[Congressional Record Volume 141, Number 133 (Wednesday, August 9, 1995)]
[Senate]
[Pages S12079-S12098]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. FAIRCLOTH (for himself, Mr. Frist, Mr. Bennett, and Mr. 
        Shelby):
  S. 1132. A bill to amend the Fair Housing Act, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.


       the fair housing reform and freedom of speech act of 1995

 Mr. FAIRCLOTH. Mr. President, today I am introducing the Fair 
Housing Reform and Freedom of Speech Act of 1995.
  Mr. President when I ran for the Senate in 1992, one of the themes of 
my campaign was that I wanted a return to common sense in Washington, 
DC. The purpose of the bill I am introducing today is to bring a little 
common sense to our nation's housing policy, and particularly the way 
the Clinton administration has conducted housing policy.
  First, this bill would overturn the recent Supreme Court ruling in 
City of Edmonds versus Oxford House. In that case, a home for 10 to 12 
recovering drug addicts and alcoholics was located in a single family 
neighborhood. The city tried to have the house removed because it 
violated the city's local zoning code that placed limits on the number 
of unrelated persons living together. the Supreme Court ruled that the 
Fair Housing Act was violated by this zoning law.
  I think the Supreme Court ruled incorrectly in this case. The 
Congress clearly intended an exemption from the Fair Housing Act 
regarding the number of unrelated occupants living together. My bill 
would clarify that localities can continue to zone certain areas as 
single family neighborhoods, by limiting the number of unrelated 
occupants living together. In my opinion, I think families should be 
able to live in neighborhoods without the threat that groups homes--
unsuitable for single family neighborhoods--can move in next door and 
receive the protection of the Fair Housing Act.
  But the most important point is this one; decisions about zoning 
should be made in cities and towns and not in Washington. If a locality 
wants to permit groups homes in a certain area--it can do so without 
HUD interfering in the decision.
  Mr. President, my bill would also correct the abuses of the Fair 
Housing Act by the Clinton administration. In the past year, HUD has 
taken to suing people under the Fair Housing Act who have protested 
group homes coming into their neighborhoods. The most well known of 
these cases was the incident involving three residents in Berkeley, CA. 
HUD's actions were a blatant violation of their right to freedom of 
speech. HUD's abuse was so bad, that they dropped the suit and promised 
they wouldn't do it again. HUD even issued new guidelines on the 
subject so it couldn't happen again.
  But, just recently--HUD has done it again. This time HUD is suing 
five Californians who went to court to get a restraining order against 
a group home for the developmentally disabled that was planned for 
their neighborhood.
  Mr. President, the issue is not whether the location for this group 
home is proper, that issue can be decided by the courts. The issue is 
freedom of speech. I believe anybody has the right to speak their mind 
and to take legal action against what they think is an injustice. HUD 
won't even let them do that.
  HUD takes the opposite view. They want to intimidate people into 
submission. They want to use the Fair Housing Act as a weapon to 
silence legitimate speech, not discrimination. In the 

[[Page S12080]]
process, they have trivialized real discrimination. They have made a 
laughing stock of the Fair Housing Act--that it could actually be used 
to silence legal protest. This is wrong and it has to stop.
  Mr. President, I hope that we can make these reforms to the Fair 
Housing Act. We need to preserve this act to prevent real 
discrimination, but we do not need to use the act to pursue a far, far 
left agenda that defies common sense, and silences free speech.
                                 ______

      By Mr. McCONNELL (for himself, Mr. Harkin, and Mr. Hatch):
  S. 1133. A bill to amend the Food Stamp Act of 1977 to permit 
participating households to use food stamp benefits to purchase 
nutritional supplements of vitamins, minerals, or vitamins and 
minerals, and for other purposes; to the Committee on Agriculture, 
Nutrition, and Forestry.


                         food stamp legislation

 Mr. McCONNELL. Mr. President, today I am introducing 
legislation that would give food stamp recipients greater flexibility 
to balance their diets by permitting food stamp purchases of vitamins 
and mineral supplements.
  The Food Stamp Program is the U.S. Department of Agriculture's 
largest income security program. Its goal of providing all Americans 
access to healthy, nutritious diets is pursued by increasing the food 
purchasing power of more than 27 million low-income Americans in 11 
million households each day.
  While it is possible to receive optimum levels of nutrients through a 
careful selection of foods, the fact is that most people do not. A 
government survey of 21,000 Americans showed that not a single person 
surveyed obtained 100 percent of the recommended daily allowance [RDA] 
for all of the essential vitamins and minerals. Scientific research 
shows that many nutrients play an important role in reducing the risk 
of various common and chronic diseases. So, it is no surprise that 
millions of Americans regularly take vitamin and mineral supplements to 
assure that they receive appropriate levels of these essential 
nutrients.
  Unfortunately, food stamp recipients have not been permitted to use 
their food stamps to purchase vitamin and mineral supplements. 
Therefore, the legislation I am proposing would permit Food Stamp 
Program recipients the option of spending the few pennies a day it 
costs to purchase vitamin and mineral supplements.
  Mr. President, this legislation would help the people who need 
nutritional help the most--the poor--especially women of childbearing 
age, young children, and the elderly. Their access to vitamin and 
mineral supplements can help them assure they are receiving a 
nutritious diet. I urge my colleagues to consider the positive 
contribution to public health that can be achieved through permitting 
low-income Americans access to vitamin and mineral supplements.
  My legislation is simple, it permits vitamin and mineral supplements 
to be purchased with food stamp coupons. It helps the people who need 
nutritional food the most, the poor and elderly. If food stamp 
recipients are permitted to use their food stamps to buy nutritional 
supplements, everybody will be helped. Vitamin and mineral supplements 
are considered an accessory food and therefore would have no effect on 
the number of stores participating in the Food Stamp Program. I urge 
all of my colleagues to take a look at this legislation and consider 
the positive health benefits that vitamin and mineral supplements can 
add to a healthy diet.
 Mr. HARKIN. Mr. President, I am pleased to join Senator 
McConnell and Senator Hatch in introducing legislation today that will 
allow the use of food stamps for the purchase of nutritional 
supplements. I believe this important legislation can contribute 
substantially to improving the nutrition and health of a segment of our 
society that too often falls below adequate levels of nutrient 
consumption.
  Scientific evidence continues to mount showing that good nutrition is 
essential for normal growth and cognitive development in children, and 
for improved health and the prevention of a variety of conditions and 
illnesses. That knowledge is the underlying basis for our Federal 
nutrition assistance programs.
  Studies have also shown, unfortunately, that many Americans do not 
have sufficient dietary intakes of a number of important nutrients. 
Insufficient dietary intakes are especially critical for children, 
pregnant women, and the elderly.
  A recent study conducted by the Tufts University School of Nutrition, 
and based on government data, showed that millions of poor children in 
the United States have dietary intakes that are well below the 
government's recommended daily allowance for a number of important 
nutrients. The study found that major differences exist in the intakes 
of poor versus nonpoor children for 10 out of 16 nutrients--food 
energy, folate, iron, magnesium, thiamin, vitamin A, vitamin B6, 
vitamin C. Vitamin E, and zinc. Moreover, the proportion of poor 
children with inadequate intakes of zinc is over 50 percent; for iron, 
over 40 percent; and for vitamin E, over 33 percent. For some 
nutrients, such as vitamin A and magnesium, the proportion of poor 
children with inadequate intakes is nearly six times as large as for 
nonpoor children.
  Pregnant women also have high nutritional needs. For example, after 
years of concern about inadequate folate intake by pregnant women, the 
Public Health Service has issued a recommendation regarding consumption 
of folic acid by all women of childbearing age who are capable of 
becoming pregnant for the purpose of reducing the incidence of spina 
bifida or other neural tube defects.
  Millions of Americans, including myself, take dietary supplements to 
improve their health, prevent illness, and ensure that they and their 
families are consuming sufficient levels of key nutrients.
  This legislation would enable low-income people to have greater 
access to nutritional supplements to improve their diet. Currently, 
recipients of food stamps are not allowed to use those
 resources to purchase nutritional supplements. This restriction 
clearly serves as an impediment to adequate nutrition for low-income 
people who may need supplements to ensure they are consuming sufficient 
levels of nutrients.

  The current restriction also prevents food stamp recipients from 
exercising their own responsibility and choice to use food stamps for 
purchasing nutritional supplements that they determine are important 
for the health of their children or themselves. It is a glaring 
inconsistency that food stamps may currently be used to purchase a 
variety of non-nutritious or minimally nutritious foods but not to 
purchase nutritional supplements--to purchase diet soft drinks having 
no nutritive value, but not to purchase folic acid which may prevent a 
fatal birth defect.
  Opponents of this legislation will argue that food stamps are most 
effectively used to improve nutrition through purchasing food rather 
than nutritional supplements, and that if food stamps may be used for 
nutritional supplements, households will be less able to stretch their 
resources to purchase sufficient quantities of food. The available 
evidence indicates, however, that food stamp households actually make 
more careful and effective use of their resources in purchasing 
nutritious foods than consumers in general. Since food stamp households 
necessarily have a limited amount of money to spend on food--and 
generally already find it difficult to meet their food needs--they 
simply cannot afford to make unwise or unnecessary purchases of 
nutritional supplements using food stamps which would otherwise be used 
for food. So I believe the concerns that food stamps will be wasted or 
unwisely used for nutritional supplements is unfounded.
  Mr. President, I hope that my colleagues will join in supporting this 
legislation designed to improve opportunities for low-income Americans 
to ensure adequate nutrition and improved health for their families and 
themselves.
                                 ______

      By Mr. NICKLES (for himself, Mr. Grams, Mr. Dole, Mr. Coats, Mr. 
        Faircloth, Mr. Kempthorne, Mr. Coverdell, Mr. Shelby, Mr. Mack, 
        Mr. Thurmond, Mr. Gramm, Mr. Santorum, Mr. Smith, Mr. Kyl, Mr. 
        Thompson, Mr. Inhofe, Mr. Craig, Mr. Lott, and Mr. Bennett):

[[Page S12081]]

  S. 1134. A bill to provide family tax relief; to the Committee on 
Finance.


               the american family tax relief act of 1995

 Mr. NICKLES. Mr. President, when the Senate returns from the 
August recess we will begin the long, hard budget reconciliation 
process. We have already come a long way toward our goal of balancing 
the Federal budget, but reconciliation is the real test of our 
leadership and our commitment. The spending cuts we will enact will not 
come without sacrifice from many people. Fortunately, that sacrifice 
will not go unrewarded, because we intend to cut spending enough to 
balance the budget, plus provide tax relief to Americans.
  Today I am pleased to introduce legislation which represents a key 
portion of our promise to reduce taxes on American families. The 
American Family Tax Relief Act will provide a $500 per child tax credit 
to benefit 52 million children in 35 million families nationwide.
  I am also pleased to say that my legislation is being cosponsored by 
many of my colleagues, several of which have worked for years to enact 
a family tax credit. My cosponsors include long-time family credit 
sponsors Senator Grams and Senator Coats, the Majority Leader Senator 
Dole, Senator Faircloth, Senator Kempthorne, Senator Coverdell, Senator 
Mack, Senator Thurmond, Senator Gramm, Senator Santorum, Senator Smith, 
Senator Kyl, Senator Thompson, and Senator Inhofe.
  Mr. President, the Balanced Budget Resolution we passed earlier this 
year promised that if we do our job, that is if we enact spending cuts 
sufficient to balance the budget by fiscal year 2002, the economy will 
reward us with a fiscal dividend sufficient to reduce the tax burden on 
our citizens by up to $245 billion over 7 years. While many critics 
have complained that a tax cut of that magnitude is too generous, 
consider the following facts. Over the next 7 years the Federal 
Government will take more than $11.4 trillion out of the pockets of 
American families and businesses. A tax cut of $245 billion is barely 2 
percent of that amount.
  With that $245 billion, we are going to reverse the trend of tax 
increases which have marked the past several years, reduce taxes on 
families and businesses, and increase savings and investment. I firmly 
believe, however, that the priority should be on families. At least 60 
to 70 percent of our fiscal dividend should be family friendly, and 
that is why I am introducing this legislation.
  Why is family tax relief important, Mr. President? Primarily because 
today's families with children are overtaxed. In 1948, the average 
American family paid only 3 percent of its income in Federal taxes. 
Today, the same family pays over 25 percent. This mounting tax burden 
is caused by many factors, but particularly damaging are heavy payroll 
taxes and the eroding value of the personal and dependent exemption. In 
1948, the dependent exemption equaled 42.1 percent of per capita 
personal income, effectively shielding that income from taxation. 
Today's dependent exemption of $2,500 equals only 10.9 percent of per 
capita personal income. Congress would have raise the exemption to 
$9,657 to provide the same benefit as 1948. Payroll taxes hit families 
with children particularly hard because most of their income comes in 
the form of wages. Nearly three-fourths of all taxpayers now pay more 
in payroll taxes than income taxes.
  Another reason to enact family tax relief is that it can make our tax 
system more progressive and literally remove the IRS from the lives of 
millions of families. A study by the Heritage Foundation based on IRS 
and Bureau of the Census data estimates that a $500 per child tax 
credit would: eliminate all Federal income tax liability for families 
of four earning between $17,000 and $24,000 per year, cut by 50 percent 
the income tax burden of a family earning $30,000 per year, cut by 30 
percent the income tax burden of a family earning $40,000 per year, cut 
by 6.8 percent the income tax burden of a family earning $100,000 per 
year, and cut by 2.6 percent the income tax burden of a family earning 
$200,000 per year.
  Heritage further estimates that the typical congressional district 
has 117,000 children in families eligible for a $500 credit, meaning 
$59 million per year in lower taxes which families can spend on their 
own priorities. Families in the state of Oklahoma stand to gain over 
$322 million. I have no doubt that those Oklahoma parents can spend 
that money much more wisely than the Federal bureaucracy.
  Mr. President, the American Family Tax Relief Act is nearly identical 
to the family tax credit passed by the House earlier this year as part 
of the Contract with America. The only difference between our proposals 
is that my bill has no income limit. Because the President and our 
Democrat colleagues have shown a near rabid desire to turn any tax cut 
initiative into a class war, I have no doubt that we will discuss this 
issue at length in the Senate Finance Committee and on the Senate 
floor. However, there is absolutely no economic or tax policy 
justification to limit the family tax credit to certain income levels. 
The only reasons are political, ones, and even those pale when you 
realize that almost all children, 94 percent, live in families with 
incomes below $100,000.
  I thank my colleagues, and I encourage those who have not already 
done so to join me in this important initiative.
  Mr. President, I ask unanimous consent that the text of the bill and 
additional material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1134

       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 ``American Family Tax Relief 
     Act of 1995''.

     SEC. 2. FAMILY TAX CREDIT.

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

     ``SEC. 23. FAMILY TAX CREDIT.

       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to $500 multiplied by the number 
     of qualifying children of the taxpayer.
       ``(b) Qualifying Child.--For purposes of this section--
       ``(1) In general.--The term `qualifying child' means any 
     individual if--
       ``(A) the taxpayer is allowed a deduction under section 151 
     with respect to such individual for such taxable year,
       ``(B) such individual has not attained the age of 18 as of 
     the close of the calendar year in which the taxable year of 
     the taxpayer begins, and
       ``(C) such individual bears a relationship to the taxpayer 
     described in section 32(c)(3)(B) (determined without regard 
     to clause (ii) thereof).
       ``(2) Exception for certain noncitizens.--
       The term `qualifying child' shall not include any 
     individual who would not be a dependent if the first sentence 
     of section 152(b)(3) were applied without regard to all that 
     follows `resident of the United States'.
       ``(c) Inflation Adjustment.--
       ``(1) In general.--In the case of a taxable year beginning 
     in a calendar year after 1996, the $500 amount contained in 
     subsection (a) shall be increased by an amount equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)3 for the calendar year in which the taxable year 
     begins, determined by substituting `calendar year 1995' for 
     `calendar year 1992' in subparagraph (B) thereof.
       ``(2) Rounding.--If any amount as adjusted under paragraph 
     (1) is not a multiple of $50, such amount shall be rounded to 
     the nearest multiple of $50.
       ``(d) Certain Other Rules Apply.--Rules similar to the 
     rules of subsections (d) and (e) of section 32 shall apply 
     for purposes of this section.''
       (b) Conforming 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. Family tax credit.''

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.
                                                                    ____

       The American Family Tax Relief Act--Technical Description


                             family credit

       The American Family Tax Relief Act would provide a maximum, 
     non-refundable credit against income tax liability of $500 
     for each qualifying child.
       In calendar years after 1996, the maximum credit amount is 
     indexed annually for inflation, with rounding to the nearest 
     multiple of $50.


                            qualifying child

       A qualifying child must satisfy the following tests:
       Relationship test: the child must be a son, stepson, 
     daughter, or stepdaughter of the 

[[Page S12082]]
     taxpayer, a descendent of a son or daughter of the taxpayer, or a 
     foster or adopted child of the taxpayer.
       Dependency test: the child must be a dependent of the 
     taxpayer with respect to whom the taxpayer is entitled to 
     claim a dependency deduction. The child must also be a 
     resident of the United States, except that a non-resident 
     adopted child who lived with the taxpayer for the entire 
     taxable year would satisfy this test.
       Age test: the child must be under age 18 at the end of the 
     calendar year in which the taxpayer's taxable year begins.


                             filing status

       Married individuals must file a joint return to claim the 
     credit, unless they lived apart from their spouse for the 
     last six months of the taxable year and the individual 
     claiming the credit (1) maintains the household for the 
     qualifying child for more than half of the year and (2) 
     furnishes over half of the cost of maintaining that 
     household.


                             effective date

       These provisions are effective for taxable years beginning 
     after December 31, 1995.

 Mr. COATS. Mr. President, I am pleased that Majority Leader 
Dole and Senator Rod Grams  and myself to ensure the passage of a $500 
per child tax credit by introducing the American Family Tax Relief Act 
of 1995. Many of my colleagues are already familiar with the Family's 
First legislation that I introduced earlier this year. The centerpiece 
of this legislation is the $500 per child tax credit which I have been 
proposing for the last 3 years.
  The $500 per child tax credit already has cleared the House. The 
introduction of this legislation with strong leadership support is 
great news for the hard working families of America. With Majority 
Leader Dole's support and leadership on this issue, I am now confident 
that the Senate will include a $500 per child tax credit in the 
reconciliation bill later this year.
  The time has come to show families that they are a priority--for too 
long we have ignored their cries of help. The federal tax burden on the 
typical American family has become overwhelming. In 1948, the average 
American family of four paid just 3 percent of its income to the 
Federal Government. By 1992, that tax bill has skyrocketed to 24.5 
percent of family earnings.
  This dramatically increased tax burden complicates the family's 
role--to provide for the social and moral education of children. Family 
tax reform is more than a matter of money. It will help restore the 
family to an economic position that allows it to fulfill its most vital 
responsibilities.
  In 1993, the bipartisan Commission on America's Urban Families found 
that ``the trend of family fragmentation drives the nation's most 
pressing social problems: crime, educational failure, declining mental 
health, drug abuse, and poverty. These, in turn, further fragment 
families.''
  The Commission continued, ``To date, the nation's basic response has 
been policies that attempt to address the negative consequences of this 
trend. This response has been insufficient. Our principal national goal 
must be to reverse the trend of family fragmentation.''
  One of the key policy recommendations of the commission was to 
``increase the self-sufficiency and economic well-being of families by 
either significantly increasing the personal exemption * * * or a child 
tax credit for all children through age 18.''
  The findings of the National Commission on Urban Families were 
remarkably similar to those advocated 3 years earlier by the Democratic 
Progressive Policy Institute. In an impressive report entitled 
``Putting Children First: A Progressive Family Policy for the 1990s'', 
this group found:

       America is the only country among the eighteen rich 
     democracies in the world that does not have a family 
     allowance or some other sort of government subsidy per child. 
     Western European countries recognize that nurturance has a 
     great societal value. . . [T]hese societies have acknowledged 
     that there are some things that only families can do and that 
     if families are placed under so much stress that they cannot 
     raise children effectively, the rest of society cannot make 
     up the difference in later years.
       The United States used to have a form of family allowance; 
     we just did not call it that. In 1948 there was a pro-family 
     government policy based on a simple notion: the government 
     should not tax away that portion of a family's income that is 
     needed to raise children.

