effective capitated basis to frail elderly patients at 
     risk of institutionalization. An organization shall be 
     eligible to be a provider under such titles if the 
     organization successfully completes the trial period 
     described in the preceding sentence.
       (2) Approval of applications.--An appropriately completed 
     application for a waiver under this Act is deemed approved 
     unless the Secretary specifically disapproves it in writing--
       (A) not later than 90 days after the date the completed 
     application is filed in proper form; or
       (B) not later than 90 days after the date additional 
     information is provided to the Secretary if the Secretary 
     requests reasonable and substantial additional information 
     during the 90-day period described in subparagraph (A).
       (3) Sole authority.--The Secretary shall have sole 
     authority to approve or disapprove the eligibility of an 
     organization for a waiver under this Act and shall make such 
     determinations in a timely manner.
       (4) Consideration of existing sites.--In reviewing an 
     application for a waiver under this Act, the Secretary 
     shall--
       (A) consider whether any existing organization already 
     operates under a waiver granted under this Act in the 
     proposed service area identified in the application; and
       (B) if the Secretary determines that such an organization 
     exists, assure that the potential population of eligible 
     individuals to be served under the proposed waiver is 
     reasonably sufficient to sustain an additional organization 
     without jeopardizing the economic or service viability of any 
     other organization operating in that service area.
       (b) Terms and Conditions for Waivers.--
       (1) In general.--Except as otherwise provided by law or 
     regulation, the terms and conditions of a waiver granted 
     pursuant to this Act shall be substantially equivalent to--
       (A) the terms and conditions of the On Lok waiver (referred 
     to in section 603(c) of the Social Security Amendments of 
     1983 and extended by section 9220 of the Consolidated Omnibus 
     Budget Reconciliation Act of 1985), including permitting the 
     organization to assume the full financial risk progressively 
     over the initial 3-year period of the waiver; and
       (B) the terms and conditions provided under the Protocol 
     for the Program of All-inclusive Care for the Elderly (PACE), 
     as published by On Lok, Inc. as of April 14, 1995, and made 
     generally available.
       (2) Not conditioned on information.--
       (A) In general.--The Secretary's approval of a waiver for a 
     trial period shall not be conditioned upon an organization 
     collecting information for purposes other than operational 
     purposes, including monitoring of cost and quality of care 
     provided.
       (B) Research.--The Secretary may require information from 
     an organization operating under a waiver under this Act for 
     purposes of general research or general evaluation, but only 
     if an organization agrees to participate in such research or 
     evaluation and is appropriately compensated for any expenses 
     incurred, or where such research is undertaken entirely at 
     the expense of the Secretary.
       (3) 3-year waiver limit.--
       (A) In general.--Except as provided in subparagraph (B), a 
     waiver granted under this Act shall be for a trial period not 
     to exceed 3 years.
       (B) Exception.--The Secretary may extend a waiver granted 
     under this Act beyond the 3-year period during the 
     consideration of an application from an organization under 
     subsection (c).
       (4) Number of organizations authorized.--
       (A) Prior to july 1, 1998.--
       (i) In general.--The Secretary shall grant waivers under 
     this Act to not more than--

       (I) 30 organizations before July 1, 1996;
       (II) 40 organizations before July 1, 1997, and after July 
     1, 1996; or
       (III) 50 organizations before July 1, 1998, and after July 
     1, 1997.

       (ii) Section 9412(b) and on lok waivers included.--For 
     purposes of clause (i), the number of organizations specified 
     in such clause shall include any organization established and 
     operating under a waiver granted under section 603(c) of the 
     Social Security Amendments of 1983 or any organization 
     established and operating under a waiver granted under 
     section 9412(b) of the Omnibus Budget Reconciliation Act of 
     1986 (as such sections were in effect on the day before the 
     date of the enactment of this Act).
       (B) On and after july 1, 1998.--On and after July 1, 1998, 
     the number of organizations operating under a waiver under 
     this Act shall no longer be limited.
       (c) Eligibility To Be a Provider.--
       (1) In general.--Upon successful completion of the trial 
     period established under this Act, an organization which 
     continues to meet the requirements of this Act shall be 
     eligible to be a provider under any applicable title of the 
     Social Security Act, including under titles XVIII and XIX of 
     such Act (42 U.S.C. 1395 et seq.; 42 U.S.C. 1396 et seq.), 
     and may apply to be recognized as such in accordance with 
     regulations promulgated by the Secretary.
       (2) Requirements.--No organization may be eligible to be a 
     provider under any applicable title of the Social Security 
     Act if--
       (A) the Secretary specifically and formally finds that 
     projected reimbursement for such organization would not, 
     without any reimbursement modifications specified in the 
     Secretary's finding, result in payments below the projected 
     costs for a comparable population under the medicare program 
     under title XVIII of the Social Security Act (42 U.S.C. 1395 
     et seq.) and the medicaid program under title XIX of such Act 
     (42 U.S.C. 1396 et seq.), or under any other applicable title 
     of such Act, or that the care provided by such organization 
     is significantly deficient; and
       (B) such projected reimbursement costs or significant 
     deficiencies in quality of care are not appropriately 
     adjusted or corrected on a timely basis (as determined by the 
     Secretary) in accordance with the specific recommendations 
     for reimbursement adjustments or corrections in the quality 
     of service included in the Secretary's formal finding under 
     subparagraph (A).
       (3) Not conditioned on information.--The provisions of 
     subsection (b)(2) shall apply to an organization eligible to 
     be a provider under any applicable title of the Social 
     Security Act after successfully completing a trial period 
     under this Act.
       (d) Reimbursement.--
       (1) In general.--Notwithstanding any other provision of 
     law, and except as provided in paragraph (2), an organization 
     that is granted a waiver under this Act, or that is eligible 
     to be a provider under any applicable title of the Social 
     Security Act as a result of this Act, shall ordinarily be 
     reimbursed on a capitation basis. Any such organization may 
     provide additional services as deemed appropriate by the 
     organization for qualified participants without regard to 
     whether such services are specifically reimbursable through 
     capitation payments. To the extent such services, in terms of 
     type or frequency, are not reimbursable, no payments for such 
     services may be required of participants.
       (2) Exception.--In the case of an organization receiving an 
     initial waiver under this Act on or after October 1, 1995, 
     the Secretary (at the request of the organization) shall not 
     require the organization to provide services under title 
     XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) on 
     a capitated or other risk basis during the first or second 
     year of the waiver, in order to allow such an organization to 
     progressively assume the financial risk and to acquire 
     experience with such a payment method.
       (e) Application to On Lok Waivers.--The provisions of this 
     Act also shall apply to an organization operating under the 
     On Lok waiver described in subsection (b)(1)(A).
       (f) Application of Income and Resources Standards for 
     Certain Institutionalized Spouses.--Section 1924 of the 
     Social Security Act (42 U.S.C. 1396r-5) (relating to the 
     treatment of income and resources for certain 
     institutionalized spouses) shall apply to any individual 
     receiving services from an organization operating--
       (1) under a waiver under this Act; or
       (2) as a provider under title XIX of such Act, after a 
     determination that the organization has successfully 
     completed a trial period under this Act.
       (g) Promotion of Additional Applications.--The Secretary 
     shall institute an ongoing effort to promote the development 
     of organizations to acquire eligibility, through 
     participation in a trial period under this Act, to become 
     providers under any applicable title of the Social Security 
     Act.
       (h) Provision of Services to Additional Populations.--
     Nothing in this Act shall prevent any participating 
     organization from independently developing distinct programs 
     to provide appropriate services to frail populations other 
     than the elderly under any provision of law other than this 
     Act, except where the Secretary finds that the provision of 
     such services impairs the ability of the organization to 
     provide services required for the elderly.
       (i) Definition of Provider.--The term ``provider'' means a 
     provider of services which--
       (1) has filed an agreement with the Secretary under section 
     1866 of the Social Security Act (42 U.S.C. 1395cc);
       (2) is eligible to participate in a State plan approved 
     under title XIX of the Social Security Act (42 U.S.C. 1396 et 
     seq.); or
       (3) is eligible to receive payment for such services under 
     any other applicable title of the Social Security Act.

     SEC. 3. APPLICATION OF SPOUSAL IMPOVERISHMENT RULES.

       Section 1924(a)(5) of the Social Security Act (42 U.S.C. 
     1396r-5(a)(5)) is amended to read as follows:
       ``(5) Application to individuals receiving services from 
     certain organizations.--This section applies to individuals 
     receiving institutional or noninstitutional services from any 
     organization--
       ``(A) operating under a waiver under--
       ``(i) section 603(c) of the Social Security Amendments of 
     1983 (as in effect on the day 

[[Page S 9436]]
     before the date of the enactment of the PACE Provider Act of 1995);
       ``(ii) section 9412(b) of the Omnibus Budget Reconciliation 
     Act of 1986 (as so in effect); or
       ``(iii) the PACE Provider Act of 1995; or
       ``(B) which has become a provider under this title after a 
     determination that the organization has successfully 
     completed a trial period under the PACE Provider Act of 
     1995.''.

     SEC. 4. REPEALS; EFFECTIVE DATE AND APPLICATION TO EXISTING 
                   WAIVERS.

       (a) Repeals.--Section 603(c) of the Social Security 
     Amendments of 1983, section 9220 of the Consolidated Omnibus 
     Budget Reconciliation Act of 1985, and section 9412(b) of the 
     Omnibus Budget Reconciliation Act of 1986 are repealed.
       (b) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     provisions of subsection (a) shall be effective on the date 
     of the enactment of this Act.
       (2) Application to existing waivers.--
       (A) In general.--To the extent that any organization is 
     operating on the date of the enactment of this Act under the 
     On Lok waiver (referred to in section 603(c) of the Social 
     Security Amendments of 1983 and extended by section 9220 of 
     the Consolidated Omnibus Budget Reconciliation Act of 1985), 
     or a waiver granted under section 9412(b) of the Omnibus 
     Budget Reconciliation Act of 1986, the provisions of such 
     sections (as in effect before the date of the enactment of 
     this Act) shall continue to apply with respect to such waiver 
     until--
       (i) the organization is eligible to be a provider under 
     this Act;
       (ii) the Secretary issues and implements the regulations 
     referred to in section 2(c)(1); and
       (iii) the organization has had a reasonable opportunity to 
     apply to be recognized as a provider, such application has 
     been formally considered by the Secretary, and a final 
     determination on the application has been made.
       (B) Continuation of waiver until effective date.--The 
     waiver authority of any organization applying for recognition 
     under subparagraph (A) shall continue until--
       (i) the date that the Secretary determines that such 
     organization is eligible to be and can actually serve as a 
     provider under this Act; or
       (ii) if the Secretary determines that the organization is 
     not eligible to be a provider under this Act, the expiration 
     of the waiver.
       (C) Consideration of periods of operation prior to this 
     act.--In determining whether an organization is eligible to 
     be a provider under subparagraph (A), the Secretary--
       (i) in determining whether the organization has 
     successfully completed a trial period under this Act, shall 
     consider any period before the date of the enactment of this 
     Act during which an organization was operating under a waiver 
     described in subparagraph (A); and
       (ii) shall treat the organization as eligible to be a 
     provider under this Act for periods after the date of the 
     enactment of this Act and before such determination if the 
     organization meets the requirements of the regulations issued 
     under section 2(c)(1) during such periods.
                                 ______

      By Mr. SIMPSON (by request):
  S. 991. A bill to amend title 38, United States Code, and other 
statutes, to extend VA's authority to operate various programs, collect 
copayments associated with provision of medical benefits, and obtain 
reimbursement from insurance companies for care furnished; to the 
Committee on Veterans' Affairs.


                         veterans' legislation

 Mr. SIMPSON. Mr. President, as chairman of the Veterans' 
Affairs Committee, I have today introduced, at the request of the 
Secretary of Veterans Affairs, S. 991, a bill to amend title 38, United 
States Code, and other statutes to extend VA's authority to operate 
various programs, collect copayments associated with provision of 
medical benefits, and obtain reimbursement from insurance companies for 
care furnished. The Secretary of Veterans Affairs submitted this 
legislation to the President of the Senate by letter dated March 3, 
1995.
  My introduction of this measure is in keeping with the policy which I 
have adopted of generally introducing--so that there will be specific 
bills to which my colleagues and others may direct their attention and 
comments--all administration-proposed draft legislation referred to the 
Veterans' Affairs Committee. Thus, I reserve the right to support or 
oppose the provisions of, as well as any amendment to, this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record, together with the transmittal letter and the 
enclosed analysis of the draft legislation.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S 991

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That 
     except as otherwise expressly provided, whenever in this Act 
     an amendment is expressed in terms of an amendment to a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of title 38, 
     United States Code.
       Sec. 2. Section 1720A(e) is amended by striking ``1995'' 
     and inserting in lieu thereof ``1997''.
       Sec. 3. Section 1720C(a) is amended by striking ``1995'' 
     and inserting in lieu thereof ``1996''.
       Sec. 4. Section 1722A(c) is amended by striking ``1998'' 
     and inserting in lieu thereof ``2000''.
       Sec. 5. (a) Section 1732 is amended--
       (1) in the heading by striking ``and grants'';
       (2) by striking subsection (b) and redesignating 
     subsections (c) and (d) as (b) and (c);
       (3) in subsection (b) as redesignated by striking ``or 
     grant'' both places it appears;
       (4) in subsection (c) as redesignated by striking ``and to 
     make grants''.
       (b) The table of sections at the beginning of chapter 17 is 
     amended by revising the item relating to section 1732 to read 
     as follows:
       ``1732. Contracts to provide for the care and treatment of 
           United States veterans by the Veterans Memorial Medical 
           Center''.
       Sec. 6. Section 3735(c) is amended by striking ``1995'' and 
     inserting in lieu thereof ``1997''.
       Sec. 7. Section 7451(d)(3)(C)(iii) is amended by striking 
     ``1995'' and inserting in lieu thereof ``1999''.
       Sec. 8. Section 7618 is amended by striking ``1995'' and 
     inserting in lieu thereof ``1999''.
       Sec. 9. Section 8169 is amended by striking ``1995'' and 
     inserting in lieu thereof ``1997''.
       Sec. 10. Section 115(d) of the Veterans' Benefits and 
     Services Act of 1988, Public Law 100-322, is amended by 
     striking ``1995'' and inserting in lieu thereof ``1998''.
       Sec. 11. Section 7(a) of Public Law 102-54 is amended by 
     striking ``1995'' and inserting in lieu thereof ``1998''.
       Sec. 12. Section 8013(e) of the Omnibus Budget 
     Reconciliation Act of 1990 (Public Law 101-508) is amended by 
     striking ``1998'' and inserting in lieu thereof ``2000''.
       Sec. 13. The Secretary of Veterans Affairs may carry out 
     the major medical facility projects for the Department of 
     Veterans Affairs, and may carry out the major medical 
     facility leases for that Department, for which funds are 
     requested in the budget of the President for Fiscal Year 
     1996, and authorization is required under section 8104(a)(2) 
     of title 38, United States Code.
       Sec. 14. (a) There are authorized to be appropriated to the 
     Secretary of Veterans Affairs for Fiscal Year 1996--
       (1) $224,800,000 for the major medical facility projects 
     authorized in section 13; and
       (2) $2,790,000 of the major medical facility leases 
     authorized in section 13.
       (b) The projects authorized in section 13 may only be 
     carried out using--
       (1) funds appropriated for fiscal year 1996 pursuant to the 
     authorization of appropriations in subsection (a);
       (2) funds appropriated for Construction, Major Projects for 
     any fiscal year that remain available for obligation; and
       (3) funds appropriated for Construction, Major Projects for 
     any fiscal year for a category of activity not specific to a 
     project.
       Sec. 15. Section 1710(e)(3) is amended to read as follows:
       ``(3) Hospital and nursing home care and medical services 
     may not be provided under or by virtue of subsection 
     (a)(1)(G) of this section--
       (A) after December 31, 1996 in the case of a veteran 
     described in paragraph (1)(A);
       (B) after September 30, 1997 in the case of a veteran 
     described in paragraph (1)(C).''
       Sec. 16. Section 1712(a)(1)(D) is amended by striking out 
     ``December 31, 1995'' and inserting in lieu thereof 
     ``September 30, 1997''.
       Sec. 17. Section 1729(a)(2)(E) is amended by striking 
     ``1988'' and inserting in lieu thereof ``2000''.
                                                                    ____

                      Section-by-Section Analysis

       Section 2: Section 2 would amend 38 U.S.C. Sec. 1720A to 
     extend through December 31, 1997, VA's authority to contract 
     for care, treatment, and rehabilitative services for eligible 
     veterans suffering from alcohol or drug dependence or abuse 
     disabilities. Section 1720A specifically authorizes VA to 
     contract for the appropriate care with halfway houses, 
     therapeutic communities, psychiatric residential treatment 
     centers, and other community-based treatment facilities. 
     Before October 1, 1997, the Department will complete an 
     evaluation of this program's effectiveness to determine 
     whether it should be permanently authorized. Under existing 
     law, authority to enter into such contracts expires on 
     December 31, 1995.
       Section 3: Section 3 would amend 38 U.S.C. Sec. 1720C(a) to 
     extend through September 30, 1996, VA's authority to conduct 
     its Pilot Program for Noninstitutional Alternatives to 
     Nursing Home Care. Under existing law, authority for this 
     recently implemented pilot program will expire on September 
     30, 1995. The program allows VA to contract for provision of 
     home-based care, and other noninstitutional care for veterans 
     who are either receiving nursing home care or who are in need 
     of nursing home care. Extension of the authority will allow 
     VA to fully assess the cost-effectiveness of the program as 
     an 

[[Page S 9437]]
     inexpensive alternative to costly nursing home care.
       Section 4: Section 1722A of title 38, United States Code, 
     requires VA to charge a $2 copayment for each 30 day supply 
     of medication furnished to veterans, except service-connected 
     veterans rated at least 50 percent, veterans receiving the 
     medication for a service-connected disability, and 
     nonservice-connected veterans with low incomes. Subsection 
     (c) of section 1722A provides that the copayment requirement 
     will expire on September 30, 1998. Section 4 of this proposal 
     would extend the authority to collect the copayments through 
     September 30, 2000.
       Section 5: Section 5 would amend section 1732 of title 38, 
     United States Code, to delete all provisions pertaining to 
     authorization of appropriations for VA to make certain grants 
     to the Veterans Memorial Medical Center (VMMC) in the 
     Philippines. For a number of years, section 1732(b) 
     authorized appropriations for VA to make grants to assist the 
     Philippines in the replacement and upgrading of equipment and 
     in rehabilitating the physical plant and facilities of the 
     VMMC. Although the authorization of appropriations expired on 
     September 30, 1990, Congress has continued to appropriate 
     funds for the grants in VA's annual appropriation Act. No 
     funds for the grants are being sought in the President's 
     budget for Fiscal Year 1996. There is no reason to retain the 
     provisions in section 1732, and section 5 would therefore 
     delete them.
       Section 6: Section 6 would amend 38 U.S.C. Sec. 3735(c) to 
     extend through December 31, 1997, VA's authority to sell, 
     lease, or donate certain real property for use by homeless 
     veterans. The law permits VA to convey real property acquired 
     under the Department's home loan guaranty program to 
     nonprofit organizations, states, and local governments which 
     agree to use the property solely as a shelter primarily for 
     homeless veterans and their families. Under existing law, 
     authority for the program will expire on December 31, 1995.
       Section 7: Section 7 would amend 38 U.S.C. 
     Sec. 7451(d)(3)(C) to extend through April 1, 1999, the 
     authority of VA medical center directors to use nurse 
     anesthetist contract agency compensation data to adjust 
     locality-based nurse anesthetist pay rates where a VA 
     locality survey provides insufficient data. A medical center 
     may use this authority only if, after exhaustion of all 
     available administrative authority, it is unsuccessful in 
     conducting a VA local survey.
       Section 8: Section 8 would amend 38 U.S.C. Sec. 7618 to 
     extend through fiscal year 1999, VA's authority to award 
     scholarships under VA's Health Professional Scholarship 
     Program. The program assists VA in recruiting and retaining 
     various health professionals, most notably nurses, physical 
     therapists, occupational therapists, nurse anesthetists, and 
     respiratory therapists. VA furnishes students in the above 
     professions with scholarships during the final year or two of 
     their educational program. In return, the student agrees to 
     work for VA for a specified period of obligated service. 
     Under existing law, authority for the scholarship program 
     will expire on December 31, 1995.
       Section 9: Section 9 would amend 38 U.S.C. Sec. 8169 to 
     extend through December 31, 1997, authority for VA's 
     enhanced-use leasing program. Under the program, the 
     Secretary may enter into long-term leases of VA real property 
     and in return, obtain goods and services from the lessee with 
     little or no expenditure of appropriated funds. For example, 
     VA might lease real property to a 3rd party who constructs a 
     nursing home on the property, and agrees to provide VA with a 
     certain number of nursing home beds at a discount rate. 
     During the next two fiscal years, VA will complete a report 
     evaluating the cost effectiveness of this program. Under 
     existing law, authority for the enhanced-use leasing program 
     will expire on December 31, 1995.
       Section 10: Section 10 would amend section 115(d) of Public 
     Law 100-322 to extend through September 30, 1998, authority 
     for VA's pilot program to assist homeless chronically 
     mentally ill veterans. Under this widely recognized program, 
     VA conducts outreach among homeless veterans, and furnishes 
     residential care to those who are chronically mentally ill. 
     Care is primarily furnished on a contract basis. Under 
     existing law, authority for the program will expire September 
     30, 1995.
       Section 11: Section 11 would amend section (7)(a) of Public 
     Law 102-54 to extend through September 30, 1998, authority 
     for VA's compensated Work Therapy/Therapeutic Residence 
     Program. This program permits VA to operate transitional 
     housing for veterans who are participating in VA's 
     compensated work therapy program. It serves many veterans who 
     are homeless or at risk of becoming homeless, and who suffer 
     from substance abuse disabilities. Under existing law, 
     authority for the program will expire September 30, 1995.
       Section 12: Section 8013 of Public Law 101-508 amended 38 
     U.S.C. Sec. 1710 to expand the categories of veterans 
     required to agree to pay copayments in order to receive VA 
     health-care benefits. That law also imposed additional new 
     copayments on certain veterans amounting to $10 per day for 
     hospital care, and $5 per day for nursing home care. 
     Subsection (e) of section 8013 originally provided that the 
     changes made by the section would expire on September 30, 
     1991, but that date has subsequently been extended several 
     times. Most recently, section 12002 of Public Law 103-66 
     extended the provisions to September 30, 1998. Section 12 of 
     the draft bill would extend the provision for two years to 
     September 30, 2000.
       Section 13: Section 13 would authorize the VA to undertake 
     the major medical facility construction and leasing projects 
     requested in the President's Fiscal Year 1996 budget.
       Section 14: Section 14 would authorize appropriations of 
     $224,800,000 to carry out the major medical facility 
     construction projects authorized in section 13, and 
     $2,790,000 for the leases authorized in section 13.
       Section 15: Section 15 would extend the expiration dates 
     for the authority provided in 38 U.S.C. Sec. 1710(a)(1)(G). 
     Section 1710(a)(1)(G) requires VA to furnish needed hospital 
     and nursing home care in three unique situations described in 
     section 1710(e). First, VA must furnish such care for 
     disorders possibly associated with exposure to ionizing 
     radiation from nuclear testing, or from participation in the 
     American occupation of Hiroshima and Nagasaki at the end of 
     World War II. Second, VA must provide care to Vietnam 
     veterans for disabilities which may be associated with 
     exposure to dioxin or a toxic substance found in herbicides 
     used in Vietnam. Third, subsection (e) provides that VA shall 
     furnish hospital and nursing home care to Persian Gulf 
     veterans for disabilities possibly related to exposure to a 
     toxic substance or environmental hazard during Gulf service.
       The authority to provide care for disorders possibly 
     associated with exposure to ionizing radiation will expire on 
     June 30, 1995. Section 2 would make permanent the requirement 
     that VA furnish such care. The authority to provide care for 
     disorders associated with exposure to dioxin or a toxic 
     substance found in a herbicide will expire on June 30, 1995. 
     Section 15 would extend that authority through December 31, 
     1995. Finally, the requirement that VA provide care to 
     Persian Gulf veterans exposed to a toxic substance or 
     environmental hazard expires on September 30, 1995. Section 
     15 would extend the authority through September 30, 1997.
       Section 16: Section 16 would extend provisions of 38 U.S.C. 
     Sec. 1712 which require VA to provide priority outpatient 
     care to Persian Gulf veterans for disabilities possibly 
     related
      to exposure to a toxic substance or environmental hazard 
     during Gulf service. Under current law, the authority to 
     furnish such priority care will expire on September 30, 
     1995. Section 16 would extend the authority for two years 
     through September 30, 1997.
       Section 17: Section 1729 of title 38, United States Code, 
     authorizes VA to recover or collect from insurance companies, 
     the reasonable cost of care it furnishes to a veteran for a 
     nonservice-connected disability. VA may collect or recover to 
     the extent the veteran would be eligible to receive payment 
     for such care from the insurance company. VA may not collect 
     for care furnished for a service-connected disability. If the 
     veteran has a service-connected disability, and receives care 
     for a nonservice-connected disability, section 1729 
     authorizes VA to recover from the insurance company, but that 
     authority currently exists only through September 30, 1998. 
     Section 17 would extend that authority for two additional 
     years through September 30, 2000.
                                                                    ____



                            The Secretary of Veterans Affairs,

                                    Washington, DC, March 3, 1995.
     Hon. Al Gore, Jr.,
     President, U.S. Senate,
     Washington, DC.
       Dear Mr. President: There is transmitted herewith a draft 
     bill, ``To amend title 38, United States Code, and other 
     statutes, to extend VA's authority to operate various 
     programs, collect copayments associated with provision of 
     medical benefits, and obtain reimbursement from insurance 
     companies for care furnished.'' We request that it be 
     referred to the appropriate committee for prompt 
     consideration and enactment.
       Authority for a number of important VA health care programs 
     are time limited and will soon expire. Some of the programs 
     provide veterans with needed benefits; others provide 
     mechanisms by which the Government obtains funding to help 
     defray the cost of providing nonservice-connected health care 
     benefits. The Department has assessed the continuing need for 
     these programs and authorities in the development of the 
     President's budget for fiscal year 1996, and has determined 
     that extensions of the expiring authorities are warranted. 
     Also included in the draft bill are the Administration's 
     proposals for major medical facility construction projects 
     and leases. We urge that Congress act favorably on this 
     measure.


                         cost-saving provisions

       In 1986, Congress first authorized VA to begin collecting 
     funds from insurance companies for the cost of care furnished 
     to nonservice-connected veterans who have health insurance. 
     The law permits VA to recover to the extent the veteran would 
     otherwise be eligible to recover. In 1990, Congress extended 
     the authority to collect to
      insured service-connected veterans who receive care for 
     nonservice-connected conditions. However, that authority 
     will expire on September 30, 1998.
       Similarly in 1990, laws were enacted requiring VA to impose 
     certain new copayments on veterans to help defray the cost of 
     delivering care. VA is required to charge a $2 copayment for 
     each 30 day supply of medication furnished to veterans, 
     except service-connected veterans rated at least 50 percent 
     disabled, veterans receiving the medication for a service-
     connected disability, and nonservice-connected veterans with 
     low incomes. Additionally, the law requires veterans with 
     relatively higher incomes, who have 

[[Page S 9438]]
     no service-connected disabilities, to pay copayments amounting to $10 
     per day for hospital care, and $5 per day for nursing home 
     care. These copayment requirements will expire on September 
     30, 1998.
       The draft bill would extend the foregoing authorities 
     through Fiscal Year 2000.
       Extension of the 3rd party insurance recovery provision 
     would result in saving of $312.5 million in Fiscal Year 1999, 
     and $318.8 million in Fiscal Year 2000. Extension of the 
     copayment provisions would result in savings of $39.4 million 
     in both Fiscal Year 1999, and Fiscal Year 2000.


                     special treatment authorities

       The draft bill would also continue VA's special authority 
     to provide hospital and nursing home care in three unique 
     situations. First, it would permanently authorize treatment 
     for disorders which may be associated with exposure to 
     ionizing radiation following the detonation of the two bombs 
     in Japan, and during subsequent nuclear weapons testing. It 
     would extend through December 3, 1996, the authority to treat 
     Vietnam veterans for disabilities which may be associated 
     with exposure to Agent Orange. It would extend through 
     September 30, 1997, the authority to treat Persian Gulf 
     veterans for disorders which may be associated with exposure 
     to environmental contaminants during service in the Gulf.
       In 1981, Congress first authorized VA to provide treatment 
     for disorders possibly associated with exposure to ionizing 
     radiation from nuclear testing, or from participation in the 
     American occupation of Hiroshima and Nagasaki at the end of 
     World War II. Congress initially authorized treatment while 
     scientific studies took place to more clearly determine the 
     effects of exposure. The authority has been extended several 
     times. Over the years, scientific evidence has been amassed 
     linking various cancers to exposure to radiation. Given the 
     current state of knowledge about diseases related to exposure 
     to radiation, permanent treatment authority is warranted, as 
     provided in the draft bill.
       In 1981, Congress also first authorized VA to treat Vietnam 
     veterans for disabilities which may be associated with 
     exposure to dioxin or a toxic substance found in herbicides 
     used in Vietnam. The authority was time limited, but has been 
     extended on several occasions as scientific work has 
     continued regarding disorders which may be associated with 
     exposure. For some time, the National Academy of Sciences 
     (NAS) has been conducting a study of the matter. The NAS 
     released preliminary findings of its work in 1993, and is 
     scheduled to provide a further report to VA in late 1995. 
     That report may provide VA with information to better tie the 
     treatment authority to specific disorders that may have 
     resulted from exposure. Until that time, it is appropriate to 
     extend the blanket treatment authority. The draft bill would 
     extend the existing authority through December 31, 1996, a 
     period sufficient to allow VA officials time to receive and 
     assess the NAS report, and determine what further legislative 
     action is needed.
       In 1993, Congress authorized the Secretary to provide care 
     to Persian Gulf veterans for disabilities possibly related to 
     exposure to a toxic substance or environmental hazard during 
     Gulf service. The authority is needed to care
      for veterans while the scientific community seeks answers to 
     questions about what might be causing illnesses and 
     conditions experienced by some Persian Gulf veterans. At 
     this time research is continuing. Until further work is 
     completed, VA's authority to provide priority care to 
     effected veterans should be extended. The draft bill would 
     extend the authority for two years. The estimated cost of 
     this provision is $36 million for Fiscal Year 1996.


          noninstitutional care and programs for the homeless

       The draft bill would extend five separate programs which 
     provide noninstitutional care or facilitate care of the 
     homeless and those suffering from substance abuse 
     disabilities. Since 1980, VA has had authority to contract 
     for care, treatment and rehabilitative services for eligible 
     veterans suffering from alcohol or drug dependence 
     disabilities. The Department contracts for these services 
     with halfway houses, therapeutic communities, psychiatric 
     residential treatment centers, and other community-based 
     treatment facilities. Begun as a time limited pilot program, 
     the contract authority has been extended several times. The 
     draft bill would extend this program through December 31, 
     1997. By that date, VA will have completed a study evaluating 
     the effectiveness of this program to determine whether it 
     should be permanently authorized. The estimated costs of this 
     provision are $9.5 million in Fiscal Year 1996.
       The draft bill would also extend, through Fiscal Year 1996, 
     authority for a pilot program which allows VA to contract for 
     provision of home-based care for veterans who are receiving 
     nursing home care or are in need of nursing home care. 
     Continued authority is needed to allow VA to fully assess the 
     cost effectiveness of the program as an alternative to 
     expensive nursing home care. The Department will complete a 
     report evaluating the effectiveness of this program. The 
     estimated costs of this provision are $17.3 million in Fiscal 
     Year 1996.
       Authority for VA's two most prominent programs to assist 
     homeless veterans will expire in 1995 and must be extended. 
     Under the well known Homeless Chronically Mentally Ill 
     Veterans (HCMI) Program, VA outreach teams work with veterans 
     in the streets, and assist those who are eligible to enter 
     into a contract residential treatment program. The estimated 
     cost of this program is $28 million in Fiscal Year 1996, and 
     $88.2 million over three fiscal years. Under the Compensated 
     Work Therapy/Therapeutic Residence (CWT/TR) Program, VA 
     operates transitional housing for veterans who participate in 
     VA's compensated work therapy programs during the day. 
     Participants work in the community pursuant to contracts VA 
     has with private entities, and use their earnings to pay rent 
     for the transitional housing. The estimated operating cost of 
     this program is $6.9 million in Fiscal Year 1996, and $21.5 
     million over three fiscal years. The draft bill would extend 
     authority for both programs through September 30, 1998.
       The bill would also extend through December 31, 1997, VA's 
     authority to sell, lease, or donate certain real property for 
     use by homeless veterans. The authority permits VA to convey 
     real property acquired under the Department's home loan 
     guaranty program to nonprofit organizations, states, and 
     local governments which agree to use the property solely as 
     shelter primarily for homeless veterans and their families.


                       administrative provisions

       The draft bill would extend for two more years, VA's 
     enhanced-use leasing program. The program permits the 
     Secretary to enter into long-term leases of VA real property 
     and in return, obtain goods and services from the lessee with 
     little or no expenditure of appropriated funds. For example, 
     VA might lease real property to a 3rd party who constructs a 
     nursing home on the property, and agrees to
      provide VA with a certain number of nursing home beds at a 
     discount rate. During the next two years, the Department 
     will complete a study evaluating the cost-effectiveness of 
     this program to determine whether it should be continued 
     beyond Fiscal Year 1997. Enactment of the measure will not 
     result in new costs.
       VA also proposes extension of the Health Professional 
     Scholarship Program. The program assists in recruiting and 
     retaining various health professionals, most notably nurses, 
     physical therapists, occupational therapists, nurse 
     anesthetists, and respiratory therapists. VA furnishes 
     students in the above professions with scholarships during 
     the final year or two of their educational program. In 
     return, the student agrees to work for VA for a specified 
     period of obligated service. The estimated costs of the 
     extension are $10.4 million in Fiscal Year 1996, and $41.6 
     million for the four year extension.
       Finally, the bill would extend for four more years a sunset 
     provision in VA's authority to use nurse anesthetist contract 
     data in adjusting VA locality nurse anesthetist salaries. 
     There would be no additional costs associated with this 
     measure.