  The Progressive Policy Institute concluded, ``We believe that a 
primary goal of our tax policy should be to bolster families who are 
raising children.''
  When families fail, the cost to society is enormous. As we have 
learned in the past decades, programs aimed at fixing the failures are 
not only expensive, they are often ineffective.
  I believe that it is time to reassess our priorities. We need to 
direct our focus, and our funds, to strengthen the family. I believe 
this legislation takes us on the right course.
  Obviously, government's role in preserving the family is limited but 
it is not insignificant. Perhaps the single most important thing 
government can accomplish is to alleviate the economic stress on the 
family.
  Economist Eugene Steurle noted that in 1948 the personal exemption 
was $600 and the median family income was $3,187. This meant that a 
family of four paid only 3 percent of its income in federal income 
taxes. He noted that the net result of the ensuing erosion of the 
personal exemption has been that ``tax-exempt levels for households 
without dependents have been moving closer and closer to tax-exempt 
levels for households with dependents.''
  In 1948, the personal exemption shielded 42 percent of family income 
from taxes. By 1992, that tax bill had skyrocketed to 24.5 percent of 
family earnings, and the value of that exemption has eroded to 11 
percent of income. In order for the personal exemption to provide the 
same benefit as it did in 1948 it would have to be raised from $2,500 
to $9,657.
  With rising costs and the seemingly never-ending tax burden, it is 
nearly impossible for American families to get ahead today. Families 
are working harder today than ever before. Many Hoosiers continually 
tell me that its just harder and harder to make ends meet. Sometimes 
one or both parents are working two jobs which takes more time away 
from the family just to pay the tax man.
  In my home state of Indiana the median income for a family of four is 
$34,082. Of that, nearly $11,000 is devoted to federal, state, and 
local taxes. The average family in Indiana pays more in taxes than it 
does in housing, food, and clothing expenses combined. The Tax 
Foundation has stated that Indiana families worked 117 days this year 
until April 27 to pay Uncle Sam.
  Some have said that $500 will not go far. To them I say, you have 
been inside the beltway for too long. Economists have noted, that 
invested over the life of the child, it is enough today for a state 
college education. It means $80 of grocery money each month. And it may 
buy time for parents to spend with their children, time to instill the 
values of love and discipline that are critical in the formation of 
citizens of character.
  Fifty-two million children are eligible for this credit, and 86 
percent of this tax relief would go to families making less than 
$75,000 per year.
  The American social fabric is seriously strained. When families fail, 
the cost to society is enormous. That failure is measured in lost 
dollars and in lost lives. the lessons learned from decades of social 
spending are clear. Government cannot effectively stay the hand of 
despair and destruction. Strong families can. We simply cannot afford 
to ignore the evidence before us. Family preservation must be paramount 
in our Federal policy. I am pleased that the Majority Leader and 
Senator Nickles have joined the family tax relief effort. I look 
forward to working with them this fall to enact the $500 per child tax 
credit this year.
                                 ______

      By Mr. CRAIG (for himself and Mr. Kempthorne):
  S. 1135. A bill to amend the Federal Crop Insurance Act to include 
seed crops among the list of crops specifically covered under the 
noninsured crop disaster assistance program, and for other purposes; to 
the Committee on Agriculture, Nutrition, and Forestry.


                         seed crops legislation

 Mr. CRAIG. Mr. President, my purpose here today is to 
introduce a bill that would amend the Federal Crop Insurance Act to 
include seed crops among the list of crops specifically covered under 
the noninsured crop disaster assistance program.
  It was my understanding that seed crops were to be covered under the 
Federal Crop Insurance Corporation [FCIC] changes that were implemented 
as part of the USDA reorganization in the 103d 

[[Page S12083]]
Congress. Since my understanding differs from the current 
implementation, I urge my colleagues to accept this amendment and 
rectify the situation.
  As the origin of all crop production, a stable supply of seeds is an 
absolute necessity. If seed producers are to continue supplying a 
valuable product, they must have access to risk management tools, which 
includes insurance coverage. In my State of Idaho, we are proud to 
produce the Nation's largest supply of seed for sweet corn, field 
beans, garden beans, and teff. In addition, Idaho is among the top 
producers of alfalfa, popcorn, and turf grasses.
  Mr. Chair, I urge my colleagues to join me in enabling this industry 
to utilize the insurance coverage that is provided to other 
agricultural commodities.
  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. 1135

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

     SECTION 1. NONINSURED CROP DISASTER ASSISTANCE COVERAGE OF 
                   SEED CROPS.

       Section 519(a)(2)(B) of the Federal Crop Insurance Act (7 
     U.S.C. 1519(a)(2)(B)) is amended by inserting ``seed crops,'' 
     after ``turfgrass sod,''. 

 Mr. KEMPTHORNE. Mr. President, the Idaho delegation today is 
taking steps to right a wrong. Senator Craig and I are joining our 
colleagues in the House, Representatives Crapo and Chenoweth in 
introducing legislation to clarify congressional intent regarding the 
Federal crop insurance program reform that the 103d Congress completed.
  Implementing crop insurance reform has not always been the smoothest 
process, as Idaho's agriculture producers can attest. While that reform 
was a much needed step forward in streamlining the Federal crop 
insurance program, there is still work to be done. This bill tackles 
one part of that remaining effort.
  When the Federal crop insurance reforms were implemented last year, 
the agency interpreted the law to be strictly limited to commodities 
that are consumed directly as foodstuffs. Such an interpretation 
ignores some crops which had traditionally been covered under the crop 
insurance umbrella. Among those are seed crops.
  I am here today as someone who supported Federal crop insurance 
reform, to say that such an exclusion was not the intent of Congress. 
The bill Senator Craig and I are introducing today will set the record 
straight.
                                 ______

      By Mr. HATCH (for himself, Mr. Leahy, Mr. Thurmond, Mr. Brown, 
        Mr. Kyl, Mr. Abraham, and Mrs. Feinstein):
  S. 1136. A bill to control and prevent commercial counterfeiting, and 
for other purposes; to the Committee on the Judiciary.


         the anticounterfeiting consumer protection act of 1995

  Mr. HATCH. Mr. President, I am pleased to be joined today by my 
colleagues, Senators Leahy, Thurmond, Brown, Kyl, Abraham, and 
Feinstein, in introducing legislation to confront a rapidly growing 
threat to American industry and to the public: trademark 
counterfeiting. Stated simply, it is time we knock-out the knock-off 
industry.
  We contacted some selected U.S. industries and found that the impact 
of counterfeiting losses are substantial. Companies invest heavily in 
developing and maintaining their reputations. And, the jobs of millions 
of American workers depend on the competitiveness of their employers.
  Sales of pirated motion pictures cause losses equal to 8 percent of 
all movie sales revenue. The pirates are so efficient that tapes of the 
recently released ``Apollo 13'' were available the day after the 
movie's release in theaters. And tapes of the much-hyped 
``Waterworld'', composed mainly of outtakes, was available before the 
movie's theatrical release.
  The software industry is particularly affected, with sales of pirated 
software accounting for more than 40 percent of total revenues. Some 
analysts suggest that is more than the industry's total profits.
  Perhaps most troubling, however, is the widespread threat 
counterfeiting poses to public health and safety. Automobile parts are 
commonly made of substandard material and pose serious risks to 
consumers. The San Francisco Chronicle reported that a counterfeit GM 
brake lining composed of wood chips was responsible for an accident 
that claimed the life of a mother and her child.
  Media reports on the seizures in 16 States of a counterfeit version 
of the popular infant formula Similac underscore our vulnerability. 
This bogus formula could kill children who may be allergic to it.
  Unfortunately, few Americans truly appreciate the significance, 
scope, or consequences of this crime. Only yesterday, Committee 
investigators purchased a fake Cartier watch and bogus Ray Ban 
sunglasses one block from the Capitol. It is hard to perceive the 
relationship between a cheap, fake watch or handbag and public health 
risks, money laundering, murder, and--if media reports are true--
terrorism. But it is there.
  Those who traffic in counterfeit goods can be ruthless members of 
dangerous businesses, and organized crime is increasingly involved. The 
leader of the ``Born to Kill'' crime gang in New York City made an 
estimated $13 million a year
 selling fake Cartier and Rolex watches. This revenue stream was 
probably useful in financing other nefarious business, as well as being 
profitable in itself. For the criminal, the lure of counterfeiting is 
not just the billions of dollars in illegal profit. It is the fact that 
the risk of being caught, prosecuted, and imprisoned is not high.

  The time has come to make sure that the law provides the tools 
necessary to fight today's sophisticated counterfeiters. Our bill will 
do just that. It is called the ``Anticounterfeiting Consumer Protection 
Act of 1995.'' I like to call it the ``Knock-Out the Knock-Offs'' bill.
  First, it increases criminal penalties by making trafficking in 
counterfeit goods or services a RICO offense, thereby providing for 
increased jail time, criminal fines, and asset forfeiture.
  Second, our bill allows greater involvement by all Federal law 
enforcement in fighting counterfeiting, including enhanced authority to 
seize counterfeit goods and the tools of the counterfeiter's trade.
  Third, it makes it more difficult for these goods to re-enter the 
stream of commerce once they have been seized.
  Fourth, our bill also adds teeth to existing statutes by providing 
for further civil remedies, including civil fines pegged to the value 
of genuine goods and statutory damage awards of up to $1,000,000 per 
mark.
  The time has come for us to send the message to the public that 
counterfeiting is a serious crime that involves domestic and 
international organized crime rings. It is a crime that robs all 
Americans. It is time to knock-out the knock-offs.
  Mr. President, I ask unanimous consent that the text of the bill and 
additional material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                S. 1136

       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 ``Anticounterfeiting Consumer 
     Protection Act of 1995''.

     SEC. 2. FINDINGS.

       The counterfeiting of trademarked and copyrighted 
     merchandise--
       (1) has been connected with organized crime;
       (2) deprives legitimate trademark and copyright owners of 
     substantial revenues and consumer goodwill;
       (3) poses health and safety threats to American consumers;
       (4) eliminates American jobs; and
       (5) is a multibillion-dollar drain on the United States 
     economy.

     SEC. 3. COUNTERFEITING AS RACKETEERING.

       Section 1961(1)(B) of title 18, United States Code, is 
     amended by inserting ``, section 2318 (relating to 
     trafficking in counterfeit labels for phonorecords, computer 
     programs or computer program documentation or packaging and 
     copies of motion pictures or other audiovisual works), 
     section 2319 (relating to criminal infringement of a 
     copyright), section 2320 (relating to trafficking in goods or 
     services bearing counterfeit marks)'' after ``sections 2314 
     and 2315 (relating to interstate transportation of stolen 
     property),''.
     
[[Page S12084]]


     SEC. 4. APPLICATION TO COMPUTER PROGRAMS, COMPUTER PROGRAM 
                   DOCUMENTATION, OR PACKAGING.

       Section 2318 of title 18, United States Code, is amended--
       (1) in subsection (a), by inserting ``a computer program or 
     computer program documentation or packaging or'' after ``copy 
     of'';
       (2) in subsection (b)(3), by inserting ```computer 
     program,''' after ```motion picture,'''; and
       (3) in subsection (c)(3), by inserting ``a copy of a 
     computer program or computer program documentation or 
     packaging,'' after ``enclose,''.

     SEC. 5. TRAFFICKING IN COUNTERFEIT GOODS OR SERVICES.

       Section 2320 of title 18, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(e) Beginning with the first year after the date of 
     enactment of this subsection, the Attorney General shall 
     include in the report of the Attorney General to Congress on 
     the business of the Department of Justice prepared pursuant 
     to section 522 of title 28, on a district by district basis, 
     for all actions involving trafficking in counterfeit labels 
     for phonorecords, copies of computer programs or computer 
     program documentation or packaging, copies of motion pictures 
     or other audiovisual works (as defined in section 2318 of 
     title 18), criminal infringement of copyrights (as defined in 
     section 2319 of title 18), or trafficking in goods or 
     services bearing counterfeit marks (as defined in section 
     2320 of title 18, an accounting of--
       ``(1) the number of open investigations;
       ``(2) the number of cases referred by the United States 
     Customs Service;
       ``(3) the number of cases referred by other agencies or 
     sources; and
       ``(4) the number and outcome, including settlements, 
     sentences, recoveries, and penalties, of all prosecutions 
     brought under section 2318, 2319, and 2320 of title 18.''.

     SEC. 6. SEIZURE OF COUNTERFEIT GOODS.

       Section 34(d)(9) of the Act of July 5, 1946 (60 Stat. 427, 
     chapter 540; 15 U.S.C. 1116(d)(9)), is amended by striking 
     the first sentence and inserting the following: ``The court 
     shall order that service of a copy of the order under this 
     subsection shall be made by a Federal law enforcement officer 
     (such as a United States marshal or an officer or agent of 
     the United States Customs Service, Secret Service, Federal 
     Bureau of Investigation, or Post Office) or may be made by a 
     State or local law enforcement officer, who, upon making 
     service, shall carry out the seizure under the order.''.

     SEC. 7. RECOVERY FOR VIOLATION OF RIGHTS.

       Section 35 of the Act of July 5, 1946 (60 Stat. 427, 
     chapter 540; 15 U.S.C. 1117), is amended by adding at the end 
     the following new subsection:
       ``(c) In a case involving the use of a counterfeit mark (as 
     defined in section 34(d) (15 U.S.C. 1116(d)) in connection 
     with the sale, offering for sale, or distribution of goods or 
     services, the plaintiff may elect, at any time before final 
     judgment is rendered by the trial court, to recover, instead 
     of actual damages and profits under subsection (a), an award 
     of statutory damages for any such use in the amount of--
       ``(1) not less than $500 or more than $100,000 per 
     counterfeit mark per type of goods or services sold, offered 
     for sale, or distributed, as the court considers just; or
       ``(2) if the court finds that the use of the counterfeit 
     mark was willful, not more than $1,000,000 per counterfeit 
     mark per type of goods or services sold, offered for sale, or 
     distributed, as the court considers just.''.

     SEC. 8. DISPOSITION OF EXCLUDED ARTICLES.

       Section 603(c) of title 17, United States Code, is amended 
     in the second sentence by striking ``as the case may be;'' 
     and all that follows through the end and inserting ``as the 
     case may be.''.

     SEC. 9. DISPOSITION OF MERCHANDISE BEARING AMERICAN 
                   TRADEMARK.

       Section 526(e) of the Tariff Act of 1930 (19 U.S.C. 
     1526(e)) is amended--
       (1) in the second sentence, by inserting ``destroy the 
     merchandise. Alternatively, if the merchandise is not unsafe 
     or a hazard to health, and the Secretary has the consent of 
     the trademark owner, the Secretary may'' after ``shall, after 
     forfeiture,'';
       (2) by inserting ``or'' at the end of paragraph (2);
       (3) by striking ``, or'' at the end of paragraph (3) and 
     inserting a period; and
       (4) by striking paragraph (4).

     SEC. 10. CIVIL PENALTIES.

       Section 526 of the Tariff Act of 1930 (19 U.S.C. 1526) is 
     amended by adding at the end the following new subsection:
       ``(f)(1) Any person who directs, assists financially or 
     otherwise, or is in any way concerned in the importation of 
     merchandise for sale or public distribution that is seized 
     under subsection (e) shall be subject to a civil fine.
       ``(2) For the first such seizure, the fine shall be equal 
     to the value that the merchandise would have had if it were 
     genuine, according to the manufacturer's suggested retail 
     price, determined under regulations promulgated by the 
     Secretary.
       ``(3) For the second seizure and thereafter, the fine shall 
     be equal to twice the value that the merchandise would have 
     had if it were genuine, as determined under regulations 
     promulgated by the Secretary.
       ``(4) The imposition of a fine under this subsection shall 
     be within the discretion of the United States Customs 
     Service, and shall be in addition to any other civil or 
     criminal penalty or other remedy authorized by law.''.

     SEC. 11. PUBLIC DISCLOSURE OF AIRCRAFT MANIFESTS.

       Section 431(c)(1) of the Tariff Act of 1930 (19 U.S.C. 
     1431(c)(1)) is amended--
       (1) in the matter preceding subparagraph (A), by inserting 
     ``vessel or aircraft'' before ``manifest'';
       (2) by amending subparagraph (D) to read as follows:
       ``(D) The name of the vessel, aircraft, or carrier.'';
       (3) by amending subparagraph (E) to read as follows:
       ``(E) The seaport or airport of loading.''; and
       (4) by amending subparagraph (F) to read as follows:
       ``(F) The seaport or airport of discharge.''.

     SEC. 12. CUSTOMS ENTRY DOCUMENTATION.

       Section 484(d) of the Tariff Act of 1930 (19 U.S.C. 
     1484(d)) is amended--
       (1) by striking ``Entries'' and inserting ``(1) Entries''; 
     and
       (2) by adding at the end the following new paragraph:
       ``(2) The Secretary, in prescribing regulations governing 
     the content of entry documentation, shall require that entry 
     documentation contain such information as may be necessary to 
     determine whether the imported merchandise bears an 
     infringing trademark in violation of section 42 of the Act of 
     July 5, 1946 (60 Stat. 440, chapter 540; 15 U.S.C. 1124) or 
     any other applicable law, including a trademark appearing on 
     the goods or packaging.''.

     SEC. 13. UNLAWFUL USE OF VESSELS, VEHICLES, AND AIRCRAFT IN 
                   AID OF COMMERCIAL COUNTERFEITING.

       Section 80302(a) of title 49, United States Code, is 
     amended--
       (1) by striking ``or'' at the end of paragraph (4);
       (2) by striking the period at the end of paragraph (5) and 
     inserting ``; or''; and
       (3) by adding at the end the following new paragraph:
       ``(6)(A) A counterfeit label for a phonorecord, computer 
     program or computer program documentation or packaging or 
     copy of a motion picture or other audiovisual work (as 
     defined in section 2318 of title 18);
       ``(B) a phonorecord or copy in violation of section 2319 of 
     title 18; or
       ``(C) any good bearing a counterfeit mark (as defined in 
     section 2320 of title 18).''.

     SEC. 14. REGULATIONS.