                              philippines.

       The draft bill includes provisions to repeal statutory 
     language authorizing appropriations for grants to the 
     Philippine government for upgrading equipment and making 
     improvements at the Veterans Memorial Medial Center (VMMC). 
     VA has long made grants to the Philippine-run hospital which 
     has served both Filipino veterans and those Filipinos who are 
     United States veterans. The law authorizing appropriations 
     for the grants expired in 1990. Subsequent to that, grants 
     were made because Congress continued to appropriate funds for 
     the grants. United States veteran admissions to the VMMC have 
     been suspended due to many problems and deficiencies in the 
     physical plant and equipment. Therefore, no funds are being 
     sought in the President's 1996 budget, and there is no reason 
     to retain the authorization language in the law.


                        Construction and leases

       As a final matter, the draft bill includes language that 
     would authorize those major medical construction projects and 
     leases proposed in the President's Fiscal Year 1996 budget 
     that must be specifically authorized by law. It would 
     authorize $224.8 million for six construction projects, and 
     $2.79 million for two leases. The six construction projects 
     are construction of a new medical center and nursing home in 
     Brevard County, Florida, renovation of nursing home units in 
     Lebanon, Pennsylvania, environmental improvements in Marion, 
     Illinois and Salisbury, North Carolina and replacement or 
     renovation of psychiatric beds in Marion, Indiana, and Perry 
     Point, Maryland. The two leases are for a satellite 
     outpatient clinic in Bay Pines, Florida, and a footwear 
     center in New York City.
       The estimated costs for the various programs being extended 
     have been provided to the extent they are available. 
     Extension of the programs will not result in new costs. 
     Sections 4 and 12 of the draft bill--provisions extending 
     certain copayments for veterans medical services--would 
     increase receipts. Therefore, the draft bill is subject to 
     the pay-as-you-go requirement of the Omnibus Budget 
     Reconciliation Act of 1990 (OBRA). The copayment provisions 
     would result in pay-as-you-go savings of $39.4 million in 
     each of Fiscal Years 1999-2000. In addition, sections 6 and 
     9--provisions extending certain leasing authorities--are also 
     subject to the pay-as-you-go requirement of OBRA because they 
     affect both direct spending and receipts. In total, the pay-
     as-you-go effect of the leasing provisions in zero.
       We have been advised by the Office of Management and Budget 
     that there is no objection to the submission of the draft 
     bill to 

[[Page S 9439]]
     Congress and that its enactment would be in accord with the program of 
     the President.
           Sincerely yours,
                                              Jesse Brown.
                                 ______

      By Mr. SIMPSON (by request):
  S. 992. A bill to amend title 38, United States Code, to increase, 
effective as of December 1, 1995, the rates of disability compensation 
for veterans with service-connected disabilities and the rates of 
dependency and indemnity compensation for survivors of such veterans, 
and for other purposes; to the Committee on Veterans' Affairs.


    the veterans' compensation cost-of-living adjustment act of 1995

 Mr. SIMPSON. Mr. President, as chairman of the Veterans' 
Affairs Committee, I have today introduced, at the request of the 
Secretary of Veterans Affairs, S. 992, a bill entitled the ``Veterans' 
Compensation Cost-of-Living Adjustment Act of 1995,'' to amend title 
38, United States Code, to increase, effective as of December 1, 1995, 
the rates of disability compensation for veterans with service-
connected disabilities and the rates of dependency and indemnity 
compensation for survivors of such veterans, and for other purposes. 
The Secretary of Veterans Affairs submitted this legislation to the 
President of the Senate by letter dated March 1, 1995.
  My introduction of this measure is in keeping with the policy which I 
have adopted of generally introducing--so that there will be specific 
bills to which my colleagues and others may direct their attention and 
comments--all administration-proposed draft legislation referred to the 
Veterans' Affairs Committee. Thus, I reserve the right to support or 
oppose the provisions of, as well as any amendment to, this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record, together with the transmittal letter and the 
enclosed analysis of the draft legislation.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 992

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

     SECTION 1. SHORT TITLE.

       (a) Short Title.--This Act may be cited as the ``Veterans' 
     Compensation Cost-of-Living Adjustment Act of 1995.''

     SEC. 2. INCREASE IN COMPENSATION RATES AND LIMITATIONS.

       (a) In General.--The Secretary of Veterans Affairs shall, 
     as provided in paragraph (2), increase, effective December 1, 
     1995, the rates of and limitations on Department of Veterans 
     Affairs disability compensation and dependency and indemnity 
     compensation.
       (2)(A) The Secretary shall increase each of the rates and 
     limitations in sections 1114, 1115(1), 1162, 1311, 1313, and 
     1314 of title 38, United States Code, that were increased by 
     the amendments made by the Veterans' Compensation Cost-of-
     Living Adjustment Act of 1994 (Public Law No. 103-418; 108 
     Stat. 4336). This increase shall be made in such rates and 
     limitations as in effect on November 30, 1995, and except as 
     provided in subparagraph (B) shall be by the same percentage 
     that benefit amounts payable under title II of the Social 
     Security Act (42 U.S.C. 401 et seq.) are increased effective 
     December 1, 1995, as a result of a determination under 
     section 215(I) of such Act (42 U.S.C. 415(I)).
       (B) For purposes of this subsection, as well as for 
     purposes of any cost-of-living adjustment in rates of 
     dependency and indemnity compensation enacted for fiscal 
     years 1997 through 2000, the amount of any increase in the 
     rates of dependency and indemnity compensation in effect 
     under section 1311(a)(3) of title 38, United States Code, 
     will be equal to 50 percent of the amount (rounded down, if 
     not an even dollar amount, to the next lower dollar) by which 
     the rate of dependency and indemnity compensation in effect 
     under section 1311(a)(1) increases.
       (C) In the computation of increased rates and limitations 
     pursuant to subparagraph (A), and for purposes of computing 
     any cost-of-living adjustment in such rates and limitations 
     enacted for fiscal years 1997 through 2000, any amount which 
     as so computed is not an even multiple of $1 shall be rounded 
     down to the next lower whole-dollar amount.
       (b) Special Rule.--The Secretary may adjust 
     administratively, consistent with the increases made under 
     subsection (a)(2)(A) and (C), the rates of disability 
     compensation payable to persons within the purview of section 
     10 of Public Law No. 85-857 (72 Stat. 1263) who are not in 
     receipt of compensation payable pursuant to chapter 11 of 
     title 38, United States Code.
       (c) Publication Requirement.--At the same time as the 
     matters specified in section 215(i)(2)(D) of the Social 
     Security Act (42 U.S.C. 415(i)(2)(D)) are required to be 
     published by reason of a determination made under section 
     215(I) of such Act during fiscal year 1995, the Secretary 
     shall publish in the Federal Register the rates and 
     limitations referred to in subsection (a)(2)(A) as increased 
     under this section.

     SEC. 3. EXTENSION OF LIMITATION ON PENSION FOR CERTAIN 
                   RECIPIENTS OF MEDICAID-COVERED NURSING-HOME 
                   CARE.

       Section 5503(f)(7) of title 38, United States Code, is 
     amended by striking out ``September 30, 1998'' and inserting 
     in lieu thereof ``September 30, 2000''.

     SEC. 4. EXTENSION OF ``SUNSET'' LIMITATION.

       (a) Subsection (g) of section 5317 of Title 38, United 
     States Code, is amended by striking out ``1998'' and 
     inserting ``2000'' in lieu thereof.
       (b) Subparagraph (D) of section 6103(1)(7) of the Internal 
     Revenue Code of 1986 is amended by deleting ``1998'' in the 
     penultimate sentence and inserting ``2000'' in lieu thereof.
                                                                    ____

                      Section-by-Section Analysis

       Section 1. This section contains the short title of the 
     bill, the ``Veterans' Compensation Cost-of-Living Act of 
     1995.''
       Section 2. This section authorizes a December 1, 1995 COLA 
     in disability compensation and DIC rates for surviving 
     spouses and children. Most rates would increase by the same 
     percentage as Social Security rates will effective the same 
     date. The only exception is for ``grandfathered'' DIC 
     recipients, i.e. certain surviving spouses of veterans who 
     died before 1993. These rates would increase by one-half the 
     dollar amount of the increase in the basic DIC rate for 
     survivors of veterans whose deaths occurred during or after 
     1993. All rate computations would be rounded down to even-
     dollar amounts. Provisions for rounding down the COLA 
     computations and limiting to one-half the COLA for certain 
     DIC recipients would also be made to apply to any FY 1997-
     2000 COLA's in these rates.
       Section 3. This provision extends for 2 years, until 
     September 30, 2000, the provision in law (38 U.S.C. 
     Sec. 5503(f)) which limits to $90 the payment of VA pension 
     to patients receiving Medicaid-covered nursing-home care who 
     have no dependents.
       Section 4. This provision would extend for 2 years, until 
     September 30, 2000, the authority of VA to access unearned 
     income information from the Internal Revenue Service (IRS) 
     and wage and self-employment income information from the 
     Social Security Administration (SSA) for purposes of income 
     verification in determining eligibility for VA means-tested 
     benefits such as pension and medical care.
                                                                    ____

                            The Secretary of Veterans Affairs,

                                   Washington, DC., March 1, 1995.
     Hon. Albert Gore,
     President of the Senate,
     Washington, DC.
       Dear Mr. President: There is transmitted herewith a draft 
     bill to authorize an FY 1996 cost-of-living adjustment in the 
     rates of disability compensation and dependency and indemnity 
     compensation, and for other purposes. I request that this 
     bill be referred to the appropriate committee for prompt 
     consideration and enactment.
       Section 2 of this bill would provide a cost-of-living 
     increase, effective December 1, 1995, in the rates of 
     compensation for service-disabled veterans and of dependency 
     and indemnity compensation (DIC) for the survivors of 
     veterans who die as a result of service. The rate of increase 
     would in most respects be the same as the cost-of-living 
     adjustment (COLA) that will be provided under current law to 
     veterans' pension and Social Security recipients, currently 
     estimated to be 3.1 percent.
       Compensation under title 38, United States Code, is payable 
     only for disabilities resulting from injuries or diseases 
     incurred or aggravated during active service. Payments are 
     based upon a statutory schedule of rates which vary with the 
     degree of disability assigned by the Department of Veterans 
     Affairs (VA), and additional amounts are payable to veterans 
     with spouses and children if the veteran's disability is 
     rated 30-percent or more disabling. DIC benefits are payable 
     at statutorily directed rates to the surviving spouses or 
     children of veterans who die of service-connected causes, or 
     who die of other causes if they suffered service-connected 
     total disability for prescribed periods immediately preceding 
     their deaths. This proposed cost-of-living increase will 
     protect these benefits against the eroding effects of 
     inflation.
       Two features of this COLA proposal, as outlined in the 
     President's FY 1996 budget request, would substantially 
     reduce its cost. First, we propose that the dollar increase 
     in rates of DIC payable for certain pre-1993 deaths, i.e., 
     those rates which exceed the rate payable for deaths 
     occurring during and after 1993, be only 50% of the dollar 
     increase in the rate for the later-occurring deaths. Such a 
     limitation, which was also a feature of the December 1, 1993 
     COLA, would lessen the disparities in rates payable to these 
     two categories of beneficiaries. Second, under our proposal, 
     in computing the higher compensation and DIC rates, VA would 
     be required to round down to the next lower whole dollar any 
     computations which yielded amounts not evenly divisible by 
     $1. This polity is consistent with both the 1993 and 1994 
     COLA's.
       The two limiting features would be effective for each 
     year's COLA beginning in FY 1996 through 2000. Our proposal 
     would reduce FY 1996 costs by $29 million and five-year (FY 
     1996-2000) costs by $582 million. Net costs of the FY 1996 
     COLA would be an estimated 

[[Page S 9440]]
     $340 million in FY 1996 and $1.969 billion over five years.
       Section 3 of our bill would extend, through FY 2000, the 
     $90 limitation on monthly VA pension payments that may be 
     made to beneficiaries, without dependents, who are receiving 
     Medicaid-covered nursing-home care. The current payment 
     limitation, which is due to expire at the end of FY 1998, 
     works to the advantage of these nursing-home residents 
     because it permits them to keep the $90 to apply toward 
     personal expenses rather than have it ``pass through'' the 
     homes to the Medicaid program. We estimate this two-year 
     extension would result in VA savings of $497.2 million in FY 
     1999 and a total of $1 billion during FY's 1999 and 2000.
       The final provision in our bill, Section 4, would amend 
     titles 26 and 38, United States Code, to extend certain 
     income verification provisions of the Omnibus Budget 
     Reconciliation Act of 1990.
       This section would extend he current September 30, 1998, 
     ``sunset'' limitation on VA access to Internal Revenue 
     Service (IRS) and Social Security Administration (SSA) income 
     information until September 30, 2000. Experience has shown 
     that authority to match unearned income information from IRS 
     and wage and self-employment income information from SSA with 
     VA data for purposes of income verification in determining 
     eligibility for or the proper amount of VA means-tested 
     benefits has been an effective savings measure.
       The amendment would permit VA to continue its proven 
     techniques. In the compensation and pension category of VA 
     means-tested benefits, savings are estimated to total $89.4 
     million in FY 1999 and FY 2000.
       The ability to match income information improves integrity 
     in the pension program by reducing overpayments that occur 
     when self-reported income is the only information used to 
     verify eligibility. In this regard, we note that authority to 
     match income information with IRS and SSA has had a 
     significant program-abuse deterrent effect.
       Certain medical-care eligibility is also means tested. 
     Continuation of authority to match income information in that 
     program would allow VA to more effectively identify and 
     collect copayments from higher income veterans. The combined 
     savings in FY 1999 and FY 2000 are estimated to total $88.1 
     million. Combining the VA means-tested benefits categories of 
     medical care and compensation and pension, it is estimated 
     that a total of $177.5 million could be saved in FY 1999 and 
     FY 2000 with the extension of the ``sunset'' limitation.
       The bills' provisions to round down benefits, provide a 
     half COLA for certain DIC recipients, limit pensions for 
     certain veterans in nursing homes, and the income 
     verification proposals would result in pay-as-you-go savings 
     as noted above.
       We have been advised by the Office of Management and Budget 
     that there is no objection to the transmittal of this draft 
     bill to Congress and that its enactment would be in accord 
     with the program of the President.
           Sincerely yours,

                                              Jesse Brown.
                                 ______

      By Mr. SIMPSON (by request):
  S. 993. A bill to amend title 38, United States Code, to provide for 
cost-savings in the housing loan program for veterans, to limit cost-
of-living increases for Montgomery GI bill benefits, and for other 
purposes; to the Committee on Veterans' Affairs.


    the veterans' housing loan program and montgomery gi bill cost-
                         reduction act of 1995

 Mr. SIMPSON. Mr. President, as chairman of the Veterans' 
Affairs Committee, I have today introduced, at the request of the 
Secretary of Veterans' Affairs, S. 993, a bill entitled the ``Veterans' 
Housing Loan Program and Montgomery GI Bill Cost-Reduction Act of 
1995,'' to amend title 38, United States Code, to provide for cost-
savings in the housing loan program for veterans, to limit cost-of-
living increases for Montgomery GI Bill benefits, and for other 
purposes. The Secretary of Veterans Affairs submitted this legislation 
to the President of the Senate by letter dated March 2, 1995.
  My introduction of this measure is in keeping with the policy which I 
have adopted of generally introducing--so that there will be specific 
bills to which my colleagues and others may direct their attention and 
comments--all administration-proposed draft legislation referred to the 
Veterans' Affairs Committee. Thus, I reserve the right to support or 
oppose the provisions of, as well as any amendment to, this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record, together with the transmittal letter.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 993

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled. That this 
     Act may be cited as the ``Veterans' Housing Loan Program and 
     Montgomery GI Bill Cost-Reduction Act of 1995''.

                         TITLE I--HOUSING LOANS

     SEC. 101. REPEAL OF LOAN DEBT COLLECTION RESTRICTIONS.

       (a) Subchapter III of chapter 37 of title 38, United States 
     Code, is amended by striking out section 3726 in its 
     entirety.
       (b) The table of sections for such subchapter is amended by 
     striking out:

``3726. Withholding of payments, benefits, etc.''

     and inserting in lieu thereof:

``[3726. Repealed.]''.
     SEC. 102. MANUFACTURED HOME LOAN DOWNPAYMENT AND FEE.

       (a) Section 3712(c)(5) of title 38, United States Code, is 
     amended by striking out ``95'' and inserting in lieu thereof 
     ``90''.
       (b) Section 3729(a)(2)(A) of title 38, United States Code, 
     is amended by:
       (1) inserting ``(i)'' immediately after ``(A)'';
       (2) striking out ``of this title or for any purpose 
     specified in section 3712 (other than section 
     3712(a)(1)(F))'';
       (3) inserting ``or'' immediately after ``amount;''; and
       (4) inserting at the end thereof the following new clause.
       ``(ii) in the case of a loan made for any purpose specified 
     in section 3712 (other than section 3712(a)(1)(F)) of this 
     title, the amount of the fee shall be two percent of the 
     total loan amount;''.
       (c) Section 3729(a)(2)(D)(ii) of title 38, United States 
     Code, is amended by striking out ``one'' and inserting in 
     lieu thereof ``two''.
       (d) The amendments made by this section shall apply to all 
     loans closed on or after October 1, 1995.

     SEC. 103. EXTENSION OF LOAN FEE INCREASE.

       Section 3729(a)(4) of title 38, United States Code, is 
     amended by striking out ``1998,'' and inserting in lieu 
     thereof ``2000,''.

     SEC. 104. EXTENSION OF FEE FOR MULTIPLE USE OF LOAN 
                   ENTITLEMENT.

       Section 3729(a)(5)(C) of title 38, United States Code, is 
     amended by striking out ``1998.'' and inserting in lieu 
     thereof ``2000.''.

     SEC. 105. EXTENSION OF NO-BID FORMULA.

       Section 3732(c)(11) of title 38, United States Code, is 
     amended by striking out ``1998.'' and inserting in lieu 
     thereof ``2000.''.

                      Title II--MONTGOMERY GI BILL

     SEC. 201. LIMITATION REGARDING COST-OF-LIVING ADJUSTMENTS FOR 
                   MONTGOMERY GI BILL BENEFITS.

       For Fiscal Year 1996 and each subsequent fiscal year 
     through 2000, the cost-of-living adjustments in the rates of 
     educational assistance payable under chapter 30 of title 38, 
     United States Code, and under chapter 1606 of title 10, 
     United States Code, shall be the percentage equal to 50 
     percent of the percentage by which such assistance would be 
     increased under section 3015(g) of title 38, and under 
     section 1631(b)(2) of title 10, United States Code, 
     respectively, but for this section.
                                                                    ____

                      Section-by-Section Analysis


                         Title I--Housing Loans

       Section 101. Repeal of Loan Debt Collection Restrictions: 
     Subsection (a) would repeal 38 U.S.C. Sec. 3726. Section 3726 
     currently prohibits VA, in most cases, from offsetting 
     against Federal payments, other than VA benefits, debts owed 
     to the Government resulting from the foreclosure of VA 
     guaranteed or direct housing loans. This provision would 
     permit VA to collect these debts by offsetting Federal 
     salaries and income tax refunds as permitted by other Federal 
     debt collection laws. Veterans would have the right to 
     challenge the existence and amount of the debt through VA's 
     normal administrative process, including review by the Court 
     of Veterans Appeals, prior to such offset. Veterans would 
     also be able to seek waiver of the debt if collection would 
     be against equity and good conscience under current law.
       Subsection (b) would make a conforming change to the table 
     of sections.
       Section 102. Manufactured Home Loan Downpayment and Fee: 
     Subsection (a) would amend 38 U.S.C. Sec. 3712(c)(5) to 
     require a 10 percent downpayment on VA guaranteed loans for 
     the purchase of a manufactured home. Current law requires a 5 
     percent downpayment.
       Subsection (b) would amend 38 U.S.C. Sec. 3729(a)(2)(A) to 
     increase the fee most veterans must pay to VA for obtaining a 
     VA guaranteed loans for the purchase of a manufactured home 
     to 2 percent of the loan amount. The current fee for such a 
     loan is 1 percent. This amendment would not affect the 
     exemption from the fee current law grants to certain disabled 
     veterans and surviving spouses.
       Subsection (c) would amend 38 U.S.C. Sec. 3729(a)(2)(D) to 
     increase the fee veterans whose only qualifying service was 
     in the Selected Reserve must pay to VA for obtaining a VA 
     guaranteed loan for the purchase of a manufactured home to 2 
     percent of the loan amount. The current fee for such a loan 
     is 1 percent. This amendment would not affect the exemption 
     from the fee current law grants to certain disabled veterans 
     and surviving spouses.
       Subsection (d) would make these amendments apply to all 
     manufactured home loans closed on or after October 1, 1995.
       Section 103. Extension of Loan Fee Increase: Would extend 
     for 2 years the sunset of the temporary VA loan fee increase. 
     Section 12007(a) of the Omnibus Budget Reconciliation Act of 
     1993 increased by 75 basis 

[[Page S 9441]]
     points, or 0.75 percent of the loan amount, the fee that veterans must 
     pay to VA for most VA guaranteed housing loans. This increase 
     is now set to expire on September 30, 1998. This amendment 
     would continue the increased fees for all loans closed 
     through the end of Fiscal Year 2000.
       Section 104. Extension of Fee for Multiple Use of Loan 
     Entitlement: Would extend for 2 years the sunset of the fee 
     for multiple use of VA housing loan benefits. Section 
     12007(b) of the Omnibus Budget Reconciliation Act of 1993 
     imposed a fee of 3 percent of the loan on veterans who had 
     previously obtained a VA home loan. This fee does not apply 
     to certain refinancing loans or to loans where veterans make 
     a downpayment of 5 percent of more. The multiple use fee is 
     now set to expire on September 30, 1998. This amendment would 
     continue this fee for all loans closed through the end of 
     Fiscal Year 2000.
       Section 105. Extension of No-Bid Formula: Would extend for 
     2 years the sunset of the VA ``no-bid formula'' contained in 
     38 U.S.C. Sec. 3732(c). This formula determines VA's 
     liability to a loan holder under the guaranty and whether or 
     not the holder would have the election to convey the property 
     to the VA following the foreclosure. As amended by section 
     12006 of the Omnibus Budget Reconciliation Act of 1993, the 
     no-bid formula requires VA to consider, in addition to other 
     costs, VA's loss on the resale of the property. The no-bid 
     formula applies to all loans closed before October 1, 1998, 
     regardless of the date the loan is terminated. This amendment 
     would make the formula apply to all loans closed before 
     October 1, 2000.


                      Title II--Montgomery GI Bill

       Section 201. Limitation Regarding Cost-of-Living 
     Adjustments for Montgomery GI Bill Benefits: Would limit by 
     half the annual cost-of-living adjustment (COLA) payable to 
     participants in the Montgomery GI Bill (MGIB) (chapter 30 of 
     title 38 and chapter 1606 of title 10, United States Code) 
     for Fiscal Years 1996 through 2000. The MGIB currently 
     provides that the monthly rate of basic educational 
     assistance shall be subject to an annual COLA based on the 
     Consumer Price Index. Section 12009 of the Veterans' 
     Reconciliation Act of 1993 limited the MGIB COLA for Fiscal 
     Year 1995 to 50 percent of the otherwise mandated adjustment 
     (i.e., increase). This section would continue that 50 percent 
     reduction of the annual COLA through Fiscal Year 2000.
                                                                    ____

                            The Secretary of Veterans Affairs,

                                        Washington, March 2, 1995.
     Hon. Al Gore,
     President of the Senate, Washington, DC.
       Dear Mr. President: Transmitted herewith is a draft bill 
     ``To amend title 38, United States Code, to provide for cost-
     savings in the housing loan program for veterans, to limit 
     cost-of-living increases for Montgomery GI Bill benefits, and 
     for other purposes.'' This bill would implement several cost-
     savings proposals contained in the President's budget for 
     Fiscal Year 1996. I request that this measure be referred to 
     the appropriate committee and promptly enacted.
       Title I of this draft bill, entitled the ``Veterans' 
     Housing Loan Program and Montgomery GI Bill Cost-Reduction 
     Act of 1995,'' would make amendments to the Department of 
     Veterans Affairs (VA) housing loan guaranty program to reduce 
     the costs of this program, while continuing to provide 
     eligibility for all veterans. In brief, the bill would extend 
     for 2 years; i.e., until September 30, 2000, three cost-
     savings measures enacted by the Omnibus Budget Reconciliation 
     Act of 1993 and increase the downpayment and fee required for 
     VA guaranteed manufactured housing loans. In addition, this 
     bill would repeal a restriction on the collection of debts 
     owed to the Government arising from the loan program.
       The VA home loan program has been and continues to be of 
     great importance to present and former members of the 
     Nation's Armed Forces who seek to become homeowners. We are 
     mindful that the cost to the taxpayers of operating the 
     program and paying claims on loans resulting in foreclosure 
     are significant. Since the loan guaranty program provides a 
     unique benefit for a select group of beneficiaries, we 
     believe the measures proposed are reasonable, and are 
     necessary to preserve this important benefit.
       Title II of the draft bill would continue through Fiscal 
     Year 2000 the limitation on cost-of-living adjustments under 
     the Montgomery GI Bill enacted by the Omnibus Budget 
     Reconciliation Act of 1993.
       A detailed section-by-section analysis of the draft bill is 
     enclosed. We are also enclosing an analysis of changes 
     proposed to be made in existing law by title I of the draft 
     bill (title II of the bill does not amend any current 
     provision of the United States Code).
       VA estimates that enactment of title I of this bill would 
     produce a savings of approximately $0.02 million of budget 
     authority and $89.64 million in outlays in Fiscal Year 1996, 
     and a 5-year savings of approximately $372.02 million in 
     budget authority and $461.64 million in outlays. The 5-year 
     savings includes a saving of $371.90 million in the Guaranty 
     and Indemnity Program subsidy (which includes the interactive 
     effects of the extension of the three sunsets) and $0.12 
     million in the Loan Guaranty Program subsidy.
       Enactment of title II would produce savings in Fiscal Year 
     1996 of approximately $12.55 million, and a 5-year savings of 
     $202.17 million.
       The bill's provisions affecting VA's home loan program and 
     title II's limitation on cost-of-living adjustments under the 
     Montgomery GI Bill would result in pay-as-you-go savings as 
     noted above.
       We have been advised by the Office of Management and Budget 
     that there is no objection to the transmittal of the draft 
     bill to Congress and that its enactment would be in accord 
     with the program of the President.
           Sincerely yours,

                                              Jesse Brown.
                                 ______

      By Mr. SIMPSON (by request):
  S. 994. A bill to amend title 38, United States Code, to clarify the 
eligibility of certain minors for burial in national cemeteries; to the 
Committee on Veterans' Affairs.


                         veterans' legislation

 Mr. SIMPSON. Mr. President, as chairman of the Veterans' 
Affairs Committee, I have today introduced, at the request of the 
Secretary of Veterans Affairs, S. 994, a bill to clarify the 
eligibility of certain minors for burial in national cemeteries. The 
Secretary of Veterans Affairs submitted this legislation to the 
President of the Senate by letter dated May 10, 1995.
  My introduction of this measure is in keeping with the policy which I 
have adopted of generally introducing--so that there will be specific 
bills to which my colleagues and others may direct their attention and 
comments--all administration-proposed draft legislation referred to the 
Veterans' Affairs Committee. Thus, I reserve the right to support or 
oppose the provisions of, as well as any amendment to, this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record, together with the transmittal letter.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 994

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
       Section 1. That paragraph (5) of section 2402, title 38, 
     United States Code, is amended by adding the following at the 
     end thereof: ``For purposes of this paragraph, a `minor 
     child' is a child under 21 years of age, or under 23 years of 
     age if pursuing a course of instruction at an approved 
     educational institution.''
                                                                    ____

                            The Secretary of Veterans Affairs,

                                         Washington, May 10, 1995.
     Hon. Albert Gore,
     President of the Senate, Washington, DC.
       Dear Mr. President: There is transmitted herewith a draft 
     bill to clarify the eligibility of veteran's children for 
     burial in our national cemeteries. I request that this bill 
     be referred to the appropriate committee for prompt 
     consideration and enactment.
       Among those eligible for interment in the National Cemetery 
     System under section 2402 of title 38, United States Code, 
     are the minor children of veterans and certain others 
     eligible for national cemetery burial. The term ``minor 
     child'' is not defined in the statute.
       When Congress enacted the National Cemeteries Act of 1973, 
     transferring from the Department of the Army to the 
     Department of Veterans Affairs (VA) the responsibility for 
     operating national cemeteries, it reenacted without change 
     the prior title 24 provisions regarding eligibility. The 
     Department of the Army, in exercising its authority, had 
     interpreted title 24's ``minor child'' provision as including 
     children under age 21. Because Congress indicated an intent 
     that similar eligibility rules should apply under VA's 
     management of the cemetery system, this Department's 
     regulation at 38 C.F.R. Sec. 1.620(g) governing burial 
     eligibility generally defines a minor child as being under 21 
     years of age. In keeping with the general definition of a 
     ``child'' for title 38 purposes, the age limit is 23 if the 
     individual was pursuing a course of instruction at an 
     approved educational institution.
       The present situation occasionally results in confusion 
     since the general title 38 definition of a ``child'' is in 
     one significant respect more restrictive than the regulatory 
     definition of ``minor child'' for purposes of burial 
     eligibility. Under section 101(4) of title 38, an individual 
     is generally not considered a ``child'' after reaching age 18 
     unless, as indicated above, the individual is pursuing an 
     education. We do not believe Congress intended to restrict 
     burial eligibility in this manner. Accordingly, we are 
     proposing to amend statute governing burial elibility to 
     incorporate the regulatory definition of ``minor child.''
       Because enactment of our proposal would affect only 
     technical clarification of the law as currently being 
     applied, there would be no attendant costs or savings.
       We have been advised by the Office of Management and Budget 
     that there is no objection to the submission of the draft 
     bill to Congress from the standpoint of the Administration's 
     program.
           Sincerely yours,
                                              Jesse Brown.
                                 ______

      By Mr. SIMPSON (by request):

[[Page S 9442]]

  S. 995. A bill to amend title 38, United States Code, to restrict 
payment of a clothing allowance to incarcerated veterans and to create 
a presumption of permanent and total disability for pension purposes 
for certain veterans who are patients in a nursing home; to the 
Committee on Veterans' Affairs.


               THE VETERANS' BENEFITS REFORM ACT OF 1995

 Mr. SIMPSON. Mr. President, as chairman of the Veterans' 
Affairs Committee, I have today introduced, at the request of the 
Secretary of Veterans Affairs, S. 995, a bill entitled the ``Veterans' 
Benefits Reform Act of 1995,'' to amend title 38, United States Code, 
to restrict payment of a clothing allowance to incarcerated veterans 
and to create a presumption of permanent and total disability for 
pension purposes for certain veterans who are patients in a nursing 
home. The Secretary of Veterans Affairs submitted this legislation to 
the President of the Senate by letter dated May 10, 1995.
  My introduction of this measure is in keeping with the policy which I 
have adopted of generally introducing--so that there will be specific 
bills to which my colleagues and others may direct their attention and 
comments--all administration-proposed draft legislation referred to the 
Veterans' Affairs Committee. Thus, I reserve the right to support or 
oppose the provisions of, as well as any amendment to, this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record, together with the transmittal letter.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 995

       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 ``Veterans' Benefits Reform 
     Act of 1995.''

     SEC. 2. CLOTHING ALLOWANCE FOR INCARCERATED VETERANS.

       (a) In General.--Chapter 53 of title 38, United States 
     Code, is amended by inserting after section 5313 the 
     following new section:

     ``SEC. 5313A. LIMITATION ON PAYMENT OF CLOTHING ALLOWANCE TO 
                   INCARCERATED VETERANS.

       ``In the case of a veteran incarcerated in a Federal, 
     State, or local penal institution for a period in excess of 
     sixty days and furnished clothing without charge by the 
     institution, the amount of any clothing allowance payable to 
     such veteran under section 1162 of this title shall be 
     reduced on a pro rata basis for each day on which the veteran 
     was so incarcerated during the twelve-month period preceding 
     the date on which payment of the allowance would be due under 
     regulations promulgated by the Secretary.''
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 5313 the following new item:

``5313A. Limitation on payment of clothing allowance to incarcerated 
              veterans.''
     SEC. 3. PRESUMPTION OF PERMANENT TOTAL DISABILITY FOR CERTAIN 
                   VETERANS WHO ARE NURSING-HOME PATIENTS.

       Section 1502(a) of title 38, United States Code, is amended 
     by inserting ``is 65 years of age or older and a patient in a 
     nursing home or, regardless of age,'' after ``such a 
     person''.
                                                                    ____

                                 Secretary of Veterans Affairs

                                     Washington, DC, May 10, 1995.
     Hon. Albert Gore,
     President of the Senate,
     Washington, DC.
       Dear Mr. President: There is transmitted herewith a draft 
     bill entitled the ``Veterans' Benefits Reform Act of 1995.'' 
     I request that this bill be referred to the appropriate 
     committee for prompt consideration and enactment.
       Section 2 of the draft bill would amend chapter 53 of title 
     38, United States Code, to restrict the payment of a clothing 
     allowance to incarcerated veterans who are furnished clothing 
     without charge by a penal institution. Under 38 U.S.C. 
     Sec. 1162, the Department of Veterans Affairs (VA) is 
     required to pay a clothing allowance to each veteran who, 
     because of a service-connected disability, wears or uses a 
     prosthetic or orthopedic appliance which tends to wear out or 
     tear the veteran's clothing, or who uses medication 
     prescribed for a skin condition which is due to a service-
     connected disability and which causes irreparable damage to 
     the veteran's outergarments. Although 38 U.S.C. Sec. 5313 
     limits payment of compensation to certain incarcerated 
     veterans, that statute does not restrict payment of the 
     clothing allowance to incarcerated veterans, even though they 
     generally do not pay for their institutional clothing.
       A clothing allowance for incarcerated veterans is 
     unnecessary where they receive institutional clothing at no 
     personal expense. We therefore recommend legislation to limit 
     payment of the clothing allowance to incarcerated veterans 
     furnished clothing without charge by the institution in which 
     they are incarcerated. This proposal would affect direct 
     spending; therefore, it is subject to the pay-as-you-go 
     requirement of the Omnibus Budget Reconciliation Act of 1990. 
     This provision would reduce direct spending by less than 
     $500,000 annually.
       Section 3 of the draft bill would create a presumption of 
     permanent and total disability for pension purposes for 
     veterans 65 years of age or older who are patients in a 
     nursing home. Section 8002 of the Omnibus Budget 
     Reconciliation Act of 1990, 104 Stat. 1388-342, eliminated 
     the presumption of total disability for pension purposes for 
     persons 65 years of age and older. As a result, it is 
     currently necessary for a VA rating board to evaluate 
     disability before pension can be paid to any veteran, 
     regardless of age or physical condition.
       We propose that 38 U.S.C. Sec. 1502(a) be amended to 
     provide, for pension purposes, a presumption of permanent and 
     total disability for persons 65 years of age or older who are 
     patients in a nursing home. Enactment of this amendment would 
     reduce the time necessary to process disability-pension 
     claims because, once a veteran's age and status as a nursing-
     home patient is confirmed, it would no longer be necessary to 
     develop and evaluate medical evidence regarding the veteran's 
     disability.
       Adoption of this proposal would not affect the integrity of 
     VA's pension program because an individual 65 years old who 
     is a patient of a nursing home would almost certainly meet 
     the current requirements of section 1502(a), which state that 
     a person is considered to be permanently and totally disabled 
     if he or she is unemployable as a result of disability 
     reasonably certain to continue throughout the life of the 
     disabled person or suffers from a disease or disorder which 
     justifies a determination of permanent, total disability. In 
     addition, VA could adopt procedures to reevaluate entitlement 
     to pension in the event a notice of discharge is received 
     from a veteran whose pension is based on age and confinement 
     in a nursing home.
       Enactment of this proposal would result in estimated 
     administrative cost savings of $304,000 in fiscal year 1996 
     and $1.6 million for the five-year period fiscal year 1996 
     through fiscal year 2000.
       We urge that the House promptly consider and pass these 
     legislative items.
       We have been advised by the Office of Management and Budget 
     that there is no objection to the submission of the draft 
     bill to Congress from the standpoint of the Administration's 
     program.
           Sincerely yours,
                                              Jesse Brown.
                                 ______

      By Mr. SIMPSON (by request):
  S. 996. A bill to amend title 38, United States Code, to change the 
name of Servicemen's Group Life Insurance Program to Servicemembers' 
Group Life Insurance, to merge the Retired Reservists' Servicemembers' 
Group Life Insurance Program into the Veterans' Group Life Insurance 
Program, to extend Veterans' Group Life Insurance coverage to members 
of the Ready Reserve of a uniformed service who retire with less than 
20 years of service, to permit an insured to convert a Veterans' Group 
Life Insurance policy to an individual policy of life insurance with a 
commercial insurance company at any time, and to permit an insured to 
convert a Servicemembers' Group Life Insurance policy to an individual 
policy of life insurance with a commercial company upon separation from 
service; to the Committee on Veterans' Affairs.


               THE VETERANS' INSURANCE REFORM ACT OF 1995

 Mr. SIMPSON. Mr. President, as chairman of the Veterans' 
Affairs Committee, I have today introduced, at the request of the 
Secretary of Veterans Affairs, S. 996, a bill entitled the ``Veterans' 
Insurance Reform Act of 1995,'' to amend title 38, United States Code, 
to change the name of the Servicemen's Group Life Insurance Program to 
Servicemembers' Group Life Insurance Program, to merge the Retired 
Reservists' Servicemembers' Group Life Insurance Program into the 
Veterans' Group Life Insurance Program, to extend Veterans' Group Life 
Insurance coverage to members of the Ready Reserve of a uniformed 
service who retire with less than 20 years of service, to permit an 
insured to convert a veterans' group life insurance policy to an 
individual policy of life insurance with a commercial insurance company 
at any time, and to permit an insured to convert a servicemembers' 
group life insurance to an individual policy of life insurance with a 
commercial company upon separation from service. The Secretary of 
Veterans Affairs submitted this legislation to the President of the 
Senate by letter dated May 10, 1995.
  My introduction of this measure is in keeping with the policy which I 
have adopted of generally introducing--so 

[[Page S 9443]]
that there will be specific bills to which my colleagues and others may 
direct their attention and comments--all administration-proposed draft 
legislation referred to the Veterans' Affairs Committee. Thus, I 
reserve the right to support or oppose the provisions of, as well as 
any amendment to, this legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record, together with the transmittal letter.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 996

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

     SECTION 1. SHORT TITLE; REFERENCES TO TITLE 38, UNITED STATES 
                   CODE.

       (a) Short Title.--This Act may be cited as the ``Veterans' 
     Insurance Reform Act of 1995''.
       (b) References.--Except as otherwise expressly provided, 
     whenever in this Act an amendment is expressed in terms of an 
     amendment to a section or other provision, the reference 
     shall be considered to be made to a section or other 
     provision of title 38, United States Code.

     SEC. 2. REMOVAL OF GENDER REFERENCES.

       (a) In General.--
       (1) Section 1315(f)(1)(F) is amended by striking out 
     ``servicemen's'' in the first place it appears and inserting 
     in lieu thereof ``servicemembers' ''; and
       (2) Sections 1967(a), (c), and (f), 1968(b), 1969(a)-(e), 
     1970(a), (f), and (g), 1971(b), 1973, 1974, 1977(a), (d), 
     (e), and (g), 3017(a), and 3224(1) are amended by striking 
     out ``Servicemen's'' each place it appears and inserting in 
     lieu thereof ``Servicemembers' ''.
       (b) Conforming Amendments.--(1)(A) The heading of 
     subchapter III of chapter 19 is amended to read as follows:

``Subchapter III--Servicemembers' Group Life Insurance (Formerly 
              Servicemen's Group Life Insurance)''.

       (B) The item relating to such subchapter in the table of 
     sections at the beginning of such chapter is amended to read 
     as follows:

   ``Subchapter III--Servicemembers' Group Life Insurance (Formerly 
                 Servicemen's Group Life Insurance)''.

       (2)(A) The heading of section 1974 is amended to read as 
     follows:

     ``Sec. 1974. Advisory Council on Servicemembers' Group Life 
       Insurance (formerly Servicemen's Group Life Insurance)''.

       (B) The item relating to such section in the table of 
     sections at the beginning of chapter 19 is amended to read as 
     follows:

``1974. Advisory Council on Servicemembers' Group Life Insurance 
              (formerly Servicemen's Group Life Insurance)''.
     SEC. 3. MERGER OF RETIRED RESERVIST SERVICEMEMBERS' GROUP 
                   LIFE INSURANCE AND VETERANS' GROUP LIFE 
                   INSURANCE AND EXTENSION OF VETERANS' GROUP LIFE 
                   INSURANCE TO MEMBERS OF THE READY RESERVES.

       (a) Section 1965(5) is amended--
        (1) in subparagraph (B), by inserting ``and'' at the end 
     thereof;
       (2) by striking subparagraphs (C) and (D); and
       (3) redesignating subparagraph (E) as subparagraph (C).
       (b) Section 1967 is amended--
       (1) in subsection (a)--
       (A) in paragraph (1) by inserting ``and'' at the end 
     thereof;
       (B) by striking paragraphs (3) and (4) in their entirety; 
     and
       (C) by striking ``or the first day a member of the 
     Reserves, whether or not assigned to the Retired Reserve of a 
     uniformed service, meets the qualifications of section 
     1965(5)(C) of this title, or the first day a member of the 
     Reserves meets the qualifications of section 1965(5)(D) of 
     this title,''; and
       (2) by striking subsection (d) in its entirety; and
       (3) by redesignating subsections (e) and (f) as subsections 
     (d) and (e) respectively.
       (c) Section 1968 is amended--
       (1) in subsection (a)--
       (A) by striking ``subparagraph (B)(C), or (D) of section 
     1965(5)'' and inserting ``section 1965(5)(B)'' in lieu 
     thereof;
       (B) in paragraph (4) by striking--
       (i) ``--(A)'' and inserting a comma in lieu thereof;
       (ii) subparagraphs (B) and (C) in their entirety; and
       (C) by striking paragraphs (5) and (6) in their entirety; 
     and
       (2) in subsection (b) by striking the last two sentences.
       (d) Section 1969 is amended--
       (1) in subsection (a)(2) by striking ``is assigned to the 
     Reserve (other than the Retired Reserve) and meets the 
     qualifications of section 1965(5)(C) of this title, or is 
     assigned to the Retired Reserve and meets the qualifications 
     of section 1965(5)(D) of this title,'';
       (2) by striking subsection (e) in its entirety; and
       (3) by redesignating subsections (f) and (g) as subsections 
     (e) and (f) respectively.

     SEC. 4. CONVERSION TO COMMERCIAL LIFE INSURANCE POLICY.

       (a) Section 1968(b) is amended by--
       (1) adding ``(1)'' following ``the date such insurance 
     would cease,'' in the first sentence;
       (2) redesignating clauses (1) and (2) in the first sentence 
     as (A) and (B) respectively;
       (3) striking ``title.'' at the end of the first sentence 
     and inserting in lieu thereof ``title, or, (2) at the 
     election of the member, shall be converted to an individual 
     policy of insurance as described in section 1977(e) of this 
     title upon written application for conversion made to the 
     participating company selected by the member and payment of 
     the required premiums.''; and
       (4) adding ``to Veterans' Group Life Insurance'' following 
     ``automatic conversion'' in the second sentence.
       (b) Section 1977 is amended--
       (1) in paragraph (a) by striking the last two sentences and 
     inserting in lieu thereof the following: ``If any person 
     insured under Veterans' Group Life Insurance again becomes 
     insured under Servicemembers' Group Life Insurance but dies 
     before terminating or converting such person's Veterans' 
     Group Insurance, Veterans' Group Life Insurance will be 
     payable only if such person is insured for less than $200,000 
     under Servicemembers' Group Life Insurance, and then only in 
     an amount which when added to the amount of Servicemembers' 
     Group Life Insurance payable shall not exceed $200,000.''; 
     and
       (2) in paragraph (e) by striking the third sentence and 
     inserting in lieu thereof the following: ``The Veterans' 
     Group Life Insurance policy will terminate on the day before 
     the date on which the individual policy becomes effective.''

     SEC. 5. EFFECTIVE DATE.

       The Servicemembers' Group Life Insurance of any member of 
     the Retired Reserve of a uniform service in force on the date 
     of enactment of this Act shall be converted, effective ninety 
     days after that date, to Veterans' Group Life Insurance.
                                                                    ____

                            The Secretary of Veterans Affairs,

                                     Washington, DC, May 10, 1995.
     Hon. Albert Gore,
     President of the Senate,
     Washington, DC.
       Dear Mr. President: There is transmitted herewith a draft 
     bill entitled the ``Veterans' Insurance Reform Act of 1995.'' 
     I request that this bill be referred to the appropriate 
     committee for prompt consideration and enactment.
       Section 2 of this draft bill would amend title 38, United 
     States Code, to change the name of the Servicemen's Group 
     Life Insurance program to Servicemembers' Group Life 
     Insurance to reflect gender neutrality.
       Section 3 of the bill would merge the existing Retired 
     Reservists' Servicemen's Group Life Insurance (SGLI) program 
     into the Veterans' Group Life Insurance (VGLI) program. 
     Currently, when members of the Ready Reserve retire with 20 
     years of service or are transferred to the Retired Reserve 
     under the temporary special retirement authority provided in 
     10 U.S.C. Sec. 1331a, they may continue their SGLI coverage 
     as Retired Reservists' SGLI until they receive their retired 
     pay or reach age 61, whichever comes first. Members of the 
     Ready Reserve who retire with 20 years of service also have 
     the option to convert their SGLI policy to a commercial life 
     insurance policy. We propose to discontinue the Retired 
     Reservists' SGLI program and instead place the insured 
     Retired Reservists in the VGLI program. This proposal would 
     benefit Retired Reservists by making available the lifetime 
     coverage provided under the VGLI program and would save 
     administrative expenses. However, Retired Reservists who are 
     over 44 years of age would have to pay increased premiums for 
     the lifetime VGLI coverage. For example, the monthly premium 
     for $100,000 of SGLI coverage for Retired Reservists who are 
     ages 50-54 is currently $56, and the monthly premium for 
     $100,000 of VGLI coverage for the Retired Reservists who are 
     ages 50-54 would be $65. This proposal would have no adverse 
     effect on any other insured member or on the SGLI or VGLI 
     programs and would involve no cost to the Government.
       Section 3 would also extend the benefit of VGLI lifetime 
     coverage to members of the Ready Reserve of a uniformed 
     service. When the Veterans' Insurance Act of 1974 was 
     enacted. Congress stated that members of the Ready Reserve 
     who separate with less than 20 years of service would not be 
     eligible to convert their SGLI coverage to VGLI, unless they 
     are disabled and uninsurable at the time of release. This 
     proposal would improve the overall financial performance of 
     the VGLA program by creating an additional pool of potential 
     insureds and involve no cost to the Government. In addition, 
     it would not adversely affect the SGLI or VGLI programs.
       Section 4 of the draft bill would expand the opportunities 
     of SGLI and VGLI insured to convert their coverage to 
     commercial life insurance. VGLI coverage is provided under a 
     five-year level premium term plan that is renewable every 
     five years for life. Premiums are based on the insured's age 
     at the time of issue and/or renewal and are increased 
     accordingly at the beginning of each five-year renewal 
     period. Although term policies provide low cost coverage for 
     younger insureds, term insurance becomes very expensive for 
     older insureds. Under the current law, VGLI insureds have the 
     option of converting their VGLI coverage to permanent life 
     coverage with the commercial insurance company at 

[[Page S 9444]]
     the end of each five-year term period. A permanent life insurance 
     policy, which provides coverage at a level premium throughout 
     the premium paying period of the policy, is an alternative to 
     the ever-increasing cost of term coverage. Since the cost of 
     the converted policy increases as the insured's age 
     increases, required insureds to delay conversion until the 
     end of the five-year period increases the cost. For example, 
     if a VGLI insured converts his or her policy at age 41, the 
     monthly premium for $100,000 of whole life coverage would be 
     $170. However, under the draft proposal, if the insured were 
     allowed to covert at age 36, rather than waiting until the 
     end of the five-year renewal period, the premium would be 
     $133.
       For the same reason, the draft bill would also extend this 
     conversion privilege to SGLI insureds at the time of their 
     separation from service. Currently, SGLI insureds must first 
     convert to VGLI and thereafter can convert their
      VGLI policy to a commercial permanent life policy at the end 
     of their five-year VGLI period. This increases the cost of 
     conversion to a commercial life policy as discussed above.
       Expansion of the conversion privilege would expand the life 
     insurance options of our insured veteran and lower their cost 
     of conversion to a commercial permanent life policy. We do 
     not anticipate any negative effect on the SGLI or VGLI 
     program or any cost to the Government if this proposal were 
     enacted. However, changing the VGLI conversion features may 
     change the composition of VGLI policyholders and result in a 
     change to premium rates.
       We have been advised by the Office of Management and Budget 
     that there is no objection to the submission of this draft 
     bill to Congress from the standpoint of the Administration's 
     program.
       We urge that the House promptly consider and pass this 
     legislative item.
           Sincerely yours,
                                              Jesse Brown.
                                 ______

      By Mr. D'AMATO:
  S. 997. A bill to amend the Internal Revenue Code of 1986 to make 
permanent the exclusion for amounts received under qualified group 
legal services plans; to the Committee on Finance.


    the employer-provided group legal services exclusion act of 1995

 Mr. D'AMATO. Mr. President, today I am introducing legislation 
to reinstate, and make permanent, the employee exclusion for amounts 
received under qualified employer-provided group legal services plans. 
During the 103d Congress I sponsored this legislation along with 
Senators Packwood, Riegle, and Levin. Unfortunately, it was one of the 
extenders that was allowed to expire on June 30, 1992. I believe it is 
time to reinstate this measure which will provide affordable legal 
services to individuals and their families who cannot afford a private 
lawyer, and are above the maximum income range to receive a public 
defender.
  This bill amends section 120 of the Internal Revenue Code and becomes 
effective for tax years beginning after December 31, 1994. It provides 
that an employee does not have to pay income and social security taxes 
for a qualified employer-provided group legal services plan. The annual 
premium is limited to $70 per person. In order to qualify, a plan must 
fulfill certain requirements, one of which states that benefits may not 
discriminate in favor of highly compensated employees.
  The tax exclusion of group legal services is not a new provision. In 
fact, prior to its expiration in June of 1992, employees had been 
allowed to exclude such benefits from their gross income since 1976, 
albeit through seven extensions from Congress. Making this exclusion 
permanent will be a positive and substantial step forward. Group legal 
services have provided valuable and necessary assistance to millions of 
Americans. Today's economic conditions have increased the need of low 
and moderate Americans for legal counsel. Whether its a real estate 
transaction, preparation of a will, or a simple divorce, Americans are 
frequently confronted with problems of a legal nature, which makes 
access to a lawyer indispensable. Employer-provided group legal 
services are a low cost, effective source for legal assistance.
  Mr. President, there is no reason why we should not reinstate and 
make permanent this tax exclusion. By doing so, we remove the burden 
hanging over the businesses that provide these services and the 2.5 
million working Americans who gain access to critical legal services 
through these plans.
  In the past, the Senate repeatedly affirmed its commitment to 
assuring the availability of legal services. I urge my colleagues to 
join me in this effort to reinstate employer-provided group legal 
services.
  I ask unanimous consent that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 997

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

     SECTION 1. PERMANENT EXTENSION OF EXCLUSION FOR AMOUNTS 
                   RECEIVED UNDER QUALIFIED GROUP LEGAL SERVICES 
                   PLANS.

       (a) General Rule.--Section 120 of the Internal Revenue Code 
     of 1986 (relating to amounts received under qualified group 
     legal services plans) is amended by striking subsection (e) 
     and by redesignating subsection (f) as subsection (e).
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     1994.
                                 ______

      By Mr. BAUCUS:
  S. 998. A bill to require the Secretary of Agriculture to terminate 
the Far West spearmint marketing order, and for other purposes; to the 
Committee on Agriculture, Nutrition, and Forestry.


     the far west spearmint marketing order termination act of 1995

 Mr. BAUCUS. Mr. President, today, I introduce legislation to 
end one of the most inequitable and unjust farm policies ever 
conceived. I am introducing a bill that will terminate the Far West 
spearmint marketing order.
  The Far West marketing order was issued in April 1980 and controls 
production in Washington, Oregon, Idaho, Montana, and Utah. The intent, 
at that time, was to include all areas which were currently producing 
or which had the potential to produce spearmint. While there were 
attempts to include Montanans in the process, no one was producing the 
crop at that time in Montana. Therefore, they had no participation and 
were not allotted any base for selling the crop. Without the base you 
can't sell the crop.
  In the past few years farmers in Montana looking for alternative 
crops to grow, looking for ways to rotate crops and improve their land, 
have determined that spearmint would be an ideal crop for many of them. 
Agronomists from Montana State University have shown that we have ideal 
soils and climate to grow spearmint in parts of our State. Producers in 
northwest Montana have been successful producing peppermint since about 
the time the order was created. Spearmint, due to different agronomic 
characteristics, represents a potential crop to use in rotation with 
peppermint to break tough disease cycles. But alas, we cannot plant 
spearmint because we can't sell spearmint oil. Who would want to 
produce a crop you can't sell.
  At it's inception, the order covered the majority of spearmint oil 
produced and consumed in the United States. Today, nearly 50 percent of 
the domestic spearmint production occurs outside the boundaries of the 
Far West order. In addition, we are now importing over 10 times the 
quantity that was imported at the time the Far West order was started.
  Currently, a small amount of base is allotted by lottery each year in 
the order. It amounts to between 20 and 40 acres of production each 
year being awarded to each State. This absurdly low amount has failed 
to attract Montana producers.
  Montana farmers believe a more fair policy would be to establish a 
larger base of 3,000 acres in the State. Other producers in the order 
have refused to allow the establishment of spearmint production in 
Montana. This doesn't sound fair to me. It would take decades for 
enough farmers to build base to the point where they could use 
spearmint as an alternative crop. Montana farmers need more flexibility 
to be able to grow crops that not only improve their land but also 
allow them to remain profitable. Spearmint is such a crop.
  The USDA has tried to correct this problem. However, an 
administrative solution to this crisis has evaded us. In the past, USDA 
has withdrawn three orders that dealt with citrus. USDA feared 
litigation, the appearance that the orders are not working as they 
should, and the inability to achieve citrus industry consensus on the 
issue.
  These same factors exist in the spearmint program, with the exception 
of the legal action. It would appear that the Montana requests, dating 
back 

[[Page S 9445]]
over 5 years, continue to be ignored because there no legal action has 
been taken.
  Therefore, in an effort to save Montana farmers the expense of taking 
legal action and to end this unfair marketing order I offer legislation 
to end this program.
  I have participated in numerous farm bill hearings this spring on the 
Agriculture, Nutrition, and Forestry Committee. One of the underlying 
themes in these hearings have been that farmers and ranchers want the 
farm programs to be simpler, easier to understand. Mr. President, this 
bill eliminates bureaucracy and allows farmers to grow what they choose 
to grow. I believe in America we call this concept freedom. I urge and 
welcome my colleagues to join me in this effort.
                                 ______

      By Mr. BURNS (for himself, Mr. Nickles, Mr. Hatch, Mr. Murkowski, 
        Mr. Breaux, Mr. D'Amato, Mr. Mack, Mr. Grams, and Mr. Inhofe):
  S. 1000. A bill to amend the Internal Revenue Code of 1986 to provide 
that the depreciation rules which apply for regular tax purposes shall 
also apply for alternative minimum tax purposes, to allow a portion of 
the tentative minimum tax to be offset by the minimum tax credit, and 
for other purposes; to the Committee on Finance.
             THE ALTERNATIVE MINIMUM TAX REFORM ACT OF 1995

 Mr. BURNS. Mr. President, I join my colleagues Senator 
Nickles, Senator Hatch, Senator Murkowski, Senator Breaux, Senator 
D'Amato, Senator Mack, Senator Grams, and Senator Inhofe, in offering 
this bill to reform the corporate alternative minimum tax. The intent 
of this bill is to make the alternative minimum tax system work more as 
Congress originally envisioned when it enacted this scheme back in 
1986--as a backstop so that truly profitable companies pay their fair 
share of the tax burden. Under this bill, companies will not be able to 
escape paying their fair share of taxes; but, the Government will not 
be allowed to take more than its fair share either.
  While the overall goal of the AMT is noble, its present practical 
effect is to discourage capital investment, to threaten the 
competitiveness of American businesses in the global market, and to 
increase taxes operating close to the margin at a time when they can 
least afford an increase in taxes. Because the AMT increases the cost 
of capital projects by negating the benefits of accelerated 
depreciation which was designed to foster capital formation and 
investment, reducing capital investment in one of the only ways that a 
taxpayer can extract itself from AMT status. Further, the AMT is the 
worst capital cost recovery system among the industrialized nations; 
most of the other industrialized nations allow industry to recover the 
cost of capital expenditure over much shorter periods in order to 
encourage investment in cost-effective, efficient environmentally 
updated equipment; under the current AMT depreciation rules, American 
companies are discouraged from doing so.
  Finally, the costs of compliance with AMT are oppressive to most 
small businesses. Essentially, every company in America which might 
fall into AMT status must keep separate books on depreciation for every 
piece of plant and equipment: one set of books for regular tax 
depreciation, and one for AMT depreciation. Also, all of these 
companies must take the time to conduct two tax computations to 
determine if they fall into AMT status. These tax computations are 
highly complicated and extremely time-consuming to complete. According 
to statistics compiled by the National Association of Manufacturers, 
approximately 90% of the companies who incur these compliance costs to 
determine whether they fall into AMT status, do not end up paying the 
AMT tax. They still, however, have to incur the costs of making that 
determination.
  It is clear that the AMT is not working as Congress intended. For 
many cyclical capital-intensive companies, AMT has become their primary 
system of taxation. AMT was originally intended to operate as a 
backstop to prevent truly profitable companies from paying little or no 
tax. It was never intended to provide disparate tax treatment for 
investment in the same asset. Yet this has been the practical result of 
AMT. Those industries most affected include airline, mining, 
transportation, and utility businesses, and producers of automobiles, 
chemicals, energy, and paper. And the effect of AMT on these industries 
is to increase the costs to the consumers, decrease the efficiency of 
these businesses, and decreases the businesses' ability to compete 
globally.
  Many companies have made substantial AMT payments over the past few 
years in excess of their regular
 tax liability. These payments--AMT credits--are supposed to be 
returned to these companies when their regular tax liability exceeds 
their AMT tax, so that, over time, these companies will pay no more in 
tax than is required by the regular income tax system. Many taxpayers, 
however, find that the limitation on use of AMT credits is too severe 
and, therefore, they cannot be used in a meaningful time frame. Our 
legislation addresses these concerns in the following ways:

  First, depreciation reform: This legislation would allow companies to 
use the same depreciation system for AMT purposes as they use for 
regular tax purposes. Investment in plant and equipment and other 
business use assets is essential for American businesses to increase 
productivity and modernize and maintain international competitiveness. 
The current AMT depreciation system penalizes companies for making 
these job creating investments and is contributing to inadequate 
replacement of capital assets necessary for long-term economic growth. 
Furthermore, this change eliminates the burden of keeping separate 
depreciation books for all plant and equipment purchased after 
enactment of the AMT. This would substantially reduce the compliance 
costs that these companies incur, and, in so doing, free up money for 
increasing salaries, job creation, and investment.
  Two, accumulated minimum tax credits: This legislation also allows 
taxpayers who have unused accumulated minimum tax credits for any 3 of 
the past 5 years to use a portion of those credits to offset up to 50 
percent of their current year AMT liability. When Congress originally 
imposed the AMT, it was intended to accelerate the timing of tax 
payments rather than permanently increase tax payments. Therefore, 
Congress allowed companies to receive credit in future years for the 
amount of AMT they paid in excess of their regular tax liability. For 
many companies, the limits on the use of AMT credits have effectively 
prevented them from recovering their excess payment of taxes in a 
timely manner. The Government is, in effect, under the present scheme 
enjoying an interest-free loan from these taxpayers, many of whom had 
to borrow the money to pay the AMT liability. This provision would 
bring AMT into line with its original intention and assure that low-
profit, capital intensive companies are not subject to an unintended 
permanent tax increase.
  I conclude my remarks today by emphasizing that enactment of this 
legislation would result in the AMT operating as Congress originally 
intended that it should--as a backstop system so that truly profitable 
companies would not escape taxation. It would correct the current 
problem of excessively taxing investment during recessionary periods, 
and it would ensure that investments in similar assets are taxed the 
same. Because it will result in economic growth and significant new job 
creation in high wage, high-skilled industries, I encourage my 
colleagues to support this bill.
 Mr. GRAMS. Mr. President, I am pleased to join my Senate 
colleagues in support of the Minimum Tax Reform Act of 1995. It will 
reform the alternative minimum tax, or AMT, that is imposed on 
profitable U.S. companies. By reforming the way the system works, our 
businesses will be able to create more high-wage and high-skilled jobs, 
leading to greater economic growth.
  The current AMT is a job killer. Companies are penalized for making 
needed investments in new plant equipment and technology that improve 
productivity and keep prices competitive. Not only is job creation 
impaired, but existing jobs are put in jeopardy as companies lose out 
to foreign competition. The AMT is an impediment to job creation in 
basic industries such as 