       Not later than 6 months after the date of enactment of this 
     Act, the Secretary of the Treasury shall prescribe such 
     regulations or amendments to existing regulations that may be 
     necessary to implement and enforce this Act.
                                                                    ____

Anticounterfeiting Consumer Protection Act of 1995--Section-by-Section 
                                Analysis

       The Anticounterfeiting Consumer Protection Act of 1995 
     proposes a number of statutory amendments to strengthen this 
     country's anticounterfeiting laws in three important areas: 
     criminal law enforcement, civil lawsuits, and Customs Service 
     interdiction. A brief section-by-section analysis of the Act 
     follows.
       Section 1. Short title.--The proposed legislation is 
     entitled the ``Anticounterfeiting Consumer Protection Act of 
     1995.''
       Section 2. Findings.--Section 2 summarizes the significant 
     harms associated with counterfeiting, including the link 
     between counterfeiting and organized crime, the resulting 
     losses in revenues and goodwill to U.S. copyright and 
     trademark owners, the threat to consumer health and safety, 
     the loss of American jobs, and the overall drain on the U.S. 
     economy.
       Section 3. Counterfeiting as racketeering.--Section 3 would 
     make the following crimes ``predicate acts'' for purposes of 
     the Racketeer Influenced and Corrupt Organizations Act 
     (``RICO''), 18 U.S.C. Sec. 1961: (i) trafficking in 
     counterfeit labels for phonorecords, computer programs or 
     computer program documentation or packaging and copies of 
     motion pictures or other audiovisual works, as defined in 18 
     U.S.C. Sec. 2318\1\; (ii) criminal infringement of a 
     copyright in violation of 18 U.S.C. Sec. 2319; and (iii) 
     trafficking in counterfeit goods or services, as defined in 
     18 U.S.C. Sec. 2320. This amendment to the RICO statute would 
     allow law enforcement officials in appropriate cases to seize 
     not only counterfeit goods, but also the non-monetary assets, 
     including both personal and real property (e.g., raw 
     materials, tools, equipment, and manufacturing or storage 
     facilities), associated with the criminal counterfeiting 
     enterprise, just as they now can do for a host of other 
     criminal enterprises. See 18 U.S.C. Sec. 1963.
     \1\Section 4 would amend 18 U.S.C. Sec. 2318 to prohibit 
     trafficking in counterfeit labels affixed to copies of 
     computer programs or computer program documentation or 
     packaging.
---------------------------------------------------------------------------
       Section 4. Application to computer programs, computer 
     program documentation, or packaging.--Section 4 would extend 
     the criminal prohibitions and penalties of 18 U.S.C. 
     Sec. 2318 to trafficking in counterfeit labels affixed or 
     designed to be affixed to copies of a computer program or 
     computer program documentation or packaging. This amendment 
     would recognize and address the widespread counterfeiting of 
     computer software and international trafficking in 
     counterfeit labels, holograms and other computer software 
     documentation and packaging. Moreover, the amendment would 
     update existing criminal counterfeiting provisions directed 
     at labels for phonorecords and videos 

[[Page S12085]]
     to take into account the significant advancements in technology and 
     thereby empower federal law enforcement agencies to combat 
     the growing counterfeiting trade in computer programs.
       Section 5. Trafficking in counterfeit goods or services.--
     Section 5 would amend 18 U.S.C. Sec. 2320, the statute 
     govering trafficking in counterfeit goods or services, to 
     require the Attorney General to obtain from all United States 
     Attorney's Offices certain statistical information relating 
     to all criminal counterfeiting actions involving (i) 
     trafficking in counterfeit labels for phonorecords, copies of 
     computer programs or computer program documentation or 
     packaging, copies of motion pictures or other audiovisual 
     works; (ii) criminal infringement of copyrights; or (iii) 
     trafficking in goods or services bearing counterfeit marks. 
     The information must then be incorporated into the Attorney 
     General's annual report to Congress mandated by Section 522 
     of Title 28. This reporting requirement will enable Congress 
     and the American public to assess the extent to which 
     commercial counterfeiting is being vigilantly investigated 
     and prosecuted by our nation's U.S. Attorneys.
       Section 6. Seizure of counterfeit goods.--Section 6 would 
     amend 15 U.S.C. Sec. 1116 to make clear that, in addition to 
     U.S. marshals and state and local law enforcement officers, 
     any federal law enforcement officer may assist in conducting 
     an ex parte seizure of counterfeit trademarked merchandise 
     (including, by way of example, an officer or agent of the 
     U.S. Customs Service, Secret Service, Federal Bureau of 
     Investigation, or Post Office). The present statute provides 
     that seizures of counterfeit merchandise may be conducted by 
     ``a United States marshal or other law enforcement officer.'' 
     15 U.S.C. Sec. 1116(d)(9). Clarification of this provision to 
     include other federal law enforcement officers is necessary 
     to ensure that ex parte seizure orders are executed in a 
     timely manner. At present, significant delays often occur 
     because the Marshal's Service often lacks the manpower to 
     promptly conduct an ex parte seizure. Moreover, the language 
     ``other law enforcement officer'' has been interpreted to 
     mean only state and local police officers, who are not 
     subject to federal judicial mandate and thus cannot be 
     compelled to execute seizure orders granted under federal 
     trademark law. The amendment would avoid this delay by 
     expressly extending seizure authority to any other federal 
     law enforcement officer.
       Section 7. Recovery for violation of rights.--Section 7 
     would amend 15 U.S.C. Sec. 1117 to provide statutory damages 
     as an alternative to actual damages in cases involving the 
     use of counterfeit trademarks. The option to elect statutory 
     damages in counterfeit cases ensures that trademark owners 
     and adequately compensated and that counterfeiters are justly 
     punished, even in
      cases where the plaintiff is unable to prove actual damages 
     because, for example, the defendant engages in deceptive 
     record-keeping. Section 7 provides that a plaintiff may 
     elect, and a court may approve, statutory damages ranging 
     from $500 to $100,000 per mark for each type of 
     merchandise involved, or up to $1,000,000 per mark for 
     each type of merchandise if the violation is willful.
       Section 8. Disposition of excluded articles.--Section 8 
     would amend 17 U.S.C. Sec. 603(c) to eliminate the provision 
     allowing the U.S. Customs Service to re-export piratical 
     merchandise, thus ensuring that such goods are not allowed 
     back into the global marketplace where they continue to 
     violate the rights of American copyright owners and endanger 
     American consumers.
       Section 9. Disposition of merchandise bearing American 
     trademark.--Section 9 would amend 19 U.S.C. Sec. 1526(e) to 
     require the U.S. Customs Service to destroy all counterfeit 
     merchandise that it seizes, unless the trademark owner 
     consents to some other disposition of the merchandise and the 
     merchandise is not a threat to consumer health or safety.
       Section 10. Civil penalties.--Section 10 would add a new 
     subsection to 19 U.S.C. Sec. 1526 authorizing the U.S. 
     Customs Service to impose a civil fine on persons who are in 
     any way involved in the importation of counterfeit goods for 
     sale or public distribution. For first offenses, the fine 
     would be equal to the market value that the merchandise would 
     have had if it were genuine, according to the manufacturer's 
     suggested retail price. For repeat offenses, the fine would 
     be double that value. The imposition of the fine would be 
     subject to the discretion of the U.S. Customs Service, and 
     would be in addition to any other civil or criminal penalty 
     or other remedy authorized by law.
       Section 11. Public disclosure of aircraft manifests.--
     Section 11 would amend section 431(c)(1) of the Tariff Act, 
     19 U.S.C. Sec. 1431(c)(1), to make clear that existing 
     manifest disclosure requirements also extend to information 
     found in aircraft manifests. Under existing regulations, the 
     U.S. Customs Service discloses on a routine basis information 
     relating to shipments by sea, but is not required to disclose 
     information within its possession concerning shipments by 
     air. As a result of this distinction between sea and air 
     information, an entire category of shipping information is 
     shielded from public scrutiny, making it much more difficult 
     to detect and stop numerous counterfeiters and other 
     infringers who ship their merchandise by air. In order to 
     close this informational gap, this amendment would expressly 
     extend these manifest disclosure requirements to aircraft 
     manifests and thus require the Customs Service to amend its 
     regulations accordingly.
       Section 12. Customs entry documentation.--Section 12 would 
     amend 19 U.S.C. Sec. 1484(d) to require the Secretary of the 
     Treasury, in prescribing regulations governing customs entry 
     documentation, to require importers to disclose on that 
     documentation such information as may be necessary to 
     determine whether the imported merchandise bears an 
     infringing trademark, including, for example, any trademarks 
     appearing on the goods or their packaging. Presently, 
     importers have no obligation to disclose to the Customs 
     Service the identity of any trademark appearing on imported 
     merchandise. By requiring the disclosure of any such 
     trademark or related information, this amendment would 
     facilitate the identification of infringing goods by Customs 
     officials and trademark owners and thus enhance border 
     enforcement of intellectual property rights.
       Section 13. Unlawful use of vessels, vehicles, and aircraft 
     in aid of commercial counterfeiting.--Section 13 would amend 
     the definition of ``contraband'' in 49 U.S.C. App. Sec. 781 
     to include (i) a counterfeit label for a phonorecord, 
     computer program or computer program documentation or 
     packaging or copy of a motion picture or other audiovisual 
     work, as defined in 18 U.S.C. Sec. 2318; (ii) a phonorecord 
     or copy in violation of 18 U.S.C. Sec. 2319; or (iii) goods 
     bearing counterfeit marks, as defined in 18 U.S.C. Sec. 2320. 
     This amendment would allow law enforcement officials to seize 
     the vehicles used by counterfeiters in transporting 
     counterfeit merchandise, just as they are currently allowed 
     to do with respect to counterfeit currency and government 
     securities.
       Section 14. Regulations.--Section 14 would require the 
     Secretary of the Treasury to prescribe, within six months 
     after the date of enactment, such regulations or amendments 
     to existing regulations as may be necessary to implement and 
     enforce the provisions of the Act.
                                 ______

      By Mr. THOMAS (for himself and Mr. Brown):
  S. 1137. A bill to amend title 17, United States Code, with respect 
to the licensing of music, and for other purposes; to the Committee on 
the Judiciary.


                       SMALL BUSINESS LEGISLATION

 Mr. THOMAS. Mr. President, I introduce legislation designed to 
help small business owners by exempting them from paying licensing fees 
for music copyrights relating to radios and televisions used in their 
establishments. This bill is common-sense approach which would level 
the playing field for business owners who currently are faced with 
having to pay huge fees for the incidental broadcast of music played in 
their business.
  The issue of licensing fees for copywritten music is extremely 
complex. No one disputes the right of performers to be properly 
compensated for their music or compositions. However, the current law 
regarding music licensing causes confusion and hardship for many 
business owners in my State and across the country. Every year, 
thousands of business owners are charged fees by the performing rights 
societies for the television and radio programming they present in 
their establishments. Unfortunately, many times these fees are charged 
in a confusing or ambiguous manner, without any oversight or controls.
  I have heard for folks across Wyoming and the Nation who have 
experienced trouble with the music licensing organizations. Often the 
fees charged by the organizations for playing radios or televisions 
vary greatly from year to year. In addition, businesses are often 
threatened with legal action or harassed for doing something they did 
not realize was against the law.
  The legislation I am introducing today would exempt these small 
business operators from being charged fees for playing radios and 
televisions in their establishments. The bill is designed to address a 
unique problem these folks are experiencing. It clarifies the law so 
these individuals can operate their businesses without fear of costly 
litigation. It is also important to note this bill only deals with 
performances which are incidental to the main purpose of the 
establishment. Records, tapes jukeboxes or video recordings are not 
covered by my bill.
  Finally, this legislation would also require the performing rights 
societies to offer radio broadcasters a per programming period license 
to perform nondramatic musical works in the repertoire of the 
performing rights society. Currently, many specialty radio broadcasters 
such as religious and classical stations are forced to purchase a 
blanket license for radio broadcasts although they only play a small 
portion of the repertoire of the performing rights society. My bill 
would solve this 

[[Page S12086]]
problem and allow these broadcasters to pay for the copywritten music 
that is actually played, rather than a broad blanket fee which is 
unnecessary.
  Mr. President, the bottom line is this legislation is designed to 
help small business owners solve a very difficult and confusing 
problem. This bill will help clarify the law and make it understandable 
for everyone across the Nation. The time has come to address this 
confusing issue and solve this problem for thousands of folks across 
the country.
                                 ______

      By Mr. GRASSLEY:
  S. 1138. A bill to amend title XVIII of the Social Security Act to 
provide that certain health insurance policies are not duplicative, and 
for other purposes; to the Committee on Finance.


              THE MEDICARE CONSUMER PROTECTION ACT OF 1995

 Mr. GRASSLEY. Mr. President, today I am introducing a bill 
which, if enacted, would correct a serious problem created by the 
Medicare anti-duplication provisions contained in the Social Security 
Act Amendments of 1994 (P.L. 103-432) and by subsequent interpretations 
of those provisions by the Health Care Financing Administration.
  The genesis of this problem is to be found in provisions included in 
OBRA 1990. Those provisions were designed to prohibit the sale of 
Medicare Supplemental Insurance Policies [Medigap policies] to Medicare 
beneficiaries already covered by another Medigap policy. Even though 
those provisions were clearly designed to apply only to duplicative 
Medigap policies, they could be interpreted, and were interpreted by 
many, as prohibiting the sale of any other health insurance product 
that might duplicate benefits available under Medicare to Medicare 
beneficiaries.
  The Social Security Act Amendments of 1994 contained provisions 
designed to clarify the intent of the OBRA 1990 provisions. 
unfortunately, the statute, and recent interpretations of it by the 
Health Care Financing Administration, have led to further confusion and 
potential disruption of the long term care insurance market as well as 
the market for other private, non-Medigap, health insurance sold to 
Medicare beneficiaries.
  Rather than determine the extent of actual duplication, HCFA has 
arbitrarily deemed all private insurance to be duplicative without 
actual findings of Medicare duplication. A legislative correction is 
necessary because HCFA was fully aware of the legislative history and 
nevertheless issued a notice clearly in conflict with the legislative 
intent.
  For private long term care policies, HCFA's interpretation implies 
that those which coordinate with Medicare are not permitted. 
Ironically, coordination of private long term care insurance with 
Medicare is consistent with an emerging national policy that 
duplicative coverages should be discouraged. Most of the health care 
reform bills that addressed long term care required such coordination. 
And almost all the congressional proposals that would clarify the tax 
treatment of long term care insurance have consistently required 
coordination with Medicare.
  Under the 1994 amendments, hospital indemnity policies, or policies 
that pay benefits to policy holders upon the occurrence of a specific 
disease, may be sold to Medicare beneficiaries only
 if they contain a statement to the effect that they duplicate 
Medicare. However, such policies do not duplicate Medicare. State 
insurance commissioners have for years advised that consumers be told 
that such policies are not broad-based health insurance like Medicare 
or MediGap policies. That is, that they are not, by their very nature, 
a type of policy that duplicates Medicare. Furthermore, they pay a cash 
benefit when triggered by a specific event, such as hospitalization, or 
treatment for a particular disease, regardless of other coverage. Thus, 
the policy holder receives a direct cash payment even when the medical 
services received were paid by Medicare. The direct cash payment is not 
a payment for those medical services and may be used by the recipient 
for any purpose.

  Any number of circumstances would lead an individual to desire such 
additional coverage. For instance, it is frequently the case that 
treatment of serious diseases generate other, out-of-pocket, expenses 
not covered by Medicare against which a Medicare beneficiary may wish 
to be protected. Or, an individual may lose wages due to 
hospitalization and wish to be protected against that loss.
  Requiring confusing disclosure statements may discourage the sale of 
such policies to Medicare beneficiaries. This despite the fact that the 
beneficiary may be inclined to purchase such a policy, and despite the 
fact that the individual may clearly ultimately benefit from holding 
such a policy.
  The bill I am introducing today to correct these problems follows a 
bill sponsored by Senators Packwood and Bentsen (S. 2318) which passed 
the Senate but was vetoed as part of H.R. 11, the 1992 tax bill. And 
last year the Ways and Means Committee included in their version of the 
Health Security Act a similar ``safe harbor'' for policies that always 
pay benefits. My bill would:
  Restore a ``safe harbor'' for those policies that always pay benefits 
regardless of other coverage; and
  Provide a ``safe harbor'' for long term care and similar policies 
that coordinate benefits to prevent Medicare duplication.
  Mr. President, I ask unanimous consent that a summary of the bill be 
printed in the Record.
  There being no objection, the summary was ordered to be printed in 
the Record, as follows:
          Summary of Medicare Consumer Protection Act of 1995

       1. Continues current Medigap rules.--Prohibits the sale of 
     more than one Medigap policy (unless replacement). Continues 
     current law provisions that also require signed statements 
     from Medicare consumers before replacing Medigap policies.
       2. Continues anti-duplication rules.--Prohibits 
     ``duplication'' of Medicare benefits by private insurance. 
     Continues current law provision intended to protect Medicare 
     consumers from purchasing private insurance that duplicates 
     Medicare.
       3. Safeharbor for policies that always pay.--Continues the 
     original 1980 safeharbor for policies that ``always pay'' 
     (also follows the 1992 Bentsen-Packwood proposal, and the 
     1994 Rangel proposal to H.R. 3600). Permits the sale of 
     private health insurance policies that pay benefits 
     regardless of other coverage so Medicare consumers always 
     receive benefits for premiums paid.
       4. Safeharbor for LTC, home health, other policies.--
     Establishes a new safeharbor for long-term care, home-health, 
     other similar policies that ``coordinate'' or offset with 
     Medicare to prevent duplication (also requires ``notice'' in 
     outline of coverage). Permits the sale of private health 
     insurance policies covering benefits for only long-term care, 
     nursing home, home health, community-based care, or a 
     combination. Permits continuation of Robert Wood Johnson 
     Partnership plans.
       5. Clarifies confusing, wrong interpretation.--Removes 
     misleading HCFA disclosure statements published in a June 12 
     ``notice'' that declares all private insurance to be 
     ``duplicative'' of Medicare. The statements were established 
     without factual findings of duplication and outside federal 
     rulemaking requirements; will confuse beneficiaries over what 
     really ``duplicates'' Medicare; will conflict with current 
     state/NAIC disclosure rules that such policies do not 
     supplement Medicare; and needlessly discourage choice and 
     purchase of private health insurance supplements.
       6. Clarifies Federal-State role.--Establishes duplication 
     of Medicare as a federal issue. Provides federal penalties to 
     be the exclusive remedy; provides exclusive federal interest 
     in preventing Medicare duplication; and continues State 
     regulation of all other matters relating to health insurance 
     policies under current State law.
       7. Clarifies effective date.--Establishes safeharbor (only 
     for policies meeting standards) from legal action based on 
     ``unsettled,'' unintended law prior to 1995 and after 1990 
     drafting ``error.'' This also: prevents frivolous lawsuits 
     that will cost consumers and benefit only lawyers; and 
     provides needed certainty in the marketplace due to 
     misinterpretations of intent and law.
                                 ______

      By Mr. LOTT (for himself, Mr. Stevens, Mrs. Hutchison, Ms. Snowe, 
        Mr. Hollings, Mr. Inouye, Mr. Breaux, and Ms. Mikulski):
  S. 1139. A bill to amend the Merchant Marine Act, 1936, and for other 
purposes; to the Committee on Commerce, Science, and Transportation.


              the maritime reform and security act of 1995

  Mr. LOTT. Mr. President, I am pleased to introduce the Maritime 
Reform and Security Act of 1995.
  Maritime reform is vital to our Nation's national and economic 
security. From our beginning history, America has been a maritime 
nation reliant on secure ocean passage and transport for commerce and 
military strength.
  From the sea battles of the American Revolution through the Persian 
Gulf, 

[[Page S12087]]
our seafarers and merchant marine courageously supplied and sustained 
our troops in combat and conflict.
  The U.S. flag fleet and merchant marine carried our troops and cargo 
through World War I, II, Korea, Vietnam, and the Persian Gulf.
  In World War II, more than 6,000 merchant mariners were killed and 
thousands more were wounded.
  After World War II, the Supreme Allied Commander, Dwight D. 
Eisenhower, declared:

       The officers and men of the merchant marine, by their 
     devotion to duty in the face of enemy action, as well as the 
     material dangers of the sea, have brought to us the tools to 
     finish the job. Their contribution to final victory will long 
     be remembered.

  Following the Persian Gulf, Chairman of the Joint Chiefs of Staff, 
Colin Powell, stated:

       Since I became Chairman of the Joint Chiefs of Staff, I 
     have to appreciate firsthand why our merchant marine has long 
     been called the Nation's fourth arm of defense. The American 
     seafarer provides an essential service to the well-being of 
     the Nation, as was demonstrated so clearly during Operations 
     Desert Shield and Desert Storm.

  In relation to our Nation's economic security, Rear Adm. (Ret.) Tom 
Patterson recently wrote in the Journal of Commerce:

       Throughout history, the Nation that ruled the seas 
     controlled the world's economy. In their time, Egypt, Greece, 
     Phoenicia, Carthage, and Rome, then Spain, Portugal, and 
     Great Britain came and went as the leading naval and 
     commercial powers. When they lost their maritime dominance, 
     they quickly became second rate in terms of economic success 
     and political influence.
       The United States is in grave danger of going down that 
     same road if it has not done so already. Our perceived 
     economic decline in recent years has been accompanied by an 
     almost suicidal approach to our maritime policy--and 
     specifically to the future of merchant shipping under the 
     American flag . . .

  Over the last 20 years, Congress has failed to pass an effective 
maritime policy. As a result, we have seen a dangerous decline of the 
U.S. flag fleet, merchant marine, and shipbuilding.
  Now, we face a situation where if we fail to act in this Congress, 
our national security and international competitiveness will be 
seriously and irreversibly harmed.
  We could easily lose our U.S.-flag fleet and
   with it our merchant marine.

  If that occurs, our military readiness and our sealift capacity will 
be dealt a blow.
  Numerous jobs would be lost related to the maritime industry and our 
balance of payments and international competitiveness will suffer.
  In times of international crisis or war, our historical and 
successful reliance on the U.S. Flag Fleet and merchant marine would 
come to an end.
  Personally, I do not want to be a part of that. We have a sobering 
opportunity to do something about it. In introducing this legislation, 
I believe that this Congress and this administration will successfully 
enact maritime reform legislation.
  Secretary Pena, on behalf of the administration, early this year 
introduced the Maritime Security Act of 1995. He continues to advocate 
and express the high priority that the administration places on 
maritime reform.
  The House National Security Committee has already reported out, H.R. 
1350, The Maritime Security Act of 1995.
  I look forward to working with the Members of the Senate, the House, 
the administration as well as the carriers, shipbuilders, and labor in 
working to enact maritime reform in this Congress.
  As I introduce this legislation, I would like to state as simply as 
possible what my objectives are.
  I want to maintain and promote a U.S. flag fleet, built in U.S. 
shipyards and manned by U.S. crews in the most cost effective and 
flexible manner possible.
  When I go home to Pascagoula, I want to see the greatest amount 
possible of Mississippi agricultural products--rice, cotton, soybeans, 
catfish, chicken and forest products and other exports moving on U.S.-
flagged ships built in America.
  In times of national emergency or war, I want to know that we will 
continue the finest tradition of the U.S. flag fleet and merchant 
marine--secure in the knowledge that our sealift capability is assured 
and confident that our troops will be supplied.
  The Maritime Reform and Security Act of 1995 will help achieve these 
objectives by establishing a new maritime security program. The bill 
terminates the previous program, reducing costs by 50 percent. In its 
place, a more efficient and flexible program will continue the 
successful private commercial partnership with the Departments of 
Transportation and Defense. A partnership which will help promote and 
preserve a modern U.S. flag fleet and merchant marine and one that will 
serve our national security in time of war or emergency.
  To promote our Nation's underlying shipbuilding infrastructure and 
capacity, this legislation reforms the title XI loan guarantee program. 
A program which effectively stimulates U.S. shipbuilding, 
competitiveness, and jobs.
  This maritime reform legislation will promote our Nation's national 
and economic security. I thank my colleagues who have joined as 
cosponsors and look forward to working with the full Senate on this 
important legislation.
  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. 1139

       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 ``Maritime Reform and Security 
     Act of 1995''.

                       TITLE I--MARITIME SECURITY

     SEC. 101. MARITIME SECURITY PROGRAM.

       Title VI of the Merchant Marine Act, 1936 (46 U.S.C. App. 
     1171 et seq.) is amended--
       (1) by striking the title heading and inserting the 
     following:

            ``Title VI--Vessel Operating Assistance Programs

        ``Subtitle A--Operating-Differential Subsidy Program'';

     and
       (2) by adding at the end the following new subtitle:

             ``Subtitle B--Maritime Security Fleet Program


                        ``establishment of fleet

       ``Sec. 651. (a) In General.--The Secretary of 
     Transportation shall establish a fleet of active, militarily 
     useful, privately-owned vessels to meet national defense and 
     other security requirements and maintain a United States 
     presence in international commercial shipping. The Fleet 
     shall consist of privately owned, United States-flag vessels 
     for which there are in effect operating agreements under this 
     subtitle, and shall be known as the Maritime Security Fleet.
       ``(b) Vessel Eligibility.--A vessel is eligible to be 
     included in the Fleet if the vessel is self-propelled and--
       ``(1)(A) is operated by a person in that person's capacity 
     as an ocean common carrier (as that term is used in the 
     Shipping Act of 1984 (46 U.S.C. App. 1701 et seq.));
       ``(B) whether in commercial service, on charter to the 
     Department of Defense, or in other employment, is either--
       ``(i) a roll-on/roll-off vessel with a carrying capacity of 
     at least 80,000 square feet or 500 twenty-foot equivalent 
     units; or
       ``(ii) a LASH vessel with a barge capacity of at least 75 
     barges; or
       ``(C) any other type of vessel that is determined by the 
     Secretary to be suitable for use by the United States for 
     national defense or military purposes in time of war or 
     national emergency;
       ``(2)(A)(i) is a United States-documented vessel; and
       ``(ii) on the date an operating agreement covering the 
     vessel is first entered into under this subtitle, is--
       ``(I) a LASH vessel that is 25 years of age or less; or
       ``(II) any other type of vessel that is 15 years of age or 
     less;
     except that the Secretary of Transportation may waive the 
     application of clause (ii) if the Secretary, in consultation 
     with the Secretary of Defense, determines that the waiver is 
     in the national interest; or
       ``(B) it is not a United States-documented vessel, but the 
     owner of the vessel has demonstrated an intent to have the 
     vessel documented under chapter 121 of title 46, United 
     States Code, if it is included in the Fleet, and the vessel 
     will be less than 10 years of age on the date of that 
     documentation; and
       ``(3) the Secretary of Transportation determines that the 
     vessel is necessary to maintain a United States presence in 
     international commercial shipping or, after consultation with 
     the Secretary of Defense, determines that the vessel is 
     militarily useful for meeting the sealift needs of the United 
     States with respect to national emergencies.


                         ``operating agreements

       ``Sec. 652. (a) In General.--The Secretary of 
     Transportation shall require, as a condition of including any 
     vessel in the Fleet, that the owner or operator of the vessel 
     enter into an operating agreement with the Secretary under 
     this section. Notwithstanding subsection (g), the Secretary 
     may enter into an operating agreement for, among 

[[Page S12088]]
     other vessels that are eligible to be included in the Fleet, any vessel 
     which continues to operate under an operating-differential 
     subsidy contract under subtitle A or which is under charter 
     to the Department of Defense.
       ``(b) Requirements for Operation.--An operating agreement 
     under this section shall require that, during the period a 
     vessel is included in the agreement--
       ``(1) the vessel--
       ``(A) shall be operated exclusively in the foreign trade or 
     in mixed foreign and domestic trade allowed under a registry 
     endorsement issued under section 12105 of title 46, United 
     States Code, and
       ``(B) shall not otherwise be operated in the coastwise 
     trade; and
       ``(2) the vessel shall be documented under chapter 121 of 
     title 46, United States Code.
       ``(c) Regulatory Relief.--A contractor of a vessel included 
     in an operating agreement under this subtitle may operate the 
     vessel in the foreign commerce of the United States without 
     restriction, and shall not be subject to any requirement 
     under section 801, 808, 809, or 810 of this Act. 
     Participation in the program established by this subtitle 
     shall not subject a contractor to section 805 or to any 
     provision of subtitle A of title VI of this Act.
       ``(d) Effectiveness and Annual Payment Requirements of 
     Operating Agreements.--
       ``(1) Effectiveness.--The Secretary of Transportation may 
     enter into an operating agreement under this subtitle for 
     fiscal year 1996. The agreement shall be effective only for 1 
     fiscal year, but shall be renewable, subject to the 
     availability of appropriations or amounts otherwise made 
     available, for each subsequent fiscal year through the end of 
     fiscal year 2005. The Secretary shall renew an operating 
     agreement under this subtitle if sufficient amounts are 
     appropriated or otherwise made available to fund that 
     agreement.
       ``(2) Annual payment.--An operating agreement under this 
     subtitle shall require, subject to the availability of 
     appropriations and the other provisions of this section, that 
     the Secretary of Transportation pay each fiscal year to the 
     contractor, for each vessel that is covered by the operating 
     agreement, an amount equal to $2,300,000 for fiscal year 1996 
     and $2,100,000 for each fiscal year thereafter in which the 
     agreement is in effect. The amount shall be paid in equal 
     monthly installments at the end of each month. The amount 
     shall not be reduced except as provided by this section.
       ``(e) Certification Required for Payment.--As a condition 
     of receiving payment under this section for a fiscal year for 
     a vessel, the owner or operator of the vessel shall certify, 
     in accordance with regulations issued by the
      Secretary of Transportation, that the vessel has been and 
     will be operated in accordance with subsection (b)(1) for 
     at least 320 days in the fiscal year. Days during which 
     the vessel is drydocked, surveyed, inspected, or repaired 
     shall be considered days of operation for purposes of this 
     subsection.
       ``(f) Operating Agreement is Obligation of United States 
     Government.--An operating agreement under this subtitle 
     constitutes a contractual obligation of the United States 
     Government to pay the amounts provided for in the agreement 
     to the extent of actual appropriations.
       ``(g) Limitations.--The Secretary of Transportation shall 
     not make any payment under this subtitle for a vessel with 
     respect to any days for which the vessel is--
       ``(1) subject to an operating-differential subsidy contract 
     under subtitle A or under a charter to the United States 
     Government, other than a charter pursuant to section 653;
       ``(2) not operated or maintained in accordance with an 
     operating agreement under this subtitle; or
       ``(3) more than 25 years of age, except that the Secretary 
     may make such payments for a LASH vessel for any day for 
     which the vessel is more than 25 years of age if that 
     vessel--
       ``(A) is modernized after January 1, 1994,
       ``(B) is modernized before it is 25 years of age, and
       ``(C) is not more than 30 years of age.
       ``(h) Payments.--With respect to payments under this 
     subtitle for a vessel included in an operating agreement, the 
     Secretary of Transportation--
       ``(1) except as provided in paragraph (2), shall not reduce 
     any payment for the operation of a vessel to carry military 
     or other preference cargoes under section 2631 of title 10, 
     United States Code, the Act of March 26, 1934 (46 U.S.C. App. 
     1241-1), section 901(a), 901(b), or 901b of this Act, or any 
     other cargo preference law of the United States;
       ``(2) shall not make any payment for any day that a vessel 
     is engaged in transporting more than 7,500 tons of civilian 
     bulk preference cargoes pursuant to section 901(a), 901(b), 
     or 901b that is bulk cargo; and
       ``(3) shall make a pro rata reduction in payment for each 
     day less than 320 in a fiscal year that a vessel covered by 
     an operating agreement is not operated in accordance with 
     subsection (b)(1), with days during which the vessel is 
     drydocked or under-going survey, inspection, or repair 
     considered to be days on which the vessel is operated.
       ``(i) Priority for Awarding Agreements.--Subject to the 
     availability of appropriations, the Secretary shall enter 
     into operating agreements according to the following 
     priority:
       ``(1) Vessels owned by citizens.--
       ``(A) Priority.--First, for any vessel that is--
       ``(i) owned and operated by persons who are citizens of the 
     United States under section 2 of the Shipping Act, 1916; or
       ``(ii) less than 10 years of age and owned and operated by 
     a corporation that is--
       ``(I) eligible to document a vessel under chapter 121 of 
     title 46, United States Code; and
       ``(II) affiliated with a corporation operating or managing 
     for the Secretary of Defense other vessels documented under 
     the chapter, or chartering other vessels to the Secretary of 
     Defense.
       ``(B) Limitation of number of operating agreements.--The 
     number of vessels for which operating agreements may be 
     entered into by the Secretary under the priority in 
     subparagraph (A)--
       ``(i) for vessels described in subparagraph (A)(i), may 
     not, for a person, exceed the sum of--
       ``(I) the number of United States-documented vessels the 
     person operated in the trade described by subsection 
     (b)(1)(A) of this section on May 17, 1995; and
       ``(II) the number of United States-documented vessels the 
     person chartered to the Secretary of Defense on that date; 
     and
       ``(ii) for vessels described in subparagraph (A)(ii), may 
     not exceed 5 vessels.
       ``(C) Treatment of related parties.--For purposes of 
     subparagraph (B), a related party with respect to a person 
     shall be treated as the person.
       ``(2) Other vessels owned by citizens and government 
     contractors.--To the extent that amounts are available after 
     applying paragraph (1), any vessel that is owned and operated 
     by a person who is--
       ``(A) a citizen of the United States under section 2 of the 
     Shipping Act, 1916, that has not been awarded an operating 
     agreement under the priority established under paragraph (1); 
     or
       ``(B)(i) eligible to document a vessel under chapter 121 of 
     title 46, United States Code; and
       ``(ii) affiliated with a corporation operating or managing 
     other United States-documented vessels for the Secretary of 
     Defense or chartering other vessels to the Secretary of 
     Defense.
       ``(3) Other vessels.--To the extent that amounts are 
     available after applying paragraphs (1) and (2), any other 
     eligible vessel.
       ``(j) Transfer of Operating agreements.--A contractor under 
     an operating agreement may transfer the agreement (including 
     all rights and obligations under the agreement) to any person 
     eligible to enter into that operating agreement under this 
     subtitle after notification of the Secretary, unless the 
     transfer is disapproved by the Secretary within 90 days that 
     the date of that notification.
      A person to whom an operating agreement is transferred may 
     receive payments from the Secretary under the agreement 
     only if each vessel to be included in the agreement after 
     the transfer is an eligible vessel under section 651(b).
       ``(k) Reversion of Unused Authority.--The obligation of the 
     Secretary to make payments under an operating agreement under 
     this subtitle shall terminate with respect to a vessel if the 
     contractor fails to engage in operation of the vessel for 
     which such payment is required--
       ``(1) within one year after the effective date of the 
     operating agreement, in the case of a vessel in existence on 
     the effective date of the agreement, or
       ``(2) within 30 months after the effective date of the 
     operating agreement, in the case of a vessel to be 
     constructed after that effective date.
       ``(l) Procedure for Considering Application; Effective Date 
     for Certain Vessels.--
       ``(1) Procedures.--No later than 30 days after the date of 
     enactment of the Maritime Reform and Security Act of 1995, 
     the Secretary shall accept applications for enrollment of 
     vessels in the Fleet and, within 90 days after receipt of an 
     application for enrollment of a vessel in the Fleet, the 
     Secretary shall enter into an operating agreement with the 
     applicant or provide in writing the reason for denial of that 
     application.
       ``(2) Effective date.--Unless an earlier date is requested 
     by the applicant, the effective date for an operating 
     agreement with respect to a vessel which is, on the date of 
     entry into an operating agreement, either subject to a 
     contract under subtitle A or on charter to the United States 
     Government, other than a charter under section 653, shall be 
     the expiration or termination date of the contract under 
     subtitle A or of the Government charter covering the vessel, 
     respectively, or any earlier date the vessel is withdrawn 
     from that contract or charter.
       ``(m) Early Termination.--An operating agreement under this 
     subtitle shall terminate on a date specified by the 
     contractor if the contractor notifies the Secretary, by not 
     later than 60 days before the effective date of the 
     termination, that the contractor intends to terminate the 
     agreement. Vessels included in an operating agreement 
     terminated under this subsection shall remain documented 
     under chapter 121 of title 46, United States Code, until the 
     date the operating agreement would have terminated according 
     to its terms. A contractor who terminates an operating 
     agreement pursuant to this subsection shall continue to be 
     bound by the provisions of section 653 until the date the 
     operating agreement would have terminated according to its 
     terms. All terms and conditions of an Emergency Preparedness 
     Agreement entered into under section 653 shall remain in 
     effect until the date the operating agreement would have 
     terminated according to its terms, except that the terms of 
     such Emergency Preparedness Agreement 

[[Page S12089]]
     may be modified by the mutual consent of the contractor and the 
     Secretary of Transportation, in consultation with the 
     Secretary of Defense.
       ``(n) Termination for Lack of Funds.--If, by the first day 
     of a fiscal year, insufficient funds have been appropriated 
     under the authority provided by section 655 for that fiscal 
     year, the Secretary of Transportation shall notify the 
     Congress that operating agreements authorized under this 
     subtitle for which insufficient funds are available will be 
     terminated on the 60th day of that fiscal year if sufficient 
     funds are not appropriated or otherwise made available by 
     that date. If funds are not appropriated under the authority 
     provided by section 655 or otherwise made available for any 
     fiscal year by the 60th day of that fiscal year, then each 
     vessel included in an operating agreement under this subtitle 
     for which funds are not available is thereby released from 
     any further obligation under the operating agreement, the 
     operating agreement shall terminate, and the vessel owner or 
     operator may transfer and register such vessel under a 
     foreign registry deemed acceptable by the Secretary of 
     Transportation, notwithstanding any other provision of law. 
     If section 902 is applicable to such vessel after registry 
     under such a registry, the vessel is available to be 
     requisitioned by the Secretary of Transportation pursuant to 
     section 902.
       ``(o) Award of Operating Agreements.--
       ``(1) In general.--The Secretary of Transportation, subject 
     to paragraph (4), shall award operating agreements within 
     each priority under subsection (i)(1), (2), and (3) under 
     such regulations as may be prescribed by the Secretary, but 
     the failure to promulgate such regulations shall not provide 
     a basis for denial of an application for enrollment of a 
     vessel in the Fleet.
       ``(2) Number of agreements awarded.--Regulations under 
     paragraph (1) shall provide that if appropriated amounts are 
     not sufficient for operating agreements for eligible vessels 
     within a priority under subsection (i)(1), (2), or (3), the 
     Secretary shall award to each person, with respect to 
     eligible vessels within such priority for which such person 
     has submitted an application for an operating agreement, a 
     number of operating agreements that bears approximately the 
     same ratio to the total number of eligible vessels in the 
     priority for which timely applications have been made as the 
     amount of appropriations available for operating agreements 
     for eligible vessels in the priority bears to the amount of 
     appropriations necessary for operating agreements for all 
     eligible vessels in the priority.
       ``(3) Treatment of related parties.--For purposes of 
     paragraph (2), a related party with respect to a person shall 
     be treated as the person.
       ``(4) Preference for u.s.-built vessels.--In awarding 
     operating agreements for vessels within a priority under 
     subsection (i) (1), (2), or (3), the Secretary shall give 
     preference to a vessel that was constructed in the United 
     States, to the extent such preference is consistent with 
     establishment of a fleet described in the first sentence of 
     section 651(a) (taking into account the age of the vessel, 
     the nature of services provided by the vessel, and the 
     commercial viability of the vessel).
       ``(p) Notice to U.S. Shipbuilders Required.--The Secretary 
     shall include in any operating agreement under this subtitle 
     a requirement that the contractor under the agreement shall, 
     by not later than 30 days after soliciting any bid or offer 
     for the construction of any vessel in a foreign shipyard and 
     before entering into a contract
      for construction of a vessel in a foreign shipyard, provide 
     notice of the intent of the contractor to enter into such 
     a contract to the Secretary of Transportation. The 
     Secretary shall, by appropriate means, inform shipyards in 
     the United States capable of constructing the vessel of 
     such notice.