[[Page S 9446]]
manufacturing, transportation, and energy production. For small growing 
firms, the AMT is particularly burdensome since their revenue stream is 
insufficient to pay start-up and expansion costs as well as the taxes 
they will owe down the road.
  I have heard from many businesses in my home State of Minnesota who 
say the AMT is severely impeding their ability to invest in 
productivity-improving assets and development activities. As a result, 
their ability to compete on a level playing field with other domestic 
and international companies is severely frustrated.
  By removing the current AMT penalty on capital investment, businesses 
of all sizes will be freed to reinvest and expand their operations. 
This will create new jobs not only for the company making the 
investment, but for companies supplying materials and labor as well.
  Republicans and Democrats alike have sponsored bills to reform the 
AMT. With this bipartisan measure introduced today, we will enable U.S. 
companies to create more jobs with better wages for American workers, 
increase economic growth, and improve the standard of living for all 
Americans.
  Mr. NICKLES. Mr. President, I rise today to introduce the Minimum Tax 
Reform Act of 1995 with my friend from Montana, Senator Burns, and 
several other colleagues. In this legislation, we are attempting to 
correct some major Tax Code inequities related to the alternative 
minimum tax.
  The alternative minimum tax, or AMT as it is commonly known, was 
enacted for what I believe is a good reason. Prior to the Tax Reform 
Act of 1986, there was a great deal of media attention directed at 
large, profitable corporations, who for a variety of reasons, paid no 
corporate income tax. The chairman of the Senate Finance Committee, 
Senator Packwood, created the AMT in 1986 to make sure corporations who 
report economic income to their shareholders pay taxes. I basically 
agree with that premise, Mr. President. I believe it is important to 
the average citizen to know that large, profitable corporations are 
paying their fair share of this country's tax burden.
  It is this issue of fairness, or the perception of fairness, which 
has always been the driving force behind the AMT. The driving force 
most certainly is not simplification or revenue generation, because the 
AMT is neither simple nor a major revenue source. It is ironic that the 
1986 tax reform effort to simplify taxation created an entirely new Tax 
Code in the AMT, and now most corporations must plan for and comply 
with two Tax Codes instead of one. Even more ironic is the fact that in 
1992 the regular corporate tax yielded $96 billion, while the AMT 
corporate tax yielded only $2.6 billion.
  Unfortunately, Mr. President, in the real world the AMT has reached 
far beyond its original purpose. As it is currently structured, the AMT 
is a massive, complicated, parallel Tax Code which places huge burdens 
on capital intensive companies.
  The biggest problem with the AMT, Mr. President, is that it denies 
many corporations the benefit of accelerated depreciation. If you 
really want to boil it down to the bare truth, the AMT is a 20-percent 
surtax on accelerated depreciation. This is very bad news for 
businesses who must invest heavily and often in new equipment to 
compete or to maintain their technological edge.
  Essentially, the AMT requires businesses to compute their 
depreciation deduction using longer recovery periods and slower 
depreciation methods. The difference between the regular tax 
depreciation and AMT depreciation is then added to taxable income.
  For example, a chemical company invests $1,000 in equipment in 1994. 
Under the regular tax, they would follow the guidelines of the Modified 
Accelerated Cost Recovery System [MACRS] to compute a first-year 
depreciation deduction of $400--200 percent declining balance method 
over 5 years. However, under the AMT they would only be allowed a 
depreciation deduction of $158--150 percent declining balance method 
over 9.5 years.
  The difference between the two calculations of $242 would be added to 
their alternative minimum taxable income [AMTI]. After adding other 
preferences and adjustments, AMTI is taxed at 20 percent to arrive at 
the tentative alternative minimum tax [TAMT]. To the extent TAMT 
exceeds regular tax the chemical company would owe the larger amount.
  As complicated as that example may sound, Mr. President, it is, in 
fact, greatly simplified compared to real life. What the example does 
clearly show, however, is the inequity of allowing a reasonable 
business deduction under one Tax Code, and then taking it away through 
another Tax Code. Meanwhile, the businessman is caught in the 
crossfire. His cost of capital is increased and he must hire more 
employees simply to keep up with the paperwork.
  I understand that there are some people in Washington, DC, who 
believe regular tax depreciation is too generous and should be 
curtailed, but this is an extremely complicated and convoluted way to 
accomplish that goal, Mr. President.
  The Minimum Tax Reform Act we are introducing today would conform AMT 
depreciation with regular tax depreciation. This one simple reform will 
remove the disincentive to invest in job-producing assets, put capital 
intensive businesses on the same footing as their international 
competitors, and greatly simplify AMT compliance and reporting.
  The second major problem with the AMT is that for many categories of 
businesses it has become a permanent tax system, a result which was not 
anticipated in 1986. Reviewing the history of the AMT reveals that its 
creators believed businesses would pay AMT for a couple of years before 
becoming
 regular taxpayers again. For this reason, they developed a provision 
which allows businesses who have paid AMT in a prior year to credit 
those payments against their regular tax liability in future years.

  Unfortunately, many capital-intensive businesses, as well as many 
oil, gas, and coal companies, have become chronic AMT taxpayers. They 
continue to pay AMT year after year with no relief in sight, and as a 
matter of function they have accumulated billions in unused AMT 
credits. These credits are a tax on future, unearned revenues which may 
never materialize, they represent an interest-free loan to the Federal 
Government, and because of the time-value of money their value to the 
taxpayer decreases every year.
  To address this problem the Minimum Tax Reform Act includes a unique 
new provision which would allow chronic AMT taxpayers to utilize unused 
prior-year AMT credits to offset 50 percent of their tentative minimum 
tax. This provision will help chronic AMT taxpayers dig their way out 
of the AMT and allow them to recoup at least a portion of these 
accelerated tax payments in a reasonable manner and timeframe.
  Mr. President, much of the tax debate this year has focused on 
providing incentives for savings and investment. An important part of 
that process should be to first eliminate the investment disincentives 
created by the AMT.
  Will the Minimum Tax Reform Act take care of every business' AMT 
problems, Mr. President? No, it will not. This bill addresses the 
depreciation adjustment, but there are many other AMT adjustments, 
preferences, and limitations which are not dealt with. These provisions 
have little to do with preventing corporations from zeroing out, but 
they have a lot to do with profitability and competitiveness. I hope 
all these issues will be examined when the Senate Finance Committee 
considers AMT reform.
  Mr. President, the issues surrounding the alternative minimum tax are 
very complicated. I hope my colleagues will take the time to study them 
and join me in this initiative.
                                 ______

      By Mr. GLENN (for himself, Mr. Chafee, Mr. Levin, Mr. Lieberman, 
        Mr. Cohen, Mr. Pryor, Mr. Kerry, Mr. Lautenberg, Mr. Daschle, 
        Mrs. Boxer, Mr. Kohl, Mr. Simon, Mrs. Murray, Mr. Akaka, Mr. 
        Kennedy, Mr. Dodd, Mr. Dorgan, Mr. Jeffords, and Mr. Biden):
  S. 1001. A bill to reform regulatory procedures, and for other 
purposes; to the Committee on Governmental Affairs.

[[Page S 9447]]



              the regualtory procedures reform act of 1995
  Mr. GLENN. Mr. President, I believe very strongly in the need for 
regulatory reform. I do not believe that is something that is debatable 
back and forth across the center aisle, where we so often have our 
differences. I think we are united as Republicans and Democrats in the 
Senate of the United States in saying that we all feel a need for 
regulatory reform.
  Now, while I recognize the tremendous value of many rules in 
protecting public health and safety and the environment, I also 
understand that Federal agencies too often ignore the costs of 
regulation on businesses, State and local governments, and on 
individuals who feel they are put down and overregulated. They see 
regulations that do not make any sense. They resent that. And I resent 
it right along with them.
  But through sensible reform, we can restore common sense to 
Government decisions, and thereby improve the quality and reduce the 
burdens of Federal regulations.
  Mr. President, any bill on the subject of regulatory reform to be 
deserving of support, I feel, must pass a test that is twofold. No. 1, 
does the bill provide for reasonable, logical, appropriate changes to 
regulatory procedures that eliminate unnecessary burdens on businesses 
and on individuals? And, No. 2, does the bill maintain the Government's 
ability to protect the health, the safety, and the environment of the 
American people?
  Now, if the answer is yes to both questions, then the bill should be 
supported. But any bill that relieves regulatory burdens and at the 
same time threatens the protections for the American people in health 
and safety and the environment should be opposed. Now, maybe that is 
obvious. Maybe those two conditions are obvious. But I think they need 
to be stated so that we set the ground rules for the debate that will 
occur on this legislation.
  What regulatory reform should not become is a backdoor way to stop 
and reverse the progress made over the past 25 years in protecting the 
health and the safety of the American people and the environment. And I 
very firmly believe that we can retain those protections for food and 
for water and air, and those things that protect every family and 
individual in this Nation, and at the same time cut out the excessive 
regulatory requirements that have truly and unnecessarily plagued 
business and individuals.
  Regulatory reform should not mean tying up Federal agencies in 
needless paperwork and throwing the regulatory process into disarray. 
And it should not become a lawyer's dream, creating endless ways for 
individuals to sue the Government. Our goal should be to make the 
Government become more efficient and effective, and less prey to 
special interests.
  Now, Mr. President, the Committee on Governmental Affairs has been 
involved in this issue for many years. This goes clear back into the 
mid-1970's, and even before. This year, under the leadership of Senator 
Roth, the chairman of our committee, the committee crafted a 
comprehensive regulatory reform bill, S. 291. It was reported out of 
committee by a unanimous, bipartisan vote. I repeat that: A unanimous 
vote out of committee. We have eight Republican members on our 
committee. We have seven Democratic members on our committee. And this 
legislation, basically this same legislation, was reported out of 
committee by a unanimous bipartisan vote. I think it proves beyond any 
shadow of a doubt that we can have bipartisan action on this subject in 
this Congress, and in this Senate.
  Last week, Senators Dole and Johnston entered into the Record a 
``discussion draft'' for regulatory reform. And yesterday, a revised 
version of that draft was also entered into the Record. In response to 
these drafts, I have sent to the desk for introduction a bill entitled 
``The Regulatory Procedures Reform Act of 1995.'' This bill is based 
primarily on our bipartisan Governmental Affairs Committee bill.
  Now, I would like to take a moment to thank Senator Roth for his 
leadership and hard work in making the Governmental Affairs Committee 
bill a strong and fair regulatory reform bill--a strong and fair 
regulatory reform bill. Through Senator Roth's efforts, we have a solid 
foundation for real regulatory reform. I am happy to have worked with 
Senator Roth in the committee and again, our work together is largely 
reflected in this bill.
  Like the Governmental Affairs bill, the bill that I introduced today 
is bipartisan.
  I offer the legislation for the Record because I have serious 
questions about the balance in the current version of the Dole-Johnston 
draft and whether the reforms it contains are outweighed by the 
creation of new opportunities to stop environmental and health and 
safety protections for the American people.
  We are not trying to retain everything in every regulation that has 
been proposed or is even in effect now. We know that many must be 
reconsidered. But when we set the ground rules for how rules and 
regulations will be promulgated in the future, there must be balance, 
weighing the regulatory concerns against the benefits that may come 
from that regulation.
  Whether the current version of the Dole-Johnston draft and the 
reforms it contains are outweighed by its limits to environmental 
health and safety protections for the American people is what I mean 
when I mention the word balance.
  I want to provide an opportunity for our colleagues to approach this 
very important issue of regulatory reform from another angle, and I 
invite Members to compare these proposals. I would like each Senator to 
ask himself or herself which proposal or which combination of both 
proposals--a melding--which combination of these proposals better 
fulfills the twin tasks of eliminating unnecessary regulatory burdens 
on business and individuals, while at the same time providing no 
diminution of the ability of the Government to protect the health and 
safety and environment of the American people.
  I believe that the legislation I am submitting is a very strong 
reform proposal. It requires cost-benefit analysis. It requires risk 
assessment. It requires peer review. It requires congressional review 
of significant rules. And it requires review of existing rules. It 
provides much-needed reform without paralyzing agencies. Issues, such 
as judicial review and how we should handle existing rules, are 
critical to this debate. Discussions on these issues are continuing, 
and we wish to make a positive contribution to these discussions by 
providing an alternative for consideration on the floor.
  It is my hope that the principles embodied in this alternative will 
find their way into the final legislation that will be adopted by the 
Senate, because I am convinced that we will pass a bill. This bill may 
be one of the most important pieces of legislation we pass this year. I 
know it is arcane. I know it is uninteresting. I know sometimes it is 
about as interesting as watching paint dry or mud dry. These issues 
involve peculiarities of law and one-word interpretations in the 
courts, and things like that. But these are the things of which this 
legislation is made, and these are the things that are so important to 
every business and person in this country.
  So discussions on these issues are continuing, and we want to make a 
positive contribution to that. I hope that this legislation I am 
proposing can be considered in that regard.
  Let us look at some of the principles we see that I think should be 
our guideposts for regulatory reform:
  No. 1: Cost-benefit and risk assessment requirements should apply 
only to major rules, which has been set at $100 million for executive 
branch review since before President Reagan's time. I think actually 
the $100 million threshold goes back to President Ford's time.
  Our bill applies to rules that have an impact on the economy of $100 
million or more. The Dole-Johnston bill applies to rules that have an 
impact on the economy of $50 million or more.
  It is my view that a $50 million threshold overloads the capability 
of most agencies to do the job because there are probably few rules 
proposed that could not be construed to have a $50 million impact on 
the country. While agencies are being cut back and staffs are being cut 
back and dollars are being reduced in the agencies, it would seem to me 
advisable to start at the $100 million level. If we find later that the 
agencies are fully capable of 

[[Page S 9448]]
administering everything at the $100 million level, then we can add 
this requirement for the $50 million level.
  No. 2: Regulatory reform should not become a lawyer's dream opening 
up a multitude of new avenues for judicial review. By judicial review, 
we mean can a court case be filed against it, in simple terms.
  Our bill limits judicial review to determination of, first, whether a 
rule is a major rule, in other words, $100 million impact on the 
country; and second, whether a final rule is arbitrary or capricious, 
taking into consideration the whole rulemaking file developed in 
arriving at that final rule.
  Specific procedural requirements for cost-benefit analysis and risk 
assessment, of which there could be hundreds of unlimited opportunities 
to delay for no legitimate reason is not subject to judicial review in 
our bill except as part of the whole rulemaking file. The final rule, 
however, before it could be put into effect, would be subject to 
judicial review. The current Dole-Johnston bill will lead to, I feel, a 
litigation explosion that could swamp the courts and could bog down 
agencies, because it would allow review of many steps in risk 
assessment and cost-benefit analysis, in addition to the determination 
of a major rule and of agency decisions to grant or deny petitions.
  The petitions, the assessments, the cost-benefit analysis, whether it 
is a major rule or not, these all provide a myriad of places where the 
Dole-Johnston legislation would allow suits. If the court turned one 
down, they would still be free to file at the next stage, the next 
stage, and the next stage. The Dole-Johnston bill simply provides a 
means, as I see it, for almost unending delay of whatever rule is being 
considered.
  The Dole-Johnston bill further alters the APA, the Administrative 
Procedures Act, standards in ways that undermine legal precedent and 
invite lawsuits. Finally, it seeks to limit agency discretion in ways 
that will lead inevitably to challenges in court.
  No. 3: Regulatory reform legislation should focus on procedures and 
not be a vehicle for special interests seeking to alter specific laws 
dealing with health, safety, the environment or other matters. Our bill 
focuses on the fundamentals of regulatory reform and contains no 
special-interest provisions.
  The current Dole-Johnston bill provides relief to special business 
interests that more properly should be considered in the context of 
something other than regulatory reform legislation. And I am referring 
to the Dole-Johnston language that has the effect of restricting, for 
instance, the Toxics Release Inventory, It also limits the Delaney 
clause and it delays and increases costs of Superfund cleanups.
  I will not go into all sorts of details on these things now, but the 
Toxics Release Inventory provides that plants in communities have to 
put together information so people will know what it is they are 
breathing or what is happening to the water in their communities.
  To take that up in regulatory reform and alter the requirements of 
that legislation without the appropriate committees or without everyone 
being heard on this seems to me not the right way to go.
  With regard to the limitation on the Delaney clause, I happen to 
think the Delaney clause does need some modification, but this would 
change it dramatically. I am sure most people would agree this is not 
something we want to go into lightly. Again, regulatory reform is not 
the place to take up a specific program reform.
  It would also fundamentally affect Superfund cleanups, causing 
significant delays and increasing costs.
  No. 4: Regulatory reform should make Federal agencies more efficient 
and more effective and not tie up agency resources with additional 
bureaucratic processes.
  Our bill requires cost-benefit analysis and risk assessment for major 
rules and requires agencies to review all their major rules by a time 
certain,
 not just prospectively, but also existing rules that have a $100 
million impact or more. So we do go back and try and correct some of 
the problems that are so vexing to business people in particular.

  Now, the current Dole-Johnston bill covers a much broader scope of 
rules and has several convoluted petition processes for what are called 
``interested parties,'' for example, to amend or rescind a major rule 
and to review policies or guidance. These petitions are judicially 
reviewable and must be granted or denied by an agency within a 
specified timeframe.
  Now, I think the petition will eat up agency resources and allow the 
petitioners, not the agencies, to set agency priorities. What we want 
to do is not swamp agencies, we want to make changes that are workable, 
ones that are of benefit to everyone in the whole country.
  No. 5: Regulatory reform legislation should improve analysis but not 
override existing statutes, including environmental, safety, and health 
laws. This is what has been referred to as the ``supermandate''.
  We have spent a generation or more putting into effect environmental 
laws, safety laws, and health laws for the benefit of the people of 
this country. I am not standing here to defend all of those laws. Some 
may have gone too far. Some rules and regulations written pursuant to 
those statutes, I am the first to say, have gone too far. But we also 
have made major improvements in our environment, in clean air and clean 
water, and health standards for our people. And to say that we will 
just pass a bill that says all that previous legislation--no matter how 
effective and how important--is automatically wiped off the book, I 
think, goes too far.
  Our bill does not override existing statutes. It requires agencies, 
however, to explain whether benefits justify costs and whether the rule 
will be more cost-effective than alternatives. It does not allow cost-
benefit determinations to override existing statutory requirements. It 
leaves intact environmental, safety, and health laws. But we do require 
all major current rules to be reviewed and set up a process for those 
that are considered inappropriate now to be reviewed.
  Now, the current Dole-Johnston bill has three separate decisional 
criteria that control agency decisions, regardless of the underlying 
statutes. These overriding provisions are created for major rule cost-
benefit determinations, for environmental cleanups, and for Regulatory 
Flexibility analysis. The Reg Flex override actually conflicts with the 
cost-benefit decisional criteria. The cost-benefit test limits agencies 
to the cheapest rule, not the most cost effective.
  No. 6: There should be sunshine in the regulatory review process. Our 
bill ensures that agencies and OMB publicly disclose the status of 
regulatory review, of related decisions, documents, and communications 
from persons outside of the Government. The current Dole-Johnston bill 
has no sunshine provision to protect against regulatory review delay, 
unsubstantiated review decisions, or undisclosed special interest 
lobbying and political deals.
  Now, we have gone through a period in the past decade or so where we 
had people doing things more in secret than in public in the executive 
branch of Government. We have come to regret that. Some of it we were 
able to stop. Some only stopped after this administration came in and 
took strong action against secrecy. I do not need to open up some of 
those old wounds at this point. But there is still a need to cut out 
the secrecy that can happen when rules are put through OMB and the 
Office of Information and Regulatory Affairs. Again, in the past, we 
have had some real problems with this. That is the reason why we feel 
so strongly that openness in Government--sunshine in the regulatory 
review process--should be included as any part of regulatory reform 
legislation.
  Mr. President, the text of this alternative bill is almost identical 
to S. 291, the regulatory reform act of 1995, which, again, was 
reported unanimously from the Senate Committee on Governmental Affairs.
  This discussion bill--I put this forward for discussion--is like S. 
291 in the following ways: No. 1: It covers all major rules with the 
cost impact of $100 million or more. I will explain a slight change we 
made to what was in S. 291, which I will address a bit later.
  No. 2: It requires cost-benefit analysis for all major rules.
  No. 3: It requires risk assessment for all major rules related to 
environment, health, or safety. There is also a small technical change 
to the risk provisions 

[[Page S 9449]]
in S. 291. I will address that later as one of three changes in the 
legislation.
  No. 4: It requires peer review of cost-benefit analysis and risk 
assessments.
  No. 5: It limits judicial review to the determination of major rules 
and to the final rulemaking file.
  No. 6: It requires agencies to review existing rules every 10 years 
with a Presidential extension of up to five years. This has changed 
slightly from the original S. 291, also. I will address that later as 
one of the three changes from the original bill.
  No. 7: It provides judicial review of Regulatory Flexibility Act 
decisions, allowing 1-year for small entities to petition for a review 
of agency compliance with the Reg Flex Act.
  No. 8: It requires public disclosure of regulatory analysis and 
review documents to ensure sunshine in the regulatory review process.
  No. 9: It provides legislative veto of major rules to provide an 
expedited procedure for Congress to review rules. In other words, every 
major rule will come back to Congress for 45 days for review by the 
Congress before it becomes effective. We passed a similar measure in 
the Senate 100-0 3 months ago.
  No. 10: It requires risk-based priority setting for the most serious 
risks to health and safety and the environment.
  No. 11: It requires regulatory accounting every 2 years on the 
cumulative costs and benefits of agency regulations. In other words, 
agencies have to report back to Congress at least every 2 years agency 
on how this legislation is working, and what the costs and benefits are 
of the rules and regulations.
  So, in other words, we put this in to so Congress can better monitor 
the cumulative burden and benefits of regulations. We no longer can 
just pass laws and forget the rules that follow. We are required to 
monitor these rules, because we will be advised at least every 2 years 
on the cumulative costs and benefits of agency regulations.
  I mentioned three changes. The bill I am introducing differs from S. 
291 on basically three points.
  No. 1: It does not sunset rules that fail to be reviewed. Rather, it 
establishes an action-enforcing mechanism that uses the rulemaking 
process. It is not an arbitrary reversal of a major rule without public 
comment and review, which could occur if we ran out to a certain time 
period without review. The rule would have been declared no longer in 
effect because it had not been reviewed in that 10-year period. Instead 
of this automatic sunset, we have an action-enforcing mechanism that 
uses the rulemaking process.
  No. 2: We do not include any narrative definitions for ``major 
rule.'' For example, one that would be a major rule because it has an 
adverse effect on wages, or something like that,
 or similar narrative definition. So we leave those out.

  No. 3: It incorporates some technical changes to risk assessment, to 
track more closely recommendations made by the National Academy of 
Sciences, and to cover specific programs and agencies.
  Now, those are the only three changes we made from the legislation, 
S. 291, that was voted out of the Governmental Affairs Committee 
unanimously--Republicans and Democrats.
  This alternative discussion bill, I repeat, discussion bill, 
presents, I believe, a comprehensive approach and a very tough, but 
workable requirement for regulatory reform.
  Mr. President, I urge my colleagues to examine this draft closely. We 
have a week and a half while we are out of session. I want it to be 
published in the Record so it can be available for staff to consider, 
and consider parts of it they think can supplement the proposal that is 
before the Senate now on the floor, or use this as a substitute and 
perfect this with amendments that people might wish to put forward.
  It is my intent that further negotiations on regulatory reform go 
forward. It is my hope that ways will be found to incorporate the 
principles that I have enunciated this evening that ultimately could be 
supported by everyone.
  I believe an appropriate melding of language of this bill with that 
of the Dole-Johnston draft could be the basis for a widely supported 
bill that produces tough and workable--tough and workable--regulatory 
reform, at the same time keeps intact the ability to protect the 
health, safety, and environment of the American people.
  That kind of balanced bill will truly be in the public interest.
  Mr. DASCHLE. Mr. President, let me commend the distinguished Senator 
from Ohio for his excellent statement and for the leadership he has 
demonstrated over the last several months on this important issue. No 
one has worked more tirelessly and more effectively to accomplish what 
the legislation he has introduced today represents.
  The legislation now enjoys bipartisan support, and a growing number 
of people have examined it and found it much to their liking. That is 
no accident. It has happened as a result of the tireless efforts of the 
distinguished Senator from Ohio and his staff.
  I look forward to working with him in the coming weeks to see if we 
can bring this effort to a successful resolution.
  As the Senator from Ohio said, this is not the end. It is just the 
beginning. We hope we can work in a bipartisan fashion to take into 
account all the good work that has been done by others, as well.
  The senior Senator from Louisiana, the senior Senator from Utah, and 
many other Senators have worked a good deal to bring the Senate to this 
point.
  I leave tonight with the expectation that, indeed, we can resolve the 
remaining differences and work through many of the difficulties that 
remain. I certainly hope that is the case.
  Indeed, I think it is true that Democrats and Republicans agree on 
the need for regulatory reform. But we also agree on the need for 
public safety. We also recognize that it is critical the American 
people retain confidence in their health and safety and the regulations 
and laws that promote and protect that health and safety.
  The Senator from Ohio has provided us an excellent way to begin the 
debate when we get back, with the expectation that, indeed, this is an 
issue on which there can be accommodation and compromise.
  Again, let me commend him for his excellent efforts and join with 
many others in cosponsoring this piece of legislation this afternoon.
                                 ______

      By Mr. CHAFEE (for himself, Mr. Graham, Mr. Pryor, Mr. Johnston, 
        and Mr. Simon):
  S. 1002. A bill to amend the Internal Revenue Code of 1986 to provide 
a credit against income tax to individuals who rehabilitate historic 
homes or who are the first purchasers of rehabilitated historic homes 
for use as a principal residence; to the Committee on Finance.


               the historic homeownership assistance act

 Mr. CHAFEE. Mr. President, all across America, in the small 
towns and great cities of this country, our heritage as a nation--the 
physical evidence of our past--is at risk. In virtually every corner of 
this land, homes in which grandparents and parents grew up, communities 
and neighborhoods that nurtured vibrant families, schools that were 
good places to learn and churches and synagogues that were filled on 
days of prayer, have suffered the ravages of abandonment and decay.
  In the decade from 1980 to 1990, Chicago lost 41,000 housing units 
through abandonment, Philadelphia 10,000 and St. Louis 7,000. The story 
in our older small communities has been the same, and the trend 
continues. It is important to understand that it is not just buildings 
that we are losing. It is the sense of our past, the vitality of our 
communities and the shared values of those precious places.
  We need not stand hopelessly by as passive witnesses to the loss of 
these irreplaceable historic resources. We can act, and to that end I 
am introducing today the Historic Homeownership Assistance Act along 
with my distinguished colleagues Senator Graham of Florida, Senator 
Pryor, Senator Johnston and Senator Simon.
  This legislation is patterned after the existing historic 
rehabilitation investment tax credit. That legislation has been 
enormously successful in stimulating private investment in the 
rehabilitation of buildings of historic importance all across the 
country. Through its use we have been able to save and re-use a rich 
and diverse array of historic buildings: landmarks such 

[[Page S 9450]]
as Union Station right here in Washington, DC, the Fox River Mills, a 
mixed use project that was once a derelict paper mill in Appleton, WI 
and the Rosa True School, an eight-unit low/moderate income rental 
project in an historic school building in Portland, ME.
  In my own State of Rhode Island, Federal tax incentives stimulated 
the rehabilitation and commercial reuse of more than 266 historic 
properties. The properties saved include the Hotel Manisses on Block 
Island, the former Valley Falls Mills complex in Central Falls, and the 
Honan Block in Woonsocket.
  The legislation that I am introducing builds on the familiar 
structure of the existing tax credit, but with a different focus and a 
more modest scope and cost. It is designed to empower the one major 
constituency that has been barred from using the existing credit--
homeowners. Only those persons who rehabilitate or purchase a newly 
rehabilitated home and occupy it as their principal residence would be 
entitled to the credit that this legislation creates. There would be no 
passive losses, no tax shelters and no syndications under this bill.
  Like the existing investment credit, the bill would provide a credit 
to homeowners equal to 20 percent of the qualified rehabilitation 
expenditures made on an eligible building that is used as a principal 
residence by the owner. Eligible buildings would be those that are 
listed on the National Register of Historic Places, are contributing 
buildings on National Register Historic Districts or in nationally 
certified State or local historic districts, or are individually listed 
on a nationally certified State or local register. As is the case with 
the existing credit, the rehabilitation work would have to be performed 
in compliance with the Secretary of the Interior's standards for 
rehabilitation, although the bill clarifies that such standards should 
be interpreted in a manner that takes into consideration economic and 
technical feasibility.
  The bill also makes provision for lower-income homebuyers who may not 
have sufficient Federal income tax liability to use a tax credit. It 
would permit such persons to receive a historic rehabilitation mortgage 
credit certificate which they can use with their bank to obtain a lower 
interest rate on their mortgage.
  The credit would be available for condominiums and co-ops, as well as 
single-family buildings. If a building were to be rehabilitated by a 
developer for sale to a homeowner, the credit would pass through to the 
homeowner. Since one purpose of the bill is to provide incentives for 
middle-income and more affluent families to return to older towns and 
cities, the bill does not discriminate among taxpayers on the basis of 
income. However, it does impose a cap of $50,000 on the amount of 
credit which may be taken for a principal residence.
  The Historic Homeownership Assistance Act will make ownership of a 
rehabilitated older home more affordable for homebuyers of modest 
incomes. It will encourage more affluent families to claim a stake in 
older towns and neighborhoods. It affords fiscally stressed cities and 
towns a way to put abandoned buildings back on the tax rolls, while 
strengthening their income and sales tax bases. It offers developers, 
realtors and homebuilders a new realm of economic opportunity in 
revitalizing decaying buildings.
  In addition to preserving our heritage, extending this credit will 
provide an important supplemental benefit--it will boost the economy. 
Every dollar of Federal investment in historic rehabilitation leverages 
many more from the private sector. Rhode Island, for example, has used 
$24 million in public funds over the years to generate $216 million in 
private investment. This investment has created more than 10,000 jobs 
and $187 million in wages.
  Mr. President, this bill is no panacea. Although its goals are great, 
its reach will be modest. But it can make a difference, and an 
important difference, in communities large and small all across this 
Nation. The American dream of owning one's own home is a powerful 
force. This bill can help it come true for those who are prepared to 
make a personal commitment to join in the rescue of our priceless 
heritage. By their actions they can help to revitalize decaying 
resources of historic importance, create jobs and stimulate economic 
development, and restore to our older towns and cities a lost sense of 
purpose and community.
  Mr. President, I ask unanimous consent that the text of the bill and 
an explanation of its provisions be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                S. 1002

       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 ``Historic Homeownership 
     Assistance Act''.

     SEC. 2. HISTORIC HOMEOWNERSHIP REHABILITATION CREDIT.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     nonrefundable personal credits) is amended by inserting after 
     section 22 the following new section:

     ``SEC. 23. HISTORIC HOMEOWNERSHIP REHABILITATION CREDIT.