                    ``national security requirements

       ``Sec. 653. (a) Emergency Preparedness Agreement.--
       ``(1) Requirement to enter agreement.--The Secretary of 
     Transportation shall establish an Emergency Preparedness 
     Program under this section that is approved by the Secretary 
     of Defense. Under the program, the Secretary of 
     Transportation shall include in each operating agreement 
     under this subtitle a requirement that the contractor enter 
     into an Emergency Preparedness Agreement under this section 
     with the Secretary. The Secretary shall negotiate and enter 
     into an Emergency Preparedness Agreement with each contractor 
     as promptly as practicable after the contractor has entered 
     into an operating agreement under this subtitle.
       ``(2) Terms of agreement.--An Emergency Preparedness 
     Agreement under this section shall require that upon a 
     request by the Secretary of Defense during time of war or 
     national emergency, an owner or operator of a vessel included 
     in an operating agreement under this subtitle shall make 
     available commercial transportation resources (including 
     services). The basic terms of the Emergency Preparedness 
     Agreement shall be established pursuant to consultations 
     among the Secretary, the Secretary of Defense, and Maritime 
     Security Program contractors. In any Emergency Preparedness 
     Agreement, the Secretary of Transportation, in consultation 
     with the Secretary of Defense, and a contractor may agree to 
     additional or modifying terms appropriate to the contractor's 
     circumstances.
       ``(b) Resources Made Available.--The commercial 
     transportation resources, including services, to be made 
     available under an Emergency Preparedness Agreement shall 
     include vessels or capacity in vessels, intermodal systems 
     and equipment, terminal facilities, inter modal and 
     management services, and other related services, or any 
     agreed portion of such nonvessel resources for activation as 
     the Secretary may determine to be necessary, seeking to 
     minimize disruption of the contractor's service to commercial 
     shippers.
       ``(c) Compensation.--
       ``(1) In general.--The Secretary of Transportation, in 
     consultation with the Secretary of Defense, shall provide in 
     each Emergency Preparedness Agreement for fair and reasonable 
     compensation for all commercial transportation resources, 
     including services, provided pursuant to this section.
       ``(2) Specific requirements.--Compensation under this 
     subsection--
       ``(A) shall not be less than the contractor's commercial 
     market charges for like transportation resources, including 
     services;
       ``(B) shall include all the contractor's costs associated 
     with provision and use of the contractor's commercial 
     resources, including services to meet emergency requirements;
       ``(C) in the case of a charter of an entire vessel, shall 
     be fair and reasonable;
       ``(D) shall be in addition to and shall not in any way 
     reflect amounts payable under section 652; and
       ``(E) shall be provided from the time that a vessel or 
     resource is diverted from commercial service until the time 
     that it reenters commercial service.
       ``(d) Temporary Replacement Vessels.--Notwithstanding any 
     other provision of this subtitle or of other law to the 
     contrary--
       ``(1) a contractor may operate or employ in foreign 
     commerce a foreign-flag vessel or foreign-flag vessel 
     capacity, as a temporary replacement for a United States-
     documented vessel or United States-documented vessel capacity 
     that is activated under an Emergency Preparedness Agreement; 
     and
       ``(2) such replacement vessel or vessel capacity shall be 
     eligible during the replacement period to transport 
     preference cargoes subject to section 2631 of title 10 United 
     States Code, the Act of March 26, 1934 (46 U.S.C. App. 1241-
     1), and sections 901(a), 901(b), and 901b of this Act to the 
     same extent as the eligibility of the vessel or vessel 
     capacity replaced.
       ``(3) Redelivery and Liability of U.S. for Damages.--
       ``(1) In general.--All commercial transportation resources 
     activated under an Emergency Preparedness Agreement shall, 
     upon termination of the period of activation, be redelivered 
     to the contractor in the same good order and condition as 
     when received, less ordinary wear and tear, or the Government 
     shall fully compensate the contractor for any necessary 
     repair or replacement.
       ``(2) Limitation on liability of united states.--Except as 
     may be expressly agreed to in an Emergency Preparedness 
     Agreement, or as otherwise provided by law, the Government 
     shall not be liable for disruption of a contractor's 
     commercial business or other consequential damages to a 
     contractor arising from activation of commercial 
     transportation resources, including services, under an 
     Emergency Preparedness Agreement.
       ``(3) Limitation on application of other requirements.--
     Sections 902 and 909 of this Act shall not apply to a vessel 
     while it is included in an Emergency Preparedness Agreement 
     under this subtitle. Any Emergency Preparedness Agreement 
     entered into by a contractor shall supersede any other 
     agreement between that contractor and the Government for 
     vessel availability in time of war or national emergency.


                             ``definitions

       ``Sec. 654. In this subtitle:
       ``(1) Fleet.--The term `Fleet' means the Maritime Security 
     Fleet established pursuant to section 651(a).
       ``(2) LASH vessel.--The term `LASH vessel' means a lighter 
     aboard ship vessel.
       ``(3) United states-documented vessel.--The term `United 
     States-documented vessel' means a vessel documented under 
     chapter 121 of title 46, United States Code.
       ``(4) Bulk cargo.--The term `bulk cargo' means cargo that 
     is loaded and carried in bulk without mark or count.
       ``(5) Contractor.--The term `contractor' means an owner or 
     operator of a vessel that enters into an operating agreement 
     for the vessel with the Secretary of Transportation under 
     section 652.


                   ``authorization of appropriations

       ``Sec. 655. There are authorized to be appropriated for 
     operating agreements under this subtitle, to remain available 
     until expended, $100,000,000 for fiscal year 1996 and such 
     sums as may be necessary, not to exceed $100,000,000, for 
     each fiscal year thereafter through fiscal year 2005.''.

     SEC. 102. TERMINATION OF OPERATING-DIFFERENTIAL SUBSIDY 
                   PROGRAM.

       (a) Limitation on Payments for Older Vessels.--Section 
     605(b) of the Merchant Marine Act, 1936 (46 U.S.C. App. 
     1175(b)), is amended to read as follows:
       ``(b) No operating-differential subsidy shall be paid for 
     the operation of a vessel after the calendar year the vessel 
     becomes 25 years of age, unless the Secretary of 
     Transportation has determined, before the date of enactment 
     of the Maritime Reform and Security Act of 1995, that it is 
     in the public interest to grant such financial aid for the 
     operation of such vessel.''. 

[[Page S12090]]

       (b) Wind-Up of Program.--Subtitle A of such Act (46 U.S.C. 
     App. 1171 et seq.), as designated by the amendment made by 
     section 2(1), is further amended by adding at the end the 
     following new section:
       ``Sec. 616. (a) After the date of enactment of the Maritime 
     Reform and Security Act of 1995, the Secretary of 
     Transportation shall not enter into any new contract for 
     operating-differential subsidy under this subtitle.
       ``(b) Notwithstanding any other provision of this Act, any 
     operating-differential subsidy contract in effect under this 
     title on the day before the date of enactment of the Maritime 
     Reform and Security Act of 1995 shall continue in effect and 
     terminate as set forth in the contract, unless voluntarily 
     terminated at an earlier date by the parties (other than the 
     United States Government) to the contract.
       ``(c) The essential service requirements of section 601(a) 
     and 603(b), and the provisions of sections 605(c) and 809(a), 
     shall not apply to the operating-differential subsidy program 
     under this subtitle effective upon the earlier of--
       ``(1) the date that a payment is made, under the Maritime 
     Security Program established by subtitle B to a contractor 
     under that subtitle who is not party to an operating-
     differential subsidy contract under this subtitle, with the 
     Secretary to cause notice of the date of such payment to be 
     published in the Federal Register as soon as possible; or
       ``(2) with respect to a particular contractor under the 
     operating-differential subsidy program, the date that 
     contractor enters into a contract with the Secretary under 
     the Maritime Security Program established by subtitle B.
       ``(d)(1) Notwithstanding any other provision of law, a 
     vessel may be transferred and registered under a foreign 
     registry deemed acceptable by the Secretary of Transportation 
     if--
       ``(A) the operator of the vessel receives an operating-
     differential subsidy pursuant to a contract under this 
     subtitle which is in force on October 1, 1994, and the 
     Secretary approves the replacement of such vessel with a 
     comparable vessel, or
       ``(B) the vessel is included in an operating agreement 
     under subtitle B, and the Secretary approves the replacement 
     of such vessel with a comparable vessel for inclusion in the 
     Maritime Security Fleet established under subtitle B.
       ``(2) Any such vessel may be requisitioned by the Secretary 
     of Transportation pursuant to section 902.''.

     SEC. 103. NONCONTIGUOUS DOMESTIC TRADES.

       (a)(1) Except as otherwise provided in this section, no 
     contractor or related party shall receive payments pursuant 
     to this subtitle during a period when it participates in a 
     noncontiguous domestic trade, except upon written permission 
     of the Secretary of Transportation. Such written permission 
     shall also be required for any material change in the number 
     or frequency of sailings, the capacity offered, or the 
     domestic ports called by a contractor or related party in a 
     noncontiguous domestic trade. The Secretary may grant such 
     written permission pursuant to written application of such 
     contractor or related party unless the Secretary finds that--
       (A) existing service in that trade is adequate; or
       (B) the service sought to be provided by the contractor or 
     related party--
       (i) would result in unfair competition to any other person 
     operating vessels in such non-contiguous domestic trade, or
       (ii) would be contrary to the objects and policy of this 
     Act.
       (2) For purposes of this subsection, ``written permission 
     of the Secretary'' means permission which states the capacity 
     offered, the number and frequency of sailings, and the 
     domestic ports called, and which is granted following--
       (A) written application containing the information required 
     by paragraph (e)(1) by a person seeking such written 
     permission, notice of which application shall be published in 
     the Federal Register within 15 days of filing of such 
     application with the Secretary;
       (B) holding of a hearing on the application under section 
     554 of title 5, United States Code, in which every person, 
     firm or corporation having any interest in the application 
     shall be permitted to intervene and be heard; and
       (C) final decision on the application by the Secretary 
     within 120 days following conclusion of such hearing.
       (b) Subsection (a) shall not apply in any way to provision 
     by a contractor of service within the level of service 
     provided by that contractor as of the date established by 
     subsection (c) or to provision of service permitted by 
     subsection (d).
       (c) The date referred to in subsection (b) shall be August 
     9, 1995, provided, however, that with respect to tug and 
     barge service to Alaska the date referred to in subsection 
     (b) shall be July 1, 1992.
       (d) A contractor may provide service in a trade in addition 
     to the level of service provided as of the applicable date 
     establish by subsection (c) in proportion to the annual 
     increase in real gross product of the noncontiguous State or 
     Commonwealth served since the applicable date established by 
     subsection (c).
       (e)(1) A person applying for award of an agreement under 
     this subtitle shall include with the application a 
     description of the level of service provided by that person 
     in each noncontiguous domestic trade served as of the date 
     applicable under subsection (c). The application also shall 
     include, for each such noncontiguous domestic trade: a list 
     of vessels operated by that person in such trade, their 
     container carrying capacity expressed in twenty-foot 
     equivalent units (TEUs) or other carrying capacity, the 
     itinerary for each such vessel, and such other information as 
     the Secretary may require by regulation Such description and 
     information shall be made available to the public. Within 15 
     days of the date of an application for an agreement by a 
     person seeking to provide service pursuant to subsection (b) 
     and (c) of this section, the Secretary shall cause to be 
     published in the Federal Register notice of such description, 
     along with a request for public comment thereon. Comments on 
     such description shall be submitted to the Secretary within 
     30 days of publication in the Federal Register. Within 15 
     days after receipt of comments, the Secretary shall issue a 
     determination in writing either accepting, in whole or part, 
     or rejecting use of the applicant's description to establish 
     the level of service provided as of the date applicable under 
     subsection (e), provided that notwithstanding the provisions 
     of this subsection, processing of the application for an 
     award of an agreement shall not be suspended or delayed 
     during the time in which comments may be submitted with 
     respect to the determination or during the time prior to 
     issuance by the Secretary of the required determination, and 
     provided further, that if the Secretary does not make the 
     determination required by this paragraph within the time 
     provided by this paragraph, the description of the level of 
     service provided by the applicant shall be deemed to be the 
     level of service provided as of the applicable date until 
     such time as the Secretary makes the determination.
       (2) No contractor shall implement the authority granted in 
     subsection (d) of this section except as follows--
       (A) An application shall be filed with the Secretary which 
     shall state the increase in capacity sought to be offered, a 
     description of the means by which such additional capacity 
     would be provided, the basis for applicant's position that 
     such increase in capacity would be in proportion to or less 
     than the increase in real gross product of the relevant 
     noncontiguous State or Commonwealth since the applicable date 
     established by subsection (c), and such information as the 
     Secretary may require so that the Secretary may accurately 
     determine such increase in real gross product of the relevant 
     noncontiguous State or Commonwealth.
       (B) Such increase in capacity sought by applicant and such 
     information shall be made available to the public.
       (C) Within 15 days of the date of an application pursuant 
     to this paragraph the Secretary shall cause to be published 
     in the Federal Register notice of such application, along 
     with a request for public comment thereon.
       (D) Comments on such application shall be submitted to the 
     Secretary within 30 days of population in the Federal 
     Register.
       (E) Within 15 days after receipt of comments, the Secretary 
     shall issue a determination in writing either accepting, in 
     whole or part, or rejecting, the increase in capacity sought 
     by the applicant as being in proportion to or less than the 
     increase in real gross product of the relevant non-contiguous 
     State or Commonwealth since the applicable date established 
     by subsection (c), provided that, notwithstanding the 
     provisions of this section, if the Secretary does not make 
     the determination required by this paragraph within the time 
     provided by this paragraph, the increase in capacity sought 
     by applicant shall be permitted as being in proportion to or 
     less than such increase in real gross product until such time 
     as the Secretary makes the determination.
       (f) With respect to provision by a contractor of service in 
     a noncontiguous domestic trade not authorized by this 
     section, the Secretary shall deny payments under the 
     operating agreement with respect to the period of provision 
     of such service but shall deny payments only in part if the 
     extent of provision of such unauthorized service was de 
     minimis or not material.
       (g) Notwithstanding any other provision of this subtitle, 
     the Secretary may issue temporary permission for any United 
     States citizen, as that term is defined in section 2 of the 
     Shipping Act, 1916, to provide service to a noncontiguous 
     State or Commonwealth upon the request of the Governor of 
     such noncontiguous State or Commonwealth, in circumstances 
     where an Act of God, a declaration of war or national 
     emergency, or any other condition occurs that prevents ocean 
     transportation service to such noncontiguous State or 
     Commonwealth from being provided by persons currently 
     providing such service. Such temporary permission shall 
     expire 90 days from date of grant, unless extended by the 
     Secretary upon written request for the Governor of such State 
     or Commonwealth.
       (h) As used in this section:
       (1) ``level of service provided by a contractor'' in a 
     trade as of a date means--
       (A) with respect to service other than service described in 
     (B), the total annual capacity provided by the contractor in 
     that trade for the 12 calendar months preceding that date, 
     provided that, with respect to unscheduled, contract carrier 
     tug and barge service between points in Alaska south of the 
     Arctic Circle and points in the contiguous 48 States, the 
     level of service provided by a contractor 

[[Page S12091]]
     shall include 100 percent of the capacity of the equipment dedicated to 
     such service on the date specified
      in subsection (c) and actually utilized in that service in 
     the two-year period preceding that date, excluding service 
     to points between Anchorage, Alaska and Whittier, Alaska 
     served by common carrier service unless such scheduled 
     service is only for carriage of oil or pursuant to a 
     contract with the United States military, and provided 
     further that, with respect to scheduled barge service 
     between the contiguous 48 states and Puerto Rico, such 
     total annual capacity shall be deemed as such total annual 
     capacity plus the annual capacity of two additional 
     barges, each capable of carrying 185 trailers and 100 
     automobiles; and
       (B) With respect to service provided by container vessels, 
     the overall capacity equal to the sum of--
       (i) 100 percent of the capacity of vessels operated by or 
     for the contractor on that date, with the vessels' 
     configuration and frequency of sailing in effect on that 
     date, and which participate solely in that noncontiguous 
     domestic trade; and
       (ii) 75 percent of the capacity of vessels operated by or 
     for the contractor on that date, with the vessels' 
     configuration and frequency of sailing in effect on that 
     date, and which participate in that noncontiguous domestic 
     trade and in another trade, provided that the term does not 
     include any restriction on frequency, or number of sailings, 
     or on ports called within such overall capacity.
       (2) The level of service set forth in paragraph (1) shall 
     be described with the specificity required by subsection 
     (e)(1) and shall be the level of service in a trade with 
     respect to the applicable date established by subsection (c) 
     only if the service is not abandoned thereafter, except for 
     interruptions due to military contingency or other events 
     beyond the contractor's control.
       (3) ``Participates in a noncontiguous domestic trade'' 
     means directly or indirectly owns, charters, or operates a 
     vessel engaged in transportation of cargo between a point in 
     the contiguous 48 states and a point in Alaska, Hawaii, or 
     Puerto Rico, other than a point in Alaska north of the Arctic 
     Circle.
       (4) ``Related party'' means--
       (A) a holding company, subsidiary, affiliate, or associate 
     of a contractor who is a party to an operating agreement 
     under subtitle A of title VI of the Merchant Marine Act, 
     1936; and
       (B) an officer, director, agent, or other executive of a 
     contractor or of a person referred to in subparagraph (A).

         TITLE II--OPERATING FLEXIBILITY AND REGULATORY RELIEF

     SEC. 201. OPERATIONAL FLEXIBILITY.