       ``(a) General Rule.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     chapter for the taxable year an amount equal to 20 percent of 
     the qualified rehabilitation expenditures made by the 
     taxpayer with respect to a qualified historic home.
       ``(b) Dollar Limitation.--
       ``(1) In general.--The credit allowed by subsection (a) 
     with respect to any residence of a taxpayer shall not exceed 
     $50,000 ($25,000 in the case of a married individual filing a 
     separate return).
       ``(2) Carryforward of credit unused by reason of limitation 
     based on tax liability.--If the credit allowable under 
     subsection (a) for any taxable year exceeds the limitation 
     imposed by section 26(a) for such taxable year reduced by the 
     sum of the credits allowable under this subpart (other than 
     this section), such excess shall be carried to the succeeding 
     taxable year and added to the credit allowable under 
     subsection (a) for such succeeding taxable year.
       ``(c) Qualified Rehabilitation Expenditure.--For purposes 
     of this section:
       ``(1) In general.--The term `qualified rehabilitation 
     expenditure' means any amount properly chargeable to capital 
     account--
       ``(A) in connection with the certified rehabilitation of a 
     qualified historic home, and
       ``(B) for property for which depreciation would be 
     allowable under section 168 if the qualified historic home 
     were used in a trade or business.
       ``(2) Certain expenditures not included.--
       ``(A) Exterior.--Such term shall not include any 
     expenditure in connection with the rehabilitation of a 
     building unless at least 5 percent of the total expenditures 
     made in the rehabilitation process are allocable to the 
     rehabilitation of the exterior of such building.
       ``(B) Other rules to apply.--Rules similar to the rules of 
     clauses (ii) and (iii) of section 47(c)(2)(B) shall apply.
       ``(3) Mixed use or multifamily building.--If only a portion 
     of a building is used as the principal residence of the 
     taxpayer, only qualified rehabilitation expenditures which 
     are properly allocable to such portion shall be taken into 
     account under this section.
       ``(d) Certified Rehabilitation.--For purposes of this 
     section--
       ``(1) In general.--Except as otherwise provided in this 
     subsection, the term `certified rehabilitation' has the 
     meaning given such term by section 47(c)(2)(C).
       ``(2) Factors to be considered in the case of targeted area 
     residences, etc.--
       ``(A) In general.--For purposes of applying section 
     47(c)(2)(C) under this section with respect to the 
     rehabilitation of a building to which this paragraph applies, 
     consideration shall be given to--
       ``(i) the feasibility of preserving existing architectural 
     and design elements of the interior of such building,
       ``(ii) the risk of further deterioration or demolition of 
     such building in the event that certification is denied 
     because of the failure to preserve such interior elements, 
     and
       ``(iii) the effects of such deterioration or demolition on 
     neighboring historic properties.
       ``(B) Buildings to which this paragraph applies.--This 
     paragraph shall apply with respect to any building--
       ``(i) any part of which is a targeted area residence within 
     the meaning of section 143(j)(1), or
       ``(ii) which is located within an enterprise or empowerment 
     zone,

     but shall not apply with respect to any building which is 
     listed in the National Register.
       ``(3) Cooperative agreements.--The term `certified 
     rehabilitation' includes a certification made in accordance 
     with a contract or cooperative agreement between the 
     Secretary of the Interior and a State Historic Preservation 
     Officer which authorizes such officer (or a local government 
     certified pursuant to section 101(c)(1) of the National 
     Historic Preservation Act), subject to such terms or 
     conditions as may be specified in such agreement, to certify 
     the rehabilitation of buildings within the jurisdiction of 
     such officer (or local government) for purposes of this 
     section.

[[Page S 9451]]

       ``(e) Definitions and Special Rules.--For purposes of this 
     section:
       ``(1) Qualified historic home.--The term `qualified 
     historic home' means a certified historic structure--
       ``(A) which has been substantially rehabilitated, and
       ``(B) which (or any portion of which)--
       ``(i) is owned by the taxpayer, and
       ``(ii) is used (or will, within a reasonable period, be 
     used) by such taxpayer as his principal residence.
       ``(2) Substantially rehabilitated.--The term `substantially 
     rehabilitated' has the meaning given such term by section 
     47(c)(1)(C); except that, in the case of any building 
     described in subsection (d)(2), clause (i)(I) thereof shall 
     not apply.
       ``(3) Principal residence.--The term `principal residence' 
     has the same meaning as when used in section 1034.
       ``(4) Certified historic structure.--
       ``(A) In general.--The term `certified historic structure' 
     has the meaning given such term by section 47(c)(3).
       ``(B) Certain structures included.--Such term includes any 
     building (and its structural components) which is designated 
     as being of historic significance under a statute of a State 
     or local government, if such statute is certified by the 
     Secretary of the Interior to the Secretary as containing 
     criteria which will substantially achieve the purpose of 
     preserving and rehabilitating buildings of historic 
     significance.
       ``(5) Enterprise or empowerment zone.--The term `enterprise 
     or empowerment zone' means any area designated under section 
     1391 as an enterprise community or an empowerment zone.
       ``(6) Rehabilitation not complete before certification.--A 
     rehabilitation shall not be treated as complete before the 
     date of the certification referred to in subsection (d).
       ``(7) Lessees.--A taxpayer who leases his principal 
     residence shall, for purposes of this section, be treated as 
     the owner thereof if the remaining term of the lease (as of 
     the date determined under regulations prescribed by the 
     Secretary) is not less than such minimum period as the 
     regulations require.
       ``(8) Tenant-stockholder in cooperative housing 
     corporation.--If the taxpayer holds stock as a tenant-
     stockholder (as defined in section 216) in a cooperative 
     housing corporation (as defined in such section), such 
     stockholder shall be treated as owning the house or apartment 
     which the taxpayer is entitled to occupy as such stockholder.
       ``(f) When Expenditures Taken Into Account.--In the case of 
     a building other than a building to which subsection (g) 
     applies, qualified rehabilitation expenditures shall be 
     treated for purposes of this section as made--
       ``(1) on the date the rehabilitation is completed, or
       ``(2) to the extent provided by the Secretary by 
     regulation, when such expenditures are properly chargeable to 
     capital account.

     Regulations under paragraph (2) shall include a rule similar 
     to the rule under section 50(a)(2) (relating to recapture if 
     property ceases to qualify for progress expenditures).
       ``(g) Allowance of Credit for Purchase of Rehabilitated 
     Historic Home.--
       ``(1) In general.--In the case of a qualified purchased 
     historic home, the taxpayer shall be treated as having made 
     (on the date of purchase) the qualified rehabilitation 
     expenditures made by the seller of such home.
       ``(2) Qualified purchased historic home.--For purposes of 
     this subsection, the term `qualified purchased historic home' 
     means any substantially rehabilitated certified historic 
     structure purchased by the taxpayer if--
       ``(A) the taxpayer is the first purchaser of such structure 
     after the date rehabilitation is completed, and the purchase 
     occurs within 5 years after such date,
       ``(B) the structure (or a portion thereof) will, within a 
     reasonable period, be the principal residence of the 
     taxpayer,
       ``(C) no credit was allowed to the seller under this 
     section or section 47 with respect to such rehabilitation, 
     and
       ``(D) the taxpayer is furnished with such information as 
     the Secretary determines is necessary to determine the credit 
     under this subsection.
       ``(h) Historic Rehabilitation Mortgage Credit 
     Certificate.--
       ``(1) In general.--The taxpayer may elect, in lieu of the 
     credit otherwise allowable under this section, to receive a 
     historic rehabilitation mortgage credit certificate. An 
     election under this paragraph shall be made--
       ``(A) in the case of a building to which subsection (g) 
     applies, at the time of purchase, or
       ``(B) in any other case, at the time rehabilitation is 
     completed.
       ``(2) Historic rehabilitation mortgage credit 
     certificate.--For purposes of this subsection, the term 
     `historic rehabilitation mortgage credit certificate' means a 
     certificate--
       ``(A) issued to the taxpayer, in accordance with procedures 
     prescribed by the Secretary, with respect to a certified 
     rehabilitation,
       ``(B) the face amount of which shall be equal to the credit 
     which would (but for this subsection) be allowable under 
     subsection (a) to the taxpayer with respect to such 
     rehabilitation,
       ``(C) which may only be transferred by the taxpayer to a 
     lending institution in connection with a loan--
       ``(i) that is secured by the building with respect to which 
     the credit relates, and
       ``(ii) the proceeds of which may not be used for any 
     purpose other than the acquisition or rehabilitation of such 
     building, and
       ``(D) in exchange for which such lending institution 
     provides the taxpayer a reduction (determined as provided in 
     such regulations) in the rate of interest on the loan.
       ``(3) Use of certificate by lender.--The amount of the 
     credit specified in the certificate shall be allowed to the 
     lender only to offset the regular tax (as defined in section 
     55(c)) of such lender. The lender may carry forward all 
     unused amounts under this subsection until exhausted.
       ``(i) Recapture.--
       ``(1) In general.--If, before the end of the 5-year period 
     beginning on the date on which the rehabilitation of the 
     building is completed (or, if subsection (g) applies, the 
     date of purchase of such building by the taxpayer)--
       ``(A) the taxpayer disposes of such taxpayer's interest in 
     such building, or
       ``(B) such building ceases to be used as the principal 
     residence of the taxpayer,

     the taxpayer's tax imposed by this chapter for the taxable 
     year in which such disposition or cessation occurs shall be 
     increased by the recapture percentage of the credit allowed 
     under this section for all prior taxable years with respect 
     to such rehabilitation.
       ``(2) Recapture percentage.--For purposes of paragraph (1), 
     the recapture percentage shall be determined in accordance 
     with the table under section 50(a)(1)(B), deeming such table 
     to be amended--
       ``(A) by striking `If the property ceases to be investment 
     credit property within--' and inserting `If the disposition 
     or cessation occurs within--', and
       ``(B) in clause (i) by striking `One full year after placed 
     in service' and inserting `One full year after the taxpayer 
     becomes entitled to the credit'.
       ``(j) Basis Adjustments.--For purposes of this subtitle, if 
     a credit is allowed under this section for any expenditure 
     with respect to any property (including any purchase under 
     subsection (g) and any transfer under subsection (h)), the 
     increase in the basis of such property which would (but for 
     this subsection) result from such expenditure shall be 
     reduced by the amount of the credit so allowed.
       ``(k) Processing Fees.--No State may impose a fee for the 
     processing of applications for the certification of any 
     rehabilitation under this section unless the amount of such 
     fee is used only to defray expenses associated with the 
     processing of such applications.
       ``(l) Denial of Double Benefit.--No credit shall be allowed 
     under this section for any amount for which credit is allowed 
     under section 47.
       ``(m) Regulations.--The Secretary shall prescribe such 
     regulations as may be appropriate to carry out the purposes 
     of this section, including regulations where less than all of 
     a building is used as a principal residence and where more 
     than 1 taxpayer use the same dwelling unit as their principal 
     residence.''
       (b) Conforming Amendment.--Subsection (a) of section 1016 
     of such Code is amended by striking ``and'' at the end of 
     paragraph (24), by striking the period at the end of 
     paragraph (25) and inserting ``, and'', and by adding at the 
     end the following new item:
       ``(26) to the extent provided in section 23(j).''
       (c) Clerical Amendment.--The table of sections for subpart 
     A of part IV of subchapter A of chapter 1 of such Code is 
     amended by inserting after the item relating to section 22 
     the following new item:

``Sec. 23. Historic homeownership rehabilitation credit.''

       (d) Effective Date.--The amendments made by this section 
     shall apply with respect to rehabilitations the physical work 
     on which begins after the date of enactment of this Act.
                                                                    ____

               The Historic Homeownership Assistance Act

       Purpose. To provide homeownership incentives and 
     opportunities through the rehabilitation of older buildings 
     in historic districts under the Federal Historic 
     Rehabilitation Tax Credit. To stimulate the revival of 
     decaying neighborhoods and communities and the preservation 
     of historic buildings and districts through homeownership.
       Rate of Credit: Eligible Buildings. The existing Historic 
     Rehabilitation Tax Credit, which provides a credit of 20% of 
     qualified rehabilitation expenditures to investors in 
     commercial and rental buildings, would be extended to 
     homeowners who rehabilitate or purchase a newly-rehabilitated 
     eligible home and occupy it as a principal residence. In the 
     case of buildings rehabilitated by developers and sold to 
     homeowners, the credit would be passed through by the 
     developer to the home purchaser. Eligible buildings would be 
     buildings individually listed on the National Register of 
     Historic Places or a nationally certified state of local 
     register, and contributing buildings in districts listed in 
     the National Register or in state or local historic districts 
     that have been nationally certified.
       Both single-family and multifamily residences, through 
     condominiums and cooperatives, would qualify for the proposed 
     credit. In addition, the credit could be claimed for that 
     portion of a building used as a principal residence, 
     notwithstanding the use of other 

[[Page S 9452]]
     portions of the building for other purposes, including residential 
     rental and commercial uses for which the existing Federal 
     Historic Rehabilitation Tax Credit could be used. The 
     proposal would make no changes in the limitations on the use 
     of the credit.
       Maximum Credit: Minimum Expenditures. The amount of the 
     homeownership credit would be limited to $50,000 for each 
     principal residence. The amount of qualified rehabilitation 
     expenditures would be required to exceed the greater of 
     $5,000 within a 24-month period or the adjusted tax basis of 
     the building (excluding the land) except for buildings in 
     census tracts targeted as distressed for Mortgage Revenue 
     Bond purposes under IRC Section 143(j)(1) and Enterprise and 
     Empowerment Zones, where the minimum would be $5,000. At 
     least five percent of the qualified rehabilitation 
     expenditures would have to be spent on the exterior of the 
     building.
       Pass-Through of Credit: Carry-Forward: Recapture. In the 
     event that a certified rehabilitation is performed on an 
     eligible property by a developer who sells the residence to a 
     home buyer, the credit would accrue to the home buyer and not 
     to the developer, who would, in effect, pass it through to 
     the home buyer. The entire amount of the credit could be used 
     to reduce Federal Income Tax liability, subject to
      Alternative Minimum Tax limitations, in the year in which 
     the expenditures were made by the taxpayer either directly 
     (if the taxpayer makes the expenditures himself or 
     herself) or at the settlement, if the taxpayer purchases 
     the newly-rehabilitated residence from a developer. Any 
     unused amounts of credit would be carried forward until 
     fully exhausted. In the event the taxpayer failed to 
     maintain his or her principal residence in the building 
     for five years, the credit would be subject to ratable 
     recapture.
       No ``Passive Loss''; No Income Limit. The credit would not 
     be treated as a ``passive loss'' because the taxpayer would 
     be actively living in the building. Further, since the 
     proposed legislation is intended not only to foster 
     homeownership and encourage rehabilitation of deteriorated 
     buildings, but also to promote economic diversity among 
     residents and increase local ad valorem real property, income 
     and sales tax revenues, individual taxpayers would be 
     eligible for the credit without regard to income.
       Secretary's Standards: Interiors. Rehabilitation would have 
     to be performed in accordance with the Secretary of the 
     Interior's Standards for Rehabilitation. The proposed 
     legislation would clarify the directive, set forth in 36 CFR 
     67, that the Standards are to be interpreted in a manner 
     which takes ``into consideration economic and technical 
     feasibility.'' It would provide that in determining whether 
     to certify rehabilitation of a building, all or a portion of 
     which is to be used as an owner-occupied residence that is a 
     ``targeted area residence'' within the meaning of IRC Section 
     143 (J)(1) or is located within an Enterprise or Empowerment 
     Zone and is not individually listed in the National Register 
     of Historic Places, the Secretary give consideration to (I) 
     the feasibility of preserving existing architectural or 
     design elements of the interior of such building, (ii) the 
     risk of further deterioration or demolition of such building 
     in the event that certification is denied because of the 
     failure to preserve such interior elements, and (iii) the 
     effects of such deterioration or demolition on neighboring 
     historic properties.
       Cooperative Agreements: Earmarking of Fees. The Secretary 
     of the Interior would be authorized to enter into cooperative 
     agreements with State Historic Preservation Officers 
     (``SHPO's'') granting to the states (and, upon the 
     recommendation of a SHPO and with the consent or the 
     Secretary, to a Certified Local Government within that state 
     deemed qualified to perform such functions), subject to the 
     terms and conditions of such cooperative agreements, 
     authority to certify the rehabilitation of certified historic 
     buildings within their respective jurisdictions. The states 
     would have authority to levy fees for processing applications 
     for certification, provided that the proceeds of such fees 
     are used only to defray expenses associated with processing 
     the application.
       Historic Rehabilitation Mortgage Credit Certificates. Lower 
     income taxpayers may not have sufficient Federal Income Tax 
     liability to make effective use of a homeownership credit. In 
     order to make the benefits of the credit available to such 
     persons, the proposed legislation would permit any recipient 
     of a credit to convert it into a mortgage credit certificate 
     which can be used to obtain an interest rate reduction on his 
     or her home mortgage loan.
       Taxpayers entitled to the credit would be able to elect to 
     receive in lieu of the credit an Historic Rehabilitation 
     Mortgage Credit Certificate in the face amount of the credit 
     to which the taxpayer is entitled. The election would be made 
     at the time of receipt by the taxpayer of the approved Part 
     III certification of the historic rehabilitation 
     (certification that the completed rehabilitation meets the 
     Secretary's Standards, and setting forth the taxpayer's 
     estimate of the costs solely attributable to the 
     rehabilitation, to which the 20 percent credit is applied).
       The taxpayer would then transfer the certificate 
     (evidencing the right to claim a federal tax credit in an 
     amount equal to 20 percent of the qualified rehabilitation 
     expenditures) to the mortgage lender in exchange for a 
     reduced interest rate on the home mortgage loan. The mortgage 
     lender would be permitted to reduce its own federal income 
     tax liability by the face amount of the certificate, subject 
     to Alternative Minimum Tax limitations. However, the credit 
     claimed by the bank would not be subject to recapture. The 
     amount of reduction in the mortgage interest rate which the 
     homeowner would obtain in exchange for the certificate would 
     be determined by a ``buy-down'' formula.
       Although the right to receive an Historic Rehabilitation 
     Mortgage Credit Certificate would be available to all persons 
     entitled to the credit, the certificate could not be used by 
     a person precluded from using the credit because of the 
     Alternative Minimum Tax limit at the time of original 
     entitlement to the certificate.
                                 ______

      By Mr. PRESSLER:
  S. 1003. A bill to suspend temporarily the duty on certain 
motorcycles brought into the United States by participants in the 
Sturgis Motorcycle Rally and Races, and for other purposes; to the 
Committee on Finance.


                 motorcycle duty suspension legislation

  Mr. PRESSLER. Mr. President, today I am pleased to introduce 
legislation that would allow for the temporary suspension of duties on 
motorcycles originally manufactured in the United States, exported, and 
brought back into the country for the purpose of participating in the 
Sturgis Motorcycle Rally and Races.
  The Sturgis Rally and Races, held annually in Sturgis, SD, is the 
largest motorcycle show in the world. Created in 1938 by Sturgis 
motorcycle shop owner J.C. ``Pappy'' Hoel, the rally has evolved from a 
small gathering of 19 motorcycle enthusiasts, to a major international 
event. Besides attracting American motorcyclists from all 50 States, 
citizens from more than 60 foreign countries travel to attend. This 
year, the 55th Annual Rally and Races will be held from August 7-13, 
and is expected to draw in more than 200,000 people, including nearly 
3,000 participants from abroad. The rally is, without question, one of 
the most important tourism events in South Dakota. With ever-increasing 
international participation, it quickly is becoming a significant 
element of foreign tourism revenue. As the new co-chair of the Senate 
Tourism Caucus, I want to do everything I can to increase the 
international flavor of tourist events like the Sturgis Rally and 
Races. Our economy only stands to benefit.
  Although the Rally has, in recent years, expanded its program to 
include guided tours of the Black Hills area and motorcycle 
expositions, the central attraction remains motorcycle racing. For 
Sturgis participants, the vehicle of choice is the Harley-Davidson. As 
my colleagues know, the Harley--Davidson company is the only remaining 
American manufacturer of motorcycles. Its two plants, located in 
Milwaukee, WI, and York, PA, are the sole remaining facilities where 
Harley's are made. In 1994, approximately 70 percent of the motorcycles 
present at the Rally were Harleys.
  Mr. President, as I mentioned, international participation is on the 
rise. We certainly welcome these foreign tourists and want to do all we 
can to encourage their participation. However, when foreign travelers 
bring their motorcycles with them, the temporary importation 
requirements of the U.S. Customs Service come into play. Specifically, 
when a foreign-owned motorcycle is admitted into the country, a bond 
must be posted that is equal to approximately twice the value of the 
motorcycle's import duty--or, roughly 6 percent of its total value. The 
purpose of the bond is to safeguard against motorcycles being brought 
into our country presumably for vacation purposes, but then are sold, 
which circumvents our import quotas and tariffs. Although the bond is 
refundable, administrative fees associated with securing the bond are 
not. Mr. President, Harley-Davidsons are American-made. As I have 
mentioned, the purpose of these bonds is to prevent foreign goods from 
being sold in this country duty free. Therefore, there is no need to 
impose the bonding requirement on American-made Harleys brought back 
into this country. This requirement is becoming increasingly onerous 
for foreign Rally participants, creating what I view as an unnecessary 
roadblock for increased foreign participation.
  This problem was brought to my attention during a meeting I had with 
South Dakota tourism leaders in Rapid City, SD earlier this year. In 
particular, I want to acknowledge and thank 

[[Page S 9453]]
Francie Reubel Alberts, executive director of the Sturgis Motorcycle 
Rally and Races, for all her help in this matter. Those involved in the 
Sturgis Rally and Races know of her dedication and hard work over the 
years to make this yearly event such an enormous success. When we 
started work on this matter, it was our hope
 that the situation could be resolved administratively through existing 
Customs regulations. It now appears legislation is the only solution.

  Therefore, the legislation I am introducing today would temporarily 
suspend the duties on foreign-owned Harley-Davidson's that are being 
brought back into our country for the purpose of participating in the 
Sturgis Motorcycle Rally and Races. Under my bill, foreign rally 
participants would be allowed to forgo the costly, time-consuming 
procedure of securing a bond for the few weeks their motorcycles would 
be in the country.
  Mr. President, this bill, by encouraging foreign participation in the 
Sturgis Rally and Races, is good for South Dakota tourism. It is good 
for American tourism in general. Furthermore, it sends a message that 
this Congress is serious about promoting America as a tourist 
destination.The Sturgis Rally and Races is quintessentially all-
American, but it has become a world-renowned, world-class event. With 
this legislation, it is my hope that this grant event in the great 
State of South Dakota will attract even greater world-wide 
representation. I urge my colleagues to support this legislation. Just 
as important, I hope to see friends, neighbors, and motorcycle 
enthusiasts in Sturgis later this summer.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1003

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

     SECTION 1. TEMPORARY DUTY SUSPENSION FOR CERTAIN MOTORCYCLES.

       (a) In General.--Subchapter II of chapter 99 of the 
     Harmonized Tariff Schedule of the United States is amended by 
     inserting in numerical sequence the following new heading:

``9902.98.05  Motorcycles produced in the                               
               United States, previously                                
               exported and brought                                     
               temporarily into the United                              
               States by nonresidents for                               
               the purpose of participating                             
               in the Sturgis Motorcycle                                
               Rally and Races..............  Fre                       
                                               e   No                   
                                                    chan                
                                                    ge    Free   On or  
                                                                  before
                                                                  8/15/ 
                                                                  95''  
                                                                        

       (b) Articles To Be Subject to Informal Entry; Taxes and 
     Fees Not To Apply.--Notwithstanding section 484 of the Tariff 
     Act of 1930 (19 U.S.C. 1484) or any other provision of law, 
     the Secretary of the Treasury may authorize the entry of an 
     article described in heading 9902.98.05 of the Harmonized 
     Tariff Schedule of the United States (as added by subsection 
     (a)) on an oral declaration of the nonresident entering such 
     article and such article shall be free of taxes and fees 
     which may be otherwise applicable.

     SEC. 2. EFFECTIVE DATE.

       The amendment made by this Act applies to articles entered, 
     or withdrawn from warehouse for consumption, on or after the 
     15th day after the date of the enactment of this Act.
                                 ______

      By Mr. STEVENS (for himself, Mr. Pressler, Mr. Hollings, and Mr. 
        Kerry):
  S. 1004. A bill to authorize appropriations for the U.S. Coast Guard, 
and for other purposes; to the Committee on Commerce, Science, and 
Transportation.


               THE COAST GUARD AUTHORIZATION ACT OF 1995

 Mr. STEVENS. Mr. President, I am pleased today to introduce 
bipartisan legislation to authorize spending for the important 
activities of the U.S. Coast Guard in fiscal year 1996.
  I am joined by Senators Hollings, Kerry, and Chairman Pressler on 
this bill.
  On March 15, 1995, we held a Commerce Committee hearing to review the 
Coast Guard's request for the authorization of appropriations and for 
various changes to the law that will allow it to more effectively carry 
out its mission.
  I believe the package we are presenting today includes all of the 
highest priorities identified by the Coast Guard for action this year.
  It also includes authorization levels for fiscal year 1995, since we 
were unable to pass a bill at the end of the last Congress.
  Before my summary, I want to point out that the package only includes 
provisions requested by the Coast Guard.
  Simultaneous to our introduction of today's legislation, we are 
working on a more comprehensive package of amendments the Subcommittee 
on Oceans and Fisheries will present to the full Commerce Committee at 
a markup, hopefully in July.
  We will try in the comprehensive package to include as many of the 
provisions that we can that are of interest to members of the Committee 
and the Senate.
  We are also reviewing the provisions included in the Coast Guard 
authorization bill passed by the House (H.R. 1361) for possible 
inclusion in this subcommittee package.
  I appreciate the interest and support of Commerce Committee Chairman 
Pressler in our efforts on this reauthorization.
  I look forward to continuing to work with the other subcommittee 
members in the coming weeks to complete our larger package for the full 
committee's consideration.
                         summary of legislation

  The bill would authorize appropriations for the Coast Guard in the 
amounts of $3.69 billion in fiscal year 1995 and $3.71 billion in 
fiscal year 1996.
  The end of year military strength for active duty Coast Guard 
personnel would be set at 39,000 for fiscal year 1995 and 38,400 for 
fiscal year 1996.
  The bill would also authorize several personnel management 
improvements requested by the Coast Guard.
  In the area of marine safety and waterway services management, the 
bill would increase civil penalties for documentation, marine casualty 
reporting, and uninspected vessel manning violations.
  The bill would renew authorization for several advisory committees 
that provide the Coast Guard with key private sector input.
  It would also authorize the electronic filing of certain vessel 
commercial instruments, making filing easier both for vessel owners and 
the Coast Guard.
  The bill would improve the management of the Coast Guard Auxiliary, a 
36,000 member volunteer organization that provides the Coast Guard with 
low-cost assistance in its boating safety mission.
  First, it would define the status of, and provide certain protections 
for auxiliary members while they are performing official Coast Guard 
duties. It would also improve their ability to cooperate with State 
authorities and obtain excess Coast Guard resources.
  The bill makes an important change in recreational boating safety by 
restructuring the process for providing States with recreational 
boating safety grants and stimulating nontrailerable vessel facility 
construction.
  A key provision of the bill would reduce the regulatory burden on 
U.S. commercial vessel operators by: Shifting away from excessive U.S. 
vessel standards toward accepted international standards; authorizing 
the use of third party and self-inspection programs as alternatives to 
Coast Guard inspections; and extending U.S. vessel inspection 
intervals.
  Both the Coast Guard and industry strongly support these changes. 
They will enable Coast Guard inspectors to focus more on the problem of 
substandard foreign vessels calling on U.S. ports.
  The bill also includes numerous technical changes to establish 
alternate vessel measurement requirements that will enable U.S. vessel 
designers and operators to be competitive in the international vessel 
market.
  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. 1004

       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 ``Coast Guard Authorization 
     Act of 1995''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:
                         Title I--Authorization

Sec. 101. Authorization of appropriations.
Sec. 102. Authorized levels of military strength and training.

[[Page S 9454]]


               Title II--Personnel Management Improvement

Sec. 201. Provision of child development services.
Sec. 202. Hurricane Andrew relief.
Sec. 203. Dissemination of results of 0-6 continuation boards.
Sec. 204. Exclude certain reserves from end-of-year strength.
Sec. 205. Officer retention until retirement eligible.
Sec. 206. Contracts for health care services.

       Title III--Marine Safety and Waterway Services Management

Sec. 301. Increased penalties for documentation violations.
Sec. 302. Clerical amendment.
Sec. 303. Maritime Drug and Alcohol Testing Program Civil Penalty.
Sec. 304. Renewal of the Navigation Safety Advisory Council.
Sec. 305. Renewal of the Commercial Fishing Industry Vessel Advisory 
              Committee.
Sec. 306. Renewal of Towing Safety Advisory Committee.
Sec. 307. Electronic filing of commercial instruments.
Sec. 308. Civil penalties.

               Title IV--Coast Guard Auxiliary Amendments

Sec. 401. Administration of the Coast Guard Auxiliary.
Sec. 402. Purpose of the Coast Guard Auxiliary.
Sec. 403. Members of the Auxiliary; Status.
Sec. 404. Assignment and Performance of Duties.
Sec. 405. Cooperation with other Agencies, States, Territories, and 
              Political Subdivisions.
Sec. 406. Vessel Deemed Public Vessel.
Sec. 407. Aircraft Deemed Public Aircraft.
Sec. 408. Disposal of Certain Material.

            Title V--Recreational Boating Safety Improvement

Sec. 501. State recreational boating safety grants.
Sec. 502. Boating access.

                Title VI--Coast Guard Regulatory Reform

Sec. 601. Short title.
Sec. 602. Safety management.
Sec. 603. Use of reports, documents, records, and examinations of other 
              persons.
Sec. 604. Equipment approval.
Sec. 605. Frequency of inspection.
Sec. 606. Certificate of inspection.
Sec. 607. Delegation of authority of Secretary to classification 
              societies.

            Title VII--Technical and Conforming Amendments.