       (a) In General.--Section 804 of the Merchant Marine Act, 
     1936 (46 U.S.C. App. 1222) is amended by adding at the end 
     the following new subsection:
       ``(f) The provisions of subsection (a) shall not preclude a 
     contractor receiving assistance under subtitle A or B of 
     title VI, or any holding company, subsidiary, or affiliate of 
     the contractor, or any officer, director, agent, or executive 
     thereof, from--
       ``(1) owning, chartering, or operating any foreign-flag 
     vessel on a voyage or a segment of a voyage that does not 
     call at a port in the United States;
       ``(2) owning, chartering, or operating any foreign-flag 
     vessel in line haul service between the United States and 
     foreign ports if--
       ``(A) the foreign-flag vessel was owned, chartered, or 
     operated by, or is a replacement for a foreign-flag vessel 
     owned, chartered, or operated by, such owner or operator, or 
     any holding company, subsidiary, affiliate, or associate of 
     such owner or operator, on the date of enactment of the 
     Maritime Reform and Security Act of 1995;
       ``(B) the owner or operator, with respect to each 
     additional foreign-flag vessel, other than a time chartered 
     vessel, has first applied to have that vessel included in an 
     operating agreement under subtitle B of title VI, and the 
     Secretary has not awarded an operating agreement with respect 
     to that vessel within 90 days after the filing of the 
     application; or
       ``(C) the vessel has been placed under foreign 
     documentation pursuant to section 9 of the Shipping Act, 1916 
     (46 U.S.C. App. 808) or section 616(d) or 652(n) of this Act, 
     except that any foreign-flag vessel, other than a time 
     chartered vessel, a replacement vessel under section 653(d), 
     or a vessel owned, chartered, or operated by the owner or 
     operator on the date of enactment of the Maritime Reform and 
     Security Act of 1995, in line haul service between the United 
     States and foreign ports is registered under the flag of a 
     foreign registry deemed appropriate by the Secretary of 
     Transportation, and available to be requisitioned by the 
     Secretary of Transportation pursuant to section 902 of this 
     Act;
       ``(3) owning, chartering, or operating foreign-flag bulk 
     cargo vessels that are operated in foreign-to-foreign service 
     or the foreign commerce of the United States;
       ``(4) chartering or operating foreign-flag vessels that are 
     operated solely as replacement vessels for United States-flag 
     vessels or vessel capacity that are made available to the 
     Secretary of Defense pursuant to section 653 of this Act; or
       ``(5) entering into time or space charter or other 
     cooperative agreements with respect to foreign-flag vessels 
     or acting as agent or broker for a foreign-flag vessel or 
     vessels.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to a contractor under subtitle B of title VI of 
     the Merchant Marine Act, 1936, as amended by this Act, upon 
     enactment of this Act, and shall apply to a contractor under 
     subtitle A of title VI of that Act, upon the earlier of--
       (1) the date that a payment is made, under the Maritime 
     Security Program under subtitle B of that
      title to a contractor under subtitle B of that title who is 
     not party to an operating-differential subsidy contract 
     under subtitle A of that title, with the Secretary of 
     Transportation to cause notice of the date of such payment 
     to be published in the Federal Register as soon as 
     possible; or
       (2) with respect to a particular contractor under the 
     operating-differential subsidy program under subtitle A of 
     that title, the date that contractor enters into a contract 
     with the Secretary under the Maritime Security Program 
     established by subtitle B of that title.

     SEC. 202. REGISTRATION REFORM.

       Section 9 of the Shipping Act, 1916 (46 U.S.C. App. 808) is 
     amended by adding at the end the following:
       ``(e) Notwithstanding subsection (c)(2), the Merchant 
     Marine Act, 1936, or any contract entered into with the 
     Secretary of Transportation under that Act, a vessel may be 
     placed under a foreign registry, without approval of the 
     Secretary, if--
       ``(1)(A) the Secretary determines that at least one 
     replacement vessel of a capacity that is equivalent or 
     greater, as measured by deadweight tons, gross tons, or 
     container equivalent units, as appropriate, is documented 
     under chapter 121 of title 46, United States Code, by the 
     owner of the vessel placed under the foreign registry; and
       ``(B) the replacement vessel is not more than 10 years of 
     age on the date of that documentation;
       ``(2)(A) an application for an operating agreement under 
     subtitle B of title VI of the Merchant Marine Act, 1936 has 
     been filed with respect to a vessel which is eligible to be 
     included in the Maritime Security Fleet under section 
     651(b)(1) of that Act; and
       ``(B) the Secretary has not awarded an operating agreement 
     with respect to that vessel within 90 days after the date of 
     that application;
       ``(3) a contract covering the vessel under subtitle A of 
     title VI of the Merchant Marine Act, 1936 has expired, and 
     that vessel is more than 15 years of age on the date the 
     contract expires; or
       ``(4) an operating agreement covering the vessel under 
     subpart B of title VI of the Merchant Marine Act, 1936 has 
     not been renewed.''.

     SEC. 203. RESTRICTION REMOVAL.

       Title V of the Merchant Marine Act, 1936 (46 U.S.C. App. 
     1151 et seq.) is amended by adding at the end the following 
     new section:

     ``SEC. 512. LIMITATION ON RESTRICTIONS.

       ``Notwithstanding any other provision of law or contract, 
     all restrictions and requirements under sections 503, 506, 
     and 802 applicable to a liner vessel constructed, 
     reconstructed, or reconditioned with the aid of construction-
     differential subsidy shall terminate upon the expiration of 
     the 25-year period beginning on the date of the original 
     delivery of the vessel from the shipyard.''.

     SEC. 204. VESSEL STANDARDS.

       (a) A liner vessel which is not documented under chapter 
     121 of title 46, United States Code, on the date of enactment 
     of this Act and which the Secretary of Transportation 
     determines to meet the criteria of section 651(b) of the 
     Merchant Marine Act, 1936, shall be eligible for a 
     certificate of inspection if it is eligible under chapter 121 
     of title 46, United States Code, to be documented as a United 
     States-flag vessel after the Secretary determines that--
       (1) the vessel is classed by and designed in accordance 
     with the rules of the American Bureau of Shipping or other 
     classification society accepted by the Secretary; and
       (2) the vessel complies with applicable international 
     agreements and associated guidelines, as determined by the 
     requirements of the country in which the vessel was 
     registered prior to documentation in the United States if, at 
     the time the Secretary makes those determinations, that 
     country has not been identified by the Secretary as 
     inadequately enforcing international vessel regulations.
       (b) A vessel documented as a United States-flag vessel 
     under this section continues to be eligible for a certificate 
     of inspection by complying with the applicable international 
     agreements and associated guidelines.
       (c) The Secretary may rely upon a certification from the 
     American Bureau of Shipping or other classification society 
     accepted by the Secretary to establish that a vessel is in 
     compliance with the requirements of subsection (a) and (b).
       (d) As used in this section, ``liner vessel'' means a cargo 
     carrying vessel which is not a tank vessel and which is 
     either a roll-on/roll-off vessel, a containership, a LASH 
     vessel, or a vessel which is operated in ocean common 
     carriage within the meaning of the Shipping Act of 1984 (46 
     U.S.C. App. 1701 et seq.), or if not employed in such 
     service, determined by the Secretary to be capable of 
     employment in such service.

               TITLE III--LOAN GUARANTEES AND SHIP REPAIR

     SEC. 301 TITLE XI LOAN GUARANTEES.

       Title XI of the Merchant Marine Act, 1936 (46 U.S.C. App. 
     1271 et seq.) is amended--
       (1) in section 1101(b), by striking ``owned by citizens of 
     the United States'';

[[Page S12092]]

       (2) in section 1104B(a), in the material preceding 
     paragraph (1), by striking ``owned by citizens of the United 
     States''; and
       (3) in section 1110(a), by striking ``owned by citizens of 
     the United States''.

     SEC. 302. VESSEL LOAN GUARANTEE PROGRAM.

       (a) Risk Factor Determinations.--Section 1103 of the 
     Merchant Marine Act, 1936 (46 U.S.C. App. 1273) is amended by 
     adding at the end the following new subsection:
       ``(h)(1) The Secretary shall--
       ``(A) establish in accordance with this subsection a system 
     of risk categories for obligations guaranteed under this 
     title, that categorizes the relative risk of guarantees made 
     under this title with respect to the risk factors set forth 
     in paragraph (3); and
       ``(B) determine for each of the risk categories a subsidy 
     rate equivalent to the average annual cost of obligations in 
     the category, expressed as a percentage of the average annual 
     aggregate amount guaranteed under this title for obligations 
     in the category.
       ``(2)(A) Before making a guarantee under this section for 
     an obligation, the Secretary shall apply the risk factors set 
     forth in paragraph (3) to place the obligation in a risk 
     category established under paragraph (1)(A).
       ``(B) The Secretary shall consider the aggregate amount 
     available to the Secretary for making guarantees under this 
     title to be reduced by the amount determined by multiplying--
       ``(i) the amount guaranteed under this title for an 
     obligation, by
       ``(ii) the subsidy rate for the category in which the 
     obligation is placed under subparagraph (A) of this 
     paragraph.
       ``(C) The estimated long-term cost to the Government of a 
     guarantee made by the Secretary under this title for an 
     obligation is deemed to be the amount determined under 
     subparagraph (B) for the obligation.
       ``(D) The Secretary may not guarantee obligations under 
     this title after the aggregate amount available to the 
     Secretary under appropriations Acts for the cost of loan 
     guarantees is required by subparagraph (B) to be considered 
     reduced to zero.
       ``(3) The risk factors referred to in paragraphs (1) and 
     (2) are the following:
       ``(A) If applicable, the country risk for each eligible 
     export vessel financed or to be financed by an obligation.
       ``(B) The period for which an obligation is guaranteed or 
     to be guaranteed.
       ``(C) The portion of an obligation, which is guaranteed or 
     to be guaranteed, in relation to the total cost of the 
     project financed or to be financed by the obligation.
       ``(D) The financial condition of an obligor or applicant 
     for a guarantee.
       ``(E) If applicable, any guarantee under this title for an 
     associated project.
       ``(F) If applicable, the projected employment of each 
     vessel or equipment to be financed with an obligation.
       ``(G) If applicable, the projected market that will be 
     served by each vessel or equipment to be financed with an 
     obligation.
       ``(H) The collateral provided for a guarantee for an 
     obligation.
       ``(I) The management and operating experience of an obligor 
     or applicant for a guarantee.
       ``(J) Whether a guarantee is or will be in effect during 
     the construction period of the project financed with the 
     proceeds of a guaranteed obligation.
       ``(4) In this subsection, the term `cost' has the meaning 
     given that term in section 502 of the Federal Credit Reform 
     Act of 1990 (2 U.S.C. 661a).''.
       ``(b) Application.--Subsection (h)(2) of section 1103 of 
     the Merchant Marine Act, 1936 (46 U.S.C. App. 1273), as 
     amended by subsection (a) of this section, shall apply to 
     guarantees that the Secretary of Transportation makes or 
     commits to make with amounts that are unobligated on or after 
     the date of enactment of this Act.
       ``(c) Guarantee Fees.--Section 1104A(e) of title XI of the 
     Merchant Marine Act, 1936 (46 U.S.C. App. 1274(e)) is amended 
     to read as follows:
       ``(e)(1) Except as otherwise provided in this subsection, 
     the Secretary shall prescribe regulations to assess in 
     accordance with this subsection a fee for the guarantee of an 
     obligation under this title.
       ``(2)(A) The amount of a fee under this subsection for a 
     guarantee is equal to the sum determined by adding the 
     amounts determined under subparagraph (B) for the years in 
     which the guarantee is in effect.
       ``(B) The amount referred to in subparagraph (A) for a year 
     is the present value (determined by applying the discount 
     rate determined under subparagraph (F)) of the amount 
     determined by multiplying--
       ``(i) the estimated average unpaid principal amount of the 
     obligation that will be outstanding during the year 
     (determined in accordance with subparagraph (E)), by
       ``(ii) the fee rate established under subparagraph (C) for 
     the obligation for each year.
       ``(C) The fee rate referred to in subparagraph (B)(ii) for 
     an obligation shall be--
       ``(i) in the case of an obligation for a delivered vessel 
     or equipment, not less than one-half of 1 percent and not 
     more 1 percent, determined by the Secretary for the 
     obligation under the formula established under subparagraph 
     (D); or
       ``(ii) in the case of an obligation for a vessel to be 
     constructed, reconstructed, or reconditioned, or of equipment 
     to be delivered, not less than one-quarter of 1 percent and 
     not more than one-half of 1 percent, determined by the 
     Secretary for the obligation under the formula established 
     under subparagraph (D).
       ``(D) The Secretary shall establish a formula for 
     determining the fee rate for an obligation for purposes of 
     subparagraph (C), that--
       ``(i) is a sliding scale based on the creditworthiness of 
     the obligor;
       ``(ii) takes into account the security provided for a 
     guarantee under this title for the obligation; and
       ``(iii) uses--
       ``(I) in the case of the most creditworthy obligors, the 
     lowest rate authorized under subparagraph (C)(i) or (ii), as 
     applicable; and
       ``(II) in the case of the least creditworthy obligors, the 
     lowest rate authorized under subparagraph (C)(i) or (ii), as 
     applicable.
       ``(E) For purposes of subparagraph (B)(i), the estimated 
     average unpaid principal amount does not include the average 
     amount (except interest) on deposit in a year in the escrow 
     fund under section 1108.
       ``(F) For purposes of determining present value under 
     subparagraph (B) for an obligation, the Secretary shall apply 
     a discount rate determined by the Secretary of the Treasury 
     taking into consideration current market
      yields on outstanding obligations of the United States 
     having periods to maturity comparable to the period to 
     maturity for the obligation with respect to which the 
     determination of present value is made.
       ``(3) A fee under this subsection shall be assessed and 
     collected not later than the date on which amounts are first 
     advanced under an obligation with respect to which the fee is 
     assessed.
       ``(4) A fee paid under this subsection is not refundable. 
     However, an obligor shall receive credit for the amount paid 
     for the remaining term of guaranteed obligation if the 
     obligation in refinanced and guaranteed under this title 
     after such refinancing.
       ``(5) The amount guaranteed by the Secretary under this 
     title shall include the amount of the fee paid under this 
     subsection.''.
       (d) Fishing Vessel Loan Guarantees.--Notwithstanding any 
     other provision of law, for purposes of section 1101(n) of 
     the Merchant Marine Act, 1936 (46 U.S.C. App. 1271n)), the 
     Secretary of Transportation shall be deemed the ``Secretary'' 
     with respect to loan guarantee applications to finance the 
     construction, reconstruction, or reconditioning of fishing 
     vessels intended for the export commerce. Any fishing vessel 
     financed with a Department of transportation export loan 
     guarantee shall be prohibited from engaging in nay fishery 
     within the United States exclusive economic zone.

     SEC. 303. VESSEL REPAIR AND MAINTENANCE PILOT PROGRAM.

       (a) In general.--The Secretary of Transportation shall 
     conduct a pilot program to evaluate the feasibility of using 
     long-term contracts for the maintenance and repair of 
     outported vessels in the Ready Reserve Force to enhance the 
     readiness of those vessels. Under the pilot program, the 
     Secretary, subject to the availability of appropriations and 
     within 6 months after the date of the enactment of this Act, 
     shall award 9 contracts for this purpose.
       (b) Use of Various Contracting Arrangements.--In conducting 
     a pilot program under this section, the Secretary of 
     Transportation shall use contracting arrangements similar to 
     those used by the Department of Defense for procuring 
     maintenance and repair of its vessels.
       (c) Contract Requirements.--Each contract with a shipyard 
     under this section shall--
       (1) subject to subsection (d), provide for the procurement 
     from the shipyard of all repair and maintenance (including 
     activation, deactivation, and drydocketing) for 1 vessel in 
     the Ready Reserve Force that is outported in the 
     georgraphical vicinity of the shipyard; and
       (2) be effective for 3 years.
       (d) Limitation of Work Under Contracts.--A contract under 
     this section may not provide for the procurement of operation 
     or manning for a vessel that may be procured under another 
     contract for the vessel to which section 11(d)(2) of the 
     Merchant Ship Sales Act of 1946 (50 U.S.C. App. 1774(d)(2)) 
     applies.
       (a) Geographic Distribution.--The Secretary shall seek to 
     distribute contract awards under this section to shipyards 
     located throughout the United States.
       (f) Reports.--The Secretary shall submit to the Congress--
       (1) an interim report on the effectiveness of each contract 
     under this section in providing for economic and efficient 
     repair and maintenance of the vessel included in the 
     contract, no later than 20 months after the date of the 
     enactment of this Act; and
       (2) a final report on that effectiveness no later than 6 
     months after the termination of all contracts awarded 
     pursuant to this section.

                        TITLE IV--MISCELLANEOUS

     SEC. 401. MERCHANT MARINER BENEFITS.

       (a) Part G of subtitle II, title 46, United States Code, is 
     amended by adding at the end of the following new chapter:
                ``CHAPTER 112--MERCHANT MARINER BENEFITS

``Sec.
``11201. Qualified service.
``11202. Documentation of qualified service.
``11203. Eligibility for certain veterans' benefits.
``11204. Processing fees.

[[Page S12093]]


     ``11201. Qualified service

       ``For purposes of this chapter, a person engaged in 
     qualified service if, between August 16, 1945, and December 
     31, 1946, the person--
       ``(1) was a member of the United States merchant marine 
     (including the Army Transport Service and the Naval 
     Transportation Service) serving as a crewmember of a vessel 
     that was--
       ``(A) operated by the War Shipping Administration or the 
     Office of Defense Transportation (or an agent of the 
     Administration or Office);
       ``(B) operated in waters other than inland waters, the 
     Great Lakes, other lakes, bays, and harbors of the United 
     States;
       ``(C) under contract or charter to, or property of, the 
     Government of the United States; and
       ``(D) serving the Armed Forces; and
       ``(2) while so serving, was licensed or otherwise 
     documented for service as a crewmember of such a vessel by an 
     officer or employee of the United States authorized to 
     license or document the person for such service.

     ``11202. Documentation of qualified service

       ``(a) The Secretary shall, upon application--
       ``(1) issue a certificate of honorable discharge to a 
     person who, as determined by the Secretary, engaged in 
     qualified service of a nature and duration that warrants 
     issuance of the certificate; and
       ``(2) correct, or request the appropriate official of the 
     Federal Government to correct, the service records of the 
     person to the extend necessary to reflect the qualified 
     service and the issuance of the certificate of honorable 
     discharge.
       ``(b) The Secretary shall take action on an application 
     under subsection (a) not later than one year after the 
     Secretary receives the application.
       ``(c) In making a determination under subsection (a)(1), 
     the Secretary shall apply the same standards relating to the 
     nature and duration of service that apply to the issuance of 
     honorable discharges under section 401(a)(1)(B) of the GI 
     Bill Improvement Act of 1977 (38 U.S.C. 106 note).
       ``(d) An official of the Federal Government who is 
     requested to correct service records under subsection (a)(2) 
     shall do so.

     ``11203. Eligibility for certain veterans' benefits

       ``(a) The qualified service of an individual who--
       ``(1) receives an honorable discharge certificate under 
     section 11202 of this title, and
       ``(2) is not eligible under any other provision of law for 
     benefits under laws administered by the Secretary of Veterans 
     Affairs, is deemed to be active duty in the Armed Forces 
     during a period of war for purposes of eligibility for 
     benefits under chapters 23 and 24 of title 38.
       ``(b) The Secretary shall reimburse the Secretary of 
     Veterans Affairs for the value of benefits that the Secretary 
     of Veterans Affairs provides for an individual by reason of 
     eligibility under this section.
       ``(c) An individual is not entitled to receive, and may not 
     receive, benefits under this chapter for any period before 
     the date on which this chapter takes effect.
     ``11204. Processing fees

       ``(a) The Secretary shall collect a fee of $30 from each 
     applicant for processing an application submitted under 
     section 11202(a) of this title.
       ``(b) Amounts received by the Secretary under this section 
     shall be credited to appropriations available to the 
     Secretary for carrying out this chapter.''.
       (b) 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 111 the following:
``112. Merchant Mariner Benefits 11201''.
     SEC. 402. REEMPLOYMENT RIGHTS FOR CERTAIN MERCHANT SEAMEN.