Sec. 701. Amendment of inland navigation rules.
Sec. 702. Measurement of vessels.
Sec. 703. Longshore and harbor workers compensation.
Sec. 704. Radiotelephone requirements.
Sec. 705. Vessel operating requirements.
Sec. 706. Merchant Marine Act, 1920.
Sec. 707. Merchant Marine Act, 1956.
Sec. 708. Maritime education and training.
Sec. 709. General definitions.
Sec. 710. Authority to exempt certain vessels.
Sec. 711. Inspection of vessels.
Sec. 712. Regulations.
Sec. 713. Penalties--inspection of vessels.
Sec. 714. Application--tank vessels.
Sec. 715. Tank vessel construction standards.
Sec. 716. Tanker minimum standards.
Sec. 717. Self-propelled tank vessel minimum standards.
Sec. 718. Definition--abandonment of barges.
Sec. 719. Application--load lines.
Sec. 720. Licensing of individuals.
Sec. 721. Able seamen--limited.
Sec. 722. Able seamen--offshore supply vessels.
Sec. 723. Scale of employment--able seamen.
Sec. 724. General requirements--engine department.
Sec. 725. Complement of inspected vessels.
Sec. 726. Watchmen.
Sec. 727. Citizenship and naval reserve requirements.
Sec. 728. Watches.
Sec. 729. Minimum number of licensed individuals.
Sec. 730. Officers' competency certificates convention.
Sec. 731. Merchant mariners' documents required.
Sec. 732. Certain crew requirements.
Sec. 733. Freight vessels.
Sec. 734. Exemptions.
Sec. 735. United States registered pilot service.
Sec. 736. Definitions--merchant seamen protection.
Sec. 737. Application--foreign and intercoastal voyages.
Sec. 738. Application--coastwise voyages.
Sec. 739. Fishing agreements.
Sec. 740. Accommodations for seamen.
Sec. 741. Medicine chests.
Sec. 742. Logbook and entry requirements.
Sec. 743. Coastwise endorsements.
Sec. 744. Fishery endorsements.
Sec. 745. Convention tonnage for licenses, certificates, and documents.
                         TITLE I--AUTHORIZATION

     SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

       (a) Fiscal Year 1995.--Funds are authorized to be 
     appropriated for necessary expenses of the Coast Guard for 
     fiscal year 1995, as follows:
       (1) For the operation and maintenance of the Coast Guard, 
     $2,630,505,000, of which $25,000,000 shall be derived from 
     the Oil Spill Liability Trust Fund.
       (2) For the acquisition, construction, rebuilding, and 
     improvement of aids to navigation, shore and offshore 
     facilities, vessels, and aircraft, including equipment 
     related thereto, $439,200,000, to remain available until 
     expended, of which $32,500,000 shall be derived from the Oil 
     Spill Liability Trust Fund to carry out the purposes of 
     section 1012(a)(5) of the Oil Pollution Act of 1990.
       (3) For research, development, test, and evaluation of 
     technologies, materials, and human factors directly relating 
     to improving the performance of the Coast Guard's mission in 
     support of search and rescue, aids to navigation, marine 
     safety, marine environmental protection, enforcement of laws 
     and treaties, ice operations, oceanographic research, and 
     defense readiness, $20,310,000, to remain available until 
     expended, of which $3,150,000 shall be derived from the Oil 
     Spill Liability Trust Fund.
       (4) For retired pay (including the payment of obligations 
     otherwise chargeable to lapsed appropriations for this 
     purpose), payments under the Retired Serviceman's Family 
     Protection and Survivor Benefit Plans, and payments for 
     medical care of retired personnel and their dependents under 
     chapter 55 of title 10, United States Code, $562,585,000.
       (5) For alteration or removal of bridges over navigable 
     waters of the United States constituting obstructions to 
     navigation, and for personnel and administrative costs 
     associated with the Bridge Alteration Program, $12,880,000, 
     to remain available until expended, which may be made 
     available under section 104(e) of title 49, United States 
     Code.
       (6) For environmental compliance and restoration at Coast 
     Guard facilities (other than parts and equipment associated 
     with operations and maintenance), $25,000,000, to remain 
     available until expended.
       (b) Fiscal Year 1996.--Funds are authorized to be 
     appropriated for necessary expenses of the Coast Guard for 
     fiscal year 1996, as follows:
       (1) For the operation and maintenance of the Coast Guard, 
     $2,618,316,000, of which $25,000,000 shall be derived from 
     the Oil Spill Liability Trust Funds.
       (2) For the acquisition, construction, rebuilding, and 
     improvement of aids to navigation, shore and offshore 
     facilities, vessels, and aircraft, including equipment 
     related thereto, $428,200,000, to remain available until 
     expended, of which $32,500,000 shall be derived from the Oil 
     Spill Liability Trust fund to carry out the purposes of 
     section 1012(a)(5) of the Oil Pollution Act of 1990.
       (3) For research, development, test, and evaluation of 
     technologies, materials, and human factors directly relating 
     to improving the performance of the Coast Guard's mission in 
     support of search and rescue, aids to navigation, marine 
     safety, marine environmental protection, enforcement of laws 
     and treaties, ice operations, oceanographic research, and 
     defense readiness, $22,500,000, to remain available until 
     expended, of which $3,150,000 shall be derived from the Oil 
     Spill Liability Trust Fund.
       (4) For retired pay (including the payment of obligations 
     otherwise chargeable to lapsed appropriations for this 
     purpose), payments under the Retired Serviceman's Family 
     Protection and Survivor Benefit Plans, and payments for 
     medical care of retired personnel and their dependents under 
     chapter 55 of title 10, United States Code, $582,022,000.
       (5) For alteration or removal of bridges over navigable 
     waters of the United States constituting obstructions to 
     navigation, and for personnel and administrative costs 
     associated with the Bridge Alteration Program, $16,200,000, 
     to remain available until expended, of which up to 
     $14,200,000 may be made available under section 104(e) of 
     title 49, United States Code.
       (6) For environmental compliance and restoration at Coast 
     Guard facilities (other than parts and equipment associated 
     with operations and maintenance), $25,000,000, to remain 
     available until expended.
       (c) Amounts From the Discretionary Bridge Program.--Section 
     104 of title 49, United States Code, is amended by adding at 
     the end thereof the following:
       ``(e) Notwithstanding the provisions of sections 101(d) and 
     144 of title 23, highway bridges determined to be 
     unreasonable obstructions to navigation under the Truman-
     Hobbs Act may be funded from amounts set aside from the 
     discretionary bridge program. The Secretary shall transfer 
     these allocations and the responsibility for administration 
     of these funds to the United States Coast Guard.''.

     SEC. 102. AUTHORIZED LEVELS OF MILITARY STRENGTH AND 
                   TRAINING.

       (a) Authorized Military Strength Level.--The Coast Guard is 
     authorized an end-of-year strength for active duty personnel 
     of--
       (1) 39,000 as of September 30, 1995.
       (2) 38,400 as of September 30, 1996.

     The authorized strength does not include members of the Ready 
     Reserve called to active duty for special or emergency 
     augmentation of regular Coast Guard forces for periods of 180 
     days or less.
       (b) Authorized Level of Military Training.--The Coast Guard 
     is authorized average military training student loads as 
     follows:
       (1) For recruit and special training--
       (A) 2,000 student years for fiscal year 1995; and

[[Page S 9455]]

       (B) 1,604 student years for fiscal year 1996.
       (2) For flight training--
       (A) 133 student years for fiscal year 1995; and
       (B) 85 student years for fiscal year 1996.
       (3) For professional training in military and civilian 
     institutions--
       (A) 344 student years for fiscal year 1995; and
       (B) 330 student years for fiscal year 1996.
       (4) For officer acquisition--
       (A) 955 student years for fiscal year 1995; and
       (B) 874 student years for fiscal year 1996.

               TITLE II--PERSONNEL MANAGEMENT IMPROVEMENT

     SEC. 201. PROVISION OF CHILD DEVELOPMENT SERVICES.

       (a) In General.--Title 14, United States Code, is amended 
     by inserting after section 514 the following new section:

     ``Sec. 515. Child development services

       ``(a) The Commandant may make child development services 
     available for members and civilian employees of the Coast 
     Guard, and thereafter as space is available for members of 
     the Armed Forces and Federal civilian employees. Child 
     development service benefits provided under the authority of 
     this section shall be in addition to benefits provided under 
     other laws.
       ``(b)(1) Except as provided in paragraph (2), the 
     Commandant may require that amounts received as fees for the 
     provision of services under this section at Coast Guard child 
     development centers be used only for compensation of 
     employees at those centers who are directly involved in 
     providing child care.
       ``(2) If the Commandant determines that compliance with the 
     limitation in paragraph (1) would result in an uneconomical 
     and inefficient use of such fee receipts, the Commandant may 
     (to the extent that such compliance would be uneconomical and 
     inefficient) use such receipts--
       ``(A) for the purchase of consumable or disposable items 
     for Coast Guard child development centers; and
       ``(B) if the requirements of such centers for consumable or 
     disposable items for a given fiscal year have been met, for 
     other expenses of those centers.
       ``(c) The Commandant shall provide for regular and 
     unannounced inspections of each child development center 
     under this section and may use Department of Defense or other 
     training programs to ensure that all child development center 
     employees under this section meet minimum standards of 
     training with respect to early childhood development, 
     activities and disciplinary techniques appropriate to 
     children of different ages, child abuse prevention and 
     detection, and appropriate emergency medical procedures.
       ``(d) Of the amounts available to the Coast Guard each 
     fiscal year for operating expenses (and in addition to 
     amounts received as fees), the Secretary shall use for child 
     development services under this section an amount equal to 
     the total amount the Commandant estimates will be received by 
     the Coast Guard in the fiscal year as fees for the provision 
     of those services.
       ``(e) The Commandant may use appropriated funds available 
     to the Coast Guard to provide assistance to family home day 
     care providers so that family home day care services can be 
     provided to uniformed service members and civilian employees 
     of the Coast Guard at a cost comparable to the cost of 
     services provided by Coast Guard child development centers.
       ``(f) The Secretary shall promulgate regulations to 
     implement this section. The regulations shall establish fees 
     to be charged for child development services provided under 
     this section which take into consideration total family 
     income.
       ``(g) For purposes of this section, the term `child 
     development center' does not include a child care services 
     facility for which space is allotted under section 616 of the 
     Act of December 22, 1987 (40 U.S.A. 490b).''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 13 of title 14, United States Code, is 
     amended by inserting after the item related to section 514 
     the following:

``515. Child development services.''.
     SEC. 202. HURRICANE ANDREW RELIEF.

       Section 2856 of the National Defense Authorization Act for 
     Fiscal Year 1993 (Pub. L. 102-484) applies to the military 
     personnel of the Coast Guard who were assigned to, or 
     employed at or in connection with, any Federal facility or 
     installation in the vicinity of Homestead Air Force Base, 
     Florida, including the areas of Broward, Collier, Dade, and 
     Monroe Counties, on or before August 24, 1992, except that 
     funds available to the Coast Guard, not to exceed $25,000, 
     shall be used. The Secretary of Transportation shall 
     administer the provisions of section 2856 for the Coast 
     Guard.

     SEC. 203. DISSEMINATION OF RESULTS OF 0-6 CONTINUATION 
                   BOARDS.

       Section 289(f) of title 14, United States Code, is amended 
     by striking ``Upon approval by the President, the names of 
     the officers selected for continuation on active duty by the 
     board shall be promptly disseminated to the service at 
     large.''.

     SEC. 204. EXCLUDE CERTAIN RESERVES FROM END-OF-YEAR STRENGTH.

       Section 712 of title 14, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(d) Members ordered to active duty under this section 
     shall not be counted in computing authorized strength in 
     members on active duty or members in grade under this title 
     or under any other law.''.

     SEC. 205. OFFICER RETENTION UNTIL RETIREMENT ELIGIBLE.

       Section 283(b) of title 14, United States Code, is 
     amended--
       (1) by inserting ``(1)'' after ``(b)'';
       (2) by striking the last sentence; and
       (3) by adding at the end the following:
       ``(2) Upon the completion of a term under paragraph (1), an 
     officer shall, unless selected for further continuation--
       ``(A) except as provided in subparagraph (B), be honorably 
     discharged with severance pay computed under section 286 of 
     this title;
       ``(B) in the case of an officer who has completed at least 
     18 years of active service on the date of discharge under 
     subparagraph (A), be retained on active duty and retired on 
     the last day of the month in which the officer completes 20 
     years of active service, unless earlier removed under another 
     provision of law; or
       ``(C) if eligible for retirement under any law, be 
     retired.''.

     SEC. 206. CONTRACTS FOR HEALTH CARE SERVICES.

       (a) Chapter 17 of title 14, United States Code, is amended 
     by inserting after section 644 the following new section:
     ``Sec. 644a. Contracts for health care services

       ``(a) Subject to the availability of appropriations for 
     this purpose; the Commandant may enter into personal services 
     and other contracts to carry out health care responsibilities 
     pursuant to section 93 of this title and other applicable 
     provisions of law pertaining to the provision of health care 
     services to Coast Guard personnel and covered beneficiaries. 
     The authority provided in this subsection is in addition to 
     any other contract authorities of the Commandant provided by 
     law or as delegated to the Commandant from time to time by 
     the Secretary, including but not limited to authority 
     relating to the management of health care facilities and 
     furnishing of health care services pursuant to title 10 and 
     this title.
       ``(b) The total amount of compensation paid to an 
     individual in any year under a personal services contract 
     entered into under subsection (a) shall not exceed the amount 
     of annual compensation (excluding allowances for expenses) 
     allowable for such contracts entered into by the Secretary of 
     Defense pursuant to section 1091 of title 10.
       ``(c)(1) The Secretary shall promulgate regulations to 
     assure--
       ``(A) the provision of adequate notice of contract 
     opportunities to individuals residing in the area of a 
     medical treatment facility involved; and
       ``(B) consideration of interested individuals solely on the 
     basis of the qualifications established for the contract and 
     the proposed contract price.
       ``(2) Upon establishment of the procedures under paragraph 
     (1), the Secretary may exempt personal services contracts 
     covered by this section from the competitive contracting 
     requirements specified in section 2304 of title 10, or any 
     other similar requirements of law.
       ``(d) The procedures and exemptions provided under 
     subsection (c) shall not apply to personal services contracts 
     entered into under subsection (a) with entities other than 
     individuals or to any contract that is not an authorized 
     personal services contract under subsection (a).''.
       (b) The table of sections for chapter 17 of title 14, 
     United States Code, is amended by inserting after the item 
     relating to section 644 the following:

``644 a. Contracts for health care services.''.

       (c) The amendments made by this section shall take effect 
     on the date of enactment of this Act. Any personal services 
     contract entered into on behalf of the Coast Guard in 
     reliance upon the authority of section 1091 of title 10 
     before that date is confirmed and ratified and shall remain 
     in effect in accordance with the terms of the contract.

       TITLE III--MARINE SAFETY AND WATERWAY SERVICES MANAGEMENT

     SEC. 301. INCREASED PENALTIES FOR DOCUMENTATION VIOLATIONS.

       (a) Civil Penalty.--Section 12122(a) of title 46, United 
     States Code, is amended by striking ``$500'' and inserting 
     ``$10,000.''
       (b) Seizure and Forfeiture.--
       (1) In general.--Section 12122(b) of title 46, United 
     States Code, is amended to read as follows:
       ``(b) A vessel and its equipment are liable to seizure by 
     and forfeiture to the United States Government--
       ``(1) when the owner of a vessel or the representative or 
     agent of the owner knowingly falsifies or conceals a material 
     fact, or knowingly makes a false statement or representation 
     about the documentation or when applying for documentation of 
     the vessel;
       ``(2) when a certificate of documentation is knowingly and 
     fraudulently used for a vessel;
       ``(3) when a vessel is operated after its endorsement has 
     been denied or revoked under section 12123 of this title;
       ``(4) when a vessel is employed in a trade without an 
     appropriate trade endorsement;
       ``(5) when a documented vessel with only a recreational 
     endorsement is operated other than for pleasure; or
       ``(6) when a documented vessel, other than a vessel with 
     only a recreational endorsement operating within the 
     territorial waters of the United States, is placed under the 
     command of a person not a citizen of the United States.''.

[[Page S 9456]]

       ``(2) Conforming amendments.--Section 12122(c) of title 46, 
     United States Code, is repealed.
       ``(c) Limitation on Operation of Vessel with Only 
     Recreational Endorsement.--Section 12110(c) of title 46, 
     United States Code, is amended to read as follows:
       ``(c) A vessel with only a recreational endorsement may not 
     be operated other than for pleasure.''.
       ``(d) Termination Of Restriction On Command Of Recreational 
     Vessels.--
       ``(1) Termination Of Restriction.--Subsection (d) of 
     section 12110 of title 46, United States Code, is amended by 
     inserting ``, other than a vessel with only a recreational 
     endorsement operating within the territorial waters of the 
     United States,'' after ``A documented vessel''; and
       ``(2) Conforming Amendment.--Section 12111(a)(2) of title 
     46, United States Code, is amended by inserting before the 
     period the following: ``in violation of section 12110(d) of 
     this title''.

     SEC. 302. CLERICAL AMENDMENT.

       Chapter 121 of title 46, United States Code, is amended--
       (1) by striking the first section 12123; and
       (2) in the table of sections at the beginning of the 
     chapter by striking the first item relating to section 12123.

     SEC. 303. MARITIME DRUG AND ALCOHOL TESTING PROGRAM CIVIL 
                   PENALTY.

       (a) In General.--Chapter 21 of title 46, United States 
     Code, is amended by adding at the end a new section 2115 to 
     read as follows:

     ``Sec. 2115. Civil penalty to enforce alcohol and dangerous 
       drug testing

       ``Any person who fails to implement or conduct, or who 
     otherwise fails to comply with the requirements prescribed by 
     the Secretary for, chemical testing for dangerous drugs or 
     for evidence of alcohol use, as prescribed under this 
     subtitle or a regulation prescribed by the Secretary
      to carry out the provisions of this subtitle, is liable to 
     the United States Government for a civil penalty of not 
     more than $1,000 for each violation. Each day of a 
     continuing violation shall constitute a separate 
     violation.''.
       (b) Conforming Amendment.--The table of sections at the 
     beginning of chapter 21 of title 46, United States Code, is 
     amended by inserting after the item relating to section 2114 
     the following:

``2115. Civil penalty to enforce alcohol and dangerous drug testing.''
     SEC. 304. RENEWAL OF THE NAVIGATION SAFETY ADVISORY COUNCIL.
       Section 5(d) of the Inland Navigational Rules Act of 1980 
     (33 U.S.C. 2073) is amended by striking ``September 30, 
     1995'' and inserting ``September 30, 2000''.

     SEC. 305. RENEWAL OF THE COMMERCIAL FISHING INDUSTRY VESSEL 
                   ADVISORY COMMITTEE.

       Subsection (e)(1) of section 4508 of title 46, United 
     States Code, is amended by striking ``September 30, 1994'' 
     and inserting ``September 30, 2000''.

     SEC, 306. RENEWAL OF TOWING SAFETY ADVISORY COMMITTEE.

       Subsection (e) of the Act to Establish A Towing Safety 
     Advisory Committee in the Department of Transportation (33 
     U.S.C. 1231a(e) is amended by striking ``September 30, 1995'' 
     and inserting ``September 30, 2000''.

     SEC. 307. ELECTRONIC FILING OF COMMERCIAL INSTRUMENTS.

       Section 31321(a) of title 46, United States Code, is 
     amended by adding at the end the following new paragraph:
       ``(4)(A) A bill of sale, conveyance, mortgage, assignment, 
     or related instrument may be filed electronically under 
     regulations prescribed by the Secretary.
       ``(B) A filing made electronically under subparagraph (A) 
     shall not be effective after the 10-day period beginning on 
     the date of the filing unless the original instrument is 
     provided to the Secretary within that 10-day period.''.

     SEC. 308. CIVIL PENALTIES.

       (a) Penalty for Failure to Report a Casualty.--Section 
     6103(a) of title 46, United States Code is amended by 
     striking ``$1,000'' and inserting ``not more than $25,000''.
       (b) Operation of Uninspected Towing Vessel in Violation of 
     Manning Requirements.--Section 8906 of title 46, United 
     States Code, is amended by striking ``$1,000'' and inserting 
     ``not more than $25,000''.
                    TITLE IV--COAST GUARD AUXILIARY

     SEC. 401. ADMINISTRATION OF THE COAST GUARD AUXILIARY.

       (a) Section 821, title 14, United States Code, is amended 
     to read as follows:
       ``(a) The Coast Guard Auxiliary is a nonmilitary 
     organization administered by the Commandant under the 
     direction of the Secretary. For command, control, and 
     administrative purposes, the Auxiliary shall include such 
     organizational elements and units as are approved by the 
     Commandant, including but not limited to, a national board 
     and staff (Auxiliary headquarters unit), districts, regions, 
     divisions, flotillas, and other organizational elements and 
     units. The Auxiliary organization and its officers shall have 
     such rights, privileges, powers, and duties as may be granted 
     to them by the Commandant, consistent with this title and 
     other applicable provisions of law. The Commandant may 
     delegate to officers of the Auxiliary the authority vested in 
     the Commandant by this section, in the manner and to the 
     extent the Commandant considers necessary or appropriate for 
     the functioning, organization, and internal administration of 
     the Auxiliary.
       ``(b) Each organizational element or unit of the Coast 
     Guard Auxiliary organization (but excluding any corporation 
     formed by an organizational element or unit of the Auxiliary 
     under subsection (c) of this section), shall, except when 
     acting outside the scope of section 822, at all times be 
     deemed to be an instrumentality of the United States, for 
     purposes of the Federal Tort Claims Act (28 U.S.C. 2671, et 
     seq.), the Military Claims Act (10 U.S.C. 2733), the Public 
     Vessels Act (46 U.S.C. App. 781-790), the Suits in Admiralty 
     Act (46 U.S.C. App. 741-752), the Admiralty Extension Act (46 
     U.S.C. App. 740), and for other noncontractual civil 
     liability purposes.
       ``(c) The national board of the Auxiliary, and any 
     Auxiliary district or region, may form a corporation under 
     State law, provided that the formation of such a corporation 
     is in accordance with policies established by the 
     Commandant.''.
       (b) The section heading for section 821 of title 14, United 
     States Code, is amended after ``Administration'' by inserting 
     ``of the Coast Guard Auxiliary''.
       (c) The table of sections at the beginning of chapter 23 of 
     title 14, United States Code, is amended in the item relating 
     to section 821, after ``Administration'' by inserting ``of 
     the Coast Guard Auxiliary''.

     SEC. 402. PURPOSE OF THE COAST GUARD AUXILIARY.

       (a) Section 822 of title 14, United States Code, is amended 
     by striking the entire text and inserting:
       ``The purpose of the Auxiliary is to assist the Coast 
     Guard, as authorized by the Commandant, in performing any 
     Coast Guard function, power, duty, role, mission, or 
     operation authorized by law.''.
       (b) The section heading for section 822 of title 14, United 
     States Code, is amended after ``Purpose'' by inserting ``of 
     the Coast Guard Auxiliary''.
       (c) The table of sections at the beginning of chapter 23 of 
     title 14, United States Code, is amended in the item relating 
     to section 822, after ``Purpose'' by inserting ``of the Coast 
     Guard Auxiliary''.

     SEC. 403. MEMBERS OF THE AUXILIARY; STATUS.

       (a) Title 14, United States Code, is amended by inserting 
     after section 823 the following new section:

     ``Sec. 823a. Members of the Auxiliary; status

       ``(a) Except as otherwise provided in this chapter, a 
     member of the Coast Guard Auxiliary shall not be deemed to be 
     a Federal employee and shall not be subject to the provisions 
     of law relating to Federal employment, including those 
     relating to hours of work, rates of compensation, leave, 
     unemployment compensation, Federal employee benefits, ethics, 
     conflicts of interest, and other similar criminal or civil 
     statutes and regulations governing the conduct of Federal 
     employees. However, nothing in this subsection shall 
     constrain the Commandant from prescribing standards for the 
     conduct and behavior of members of the Auxiliary.
       ``(b) A member of the Auxiliary while assigned to duty 
     shall be deemed to be a Federal employee only for the 
     purposes of the following:
       ``(1) the Federal Tort Claims Act (28 U.S.C. 2671 et seq.), 
     the Military Claims Act (10 U.S.C. 2733), the Public Vessels 
     Act (46 U.S.C. App. 781-790), the Suits in Admiralty Act (46 
     U.S.C. App. 741-752), the Admiralty Extension Act (46 U.S.C. 
     App. 740), and for other noncontractual civil liability 
     purposes;
       ``(2) compensation for work injuries under chapter 81 of 
     title 5, United States Code; and
       ``(3) the resolution of claims relating to damage to or 
     loss of personal property of the member incident to service 
     under the Military Personnel and Civilian Employees' Claims 
     Act of 1964 (31 U.S.C. 3721).
       ``(c) A member of the Auxiliary, while assigned to duty, 
     shall be deemed to be a person acting under an officer of the 
     United States or an agency thereof for purposes of section 
     1442(a)(1) of title 28, United States Code.''.
       (b) The table of sections for chapter 23 of title 14, 
     United States Code, is amended by inserting the following new 
     item after the item relating to section 823:

``823a. Members of the Auxiliary; status.''.

     SEC. 404. ASSIGNMENT AND PERFORMANCE OF DUTIES.

       Title 14, United States Code, is amended by striking 
     ``specific'' each place it appears in sections 830, 831, and 
     832.

     SEC. 405. COOPERATION WITH OTHER AGENCIES, STATES, 
                   TERRITORIES, AND POLITICAL SUBDIVISIONS.

       (a) Section 141 of title 14, United States Code, is 
     amended--
       (1) by striking ``General'' in the section caption and 
     inserting ``Cooperation with other agencies, States, 
     Territories, and political subdivisions'';
       (2) by inserting ``(which include members of the Auxiliary 
     and facilities governed under chapter 23)'' after ``personnel 
     and facilities'' in the first sentence of subsection (a); and
       (3) by adding at the end of subsection (a) the following: 
     ``The Commandant may prescribe conditions, including 
     reimbursement, under which personnel and facilities may be 
     provided under this subsection.''.
       (b) The table of sections for chapter 7 of title 14, United 
     States Code, is amended by striking ``General'' in the item 
     relating to section 141 and inserting ``Cooperation with 
     other agencies, States, Territories, and political 
     subdivisions.''.

     SEC. 406. VESSEL DEEMED PUBLIC VESSEL.

       The text of section 827 of title 14, United States Code, is 
     amended to read as follows:

[[Page S 9457]]

       ``While assigned to authorized Coast Guard duty, any 
     motorboat or yacht shall be deemed to be a public vessel of 
     the United States and a vessel of the Coast Guard within the 
     meaning of sections 646 and 647 of this title and other 
     applicable provisions of law.''.
     SEC. 407. AIRCRAFT DEEMED PUBLIC AIRCRAFT.
       The text of section 828 of title 14, United States Code, is 
     amended to read as follows:
       ``While assigned to authorized Coast Guard duty, any 
     aircraft shall be deemed to be a Coast Guard aircraft, a 
     public vessel of the United States, and a vessel of the Coast 
     Guard within the meaning of sections 646 and 647 of this 
     title and other applicable provisions of law. Subject to the 
     provisions of sections 823a and 831 of this title, while 
     assigned to duty, qualified Auxiliary pilot shall be deemed 
     to be Coast Guard pilots.''.
     SEC. 408. DISPOSAL OF CERTAIN MATERIAL.
       Section 641(a) of title 14, United States Code, is 
     amended--
       (1) by inserting ``to the Coast Guard Auxiliary, including 
     any incorporated unit thereof,'' after ``with or without 
     charge,''; and
       (2) by striking ``to any incorporated unit of the Coast 
     Guard Auxiliary,'' after ``America,''.

            TITLE V--RECREATIONAL BOATING SAFETY IMPROVEMENT
     SEC. 501. STATE RECREATIONAL BOATING SAFETY GRANTS.
       (a) Transfer of Amounts for State Boating Safety 
     Programs.--
       (1) Transfers.--Section 4(b) of the Act of August 9, 1950 
     (16 U.S.C. 777c(b); commonly referred to as the ``Dingell-
     Johnson Sport Fish Restoration Act'') is amended to read as 
     follows:
       ``(b)(1) Of the balance of each annual appropriation 
     remaining after making the distribution under subsection (a), 
     an amount equal to $15,000,000 for fiscal year 1995, 
     $40,000,000 for fiscal year 1996, $55,000,000 for fiscal year 
     1997, and $69,000,000 for each of fiscal years 1998 and 1999, 
     shall, subject to paragraph (2), be used as follows:
       ``(A) A sum equal to $7,500,000 of the amount available for 
     fiscal year 1995, and a sum equal to $10,000,000 of the 
     amount available for each of fiscal years 1996 and 1997, 
     shall be available for use by the Secretary of the Interior 
     for grants under section 5604(c) of the Clean Vessel Act of 
     1992. Any portion of such a sum available for a fiscal year 
     that is not obligated for those grants before the end of the 
     following fiscal year shall be transferred to the Secretary 
     of Transportation and shall be expended by the Secretary of 
     Transportation for State recreational boating safety programs 
     under section 13106 of title 46, United States Code.
       ``(B) A sum equal to $7,500,000 of the amount available for 
     fiscal year 1995, $30,000,000 of the amount available for 
     fiscal year 1996, $45,000,000 of the amount available for 
     fiscal year 1997, and $59,000,000 of the amount available for 
     each of fiscal years 1998 and 1999, shall be transferred to 
     the Secretary of Transportation and shall be expended by the 
     Secretary of Transportation for recreational boating safety 
     programs under section 13106 of title 46, United States Code.
       ``(C) A sum equal to $10,000,000 of the amount available 
     for each of fiscal years 1998 and 1999 shall be available for 
     use by the Secretary of the Interior for--
       ``(i) grants under section 502(e) of the Coast Guard 
     Authorization Act of 1995; and
       ``(ii) grants under section 5604(c) of the Clean Vessel Act 
     of 1992.

     Any portion of such a sum available for a fiscal year that is 
     not obligated for those grants before the end of the 
     following fiscal year shall be transferred to the Secretary 
     of Transportation and shall be expended by the Secretary of 
     Transportation for State recreational boating safety programs 
     under section 13106 of title 46, United States Code.
       ``(2)(A) Beginning with fiscal year 1996, the amount 
     transferred under paragraph (1)(B) for a fiscal year shall be 
     reduced by the lesser of--
       ``(i) the amount appropriated for that fiscal year from the 
     Boat Safety Account in the Aquatic Resources Trust Fund 
     established under section 9504 of the Internal Revenue Code 
     of 1986 to carry our the purposes of section 13106 of title 
     46, United States Code; or
       ``(ii) $35,000,000.
       ``(iii) for fiscal year 1996 only, $30,000,000.
       ``(B) The amount of any reduction under subparagraph (A) 
     shall be apportioned among the several States under 
     subsection (d) of this section by the Secretary of the 
     Interior.''.
       (2) Conforming Amendment.--Section 5604(c)(1) of the Clean 
     Vessel Act of 1992 (33 U.S.C. 1322 note) is amended by 
     striking ``section 4(b)(2) of the Act of August 9, 1950 (16 
     U.S.C. 777c(b)(2), as amended by this Act)'' and inserting 
     ``section 4(b)(1) of the Act of August 9, 1950 (16 U.S.C. 
     777c(b)(1))''.
       (b) Expenditure of Amounts for State Recreational Boating 
     Safety Programs.--Section 13106 of title 46, United States 
     Code, is amended--
       (1) by striking the first sentence of subsection (a)(1) and 
     inserting the following: ``Subject to paragraph (2), the 
     Secretary shall expend under contracts with States under this 
     chapter in each fiscal year for State recreational boating 
     safety programs an amount equal to the sum of the amount 
     appropriated from the Boat Safety Account for that fiscal 
     year plus the amount transferred to the Secretary under 
     section 4(b)(1) of the Act of August 9, 1950 (16 U.S.C. 
     777c(b)(1)) for that fiscal year.''; and
       (2) by amending subsection (c) to read as follows:
       ``(c) For expenditure under this chapter for State 
     recreational boating safety programs there are authorized to 
     be appropriated to the Secretary of Transportation from the 
     Boat Safety Account established under section 9504 of the 
     Internal Revenue Code of 1986 (26 U.S.C. 9504) not more than 
     $35,000,000 each fiscal year.''.
       (c) Excess FY 1995 Boat Safety Account Funds Transfer.--
     Notwithstanding any other provision of law, $20,000,000 of 
     the annual appropriation from the Sport Fish Restoration 
     Account in fiscal year 1996 made in accordance with the 
     provisions of section 3 of the Act of August 9, 1950 (16 
     U.S.C. 777b) shall be excluded from the calculation of 
     amounts to be distributed under section 4(a) of such Act (16 
     U.S.C. 777c(a)).
     SEC. 502. BOATING ACCESS.
       (a) Findings.--The Congress makes the following findings:
       (1) Nontrailerable recreational motorboats contribute 15 
     percent of the gasoline taxes deposited in the Aquatic 
     Resources Trust Fund while constituting less than 5 percent 
     of the recreational vessels in the United States.
       (2) The majority of recreational vessel access facilities 
     constructed with Aquatic Resources Trust Fund monies benefit 
     trailerable recreational vessels.
       (3) More Aquatic Resources Trust Fund monies should be 
     spent on recreational vessel access facilities that benefit 
     recreational vessels that are nontrailerable vessels.
       (b) Purpose.--The purpose of this section is to provide 
     funds to States for the development of public facilities for 
     transient nontrailerable vessels.
       (c) Survey.--Within 18 months after the date of the 
     enactment of this Act, any State may complete and submit to 
     the Secretary of the Interior a survey which identifies--
       (1) the number and location in the State of all public 
     facilities for transient nontrailerable vessels; and
       (2) the number and areas of operation in the State of all 
     nontrailerable vessels that operate on navigable waters in 
     the State.
       (d) Plan.--Within 6 months after submitting a survey to the 
     Secretary of the Interior in accordance with subsection (c), 
     an eligible State may develop and submit to the Secretary of 
     the Interior a plan for the construction and renovation of 
     public facilities for transient nontrailerable vessels to 
     meet the needs of nontrailerable vessels operating on 
     navigable waters in the State.
       (e) Grant Program.--
       (1) Matching Grants.--The Secretary of the Interior shall 
     obligate not less than one-half of the amount made available 
     for each of fiscal years 1998 and 1999 under section 
     4(b)(1)(C) of the Act of August 9, 1950, as amended by 
     section 501(a)(1) of this Act, to make grants to any eligible 
     State to pay not more than 75 percent of the cost of 
     constructing or renovating public facilities for transient 
     nontrailerable vessels.
       (2) Priority.--
       (A) In General.--In awarding grants under this subsection, 
     the Secretary of the Interior shall give priority to projects 
     that consist of the construction or renovation of public 
     facilities for transient nontrailerable vessels in accordance 
     with a plan submitted by a State submitted under subsection 
     (b).
       (B) Within State.--In awarding grants under this subsection 
     for projects in a particular State, the Secretary of the 
     Interior shall give priority to projects that are likely to 
     serve the greatest number of nontrailerable vessels.
       (f) Definitions.--For the purpose of this section and 
     section 501 of this Act the term--
       (1) ``Act of August 9, 1950'' means the Act entitled ``An 
     Act to provide that the United States shall aid the States in 
     fish restoration and management projects, and for other 
     purposes'', approved August 9, 1950 (16 U.S.C. 777a et seq.);
       (2) ``nontrailerable vessel'' means a recreational vessel 
     greater than 26 feet in length;
       (3) ``public facilities for transient nontrailerable 
     vessels'' means mooring buoys, day-docks, seasonal slips or 
     similar structures located on navigable waters, that are 
     available to the general public and designed for temporary 
     use by nontrailerable vessels;
       (4) ``recreational vessel'' means a vessel--
       (A) operated primarily for pleasure; or
       (B) leased, rented, or chartered to another for the 
     latter's pleasure; and
       (5) ``State'' means each of the several States of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, Guam, American Samoa, the United States Virgin 
     Islands, and the Commonwealth of the Northern Marianas.
                TITLE VI--COAST GUARD REGULATORY REFORM
     SEC. 601. SHORT TITLE.
       This title may be cited as the ``Coast Guard Regulatory 
     Reform Act of 1995''.
     SEC. 602. SAFETY MANAGEMENT.
       (a) Management of Vessels.--Title 46, United States Code, 
     is amended by adding after chapter 31 the following new 
     chapter:
                  ``CHAPTER 32--MANAGEMENT OF VESSELS
``Sec.
``3201. Definitions.
``3202. Application.
``3203. Safety management system.
``3204. Implementation of safety management system.
``3205. Certification.