       (a) In General.--Title III of the Merchant Marine Act, 1936 
     (46 U.S.C. App. 1131) is amended by inserting after section 
     301 the following new section:
       ``Sec. 302. (a) An individual who is certified by the 
     Secretary of Transportation under subsection (c) shall be 
     entitled to reemployment rights and other benefits 
     substantially equivalent to the rights and benefits provided 
     for by chapter 43 of title 38, United States Code, for any 
     member of a Reserve component of the Armed Forces of the 
     United States who is ordered to active duty.
       ``(b) An individual may submit an application for 
     certification under subsection (c) to the Secretary of 
     Transportation not later than 45 days after the date the 
     individual completes a period of employment described in 
     subsection (c)(1)(A) with respect to which the application is 
     submitted.
       ``(c) Not later than 20 days after the date the Secretary 
     of Transportation receives from an individual an application 
     for certification under this subsection, the Secretary 
     shall--
       ``(1) determine whether or not the individual--
       ``(A) was employed in the activation or operation of a 
     vessel--
       ``(i) in the National Defense Reserve Fleet maintained 
     under section 11 of the Merchant Ship Sales Act of 1946, in a 
     period in which that vessel was in use or being activated for 
     use under subsection (b) of that section;
       ``(ii) that is requisitioned or purchased under section 902 
     of this Act; or
       ``(iii) that is owned, chartered, or controlled by the 
     United States and used by the United States for a war, armed 
     conflict, national emergency, or maritime mobilization need 
     (including for training purposes or testing for readiness and 
     suitability for mission performance); and
       ``(B) during the period of that employment, possessed a 
     valid license, certificate of registry, or merchant mariner's 
     document issued under chapter 71 or chapter 73 (as 
     applicable) of title 46, United States Code; and
       ``(2) if the Secretary makes affirmative determinations 
     under paragraph (1)(A) and (B), certify that individual under 
     this subsection.
       ``(d) For purposes of reemployment rights and benefits 
     provided by this section, a certification under subsection 
     (c) shall be considered to be the equivalent of a certificate 
     referred to in paragraph (1) of section 4301(a) of title 38, 
     United States Code.''.
       (b) Application.--The amendment made by subsection (a) 
     shall apply to employment described in section 302(c)(1)(A) 
     of the Merchant Marine Act, 1936, as amended by subsection 
     (a), occurring after the date of enactment of this Act.
       (c) Regulation.--Not later than 120 days after the date of 
     the enactment of this Act, the Secretary of Transportation 
     shall issue regulations implementing this section.

     SEC. 403. EXTENSION OF WAR RISK INSURANCE AUTHORITY.

       Section 1214 of the Merchant Marine Act, 1936 (46 U.S.C. 
     App. 1294) is amended by striking ``June 30, 1995'' and 
     inserting ``June 30, 2000''.

     SEC. 404. AMENDMENT TO THE MERCHANT SHIP SALES ACT.

       Section 11(b)(2) of the Merchant Ship Sales Act of 1946 (50 
     U.S.C. App. 1744(b)(2)) is amended by striking ``Secretary of 
     the Navy,'' and inserting ``Secretary of Defense,''.

     SEC. 405. REPORTING REQUIREMENT REDUCTION.

       Section 308(c) of title 49, United States Code, is amended 
     by inserting ``even-numbered'' after ``each''.

 Mr. HOLLINGS. Mr. President, I support this legislation to 
revitalize and stabilize our maritime industry. It is long past time 
for legislation to stop the flight away from the U.S. flag. The United 
States has a long and honorable maritime heritage and tradition, but we 
are facing the prospect that our maritime industry might only be 
heritage and tradition ad not part of our future.
  The United States relies on ocean transportation for international 
trade purposes, and also to protect our national security interests. 
The continued presence of an active maritime industry ensures that the 
United States will not have to rely on the kindness of other nations to 
achieve important national objectives.
  The United States is the world's only remaining superpower, but we 
could be put in the position of sending U.S. troops into war with the 
promise that we would supply them, provided that the Department of 
Defense (DOD) can charter vessels willing to deliver cargo into the war 
zone. This position would be simply unacceptable. Ironically, DOD has 
spent billions of dollars in the construction of surge sealift vessels, 
and billions of dollars in maintaining a Reserve Fleet of vessels. 
However, DOD has neglected the most important component in marine 
transportation: who will navigate those ships and deliver the cargo. 
The commercial U.S.-flag industry provides a labor pool of experienced 
personnel capable of contributing to any defense logistical support 
need.
  Attempts to formulate a maritime reform bill over the years have had 
bipartisan support, and I look forward to continued efforts with my 
colleagues to revitalize our maritime industry.
 Mr. INOUYE. Mr. President, I take this opportunity to 
congratulate Senator Lott for his fine work in drafting a maritime bill 
with bipartisan support. I look forward to working with him to complete 
the effort that we initiated last year to reform our maritime laws, and 
look forward to the enactment of legislation preserving our maritime 
industrial base.
  The United States has a long and illustrious maritime history from 
the privateer fleet of the early eighteenth century, to the fast 
clipper ships of the mid-eighteenth century, to the incredible build up 
of Liberty and Victory ships so integral to our victory in World War 
II. In the past, when we called on the U.S. merchant marine, they 
delivered the goods.
  Absent some government action, we are facing the prospect of not 
being able to call on the merchant marine again. For years, we have 
heaped requirements on the U.S.-flag operators. These requirements have 
made it more expensive to operate as U.S. flag. 

[[Page S12094]]
Meanwhile, foreign-flag competitors have been allowed to take advantage 
of regulatory regimes that have less stringent safety, tax, and labor 
law requirements.
  The United States is the world's only remaining super power. However, 
we may be facing the prospect of having to charter foreign-flag vessels 
for U.S. military support. This may put us in the position of hoping 
that the next military conflict is internationally supported and 
provides an opportunity for the safe transportation of foreign-flag 
chartered vessels. The Department of Defense has spent billions of 
dollars building up a reserve fleet of cargo vessels. Unfortunately, a 
policy to cost-effectively crew those vessels has not been developed. 
As I speak, U.S. marines on Ready Reserve Force vessels are performing 
transportation missions in support of Operation Quick Lift, the U.S. 
government's contribution to the United Nations Reaction Force for 
Bosnia, while under fire in Croatia. I question whether foreign 
shipping interests would be interested in evacuating military personnel 
and supplies from the war zone.
  Without the passage of this legislation we will be facing the 
prospect of relying on foreign shipping to achieve our national 
security and economic security objectives.
                                 ______

      By Mr. EXXON (for himself, Mr. Hollings, and Mr. Inouye):
  S. 1140. A bill to amend title 49, United States Code, to terminate 
the Interstate Commerce Commission and establish the United States 
Transportation Board within the Department of Transportation, and to 
redistribute necessary functions within the Federal Government, reduce 
legislation, achieve budgetary savings, and for other purposes; to the 
Committee on Commerce, Science, and Transportation.


         the interstate commerce commission sunset act of 1995

 Mr. EXON. Mr. President, I introduce landmark legislation to 
eliminate the Interstate Commerce Commission (ICC) and to transfer its 
responsibilities to the independent United States Transportation Board 
(USTB) which will be organized under the U.S. Department of 
Transportation.
  This bill builds on successful legislation I introduced in recent 
years to bring fairness, efficiency and productivity to the 
transportation sector. The Negotiated Rates Act, for example, approved 
in 1993 has already saved American businesses billions of dollars in 
so-called undercharge claims and litigation, by relieving small 
businesses and charities of undercharge liability and providing for 
fair and expeditious settlement of all other undercharge claims. In 
addition, the Trucking Regulatory Reform Act of 1994 enacted dramatic 
and revolutionary federal regulatory reform in truck and bus 
transportation. These measures combined with the intra-state truck rate 
and route deregulation provision contained in the 1994 Airport 
Improvement Program Reauthorization bill represent a body of law which 
comprises one of the most important, dramatic, productive and 
meaningful regulatory reforms in modern times.
  As a long time defender and supporter of an independent Interstate 
Commerce Commission, I
 introduce this legislation with some sadness because as one of the few 
Members of Congress with regular contact with America's oldest 
independent regulatory agency, I know well the dedication, commitment, 
and hard work of the Commission and all of its employees. In a 
different time, with different fiscal realities, it might have been 
possible to maintain a strong independent regulatory agency.

  That being said, I introduce this legislation with a great deal of 
pride and enthusiasm. Not only is this legislation a tribute and 
compliment to earlier efforts made by the Congress to introduce 
competition into the bus, truck, and rail sectors through the Bus Act, 
the Motor Carrier Act, and the Staggers Act, this legislation opens a 
new chapter in Federal transportation policy.
  Mr. President, this bill can serve as a model for other agencies to 
achieve the efficiencies that the people demand, but also do the work 
that the people expect.
  One might ask why there is a need for a successor agency to the ICC. 
Simply put, if there were no forum to resolve disputes, oversee 
standard contract terms, review rail mergers and abandonments, 
establish national standards, and assure fair treatment for shippers 
and communities America's great, efficient, and productive surface 
transportation sector will spin into chaos. Each State would develop 
its own rules and transportation companies would become entangled in 
needless, complicated litigation. The United States Transportation
 Board (USTB) will assure that there is continuity in transportation 
policy.

  The new USTB--an independent board within the Department of 
Transportation will continue to be the fair referee between shippers, 
carriers and communities. It will provide interested parties one stop 
shopping and administer a significantly streamlined body of law which 
would assure that the public interest is protected in transportation 
policy.
  This transfer of responsibility and streamlining of authority will 
reduce costs both to taxpayers and the private sector and assure that 
key transportation safety responsibilities do not ``fall between the 
cracks.''
  I am hopeful that this legislation represents only a first step to 
even greater consolidation and efficiency of transportation regulation 
and dispute resolution. My vision for the new USTB is that it become a 
fair forum for all modes of transportation. I strongly support the 
incorporation of the Federal Maritime Commission's (FMC's) duties into 
the responsibilities of the USTB as well as aviation dispute resolution 
duties administered by the Federal Aviation Administration (FAA).
  Senator Inouye is the Senate's leading expert on maritime issues and 
I look forward to working with him and others to promote this 
intermodal concept.
  In a real sense, the introduction of this legislation represents the 
first step in a long journey but a necessary one.
  Mr. President, our nation takes for granted the blessings of 
America's great transportation system. Every part of the nation has 
accessible transportation service. As the Congress continues its 
efforts to keep regulation to the minimum necessary to protect the 
public interest, let us not forget what a valuable asset we have and 
how critically important it is that the Congress carefully choose the 
correct course.
  I urge my colleagues to study this proposal and look forward to 
working with members from both sides of the aisle to assure that the 
Congress continue its responsible modernization of American 
transportation policy.
                                 ______

      By Mr. PRESSLER (for himself and Mr. Burns):
  S. 1141. A bill to authorize appropriations for the activities of the 
Under Secretary of Commerce for Technology, and for scientific research 
services and construction of research facilities activities of the 
National Institute of Standards and Technology, for fiscal years 1996, 
1997, and 1998, and for other purposes; to the Committee on Commerce, 
Science, and Transportation.


        the technology administration authorization act of 1995

  Mr. PRESSLER. Mr. President, I rise to introduce the Technology 
Administration Authorization Act of 1995. I am pleased to have Senator 
Burns, chairman of the Subcommittee on Science, Technology, and Space, 
join me as an original cosponsor. This bill provides a 3-year 
authorization for the Commerce Department's Technology Administration 
and its National Institute of Standards and Technology [NIST]. 
Specifically, the bill provides $755 million for fiscal year 1996 and 
$750 million for each of fiscal years 1997 and 1998 for those programs.
  As part of our effort to streamline the Department of Commerce, the 
fiscal year 1996 authorization for the Commerce Department's Technology 
Administration represents a 13-percent cut from the fiscal year 1995 
level of $864 million. To that end, the bill also directs the 
Department to establish a plan for eliminating the largely redundant 
Office of Technology Policy during fiscal year 1996, transferring any 
essential functions to NIST. The bill also makes substantial cuts in 
funding for the Technology Administration. However, with the exception 
of the Office of Technology Policy, the bill continues all of the 
Technology Administration's major programs.

[[Page S12095]]

  With regard to NIST, the bill provides $750 million for each of 
fiscal years 1996, 1997, and 1998. This authorization is a 12-percent 
cut from the fiscal year 1995 level of $854 million. The bill provides 
$263 million for the NIST internal research programs and standards 
activities. NIST's standards work may be its most important function. 
Increasingly, standards are being used by foreign governments to close 
their markets to U.S. industries. There is little question that 
standards will become an increasingly potent trade weapon used to 
hinder market entry by U.S. firms or retaliate against the United 
States. In recognition of this, the bill fully funds NIST's lab and 
standards programs from fiscal year 1996 through fiscal year 1998 at 
their fiscal year 1995 funding level.
  The bill also provides strong support for NIST's Industrial 
Technology Services [ITS] account, which funds the agency's Advanced 
Technology Program and the manufacturing extension partnership. The 
bill authorizes $427 million a year from fiscal year 1996 through 
fiscal year 1998 for the ITS account, a cut of 19 percent from the 
fiscal year 1995 appropriation of $526 million.
  The bill leaves it to the discretion of the agency how to allocate 
funding among ATP, MEP, and the quality programs within the ITS 
account. However, the bill makes clear it does not authorize any 
funding for ATP grants after October 1, 1995. This limitation reflects 
the belief that, since it was first funded in fiscal year 1990, the ATP 
has grown too big, too fast, without demonstrating clear benefits to 
U.S. industry. Many critics of ATP have rightly pointed out that, too 
often, ATP grants have gone to Fortune 500 companies like IBM, Dupont, 
and Texas Instruments instead of the small high-technology ventures for 
which the ATP was intended.
  Regardless of the merits of the program, I believe that ATP-type 
grant programs cannot boost U.S. competitiveness alone. Rather, they 
must be a part of a larger national strategy including appropriate 
deregulation, tax incentives, and antitrust and product liability 
reform. Accordingly, the bill only authorizes support for existing 
grants while Congress has a chance to evaluate more closely the value 
of ATP in our competitiveness strategy.
  To conduct quality research, you need quality facilities. In that 
connection, the bill also provides $60 million for each of the 3 fiscal 
years for the construction of facilities account to fund needed new 
construction and renovation at NIST.
  Mr. President, it is disturbing to this Senator that less populated 
States, like South Dakota, have had difficulty getting any help from 
NIST in the area of manufacturing assistance. I know of at least two 
instances in my home State where attempts to obtain assistance from 
NIST have fallen on deaf ears. If these programs are continued in any 
form, they must benefit the entire
 country and not just high-technology corridors or revitalized Rust 
Belt areas in the East and West. To that end, the bill authorizes $10 
million in fiscal year 1996 and $15 million in fiscal year 1997 and 
fiscal year 1998 for a new program at NIST called the Experimental 
Program to Stimulate Competitive Technology [EPSCOT]. Modeled after 
similar programs at the National Science Foundation and other science 
agencies, EPSCOT will provide grants for research and outreach work in 
rural States like my home State of South Dakota. Indeed, at our August 
1 Commerce Committee hearing on the future of the Commerce Department, 
Secretary Brown endorsed the idea of starting an EPSCOT program at 
NIST. Our rural States want to contribute to the technological 
revolution. EPSCOT will help them do so.

  Finally, Mr. President, the bill would make technical changes to the 
Fastener Quality Act recommended by the Fastener Advisory Committee. In 
1992, the Fastener Advisory Committee determined that implementing the 
act in its present form--without these changes--would have imposed 
costs close to $1 billion on the industry. The changes address the 
concerns of the Fastener Advisory Committee regarding metal chemistry 
testing, commingling of fasteners in distribution, and acceptance of 
nonconforming fasteners. For the past 3 years, NIST has delayed its 
implementation of the current law in the hope that Congress would 
correct the glaring problems in the current law. The specific language 
in the bill was developed by NIST and the fastener industry. The 
fastener-related provisions in this bill are similar to changes passed 
by the Senate, but not enacted, in 1994 as part of the National 
Competitiveness Act.
  As chairman of the Senate Commerce Committee, I believe that by 
providing a 3-year authorization, our bill lends strength and stability 
to the Department of Commerce's important technology and research 
programs. At the same time, because of the tight budget environment we 
face, the bill forces the Technology Administration to carry out its 
goals and missions with less funding than before. I am hopeful the 
reduced funding level will motivate the Department of Commerce to 
eliminate unnecessary functions such as the Office of Technology Policy 
and operate more efficiently while ensuring all America has the 
opportunity to benefit from its programs. If we are going to reinvent 
the programs of the Commerce Department, the Technology Administration 
is an excellent starting point. This bill starts us on that path.
                                 ______

      By Mr. PRESSLER (for himself, Mr. Hollings, Mr. Stevens, Mr. 
        Burns, and Mr. Breaux):
  S. 1142. A bill to authorize appropriations for the National Oceanic 
and Atmospheric Administration, and for other purposes; to the 
Committee on Commerce, Science, and Transportation.


 the national oceanic and atmospheric administration authorization act 
                                of 1995

  Mr. PRESSLER. Mr. President, today I am introducing the National 
Oceanic and Atmospheric Administration Authorization Act of 1995. This 
bill provides a three year authorization for the National Oceanic and 
Atmospheric Administration [NOAA]. Specifically, the bill provides 
$1.81 billion for FY96 $2.02 billion for FY97, and $2.03 billion for 
FY98. I am pleased to have join me as original cosponsors on this 
legislation: Senator Hollings, Ranking Member of the Commerce Committee 
and Senators Stevens, Burns, and Breaux.
  One of my goals in developing this legislation was to review current 
programs to see if they could be restructured while improving their 
functions. Over the last several months, I have heard people calling 
for major changes at the Department of Commerce. As Chairman of the 
Committee on Commerce, Science, and Transportation, I conducted a 
hearing on August 1, 1995, and invited Secretary of Commerce Ronald 
Brown to testify. His comments, as well as others', have helped in 
developing a bill that answers that call. This bill downsizes 
bureaucracy. It consolidates duplicative programs. It transfers 
functions to other agencies that can manage them better. It terminates 
unnecessary programs. Overall, the bill is a 7 percent decrease from 
the FY95 appropriations level of $1.95 billion and a 14 percent 
decrease from the Administration's FY96 request.
  The mission of NOAA is to explore, map, and chart the global ocean 
and its living resources as well as to manage, use, and conserve these 
resources; to describe, monitor, and predict conditions in the 
atmosphere, ocean, sun, and space environments; to issue warnings 
against impending destructive natural events; to assess the 
consequences of inadvertent environmental modification over several 
scales of time; and to manage and disseminate long-term environmental 
information.
  Mr. President, as a Senator representing an agricultural state, I 
cannot overstate the importance of NOAA's weather warnings and 
forecasts to our farmers and ranchers. My colleagues on the Commerce 
Committee who represent coastal states also know the great value of 
weather warnings as well as the value of NOAA's ocean and fishery 
programs. Therefore, I believe that the core functions of NOAA need to 
stay together as a single entity. The National Oceanic and Atmospheric 
Administration Authorization Act of 1995 authorizes just such an 
entity.
  Mr. President, let me outline the specifics of the bill:


            title i: noaa atmospheric and satellite programs

  Section 101 authorizes the operations and research activities of the 
National 

[[Page S12096]]
Weather Service (NWS) at $477,207,000 (FY96), $491,523,000 (FY97), and 
$484,278,000 (FY98). These activities include meteorological, 
hydrological, and oceanographic public warnings and forecasts, as well 
as applied research in support of such warnings and forecasts.
  Section 102 authorizes $131,335,000 (FY96), $222,000,000 (FY97), and 
$225,500,000 (FY98) to develop, acquire, and implement public warning 
and forecast systems. These systems include: (1) the Next Generation 
Weather Radar (NEXRAD), which use Doppler technology to provide more 
accurate forecasts and warnings; (2) the Automated Surface Observing 
Systems (ASOS), which will relieve NWS staff from the manual collection 
of weather observations; (3) the Advanced Weather Interactive 
Processing System (AWIPS), which will provide NWS meteorologists with 
integrated radar, satellite, and ground data for the first time; and 
(4) the Advanced Computer Technology to enable the development of 
improved computer weather forecast models.
  Section 103 authorizes $113,252,000 (FY96), $115,918,000 (FY97), and 
$119,396,000 (FY98) for NOAA to carry out its climate and air quality 
research activities. It continues support for NOAA programs designed to 
develop the capability to predict interannual (year-to-year) and 
seasonal climate changes over North America and improves NOAA's ability 
to do long-term climate and air quality research and high performance 
computing.
  Section 104 authorizes $46,850,000 for each of FY96, FY97, and FY98 
for atmospheric research activities. These activities include efforts 
to improve observational and predictive capabilities for atmospheric 
processes, with special emphasis on solar disturbances and their 
effects on the Earth.
  Section 105 authorizes $449,000,000 for FY96 and $535,000,000 in each 
of FY97 and FY98 for the operation of NOAA's current geostationary 
(GOES) weather satellites and for NOAA's polar orbiting (POES) 
environmental satellites as well as for NOAA's related ground station 
systems. The bill also authorizes funds for the ongoing procurement and 
launch of replacement satellites. The weather satellites support the 
forecast and warning activities of the NWS. The environmental 
satellites are used for global change monitoring and research, for the 
monitoring of distress signals over land and sea through the Search and 
Rescue Satellite Aided Tracking (SARSAT) program, and for the 
monitoring of driftnets in the North Pacific.
  Section 106 authorizes $40,000,000 for each of the three fiscal years 
for NOAA's data and information products, services, and assessments. 
These climate, ocean, geophysical, and environmental data services are 
used by all of NOAA's programs.
  Section 107 describes the four core responsibilities of the National 
Weather Service (NWS) in its duty of protecting life and property and 
enhancing the national economy as: (1) the sole official source of 
weather warnings; (2) the issuance of storm warnings; (3) the 
collection, exchange, and distribution of meteorological, hydrological, 
climatic, and oceanographic data and information; and (4) the 
preparation of hydrometeorological guidance and core forecast 
information.
  Section 108 authorizes the procurement of up to four additional 
Geostationary Operational Environmental NEXT (GOES I-M) satellites and 
support systems from the developer of previous GOES-NEXT satellites.
  Finally, section 109 amends the Land Remote Sensing Act of 1992 to 
direct the Landsat Program Management Member to retain fees collected 
from foreign ground stations, and for Landsat 7 data sales to offset 
the system's operating costs. It also directs the Secretary of Commerce 
(the Secretary) to examine how NOAA might procure and operate its 
Landsat 7 ground segment in a more inexpensive fashion. It authorizes 
Landsat 7 operations at $10,000,000 annually.