[[Page S 9458]]


     ``Sec. 3201. Definitions

       ``In this chapter--
       ``(1) `International Safety Management Code' has the same 
     meaning given that term in chapter IX of the Annex to the 
     International Convention for the Safety of Life at Sea, 1974;
       ``(2) `responsible person' means--
       ``(A) the owner of a vessel to which this chapter applies; 
     or
       ``(B) any other person that has--
       ``(i) assumed the responsibility for operation of a vessel 
     to which this chapter applies from the owner; and
       ``(ii) agreed to assume with respect to the vessel 
     responsibility for complying with all the requirements of 
     this chapter and the regulations prescribed under this 
     chapter.
       ``(3) `vessel engaged on a foreign voyage' means a vessel 
     to which this chapter applies--
       ``(A) arriving at a place under the jurisdiction of the 
     United States from a place in a foreign country;
       ``(B) making a voyage between places outside the United 
     States; or
       ``(C) departing from a place under the jurisdiction of the 
     United States for a place in a foreign country.

     ``Sec. 3202. Application

       ``(a) Mandatory Application.--This chapter applies to the 
     following vessels engaged on a foreign voyage:
       ``(1) Beginning July 1, 1998--
       ``(A) a vessel transporting more than 12 passengers 
     described in section 2101(21)(A) of this title; and
       ``(B) a tanker, bulk freight vessel, or high-speed freight 
     vessel, of at least 500 gross tons.
       ``(2) Beginning July 1, 2002, a freight vessel and a mobile 
     offshore drilling unit of at least 500 gross tons.
       ``(b) Voluntary Application.--This chapter applies to a 
     vessel not described in subsection (a) of this section if the 
     owner of the vessel requests the Secretary to apply this 
     chapter to the vessel.
       ``(c) Exception.--Except as provided in subsection (b) of 
     this section, this chapter does not apply to--
       ``(1) a barge;
       ``(2) a recreational vessel not engaged in commercial 
     service;
       ``(3) a fishing vessel;
       ``(4) a vessel operating on the Great Lakes or its 
     tributary and connecting waters; or
       ``(5) a public vessel.

     ``Sec. 3203. Safety management system

       ``(a) In General.--The Secretary shall prescribe 
     regulations which establish a safety management system for 
     responsible persons and vessels to which this chapter 
     applies, including--
       ``(1) a safety and environmental protection policy;
       ``(2) instructions and procedures to ensure safe operation 
     of those vessels and protection of the environment in 
     compliance with international and United States law;
       ``(3) defined levels of authority and lines of 
     communications between, and among, personnel on shore and on 
     the vessel;
       ``(4) procedures for reporting accidents and 
     nonconformities with this chapter;
       ``(5) procedures for preparing for and responding to 
     emergency situations; and
       ``(6) procedures for internal audits and management reviews 
     of the system.
       ``(b) Compliance With Code.--Regulations prescribed under 
     this section shall be consistent with the International 
     Safety Management Code with respect to vessels engaged on a 
     foreign voyage.

     ``Sec. 3204. Implementation of safety management system

       ``(a) Safety Management Plan.--Each responsible person 
     shall establish and submit to the Secretary for approval a 
     safety management plan describing how that person and vessels 
     of the person to which this chapter applies will comply with 
     the regulations prescribed under section 3203(a) of this 
     title.
       ``(b) Approval.--Upon receipt of a safety management plan 
     submitted under subsection (a), the Secretary shall review 
     the plan and approve it if the Secretary determines that it 
     is consistent with and will assist in implementing the safety 
     management system established under section 3203.
       ``(c) Prohibition on Vessel Operation.--A vessel to which 
     this chapter applies under section 3202(a) may not be 
     operated without having on board a Safety Management 
     Certificate and a copy of a Document of Compliance issued for 
     the vessel under section 3205 of this title.

     ``Sec. 3205. Certification

       ``(a) Issuance of Certificate and Document.--After 
     verifying that the responsible person for a vessel to which 
     this chapter applies and the vessel comply with the 
     applicable requirements under this chapter, the Secretary 
     shall issue for the vessel, on request of the responsible 
     person, a Safety Management Certificate and a Document of 
     Compliance.
       ``(b) Maintenance of Certificate and Document.--A Safety 
     Management Certificate and a Document of Compliance issued 
     for a vessel under this section shall be maintained by the 
     responsible person for the vessel as required by the 
     Secretary.
       ``(c) Verification of Compliance.--The Secretary shall--
       ``(1) periodically review whether a responsible person 
     having a safety management plan approved under section 
     3204(b) and each vessel to which the plan applies is 
     complying with the plan; and
       ``(2) revoke the Secretary's approval of the plan and each 
     Safety Management Certificate and Document of Compliance 
     issued to the person for a vessel to which the plan applies, 
     if the Secretary determines that the person or a vessel to 
     which the plan applies has not complied with the plan.
       ``(d) Enforcement.--At the request of the Secretary, the 
     Secretary of the Treasury shall withhold or revoke the 
     clearance required by section 4197 of the Revised Statutes 
     (46 U.S.C. App. 91) of a vessel that is subject to this 
     chapter under section 3202(a) of this title or to the 
     International Safety Management Code, if the vessel does not 
     have on board a Safety Management Certificate and a copy of a 
     Document of Compliance for the vessel. Clearance may be 
     granted on filing a bond or other surety satisfactory to the 
     Secretary.''.
       ``(b) Clerical Amendment.--The table of chapters at the 
     beginning of subtitle II of title 46, United States Code, is 
     amended by inserting after the item relating to chapter 31 
     the following:

``32. Management of vessels.................................3201''.....

       ``(c) Study.--
       (1) In general.--The Secretary of the department in which 
     the Coast Guard is operating shall conduct, in cooperation 
     with the owners, charterers, and managing operators of 
     vessels documented under chapter 121 of title 46, United 
     States Code, and other interested persons, a study of the 
     methods that may be used to implement and enforce the 
     International Management Code for the Safe Operation of Ships 
     and for Pollution Prevention under chapter IX of the Annex to 
     the International Convention for the Safety of Life at Sea, 
     1974.
       (2) Report.--The Secretary shall submit to the Congress a 
     report of the results of the study required under paragraph 
     (1) before the earlier of--
       (A) the date that final regulations are prescribed under 
     section 3203 of title 46, United States Code (as enacted by 
     subsection (a)); or
       (B) the date that is 1 year after the date of enactment of 
     this Act.

     SEC. 603. USE OF REPORTS, DOCUMENTS, RECORDS, AND 
                   EXAMINATIONS OF OTHER PERSONS.

       (a) Reports, Documents, and Records.--Chapter 31 of title 
     46, United States Code, is amended by adding the following 
     new section:

     ``Sec. 3103. Use of reports, documents, and records

       ``The Secretary may rely, as evidence of compliance with 
     this subtitle, on--
       ``(1) reports, documents, and records of other persons who 
     have been determined by the Secretary to be reliable; and
       ``(2) other methods the Secretary has determined to be 
     reliable.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     31 of title 46, United States Code, is amended by adding at 
     the end the following:

``3103. Use of reports, documents, and records.''.

       (c) Examinations.--Section 3308 of title 46, United States 
     Code, is amended by inserting ``or have examined'' after 
     ``examine''.

     SEC. 604. EQUIPMENT APPROVAL.

       (a) In General.--Section 3306(b) of title 46, United States 
     Code, is amended to read as follows:
       ``(b)(1) Equipment and material subject to regulation under 
     this section may not be used on any vessel without prior 
     approval of the Secretary.
       ``(2) Except with respect to use on a public vessel, the 
     Secretary may treat an approval of equipment or materials by 
     a foreign government as approval by the Secretary for 
     purposes of paragraph (1) if the Secretary determines that--
       ``(A) the design standards and testing procedures used by 
     that government meet the requirements of the International 
     Convention for the Safety of Life at Sea, 1974;
       ``(B) the approval of the equipment or material by the 
     foreign government will secure the safety of individuals and 
     property on board vessels subject to inspection; and
       ``(C) for lifesaving equipment, the foreign government--
       ``(i) has given equivalent treatment to approvals of 
     lifesaving equipment by the Secretary; and
       ``(ii) otherwise ensures that lifesaving equipment approved 
     by the Secretary may be used on vessels that are documented 
     and subject to inspection under the laws of that country.''.
       (b) Foreign Approvals.--The Secretary of Transportation, in 
     consultation with other interested Federal agencies, shall 
     work with foreign governments to have those governments 
     approve the use of the same equipment and materials on 
     vessels documented under the laws of those countries that the 
     Secretary requires on United States documented vessels.
       (c) Technical Amendment.--Section 3306(a)(4) of title 46, 
     United States Code, is amended by striking ``clause (1)-(3)'' 
     and inserting ``paragraph (1), (2), and (3)''.

     SEC. 605. FREQUENCY OF INSPECTION.

       (a) Frequency of Inspection, Generally.--Section 3307 of 
     title 46, United States Code, is amended--
       (1) in paragraph (1)--
       (A) by striking ``nautical school vessel'' and inserting 
     ``, nautical school vessel, and small passenger vessel 
     allowed to carry more than 12 passengers on a foreign 
     voyage''; and
       (B) by adding ``and'' after the semicolon at the end;

[[Page S 9459]]

       (2) by striking paragraph (2) and redesignating paragraph 
     (3) as paragraph (2); and
       (3) in paragraph (2) (as so redesignated), by striking ``2 
     years'' and inserting ``5 years''.
       (b) Conforming Amendment.--Section 3710(b) of title 46, 
     United States Code, is amended by striking ``24 months'' and 
     inserting ``5 years''.

     SEC. 606. CERTIFICATE OF INSPECTION.

       Section 3309(c) of title 46, United States Code, is amended 
     by striking ``(but not more than 60 days)''.

     SEC. 607. DELEGATION OF AUTHORITY OF SECRETARY TO 
                   CLASSIFICATION SOCIETIES.

       (a) Authority to Delegate.--Section 3316 of title 46, 
     United States Code, is amended--
       (1) by striking subsections (a) and (d);
       (2) by redesignating subsections (b) and (c) as subsections 
     (a) and (b), respectively; and
       (3) in subsection (b), as so redesignated, by--
       (A) redesignating paragraph (2) as paragraph (3); and
       (B) striking so much of the subsection as precedes 
     paragraph (3), as so designated, and inserting the following:
       ``(b)(1) The Secretary may delegate to the American Bureau 
     of Shipping or another classification society recognized by 
     the Secretary as meeting acceptable standards for such a 
     society, for a vessel documented or to be documented under 
     chapter 121 of this title, the authority to--
       ``(A) review and approve plans required for issuing a 
     certificate of inspection required by this part;
       ``(B) conduct inspections and examinations; and
       ``(C) issue a certificate of inspection required by this 
     part and other related documents.
       ``(2) The Secretary may make a delegation under paragraph 
     (1) to a foreign classification society only--
       ``(A) to the extent that the government of the foreign 
     country in which the society is headquartered delegates 
     authority and provides access to the American Bureau of 
     Shipping to inspect, certify, and provide related services to 
     vessels documented in that country; and
       ``(B) if the foreign classification society has offices and 
     maintains records in the United States.''.
       (b) Conforming Amendments.--
       (1) The heading for section 3316 of title 46, United States 
     Code, is amended to read as follows:

     ``Sec. 3316. Classification societies''.

       (2) The table of sections for chapter 33 of title 46, 
     United States Code, is amended by striking the item relating 
     to section 3316 and inserting the following:

``3316. Classification societies.''.

             TITLE VII--TECHNICAL AND CONFORMING AMENDMENTS

     SEC. 701. AMENDMENT OF INLAND NAVIGATION RULES.

       Section 2 of the Inland Navigational Rules Act of 1980 is 
     amended--
       (1) by amending Rule 9(e)(i) (33 U.S.C. 2009(e)(i)) to read 
     as follows:
       ``(i) In a narrow channel or fairway when overtaking, the 
     power-driven vessel intending to overtake another power-
     driven vessel shall indicate her intention by sounding the 
     appropriate signal prescribed in Rule 34(c) and take steps to 
     permit safe passing. The power-driven vessel being overtaken, 
     if in agreement, shall sound the same signal and may, if 
     specifically agreed to take steps to permit safe passing. If 
     in doubt she shall sound the danger signal prescribed in Rule 
     34(d).'';
       (2) in Rule 15(b) (33 U.S.C. 2015(b)) by inserting ``power-
     driven'' after ``Secretary, a'';
       (3) in Rule 23(a)(i) (33 U.S.C. 2023(a)(i)) after 
     ``masthead light forward''; by striking ``except that a 
     vessel of less than 20 meters in length need not exhibit this 
     light forward of amidships but shall exhibit it as far 
     forward as is practicable;'';
       (4) by amending Rule 24(f) (33 U.S.C. 2024(f)) to read as 
     follows:
       ``(f) Provided that any number of vessels being towed 
     alongside or pushed in a group shall be lighted as one 
     vessel, except as provided in paragraph (iii)--
       ``(i) a vessel being pushed ahead, not being part of a 
     composite unit, shall exhibit at the forward end, sidelights 
     and a special flashing light;
       ``(ii) a vessel being towed alongside shall exhibit a 
     sternlight and at the forward end, sidelights and a special 
     flashing light; and
       ``(iii) when vessels are towed alongside on both sides of 
     the towing vessels a stern light shall be exhibited on the 
     stern of the outboard vessel on each side of the towing 
     vessel, and a single set of sidelights as far forward and as 
     far outboard as is practicable, and a single special flashing 
     light.'';
       (5) in Rule 26 (33 U.S.C. 2026)--
       (A) in each of subsections (b)(i) and (c)(i) by striking 
     ``a vessel of less than 20 meters in length may instead of 
     this shape exhibit a basket;''; and
       (B) by amending subsection (d) to read as follows:
       ``(b) The additional signals described in Annex II to these 
     Rules apply to a vessel engaged in fishing in close proximity 
     to other vessels engaged in fishing.''; and
       (6) by amending Rule 34(h) (33 U.S.C. 2034) to read as 
     follows:
       ``(h) A vessel that reaches agreement with another vessel 
     in a head-on, crossing, or overtaking situation, as for 
     example, by using the radiotelephone as prescribed by the 
     Vessel Bridge-to-Bridge Radiotelephone Act (85 Stat. 164; 33 
     U.S.C. 1201 et seq.), is not obliged to sound the whistle 
     signals prescribed by this rule, but may do so. If agreement 
     is not reached, then whistle signals shall be exchanged in a 
     timely manner and shall prevail.''.

     SEC. 702. MEASUREMENT OF VESSELS.

       Section 14104 of title 46, United States Code, is amended 
     by redesignating the existing text after the section heading 
     as subsection (a) and by adding at the end the following new 
     subsection:
       ``(b) If a statute allows for an alternate tonnage to be 
     prescribed under this section, the Secretary may prescribe it 
     by regulation. Until an alternate tonnage is prescribed, the 
     statutorily established tonnage shall apply to vessels 
     measured under chapter 143 or chapter 145 of this title.''.

     SEC. 703. LONGSHORE AND HARBOR WORKERS COMPENSATION.

       Section 3(d)(3)(B) of the Longshore and Harbor Workers' 
     Compensation Act (33 U.S.C. 903(d)(3)(B)) is amended by 
     inserting after ``1,600 tons gross'' the following: ``as 
     measured under section 14502 of title 46, United
      States Code, or an alternate tonnage measured under section 
     14302 of that title as prescribed by the Secretary under 
     section 14104 of that title''.

     SEC. 704. RADIOTELEPHONE REQUIREMENTS.

       Section 4(a)(2) of the Vessel Bridge-to-Bridge 
     Radiotelephone Act (33 U.S.C. 1203(a)(2)) is amended by 
     inserting after ``one hundred gross tons'' the following: 
     ``as measured under section 14502 of title 46, United States 
     Code, or an alternate tonnage measured under section 14302 of 
     that title as prescribed by the Secretary under section 14104 
     of that title,''.

     SEC. 705. VESSEL OPERATING REQUIREMENTS.

       Section 4(a)(3) of the Ports and Waterways Safety Act (33 
     U.S.C. 1223(a)(3)) is amended by inserting after ``300 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''.

     SEC. 706. MERCHANT MARINE ACT, 1920.

       Section 27A of the Merchant Marine Act, 1920 (46 U.S.C. 
     App. 883-1), is amended by inserting after ``five hundred 
     gross tons'' the following; ``as measured under section 14502 
     of title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title,''.

     SEC. 707. MERCHANT MARINE ACT, 1956.

       Section 2 of the Act of June 14, 1956 (46 U.S.C. App. 
     883a), is amended by inserting after ``five hundred gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''.

     SEC. 708. MARITIME EDUCATION AND TRAINING.

       Section 1302(4)(A) of the Merchant Marine Act, 1936 (46 
     U.S.C. App. 1295a(4)(a)) is amended by inserting after 
     ``1,000 gross tons or more'' the following: `as measured 
     under section 14502 of title 46, United States Code, or an 
     alternate tonnage measured under section 14302 of that title 
     as prescribed by the Secretary under section 14104 of that 
     title''.

     SEC. 709. GENERAL DEFINITIONS.

       Section 2101 of title 46, United States Code, is amended--
       (1) in paragraph (13), by inserting after ``15 gross tons'' 
     the following: ``as measured under section 14502 of title 46, 
     United States Code, or an alternate tonnage measured under 
     section 14302 of that title as prescribed by the Secretary 
     under section 14104 of that title'';
       (2) in paragraph (13a), by inserting after ``3,500 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (3) in paragraph (19), by inserting after ``500 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (4) in paragraph (22), by inserting after ``100 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage, 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (5) in paragraph (30)(A), by inserting after ``500 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of
      that title as prescribed by the Secretary under section 
     14104 of that title'';
       (6) in paragraph (32), by inserting after ``100 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (7) in paragraph (33), by inserting after ``300 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (8) in paragraph (35), by inserting after ``100 gross 
     tons'' the following: ``as measured 

[[Page S 9460]]
     under section 14502 of title 46, United States Code, or an alternate 
     tonnage measured under section 14302 of that title as 
     prescribed by the Secretary under section 14104 of that 
     title''; and
       (9) in paragraph (42), by inserting after ``100 gross 
     tons'' each place it appears, the following: ``as measured 
     under section 14502 of title 46, United States Code, or an 
     alternate tonnage measured under section 14302 of that title 
     as prescribed by the Secretary under section 14104 of that 
     title''.

     SEC. 710. AUTHORITY TO EXEMPT CERTAIN VESSELS.

       Section 2113 of title 46, United States Code, is amended--
       (1) in paragraph (4), by inserting after ``at least 100 
     gross tons but less than 300 gross tons'' the following: ``as 
     measured under section 14502 of title 46, United States Code, 
     or an alternate tonnage measured under section 14302 of that 
     title as prescribed by the Secretary under section 14104 of 
     that title''; and
       (2) in paragraph (5), by inserting after ``at least 100 
     gross tons but less than 500 gross tons'' the following: ``as 
     measured under section 14502 of title 46, United States Code, 
     or an alternate tonnage measured under section 14302 of that 
     title as prescribed by the Secretary under section 14104 of 
     that title''.

     SEC. 711. INSPECTION OF VESSELS.

       Section 3302 of title 46, United States Code, is amended--
       (1) in subsection (c)(1), by inserting after ``5,000 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (2) in subsection (c)(2), by inserting after ``500 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (3) in subsection (c)(3), by inserting after ``500 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (4) in subsection (c)(4)(A), by inserting after ``500 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (5) in subsection (d)(1), by inserting after ``150 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (6) in subsection (i)(1)(A), by inserting after ``300 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''; and
       (7) in subsection (j), by inserting after ``15 gross tons'' 
     the following: ``as measured under section 14502 of title 46, 
     United States Code, or an alternate tonnage measured under 
     section 14302 of that title as prescribed by the Secretary 
     under section 14104 of that title''.

     SEC. 712. REGULATIONS.

       Section 3306 of title 46, United States Code, is amended--
       (1) in subsection (h), by inserting after ``at least 100 
     gross tons but less than 300 gross tons'' the following: ``as 
     measured under section 14502 of title 46, United States Code, 
     or an alternate tonnage measured under section 14302 of that 
     title as prescribed by the Secretary under section 14104 of 
     that title''; and
       (2) in subsection (i), by inserting after ``at least 100 
     gross tons but less than 500 gross tons'' the following: ``as 
     measured under section 14502 of title 46, United States Code, 
     or an alternate tonnage measured under section 14302 of that 
     title as prescribed by the Secretary under section 14101 of 
     that title''.

     SEC. 713. PENALTIES--INSPECTION OF VESSELS.

       Section 3318 of title 46, United States Code, is amended--
       (1) in subsection (a), by inserting after ``100 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''; and
       (2) in subsection (j)(1), by inserting after ``1,600 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''.

     SEC. 714. APPLICATION--TANK VESSELS.

       Section 3702 of title 46, United States Code, is amended--
       (1) in subsection (b)(1), by inserting after ``500 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (2) in subsection (c), by inserting after ``500 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''; and
       (3) in subsection (d), by inserting after ``5,000 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';

     SEC. 715. TANK VESSEL CONSTRUCTION STANDARDS.

       Section 3703a of title 46, United States Code, is amended--
       (1) in subsection (b)(2), by inserting after ``5,000 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (2) in subsection (c)(2), by inserting after ``5,000 gross 
     tons'' each place it appears the following: ``as measured 
     under section 14502 of title 46, United States Code, or an 
     alternate tonnage measured under section 14302 of that title 
     as prescribed by the Secretary under section 14104 of that 
     title'';
       (3) in subsection (c)(3)(A), by inserting after ``15,000 
     gross tons'' the following: ``as measured under section 14502 
     of title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (4) in subsection (c)(3)(B), by inserting after ``30,000 
     gross tons'' the following: ``as measured under section 14502 
     of title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''; and
       (5) in subsection (c)(3)(C), by inserting after ``30,000 
     gross tons'' the following: ``as measured under section 14502 
     of title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''.

     SEC. 716. TANKER MINIMUM STANDARDS.

       Section 3707 of title 46, United States Code, is amended--
       (1) in subsection (a), by inserting after ``10,000 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''; and
       (2) in subsection (b), by inserting after ``10,000 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''.

     SEC. 717. SELF-PROPELLED TANK VESSEL MINIMUM STANDARDS.

       Section 3708 of title 46, United States Code, is amended by 
     inserting after ``10,000 gross tons'' the following: ``as 
     measured under section 14502 of title 46, United States Code, 
     or an alternate tonnage measured under section 14302 of that 
     title as prescribed by the Secretary under section 14104 of 
     that title''.

     SEC. 718. DEFINITION--ABANDONMENT OF BARGES.

       Section 4701(1) of title 46, United States Code, is amended 
     by inserting after ``100 gross tons'' the following: ``as 
     measured under section 14502 of title 46, United States Code, 
     or an alternate tonnage measured under section 14302 of that 
     title as prescribed by the Secretary under section 14104 of 
     that title''.

     SECTION 719. APPLICATION--LOAD LINES.

       Section 5102(b) of title 46, United States Code, is 
     amended--
       (1) in paragraph (4), by inserting after ``5,000 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (2) in paragraph (5), by inserting after ``500 gross tons'' 
     the following: ``as measured under section 14502 of title 46, 
     United States Code, or an alternate tonnage measured under 
     section 14302 of that title as prescribed by the Secretary 
     under section 14104 of that title''; and
       (3) in paragraph (10), by inserting after ``150 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''.

     SEC. 720. LICENSING OF INDIVIDUALS.

       Section 7101(e)(3) of title 46, United States Code, is 
     amended by inserting after ``1,600 gross tons'' the 
     following: ``as measured under section 14502 of title 46, 
     United States Code, or an alternate tonnage measured under 
     section 14302 of that title as prescribed by the Secretary 
     under section 14104 of that title''.

     SEC. 721. ABLE SEAMEN--LIMITED.

       Section 7308 of title 46, United States Code, is amended by 
     inserting after ``100 gross tons'' the following: ``as 
     measured under section 14502 of title 46, United States Code, 
     or an alternate tonnage measured under section 14302 of that 
     title as prescribed by the Secretary under section 14104 of 
     that title''.

     SEC. 722. ABLE SEAMEN--OFFSHORE SUPPLY VESSELS.

       Section 7310 of title 46, United States Code, is amended by 
     inserting after ``500 gross 

[[Page S 9461]]
     tons'' the following: ``as measured under section 14502 of title 46, 
     United States Code, or an alternate tonnage measured under 
     section 14302 of that title as prescribed by the Secretary 
     under section 14104 of that title''.
     SEC. 723. SCALE OF EMPLOYMENT--ABLE SEAMEN.

       Section 7312 of title 46, United States Code, is amended--
       (1) in subsection (b), by inserting after ``1,600 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (2) in subsection (c)(1), by inserting after ``500 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (3) in subsection (d), by inserting after ``500 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (4) in subsection (f)(1), by inserting after ``500 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''; and
       (5) in subsection (f)(2), by inserting after ``500 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''.

     SEC. 724. GENERAL REQUIREMENTS--ENGINE DEPARTMENT.

       Section 7313(a) of title 46, United States Code, is amended 
     by inserting after ``100 gross tons'' the following: ``as 
     measured under section 14502 of title 46, United States Code, 
     or an alternate tonnage measured under section 14302 of that 
     title as prescribed by the Secretary under section 14104 of 
     that title''.

     SEC. 725. COMPLEMENT OF INSPECTED VESSELS.

       Section 8101(h) of title 46, United States Code, is amended 
     by inserting after ``100 gross tons'' the following: ``as 
     measured under section 14502 of title 46, United States Code, 
     or an alternate tonnage measured under section 14302 of that 
     title as prescribed by the Secretary under section 14104 of 
     that title''.

     SEC. 726. WATCHMEN.

       Section 8102(b) of title 46, United States Code, is amended 
     by inserting after ``100 gross tons'' the following: ``as 
     measured under section 14502 of title 46, United States Code, 
     or an alternate tonnage measured under section 14302 of that 
     title as prescribed by the Secretary under section 14104 of 
     that title''.

     SEC. 727. CITIZENSHIP AND NAVAL RESERVE REQUIREMENTS.

       Section 8103(b)(3)(A) of title 46, United States Code, is 
     amended by inserting after ``1,600 gross tons'' the 
     following: ``as measured under section 14502 of title 46, 
     United States Code, or an alternate tonnage measured under 
     section 14302 of that title as prescribed by the Secretary 
     under section 14104 of that title''.

     SEC. 728. WATCHES

       Section 8104 of title 46, United States Code, is amended--
       (1) in subsection (b), by inserting after ``100 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (2) in subsection (d), by inserting after ``100 gross 
     tons'' and after ``5,000 gross tons'' the following: ``as 
     measured under section 14502 of title 46, United States Code, 
     or an alternate tonnage measured under section 14302 of that 
     title as prescribed by the Secretary under section 14104 of 
     that title'';
       (3) in subsection (l)(1), by inserting after ``1,600 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (4) in subsection (m)(1), by inserting after ``1,600 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (5) in subsection (o)(1), by inserting after ``500 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''; and
       (6) in subsection (o)(2), by inserting after ``500 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''.

     SEC. 729. MINIMUM NUMBER OF LICENSED INDIVIDUALS.

       Section 8301 of title 46, United States Code, is amended--
       (1) in subsection (a)(2), by inserting after ``1,000 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title'';
       (2) in subsection (a)(3), by inserting after ``at lease 200 
     gross tons but less than 1,000 gross tons'' the following: 
     ``as measured under section 14502 of title 46, United States 
     Code, or an alternate tonnage measured under section 14302 of 
     that title as prescribed by the Secretary under section 14104 
     of that title'';
       (3) in subsection (a)(4), by inserting after ``at least 100 
     gross tons but less than 200 gross tons'' the following: ``as 
     measured under section 14502 of title 46, United States Code, 
     or an alternate tonnage measured under section 14302 of that 
     title as prescribed by the Secretary under section 14104 of 
     that title'';
       (4) in subsection (a)(5), by inserting after ``300 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''; and
       (5) in subsection (b), by inserting after ``200 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''.

     SEC. 730. OFFICERS' COMPETENCY CERTIFICATES CONVENTION.

       Section 8304(b)(4), of title 46, United States Code, is 
     amended by inserting after ``200 gross tons'' the following: 
     ``as measured under section 14502 of title 46, United States 
     Code, or an alternate tonnage measured under section 14302 of 
     that title as prescribed by the Secretary under section 14104 
     of that title''.

     SEC. 731. MERCHANT MARINERS' DOCUMENTS REQUIRED.

       Section 8701 of title 46, United States Code, is amended--
       (1) in subsection (a), by inserting after ``100 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of the title''; and
       (2) in subsection (a)(6), by inserting after ``1,600 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''.

     SEC 732. CERTAIN CREW REQUIREMENTS.

       Section 8702 of title 46, United States Code, is amended--
       (1) in subsection (a), by inserting after ``100 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''; and
       (2) in subsection (a)(6), by inserting after ``1,600 gross 
     tons'' the following: ``as measured under section 14502 of 
     title 46, United States Code, or an alternate tonnage 
     measured under section 14302 of that title as prescribed by 
     the Secretary under section 14104 of that title''.

     SEC. 733. FREIGHT VESSELS.

       Section 8901 of title 46, United States Code, is amended by 
     inserting after ``100 gross tons'' the following: ``as 
     measured under section 14502 of title 46, United States Code, 
     or an alternate tonnage measured under section 14302 of that 
     title as prescribed by the Secretary under section 14104 of 
     that title''.

     SEC. 734. EXEMPTIONS.

       Section 8905(b) of title 46, United States Code, is amended 
     by inserting after ``200 gross tons'' the following: ``as 
     measured under section 14502 of title 46, United States Code, 
     or an alternate tonnage measured under section 14302 of that 
     title as prescribed by the Secretary under section 14104 of 
     that title''.

     SEC. 735. UNITED STATES REGISTERED PILOT SERVICE.

       Section 9303(a)(2) of title 46, United States Code, is 
     amended by inserting after ``4,000 gross tons'' the 
     following: ``as measured under section 14502 of title 46, 
     United States Code, or an alternate tonnage measured under 
     section 14302 of that title as prescribed by the Secretary 
     under section 14104 of that title''.

     SEC. 736. DEFINITIONS--MERCHANT SEAMEN PROTECTION.

       Section 10101(4)(B) of title 46, United States Code, is 
     amended by inserting after ``1,600 gross tons'' the 
     following: ``as measured under section 14502 of title 46, 
     United States Code, or an alternate tonnage measured under 
     section 14302 of that title as prescribed by the Secretary 
     under section 14104 of that title''.

     SEC. 737. APPLICATION--FOREIGN AND INTERCOASTAL VOYAGES.

       Section 10301(a)(2) of title 46, United States Code, is 
     amended by inserting after ``75 gross tons'' the following: 
     ``as measured under section 14502 of title 46, United States 
     Code, or an alternate tonnage measured under section 14302 of 
     that title as prescribed by the Secretary under section 14104 
     of that title''.

     SEC. 738. APPLICATION--COASTWISE VOYAGES.

       Section 10501(a) of title 46, United States Code, is 
     amended by inserting after ``50 gross 

[[Page S 9462]]
     tons'' the following: ``as measured under section 14502 of title 46, 
     United States Code, or an alternate tonnage measured under 
     section 14302 of that title as prescribed by the Secretary 
     under section 14104 of that title''.

     SEC. 739. FISHING AGREEMENTS.

       Section 10601(a)(1) of title 46, United States Code, is 
     amended by inserting after ``20 gross tons'' the following: 
     ``as measured under section 14502 of title 46, United States 
     Code, or an alternate tonnage measured under section 14302 of 
     that title as prescribed by the Secretary under section 14104 
     of that title''.

     SEC. 740. ACCOMMODATIONS FOR SEAMEN.

       Section 11101(a) of title 46, United States Code, is 
     amended by inserting after ``100 gross tons'' the following: 
     ``as measured under section 14502 of title 46, United States 
     Code, or an alternate tonnage measured under section 14302 of 
     that title as prescribed by the Secretary under section 14104 
     of that title''.

     SEC. 741. MEDICINE CHESTS.

       Section 11102(a) of title 46, United States Code, is 
     amended by inserting after ``75 gross tons'' the following: 
     ``as measured under section 14502 of title 46, United States 
     Code, or an alternate tonnage measured under section 14302 of 
     that title as prescribed by the Secretary under section 14104 
     of that title''.

     SEC. 742. LOGBOOK AND ENTRY REQUIREMENTS.

       Section 11301(a)(2) of title 46, United States Code, is 
     amended by inserting after ``100 gross tons'' the following: 
     ``as measured under section 14502 of title 46, United States 
     Code, or an alternate tonnage measured under section 14302 of 
     that title as prescribed by the Secretary under section 14104 
     of that title''.

     SEC. 743. COASTWISE ENDORSEMENTS.

       Section 12106(c)(1) of title 46, United States Code, is 
     amended by striking ``two hundred gross tons'' and inserting 
     ``200 gross tons as measured under section 14502 of title 46, 
     United States Code, or an alternate tonnage measured under 
     section 14302 of that title as prescribed by the Secretary 
     under section 14104 of that title''.

     SEC. 744. FISHERY ENDORSEMENTS.

       Section 12108(c)(1) of title 46, United States Code, is 
     amended by striking ``two hundred gross tons'' and inserting 
     ``200 gross tons as measured under section 14502 of title 46, 
     United States Code, or an alternate tonnage measured under 
     section 14302 of that title as prescribed by the Secretary 
     under section 14104 of that title''.

     SEC. 745. CONVENTION TONNAGE FOR LICENSES, CERTIFICATES, AND 
                   DOCUMENTS.

       (a) Authority To Use Convention Tonnage.--Chapter 75 of 
     title 46, United States Code, is amended by adding at the end 
     the following:

     ``Sec. 7506. Convention tonnage for licenses, certificates 
       and documents

       ``Notwithstanding any provision of section 14302(c) or 
     14305 of this title, the Secretary may--
       ``(1) evaluate the service of an individual who is applying 
     for a license, a certificate of registry, or a merchant 
     mariner's document by using the tonnage as measured under 
     chapter 143 of this title for the vessels on which that 
     service was acquired, and
       ``(2) issue the license, certificate, or document based on 
     that service.''.
       (b) Clerical Amendment.--The analysis to chapter 75 of 
     title 46, United States Code, is amended by adding a new item 
     as follows:

``7506. Convention tonnage for licenses, certificates and 
              documents.''.

  Mr. PRESSLER. Mr. President, as chairman of the Senate Committee on 
Commerce, Science, and Transportation, I am pleased to cosponsor the 
Coast Guard authorization bill for the current and next fiscal years. 
The Coast Guard is one of our Nation's oldest agencies, tracing its 
roots to the year 1790, but it also is one of our most efficient. The 
Coast Guard has broad ranging responsibilities, from enforcing 
America's maritime laws to ensuring the safety of recreational boaters 
in places like the beautiful Lewis and Clark Lake in my home State of 
South Dakota.
  I believe this bill makes a serious effort to improve the Coast 
Guard's efficiency while maintaining its effectiveness. It is clear the 
American taxpayers are demanding a smaller, more accountable Federal 
Government. At the same time, the demand for certain Government 
services, including those provided by the Coast Guard, continues to be 
great. I intend, by working with my colleagues on the Commerce 
Committee and along with other Senators who are interested in the Coast 
Guard, to meet this challenge.
  Mr. President, the core provisions of this bill are consistent with 
the agenda of the new Congress. For example, the bill includes 
important provisions that enhance recreational boating safety for the 
Nation's 50 million boaters by providing vital funding to the States to 
continue essential boating safety programs while eliminating the need 
to fund the program through annual appropriations. It also provides a 
stable source of funding to improve the safety of highway bridges that 
cross navigable waters. It reduces unnecessary and costly regulations 
on industry, thereby improving the competitiveness of the U.S. maritime 
industry. It also addresses the operation of the Coast Guard auxiliary, 
a 36,000 volunteer organization, and it improves the management and 
efficiency of the service.
  I am pleased to have the very capable Senator Stevens of Alaska, 
chairman of our Oceans and Fisheries Subcommittee, spearheading this 
authorization process. I'm hopeful the Commerce Committee will be able 
to act on this bill in an expedited fashion. I ask my colleagues to 
work with me as we authorize the Coast Guard.
                                 ______

      By Mr. BAUCUS:
  S. 1005. A bill to amend the Public Buildings Act of 1959 to improve 
the process of constructing, altering, purchasing, and acquiring public 
buildings, and for other purposes; to the Committee on Environment and 
Public Works.


                the public buildings reform act of 1995

 Mr. BAUCUS. Mr. President, I introduce the Public Buildings 
Reform Act of 1995.
  This law will change the way our Government puts up Federal 
buildings.


                        spending on courthouses

  Montanans want Government to cut waste, and spending on Federal 
buildings is a place where you can find a lot of waste.
  As chairman of the Environment and Public Works Committee last year, 
I investigated several large Federal courthouse construction projects. 
I found that there is little control over the design and costs of 
Federal courthouse projects.
  Courthouses sound small, but they are big money. Last year, GSA 
requested over $420 million for courthouse projects.
  And for this fiscal year, GSA is asking for a courthouse construction 
budget more than 50 percent higher. GSA wants more than $645 million 
for courthouses. About two out of every three tax dollars spent by GSA 
goes to build courthouses.


                          waste in courthouses

  Mr. President, these are huge numbers--a billion dollars in 2 years 
for Federal courthouse construction. And, to be charitable, this money 
is not always spent wisely.
  Many courthouses are way too expensive. Quite a few have cost us over 
$200 million, and one has run up bills in excess of $500 million. And 
what is particularly galling, some of these courthouses are practically 
palaces.
  You can find courthouses around the country with such extravagant 
furnishings as mahogany and rosewood interior panelling, brass 
doorknobs, private kitchens for judges, boat docks, and more. There is 
no reason for it. We would be better off not spending the money for 
these things at all.
  There are even cases where the judges have set such high design 
standards for courthouses that they can only be satisfied by building a 
new courthouse, even though renovating the existing building may 
actually make more sense.


                  the general services administration

  So why has this happened? To find out, we have to look at an obscure 
agency called the ``General Services Administration'' or GSA.
  The GSA is the Federal Government's landlord. It leases and builds 
Federal office buildings, courthouses, border stations, and other 
Federal structures. And GSA has the responsibility to make sure the 
Government spends its money wisely for real estate transactions. But 
unfortunately, GSA does not have the legislative tools to make wise 
real estate decisions.
  First of all, it does not set priorities. Each year, GSA submits a 
budget request to Congress that delineates the projects to be funded, 
there is no way for Congress to know which projects are the most 
important based on need.
  And GSA is not solely to blame. It is often forced to adopt pet 
projects on behalf of individual Members of Congress, rather than 
basing its decisions on an overall vision of what construction is 
necessary. Each year, Congress approves projects, especially courthouse 
projects, that are not necessary and worthy but rather frilly and 
wasteful.
  Second, responsibility for final designs is spread among different 
areas of Government, meaning that no one person is finally accountable 
for making 

[[Page S 9463]]
sensible fiscal decisions. I was stunned to find, for example, that the 
Administrative Office of the Courts set its own design guidelines for 
courthouses. This is one reason you suddenly find that a relatively 
responsible building has suddenly sprouted fountains and grown rosewood 
panels.
  In effect, the courts themselves design their own courthouses just as 
a king can design his own palace. The temptations are obvious even in 
theory. And they are glaring when you go to visit some of the 
courthouses we investigated last year. To make matters worse, the 
design guidelines are constantly changing at the whim of the AOC. 
Virtually nobody knows what they are. And, according to the General 
Accounting Office, the AOC frequently inflates the projected number of 
judges to be housed in a particular courthouse.
                            time for reform

  Mr. President, it is time for reform. A more rational, accountable 
process can cut waste, save money and make Government more responsive 
to taxpayers, that is what my bill would do: To improve oversight, it 
will require GSA each year to submit a biennial plan to Congress that 
prioritizes Federal building projects; to ensure accountability, it 
will rewrite the courthouse design guide and require GSA to establish a 
uniform, responsible set of design standards; To improve oversight, it 
will require GSA to submit more information to Congress on each 
project, such as a realistic projection of the number of judges to be 
housed by a new courthouse; To cut waste, it will require GSA to fully 
justify the need and cost of each project. This must include a 
benchmark cost, to let the public see whether a project is extremely 
expensive for that particular area of the country, and on top of that, 
it will impose a 9-month moratorium on the spending of money for any 
new construction projects so we can get these other reforms in place.


                               conclusion

  Mr. President, we all have to prioritize our own personal budgets and 
needs. GSA and the courts should do the same. This bill will help them 
do that. And I look forward to working with the chairman of the 
Environment and Public Works Committee and other Members to see it 
happen.
  I ask unanimous consent that a copy of the bill and a section-by-
section be printed in the Record.

  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                S. 1005

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Public Buildings Reform Act 
     of 1995''.

     SEC. 2. SITE SELECTION.

       Section 5 of the Public Buildings Act of 1959 (40 U.S.C. 
     604) is amended by adding at the end the following:
       ``(d) Consideration of Costs.--In selecting a site for a 
     project to construct, alter, purchase, or acquire (including 
     lease) a public building, or to lease office or any other 
     type of space, under this Act, the Administrator shall 
     consider the impact of the selection of a particular site on 
     the cost and space efficiency of the project.''.

     SEC. 3. CONGRESSIONAL OVERSIGHT OF PUBLIC BUILDINGS PROJECTS.

       (a) In General.--Section 7 of the Public Buildings Act of 
     1959 (40 U.S.C. 606) is amended--
       (1) in subsection (a)--
       (A) by striking the last sentence;
       (B) in the first sentence, by striking ``In order'' and 
     inserting the following:
       ``(2) Prerequisites to obligation of funds.--
       ``(B) Approval requirements.--
       ``(i) Construction, alteration, purchase, and 
     acquisition.--In order'';
       (C) in the second sentence, by striking ``No'' and 
     inserting the following:
       ``(ii) Lease.--No'';
       (D) in the third sentence, by striking ``No'' and inserting 
     the following:
       ``(iii) Alteration.--No'';
       (E) by striking ``Sec. 7. (a)'' and inserting the 
     following:

     ``SEC. 7. SUBMISSION AND APPROVAL OF PROPOSED PROJECTS.

       ``(a) In General.--
       ``(1) Public buildings plan.--
       ``(A) In general.--Not later than 15 days after the 
     President submits to Congress the budget of the United States 
     Government under section 1105 of title 31, United States 
     Code, the Administrator shall submit to Congress a public 
     buildings plan (referred to in this subsection as the 
     `biennial plan') for the first 2 fiscal years that begin 
     after the date of submission. The biennial plan shall specify 
     such projects for which approval is required under paragraph 
     (2)(B) relating to the construction, alteration, purchase, or 
     acquisition (including lease) of public buildings, or the 
     lease of office or any other type of space, as the 
     Administrator determines are necessary to carry out the 
     duties of the Administrator under this Act or any other 
     provision of law.
       ``(B) Contents.--The biennial plan shall include--
       ``(i) a 5-year strategic capital asset management plan for 
     accommodating the public building needs of the Federal 
     Government that reflects the office space and other public 
     buildings needs of the Federal Government and that is based 
     on procurement mechanisms that allow the Administrator to 
     take advantage of fluctuations in market forces affecting 
     building construction and availability;
       ``(ii) a list--

       ``(I) in order of priority, of each construction, 
     alteration, purchase, or acquisition (including lease) 
     project described in subparagraph (A) for which an 
     authorization of appropriations is--

       ``(aa) requested for the first of the 2 fiscal years of the 
     biennial plan referred to in subparagraph (A) (referred to in 
     this paragraph as the `first year'); or
       ``(bb) expected to be requested for the second of the 2 
     fiscal years of the biennial plan referred to in subparagraph 
     (A) (referred to in this paragraph as the `second year'); and

       ``(II) that includes a description of each such project and 
     the number of square feet of space planned for each such 
     project;

       ``(iii) a list, in order of priority, of each lease or 
     lease renewal described in subparagraph (A) for which an 
     authorization of appropriations is--

       ``(I) requested for the first year; or
       ``(II) expected to be requested for the second year;

       ``(iv) a list, in order of priority, of each planned repair 
     or alteration project described in subparagraph (A) for which 
     an authorization of appropriations is--

       ``(I) requested for the first year; or
       ``(II) expected to be requested for the second year;

       ``(v) an explanation of the basis for each order of 
     priority specified under clauses (ii), (iii), and (iv);
       ``(vi) the estimated annual and total cost of each project 
     requested in the biennial plan;
       ``(vii) a list of each public building planned to be 
     vacated in whole or in part, to be exchanged for other 
     property, or to be disposed of during the period covered by 
     the biennial plan; and
       ``(viii) requests for authorizations of appropriations 
     necessary to carry out projects listed in the biennial plan 
     for the first year.
       ``(C) Presentation of information in plan.--
       ``(i) First year.--In the case of a project for which the 
     Administrator has requested an authorization of 
     appropriations for the first year, information required to be 
     included in the biennial plan under subparagraph (B) shall be 
     presented in the form of a prospectus that meets the 
     requirements of paragraph (2)(C).
       ``(ii) Second year.--

       ``(I) In general.--In the case of a project for which the 
     Administrator expects to request an authorization of 
     appropriations for the second year, information required to 
     be included in the biennial plan under subparagraph (B) shall 
     be presented in the form of a project description.
       ``(II) Good faith estimates.--

       ``(aa) In general.--Each reference to cost, price, or any 
     other dollar amount contained in a project description 
     referred to in subclause (I) shall be considered to be a good 
     faith estimate by the Administrator.
       ``(bb) Effect.--A good faith estimate referred to in item 
     (aa) shall not bind the Administrator with respect to a 
     request for appropriation of funds for a fiscal year other 
     than a fiscal year for which an authorization of 
     appropriations for the project is requested in the biennial 
     plan.
       ``(cc) Explanation of deviation from estimate.--If the 
     request for an authorization of appropriations contained in 
     the prospectus for a project submitted under paragraph (2)(C) 
     is different from a good faith estimate for the project 
     referred to in item (aa), the prospectus shall include an 
     explanation of the difference.
       ``(D) Reinclusion of projects in plans.--If a project 
     included in a biennial plan is not approved in accordance 
     with this subsection, or if funds are not made available to 
     carry out a project, the Administrator may include the 
     project in a subsequent biennial plan submitted under this 
     subsection.'';
       (F) in paragraph (2) (as designated by subparagraph (B))--
       (i) by inserting after ``(2) Prerequisites to obligation of 
     funds.--'' the following:
       ``(A) In general.--Notwithstanding any other provision of 
     law, the Administrator may not obligate funds that are made 
     available for any project for which approval is required 
     under subparagraph (B) unless--
       ``(i) the project was included in the biennial plan for the 
     fiscal year; and
       ``(ii) a prospectus for the project was submitted to 
     Congress and approved in accordance with this paragraph.''; 
     and
       (ii) by adding at the end the following:
       ``(C) Prospectuses.--For the purpose of obtaining approval 
     of a proposed project described in the biennial plan, the 
     Administrator shall submit to Congress a prospectus for the 
     project that includes-- 

[[Page S 9464]]

       ``(i) a brief description of the public building to be 
     constructed, altered, purchased, or acquired, or the space to 
     be leased, under this Act;
       ``(ii) the location of the building or space to be leased 
     and an estimate of the maximum cost, based on the predominant 
     local office space measurement system (as determined by the 
     Administrator), to the United States of the construction, 
     alteration, purchase, or acquisition of the building, or 
     lease of the space;
       ``(iii) in the case of a project for the construction of a 
     courthouse or other public building consisting solely of 
     general purpose office space, the cost benchmark for the 
     project determined under subsection (d); and
       ``(iv) in the case of a project relating to a courthouse--

       ``(I) as of the date of submission of the prospectus, the 
     number of--

       ``(aa) Federal judges for whom the project is to be carried 
     out; and
       ``(bb) courtrooms available for the judges;

       ``(II) the projected number of Federal judges and 
     courtrooms to be accommodated by the project at the end of 
     the 10-year period beginning on the date; and
       ``(III) a justification for the projection under subclause 
     (II) (including a specification of the number of authorized 
     positions, and the number of judges in senior status, to be 
     accommodated).''; and

       (G) by adding at the end the following:
       ``(3) Emergency authority.--
       ``(A) Overriding interest.--If the Administrator, in 
     consultation with the Commissioner of the Public Buildings 
     Service, determines that an overriding interest requires 
     emergency authority to construct, alter, purchase, or acquire 
     a public building, or lease office or storage space, and that 
     the authority cannot be obtained in a timely manner through 
     the biennial planning process required under paragraph (1), 
     the Administrator may submit a written request for the 
     authority to the Committee on Environment and Public Works of 
     the Senate and the Committee on Transportation and 
     Infrastructure of the House of Representatives. The 
     Administrator may carry out the project for which authority 
     was requested under the preceding sentence if the project is 
     approved in the manner described in paragraph (2)(B).
       ``(B) Declared emergencies.--
       ``(i) Lease authority.--Notwithstanding any other provision 
     of this section, the Administrator may enter into an 
     emergency lease during any period of emergency declared by 
     the President pursuant to the Robert T. Stafford Disaster 
     Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.) 
     or any other law, or declared by any Federal agency pursuant 
     to any applicable law, except that no such emergency lease 
     shall be for a period of more than 5 years.
       ``(ii) Reporting.--As part of each biennial plan, the 
     Administrator shall describe any emergency lease entered into 
     by the Administrator under clause (i) during the preceding 
     fiscal year.'';
       (2) in subsection (b)--
       (A) by striking ``(b) The'' and inserting the following:
       ``(b) Increases in Costs of Projects.--
       ``(1) Increase of 10 percent or less.--The''; and
       (B) by adding at the end the following:
       ``(2) Greater increases.--If the Administrator increases 
     the estimated maximum cost of a project in an amount greater 
     than the increase authorized by paragraph (1), the 
     Administrator shall, not later than 30 days after the date of 
     the increase, notify the Committee on Environment and Public 
     Works of the Senate and the Committee on Transportation and 
     Infrastructure of the House of Representatives of the amount 
     of, and reasons for, the increase.'';
       (3) in subsection (c), by striking ``(c) In the case'' and 
     inserting the following:
       ``(c) Rescission of Approval.--In the case''; and
       (4) by striking subsection (d) and inserting the following:
       ``(d) Development of Cost Benchmarks.--
       ``(1) In general.--The Administrator shall develop standard 
     cost benchmarks for projects for the construction of 
     courthouses, and other public buildings consisting solely of 
     general purpose office space, for which a prospectus is 
     required under subsection (a)(2). The benchmarks shall 
     consist of the appropriate cost per square foot for low-rise, 
     mid-rise, and high-rise projects subject to the various 
     factors determined under paragraph (2).
       ``(2) Factors.--In developing the benchmarks, the 
     Administrator shall consider such factors as geographic 
     location (including the necessary extent of seismic 
     structural supports), the tenant agency, and necessary 
     parking facilities.''.
       (b) Inclusion of Requested Building Projects in Biennial 
     Plan.--Section 11 of the Act (40 U.S.C. 610) is amended--
       (1) by striking ``Sec. 11. (a) Upon'' and inserting the 
     following:

     ``SEC. 11. REPORTS TO CONGRESS.

       ``(a) Reports on Uncompleted Projects.--Upon''; and
       (2) in subsection (b)--
       (A) by striking ``(b) The Administrator'' and inserting the 
     following:
       ``(b) Building Project Surveys and Reports.--
       ``(1) In general.--The Administrator'';
       (B) in the second sentence of paragraph (1) (as so 
     designated), by inserting before the period at the end the 
     following: ``, and shall specify whether the project is 
     included in a 5-year strategic capital asset management plan 
     required under section 7(a)(1)(B)(i) or a prioritized list 
     required under section 7(a)(1)(B)''; and
       (C) by adding at the end the following:
       ``(2) Inclusion of requested building projects in biennial 
     plan.--The Administrator may include a prospectus for the 
     funding of a public building project for which a report is 
     submitted under paragraph (1) in a biennial public buildings 
     plan required under section 7(a)(1).''.
       (c) Technical and Conforming Amendments.--
       (1) Section 7 of the Act (40 U.S.C. 606) is amended by 
     striking ``Committee on Public Works and Transportation'' 
     each place it appears and inserting ``Committee on 
     Transportation and Infrastructure''.
       (2) Section 11(b)(1) of the Act (as amended by subsection 
     (b)(2)) is further amended by striking ``Committee on Public 
     Works and Transportation'' and inserting ``Committee on 
     Transportation and Infrastructure''.

     SEC. 4. FEDERAL GOVERNMENT ASSET MANAGEMENT.

       Section 12 of the Public Buildings Act of 1959 (40 U.S.C. 
     611) is amended--
       (1) by striking ``Sec. 12. (a) The Administrator'' and 
     inserting the following:

     ``SEC. 12. FEDERAL GOVERNMENT ASSET MANAGEMENT.

       ``(a) Duties of Administrator.--
       ``(1) In general.--The Administrator'';
       (2) in subsection (a), by adding at the end the following:
       ``(2) Repository for asset management information.--The 
     Administrator shall use the results of the continuing 
     investigation and survey required under paragraph (1) to 
     establish a central repository for the asset management 
     information of the Federal Government.'';
       (3) in subsection (b)--
       (A) by striking ``(b) In carrying'' and inserting the 
     following:
       ``(b) Cooperation Among Federal Agencies.--
       ``(1) By the administrator.--In carrying'';
       (B) by striking ``Each Federal'' and inserting the 
     following:
       ``(2) By the agencies.--Each Federal''; and
       (C) by adding at the end the following:
       ``(3) Identification and disposition of unneeded 
     buildings.--
       ``(A) Identification.--Each Federal agency shall--
       ``(i) identify public buildings that are or will become 
     unneeded, obsolete, or underutilized during the 5-year period 
     beginning on the date of the identification; and
       ``(ii) annually report the information on the buildings 
     described in clause (i) to the Administrator.
       ``(B) Disposition.--The Administrator shall find more cost-
     effective uses for, or sell, the public buildings identified 
     under subparagraph (A).'';
       (4) in subsection (c), by striking ``(c) Whenever'' and 
     inserting the following:
       ``(c) Identification of Buildings of Historic, 
     Architectural, and Cultural Significance.--Whenever''; and
       (5) in subsection (d), by striking ``(d) The 
     Administrator'' and inserting the following:
       ``(d) Regard to Comparative Urgency of Need.--The 
     Administrator''.

     SEC. 5. ADDRESSING LONG-TERM GOVERNMENT HOUSING NEEDS.

       (a) Report on Long-Term Housing Needs.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the head of each Federal agency (as 
     defined in section 13(3) of the Public Buildings Act of 1959 
     (40 U.S.C. 612(3)) shall review and report to the 
     Administrator on the long-term housing needs of the agency. 
     The Administrator shall consolidate the agency reports and 
     submit a consolidated report to Congress.
       (2) Assistance from account managers.--The Administrator of 
     General Services shall designate an account manager for each 
     agency to assist--
       (A) the agency in carrying out the review required under 
     paragraph (1); and
       (B) the Administrator in preparing uniform standards for 
     housing needs for--
       (i) executive agencies (as defined in section 13(4) of the 
     Act (40 U.S.C. 612(4)); and
       (ii) establishments in the judicial branch of the Federal 
     Government.
       (b) Reduction in Aggregate Office and Storage Space.--By 
     the end of the third fiscal year that begins after the date 
     of enactment of this Act, the Federal agencies referred to in 
     subsection (a)(1) shall, to the maximum extent practicable, 
     collectively reduce by no less than 10 percent the aggregate 
     office and storage space held by the agencies on the date of 
     enactment of this Act.

     SEC. 6. MORATORIUM ON CONSTRUCTION OF PUBLIC BUILDINGS.

       (a) In General.--Notwithstanding any other law, during the 
     period beginning on the date of enactment of this Act and 
     ending on the date that is 270 days after the date of 
     enactment, the Administrator of General Services may not 
     expend funds on any project relating to the construction, 
     purchase, or acquisition of a public building with respect to 
     which no funds (including no funds for site selection, 
     design, or construction) have previously been expended.
       (b) Definitions.--In this section, the terms ``construct'' 
     and ``public building'' have the meanings provided in section 
     13 of the Public Buildings Act of 1959 (40 U.S.C. 612).
     
[[Page S 9465]]


     SEC. 7. DESIGN GUIDES AND STANDARDS FOR COURT ACCOMMODATIONS.

       (a) Report.--Not later than 60 days after the date of 
     enactment of this Act, the Administrator of General Services, 
     in consultation with the Director of the Administrative 
     Office of the United States Courts, shall submit a report to 
     the Committee on Environment and Public Works of the Senate 
     and the Committee on Transportation and Infrastructure of the 
     House of Representatives that specifies the characteristics 
     of court accommodations that are essential to the provision 
     of due process of law and the safe, fair, and efficient 
     administration of justice by the Federal court system.
       (b) Design Guides and Standards.--
       (1) Development.--Not later than 180 days after the date of 
     enactment of this Act, the Administrator, in consultation 
     with the Director of the Administrative Office of the United 
     States Courts and after notice and opportunity for comment, 
     shall develop design guides and standards for Federal court 
     accommodations based on the report submitted under subsection 
     (a). In developing the design guides and standards, the 
     Administrator shall consider space efficiency and the 
     appropriate standards for furnishings.
       (2) Use.--Notwithstanding section 462 of title 28, United 
     States Code, the design guides and standards developed under 
     paragraph (1) shall be used in the design of court 
     accommodations.
                                                                    ____

                      Section-by-Section Analysis

       Section 1. Short Title.
       Provides that the Act may be cited as the ``Public 
     Buildings Reform Act of 1995''.
       Section 2. Site Selection.
       This section provides that in selecting a site for a 
     federal buildings project undertaken by the General Services 
     Administration (GSA), the impact of the site selection on the 
     cost and efficiency of the project shall be considered.
       Section 3. Congressional Oversight of Public Buildings 
     Projects.
       The purpose of this section is to require a prioritization 
     of GSA projects requiring Congressional approval and to 
     provide Congress with additional information on each GSA 
     project.
       The section:
       Requires GSA to submit to Congress, as part of an ongoing 
     two year planning cycle, its authorization and appropriations 
     requests, in order of priority, of constructing, altering, 
     purchasing, acquiring or leasing government office space.
       Prohibits the Administration from obligating funds for any 
     prospectus-level project unless the project is part of the 
     biennial plan for the fiscal year and unless a prospectus for 
     it is also submitted to and authorized by the appropriate 
     Congressional committees, as required under current law.
       Requires the GSA to include additional information in each 
     project prospectus submitted to the Senate Environment and 
     Public Works Committee and the House Transportation and 
     Infrastructure Committee for approval. Each prospectus shall 
     include:
       (a) a brief description of the project, including scope and 
     tenant agency;
       (b) the location of the project and the estimated maximum 
     cost;
       (c) the cost benchmark for the project;
       (d) the current number of Federal judges and courtrooms as 
     of the date of submission of the prospectus; and
       (e) the projected number of Federal judges and courtrooms 
     expected to be accommodated by the proposed project;
       (1) the projected figures must be justified by including 
     information on the authorized judicial positions and Federal 
     judges expected to be in senior status.
       Gives GSA the emergency authority to submit a prospectus 
     for a project not contained in the biennial plan if there is 
     an overriding interest. Should such a prospectus be submitted 
     under this emergency authority, the prospectus must still be 
     approved by the appropriate committees.
       Allows the Administrator to enter into an emergency lease, 
     of no more than 5 years, if there is a Presidentially 
     declared disaster issued pursuant to the Robert T. Stafford 
     Disaster Relief and Emergency Assistance Act.
       Provides that should GSA seek a reprogramming request from 
     the Congressional Appropriations Committees for a project, 
     GSA must notify the appropriate committees of the reasons for 
     the request and the reprogramming amount.
       Ensures that an 11(b) project request made by Congressional 
     committees are considered as part of the overall biennial 
     planning process and not authorized separately. Included in 
     the 11(b) report will be a priority ranking of the project.
       Section 4. Federal Government Asset Management.
       This section establishes a central repository at GSA to 
     house the asset management information of the Federal 
     Government. Each agency will identify--through a long-term 
     plan--unneeded, obsolete and underutilized public buildings 
     and annually report the information to GSA. The GSA, in turn, 
     will find cost-effective uses for the public buildings, 
     including asset sales.
       Section 5. Addressing Long-Term Government Housing Needs.
       This section provides that within one year, each agency 
     shall report to Congress on the long-term housing needs of 
     the agency in an attempt to reduce the Federal space needs. 
     GSA will designate managers to each agency to assist in this 
     review. By the end of the third year, each Federal agency 
     shall, to the maximum extent practicable, reduce by no less 
     than 10 percent its aggregate office or storage space.
       Section 6. Moratorium on the Construction of Public 
     Buildings.
       This section provides for a nine month moratorium on new 
     construction, purchase or acquisition projects. The 
     moratorium applies only to those projects in which no funds 
     have previously been expended on any phase of the project.
       Section 7. Design Guides and Standards for Court 
     Accommodations.
       This section provides that no later than 60 days after 
     enactment, GSA, in consultation with the Administrative 
     Office of the Courts, shall submit a report to the 
     appropriate committees on the basic characteristics of court 
     accommodations. GSA shall use the results of this report to 
     develop, in consultation with the Administrative Office of 
     the Courts, design guides and standards for Federal court 
     accommodations. These design guides and standards shall then 
     be used in the construction of Federal courthouses.
     

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