               title ii: noaa ocean and coastal programs

  Section 201 authorizes $44,917,000 (FY96), $47,652,000 (FY97), and 
$46,265,000 (FY98) for the National Ocean Service's (NOS) mapping, 
charting, and geodesy activities, including geodetic data collection 
and analysis. Observation and assessment activities are authorized at 
$66,591,000 (FY96), $68,589,000 (FY97), and $70,646,000 (FY98), of 
which $10,943,000 (FY96), $11,271,000 (FY97), and $11,609,000 (FY98) 
are authorized for Coastal Ocean Program (COP) activities. The COP 
efforts contribute to three major elements of NOAA's strategic plan by 
improving: prediction and knowledge of factors influencing our 
abilities to build and maintain sustainable fisheries; prediction of 
coastal hazards to protect human life and personal property; and 
prediction of coastal ocean pollution to help correct and prevent 
degradation.
  Section 202 authorizes $9,506,000 (FY96), $9,791,000 (FY97), and 
$10,085,000 (FY98) for Ocean and Great Lakes research activities.
  Section 203 authorizes not more than $53,300,000 (FY96), $54,899,000 
(FY97), and $56,546,000 (FY98) for the National Sea Grant College 
Program. This funding goes to the network of 29 Sea Grant institutions 
engaged in research, education, and advisory/extension services.
  Section 204 authorizes a maximum of $12,000,000 (FY96), $12,360,000 
(FY97), and $12,731,000 (FY98) for the National Undersea Research 
Program's (NURP) undersea research activities. These funds are to be 
used only to fund the ongoing operations of existing undersea research 
centers, each of which is to receive,
 at a minimum, thirteen percent of annual appropriations made under 
this section.

  Finally, section 205 authorizes programs under the Coastal Zone 
Management Act. Specifically, monies for Protection of Coastal Waters 
(section 6217) are authorized at $5,000,000 for each of FY96, FY97, and 
FY98. Grants for developing coastal zone management programs (section 
305) are authorized not to exceed $750,000 per grant in each of FY96, 
FY97, and FY98. Those grants for funding, improving, and enhancing 
coastal zone programs (section 305, 306A, and 309 grants) are 
authorized not to exceed $45,500,000 (FY96), $46,865,000 (FY97), and 
$48,271,000 (FY98). The section also authorizes amounts not to exceed 
$3,350,000 (FY96), $3,451,000 (FY97), and $3,554,000 (FY98) for section 
315 grants (National Estuarine Research Reserves), and such sums, not 
to exceed $10,000,000 per fiscal year, for FY96, FY97, and FY98 for 
section 310 (Technical Assistance) grants. Authorization for expenses 
incident to administering the Coastal Zone Program are limited to the 
lesser of either $5,000,000 or eight percent of the total appropriated 
amount under this Act, with the additional restriction that 
administrative monies are not be used to augment grants made under 
other sections of this Act.


               title iii: noaa marine fisheries programs

  Section 301 authorizes a total of $99,928,000 (FY96), $102,926,000 
(FY97), and $106,014,000 (FY98) for NOAA National Marine Fisheries 
Service (NMFS) Programs. This includes $49,340,000 (FY96), $50,820,000 
(FY97), and $52,345,000 (FY98) for Fisheries Information, Collection, 
and Analysis; $28,183,000 (FY96), $29,028,000 (FY97), and $29,899,000 
(FY98) for Fisheries Conservation and Management, and $22,405,000 
(FY96), $23,077,000 (FY97), and $23,769,000 (FY98) for State and 
Industry Cooperative Fisheries Programs.
  Section 302 authorizes the construction of a fisheries research 
facility at Fort Johnson, South Carolina and the consolidation of 
fishery research facilities on Auke Cape near Juneau, Alaska.
  Finally, section 303 provides reform to the fisheries loan guarantee 
program by limiting the loan amount to no more than $25,000,000 
annually and by prohibiting these loans for vessels that will increase 
harvesting capacity within the U.S. exclusive economic zone.


              title iv: program administration and support

  Section 401 authorizes $72,847,000 (FY96), $75,032,000 (FY97), and 
$77,283,000 (FY98) for executive direction and administrative 
activities. Acquisition, construction, maintenance, and operation of 
NOAA facilities are authorized at $54,163,000 for each of FY96, FY97, 
and FY98. Marine services activities, including ship operations, 
maintenance, and support are authorized at $60,000,000 for each of 
FY96, FY97, and FY98. Aircraft service activities, including aircraft 
operations, maintenance, and support are authorized at $9,500,000 for 
each of FY96, FY97, and FY98.
  Section 402 requires the Secretary to reduce the Full Time 
Equivalents 

[[Page S12097]]
(FTEs) of NOAA by at least 2,318 from the FY93 FTE base. This 16 
percent reduction is to be completed by the end of FY99. This section 
also calls for the reduction of active duty officers of the NOAA 
Commissioned Officer Corps and additional language to facilitate that 
downsizing.


                 title v: cost savings and streamlining

  Section 501 transfers the NOAA Aeronautical Charting and Cartography 
Office's responsibilities for functions that are necessary or 
incidental for performance by or under the Administration of the 
Federal Aviation Administration (FAA) to the FAA.
  Section 502 directs the Secretary to review regulations issued by 
NOAA prior to January 1, 1995 and to reduce the volume by 45 percent by 
December 31, 1997.
  Section 503 requires the Secretary to submit a revised fleet 
modernization plan to the appropriate committees of the Senate
 and the House of Representatives. The plan should include proposals 
for a 50 percent reduction from the current fleet size, including the 
elimination of three existing vessels in fiscal year 1997 and three in 
fiscal year 1998; a 50 percent reduction from the construction costs 
submitted in the 1993 fleet modernization plan; the use of chartering 
and contracting out; and the sale of decommissioned vessels where 
feasible.

  Section 504 directs the Secretary to review all congressionally 
mandated reporting requirements and to recommend legislation by March 
31, 1996 to eliminate at least 50 percent of such reporting 
requirements that were in effect on January 1, 1995.
  Section 505 authorizes the Secretary to develop a laboratory 
consolidation plan for underutilized facilities.
  Section 506 authorizes the Secretary to convey the NMFS Gloucester, 
Massachusetts laboratory to the Commonwealth of Massachusetts for use 
by the Commonwealth's Division of Marine Fisheries resource management 
program. The Secretary is authorized to enter into a memorandum of 
understanding with the Commonwealth to allow NMFS to continue to occupy 
part of the laboratory for a period not to exceed five years. A 
reversionary clause is included.
  Section 507 includes a provision authorizing the Secretary of 
Commerce to execute agreements with State and local governments to 
clean up land and property formerly owned by NOAA on the Pribilof 
Islands, Alaska.
  Finally, section 508 requires amounts received by the United States 
in settlement of, or judgment for, damage claims arising from a past 
accident where a moored NOAA vessel was hit by another vessel to be 
deposited as offsetting collections in the NOAA Operations, Research, 
and Facilities account. Such funds may not exceed $518,757.09.
  Mr. President, I would like to commend the ranking member, Senator 
Hollings, for his assistance in the development of this bill. Our 
desire to work in a bipartisan fashion does indeed help in providing 
the best work product possible.
  I also would like to commend the efforts of Senator Stevens and 
Senator Burns, the respective Chairmen of our Oceans and Fisheries 
Subcommittee and our Science, Technology, and Space Subcommittee, and 
their Ranking Members Senator Kerry and Senator Rockefeller. Working 
together we can restore some of the needed fiscal austerity to our 
Federal Government--making it smaller, less costly, yet more efficient. 
This bill moves us in that direction.
  Mr. STEVENS. Mr. President, I am pleased to join Senators Pressler 
and Hollings in introducing the National Oceanic and Atmospheric 
Administration Authorization Act of 1995.
  The bill reauthorizes for three years a number of NOAA programs under 
the jurisdictions of the Senate Subcommittee on Oceans and Fisheries 
(which I chair) and Senate Subcommittee on Science, Technology and 
Space (chaired by Senator Burns).
  The bill proposes significant reductions to the size and cost of NOAA 
which will help in meeting the massive reductions in federal spending 
that we must achieve.
  Even with the proposed reductions, however, I believe the legislation 
will strengthen NOAA and the programs within NOAA that have functioned 
very well together.
  The bill mandates that NOAA reduce its overall workforce by 2,318 by 
the end of FY1999. This represents a 17-percent reduction from the FY93 
level.
  It requires a 50-percent reduction in the size of the NOAA research 
fleet over the next 10 years, including the decommissioning of at least 
6 vessels within the next two years, which will represent a 25-percent 
reduction in the first two years.
  The bill allows NOAA to partially make up for this reduction in fleet 
capability through charters with private vessels.
  The bill also requires that the proposed cost of modernizing the 
vessels that are kept in the fleet be reduced by 50 percent.
  The bill authorizes the National Undersea Research Program (NURP) for 
the first time, but caps this program at $12 million per year, which is 
$6 million less than was appropriated by Congress in FY95.
  We've required that NOAA transfer its aeronautical charting functions 
to the Federal Aviation Administration to eliminate the duplication of 
functions between these two agencies.
  The bill would require the Administrator of NOAA to identify and 
eliminate all redundant or obsolete regulations issued by the agency 
within the next two years.
  The bill calls on NOAA to review all Congressionally-mandated 
reporting requirements, and to recommend legislation by March of 1996 
to reduce these reporting requirements by 50 percent.
  Many of the reports that Congress has required of NOAA are no longer 
beneficial yet we have not discontinued them.
  The bill calls on NOAA to prepare a plan by March of 1996 to 
consolidate its laboratories to eliminate duplicative functions and to 
reduce costs.
  The bill would cap the amount of fishing vessel and fishing facility 
loans that NOAA can guarantee, and allows the agency to pay for the 
administrative costs of the Fishing Vessel Obligation Guarantee Program 
with the percentage fees that are already being charged to loan 
guarantee recipients.
  The bill would prohibit new loan guarantees for the construction of 
fishing vessels if the construction of the vessel would increase the 
harvesting capacity within the U.S. exclusive economic zone.
  A provision has been included in the bill at my request to allow NOAA 
to consolidate its personnel and functions in Juneau, Alaska under one 
roof.
  NOAA does not currently have its own facility in Juneau, and this new 
facility will help the agency save the cost of leasing space in various 
Juneau buildings over the long run.
  The new facility can only be built if NOAA does not have to pay for 
the property it is built on.
  The bill also authorizes the Secretary of Commerce to clean up 
property formerly owned by NOAA on the Pribilof Islands.
  Our proposal will allow for the continued modernization of the 
National Weather Service and the vital functions provided by that 
agency.
  The bill authorizes 12 percent less in fiscal year 1996 that was 
requested in the Administration's fiscal year 1996 NOAA budget.
  In fiscal years 1997 and 1998, the amount authorized for NOAA will 
increase slightly to cover the out-year costs of the NWS modernization.
  I urge my colleagues to support the quick passage of this legislation 
when we return from the August recess.
                                 ______

      By Mr. HATCH:
  S. 1143. A bill to amend the Food Stamp Act of 1977 to permit 
participating households to use food stamp benefits to purchase 
nutritional supplements, and for other purposes; to the Committee on 
Agriculture, Nutrition, and Forestry.


                THE FOOD STAMP ACT AMENDMENT ACT OF 1995

  Mr. HATCH. Mr. President, I rise today to introduce S. 1143, a bill 
to amend the Food Stamp Act to allow participants to use food stamp 
benefits to purchase dietary supplements.
  This is a slightly broader measure than the McConnell-Harkin bill 
just introduced today, which I also am pleased to support.
  My legislation would allow purchases with food stamps of all dietary 
supplements, including vitamins, minerals, herbs, and amino acids. The 
McConnell bill, companion to Chairman Emerson's H.R. 236 in the House, 
would cover vitamins and minerals only.

[[Page S12098]]

  If we are to allow food stamps purchases of vitamins and minerals, 
which I agree is a good idea, I feel it is also wise to cover all 
dietary supplements.
  There is ample evidence to show the nutritional benefits of dietary 
supplements. I direct my colleagues' attention to Senate Report 103-
410, which accompanied the Dietary Supplement Health and Education Act 
[DSHEA] in which we provided abundant references for such studies.
  Americans use dietary supplements to ensure that their basic 
nutritional requirements are met, to support their health during 
periods of special risk, and to help protect against chronic disease.
  In fact, studies have shown that more than 100 million Americans 
regularly use dietary supplements.
  Increasingly, Americans are using herbal supplements to enhance their 
diets with substances found in plants and vegetables. Modern diets lack 
many novel constituents found only in herbal products. In addition, 
research has shown that many foodstuffs and substances found in human 
tissues and cells, such as amino acids, also contain compounds 
beneficial to health.
  Mr. President, there is an ample body of evidence to show that 
Americans simply are not consuming healthy diets, and this is true for 
children, women, and men.
  In one Government study of the eating habits of more than 21,000 
people, not a single person got the full recommended daily allowance of 
10 key vitamins and minerals.
  Many other studies have shown that the poor and elderly in our 
country are especially likely to have low nutrient intakes, often with 
significant health consequences. For example, a 1992 study by a world-
renowned authority on immune function reported that giving a modest 
multivitamin with minerals to a group of men and women over the age of 
65 for a period of 1 year cut the number of sick days in this group in 
half compared to an unsupplemented group.
  Perhaps the best example is folic acid, which the Food and Drug 
Administration steadfastly resisted revealing to America's women as a 
significant protector against birth defects in newborns.
  For this reason, I think it is entirely appropriate, indeed
   warranted, that any participant in the Food Stamp Program who wants 
to improve his or her health be allowed to purchase dietary 
supplements.

  I know that some are concerned that allowing food stamps to be used 
for nutritional supplements will in some way divert from the purpose of 
the Food Stamp Program, which is to improve the nutrition of people in 
need.
  In fact, at a July 25 hearing before the House Agriculture 
Subcommittee on Department Operations, in arguing against the Emerson 
bill, a representative of the United Fresh Fruit and Vegetable 
Association [UFFVA] testified that ``The fundamental purpose of the 
Food Stamp Program is to provide to people in need purchasing power to 
buy foods.''
  I would suggest that the Congress has already recognized that dietary 
supplements are considered food, and I direct the UFFVA to section 3 of 
the Dietary Supplement Health and Education Act of 1994--Public Law 
103-417--which clearly reiterates that dietary supplements are to be 
considered as foods within the meaning of the Federal Food, Drug and 
Cosmetic Act. I would also question what the purpose is in allowing 
people in need to purchase foods if not to improve their nutrition? And 
improving nutrition is the goal of the legislation we are introducing 
today.
  Another witness at the House hearing, Ms. Yvette Jackson, Deputy 
Administrator of the Food Stamp Program at the Department of 
Agriculture, said that ``Substituting supplements for food weakens the 
time-honored link between nutrition benefits and agricultural 
production, a link that this Committee has traditionally fought to 
preserve.'' It is interesting to find that the Agriculture Department 
seems to consider food stamps an agricultural price support, rather 
than a nutritional support.
  I have found from my study of this issue over the years that people 
who use dietary supplements are often those who are most interested in 
improving or maintaining their health. I think this shows that food 
stamps which are used to buy dietary supplements would go for good use.
  Mr. President, one final point. Many supporters of this legislation 
point out that, at present, food stamps can be used to purchase so-
called junk food.
  Given the choice between a Twinkie or a vitamin, I hope that the 
vitamin would win out every time.
  But that is not a choice afforded to participants of the Food Stamp 
Program.
  Only through legislation such as that we are introducing today can 
this deficiency in the Food Stamp Program be corrected. I invite my 
colleagues to join me in supporting this bill.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1143

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

     SECTION 1. FINDINGS.

       Congress finds that--
       (1) the dietary patterns of Americans do not result in 
     nutrient intakes that fully meet Recommended Dietary 
     Allowances (RDAs) of vitamins and minerals;
       (2) the elderly often fail to achieve adequate nutrient 
     intakes from diet alone;
       (3) pregnant women have particularly high nutrient needs, 
     which they often fail to meet through dietary means alone;
       (4)(A) many scientific studies have shown that nutritional 
     supplements that contain folic acid (a B vitamin) can prevent 
     as many as 60 to 80 percent of neural tube birth defects;
       (B) the Public Health Service, in September 1992, 
     recommended that all women of childbearing age in the United 
     States who are capable of becoming pregnant should consume 
     0.4 mg of folic acid per day for the purpose of reducing 
     their risk of having a pregnancy affected with spina bifida 
     or other neural tube birth defects; and
       (C) the Food and Drug Administration has also approved a 
     health claim for folic acid to reduce the risk of neural tube 
     birth defects;
       (5) infants who fail to receive adequate intakes of iron 
     may be somewhat impaired in their mental and behavioral 
     development; and
       (6) a massive volume of credible scientific evidence 
     strongly suggests that increasing intake of specific 
     nutrients over an extended period of time may be helpful in 
     protecting against diseases or conditions such as 
     osteoporosis, cataracts, cancer, and heart disease.

     SEC. 2. AMENDMENT OF THE FOOD STAMP ACT OF 1977.

       Section 3(g)(1) of the Food Stamp Act of 1977 (7 U.S.C. 
     2012(g)(1)) is amended by striking ``or food product'' and 
     inserting ``, food product, or dietary supplement (as defined 
     in section 201(ff) of the Federal Food, Drug, and Cosmetic 
     Act (21 U.S.C. 321(ff)))''.
     

                          ____________________