[Congressional Record Volume 141, Number 145 (Monday, September 18, 1995)]
[Senate]
[Pages S13728-S13743]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Ms. MIKULSKI (for herself and Mr. Sarbanes):
  S. 1250. A bill to amend titles 5 and 37, United States Code, to 
provide for the continuance of pay and the authority to make certain 
expenditures and obligations during lapses in appropriations; to the 
Committee on Appropriations.


            THE FEDERAL EMPLOYEE COMPENSATION PROTECTION ACT

 Ms. MIKULSKI. Mr. President, I introduce an important piece of 
legislation called the Federal Employee Compensation Protection Act.
  With a budget stalemate looming ahead, I think it is crucial that we 
keep our faith with Federal employees. The Mikulski-Sarbanes 
legislation will keep that faith by protecting Federal employee pay and 
benefits during a Government shutdown. Our legislation will ensure that 
Federal employees in Maryland and across the Nation will be able to 
make their mortgage payments, put food on the table, and provide for 
their families.
  A shutdown of the Federal Government, no matter how short, would 
disrupt the lives of thousands of Federal employees and their families. 
In my State of Maryland alone, there are more than 280,000 Federal 
employees. They are some of the most dedicated and hard-working people 
in America today. These employees have devoted their careers and lives 
to public service, and they should not be used as pawns in a game of 
political brinkmanship.
  Federal employees have already endured their fair share of hardship 
this year. Downsizing, diet COLA's, attacks on pensions and health 
benefits, and now the threat of unpaid furloughs have damaged morale at 
nearly every Federal agency. This assault must stop Mr. President. We 
cannot continue to denigrate and downgrade Federal employees and at the 
same time expect Government to work better.
  I urge my colleagues to support the Mikulski-Sarbanes legislation and 
work to prevent this train wreck from happening. We have a contract 
with our Federal employees, and we should encourage their dedication by 
ensuring that the contract is honored and their pay and benefits are 
not put in jeopardy.
 Mr. SARBANES. Mr. President, I am pleased to join my colleague 
from Maryland, Senator Mikulski, in cosponsoring this important 
legislation to ensure the protection of Federal employee pay and 
benefits in the event of a furlough.
  We have a responsibility to the men and women who have dedicated 
themselves to public service and I would hope that my colleagues would 
join Senator Mikulski and I in our ongoing effort to maintain the 
Federal Government's commitment to its dedicated work force.
  Over the past several months, Federal employees have been subject to 
numerous attacks on their pay and earned benefits. Despite my 
opposition, Congress approved the Republican budget resolution which 
seeks to change the calculation of retirement benefits for Federal 
employees from the employee's highest 3-year average to the highest 5-
year average. The resolution also contains a reduction in the Federal 
Government's contribution to employee health care benefits and an 
increase from 7 to 7.5 percent in Federal employee contribution rates 
over the next 7 years.
  In my view, this is a breach of the contract with Federal employees. 
In an attempt to restore fairness for Federal workers, I offered, along 
with Senator Mikulski and several of my colleagues, an amendment to the 
Republican budget resolution which would have stricken the high three/
high five provision. Unfortunately, the provision failed by the 
narrowest of margins.
   Mr. President, Federal employees have made a choice to serve their 
country and we should respect and reward that choice by supporting 
these hardworking, dedicated individuals. 

[[Page S 13729]]
Through the legislation Senator Mikulski and I are introducing today, 
we have the opportunity to send a message to the Federal work force and 
to all American citizens that Congress honors and values the commitment 
those who work for the Government have made.
  As I have stated many times before, Federal employees have already 
made significant sacrifices in past years in the form of downsizing 
efforts, delayed and reduced cost of living adjustments, and other 
reductions in Federal employee pay and benefits. They have been called 
on to sacrifice further in this Congress through the Republican budget 
resolution and are now facing the very real possibility that, through 
no fault of their own, they may have to either work without pay or be 
prohibited from coming to work at all.
  In a consistent and committed way, Federal workers give dedicated 
service to our country and they deserve to have their pay and earned 
benefits protected. Like Cal Ripken, who was recently honored in 
Baltimore, Federal employees show up day in and day out and do their 
jobs. In my view, we should recognize and encourage such dedication by 
ensuring that the pay and benefits of Federal workers are not placed in 
jeopardy.
                                 ______

      By Mr. HATFIELD (for himself, Mr. Harkin, and Mrs. Boxer):
  S. 1251. A bill to establish a national fund for health research to 
expand medical research programs through increased funding provided to 
the National Institutes of Health, and for other purposes; to the 
Committee on Finance.


               the national fund for health research act

  Mr. HATFIELD. Mr. President, this week finds us at the height of the 
appropriations process, as the end of the fiscal year rapidly 
approaches. It has been a season of difficult fiscal decisions which 
must be made to conform to the constraints of our balanced budget 
agreement. Never are the tradeoffs as vivid as when we consider 
spending levels for health and education programs, as we did this 
morning when the Senate Appropriations Committee completed action on 
the fiscal year 1996 Labor, HHS, and Education appropriations bill.
  I am pleased to report that the committee provided nearly $1.5 
billion more than the House for education programs. In addition, we 
provided a 2.7=percent increase for health research at the National 
Institutes of Health. While this level is less than that provided by 
the House, I believe it represents a fair balance between the vitally 
important issues of health and education. But clearly, my preference 
would have been to provide a much larger increase for medical research 
so that the engine which drives the quality of medical care and reduced 
health costs could run at full tilt.
  The current reality is, however, that available funds for 
discretionary spending are decreasing. We cannot continue to look 
solely to the appropriations process for the necessary resources to 
keep our biomedical research enterprise growing at a rate which takes 
advantage of the myriad medical breakthroughs on the horizon. We must 
look for a funding source to supplement annual appropriations to the 
National Institutes of Health.
  Today I am pleased to unite with my friend and colleague, Senator 
Harkin, in introducing legislation to establish the national fund for 
medical research. We joined forces in this effort last year and worked 
hard to see that medical research was a part of the health care reform 
debates. At the end of the process, although the issue was ultimately 
unresolved, we had received the attention and support of many Members 
in this Chamber. We introduce this bill today, with the support of 
Senator Boxer of California, with the intention of building on the 
momentum of last year to gain the support of our many colleagues in 
this body who are committed to the biomedical research infrastructure.
  Our legislation proposes to create a new fund in the U.S. Treasury, 
financed by an increase in Federal tobacco taxes and income generated 
through a voluntary Federal income tax checkoff. By raising the Federal 
tax on cigarettes by 25 cents per package, as well as raising the tax 
to an equivalent level on smokeless tobacco products, the Joint 
Committee on Taxation has estimated annual income for the fund of 
approximately $4.2 billion. These funds will be distributed on a 
phased-in basis to the National Institutes of Health to supplement, not 
replace, the funds the organization receives each year in the 
appropriations process. Funds will be distributed in accordance with 
the proportion of funds each of the member institutes and centers 
receive in the appropriations process, after 5 percent has been divided 
between the Office of the Director, the National Center for Research 
Resources, and the National Library of Medicine.
  Funds raised through this proposal will increase the budget of the 
NIH by 35 percent over the fiscal year 1995 appropriated level. This 
will allow many more research grant applications to be funded so that 
scientific opportunities of merit can be pursued and ultimately 
translated into cost-effective treatments and cures which will improve 
our national quality of life. I know of no better investment for the 
Federal Government than one which strengthens our human capital--be it 
in education or health research, our greatest strength is a healthy, 
and thus wealthy, populous.
  Mr. President, my good friend, the great philanthropist, Mary Lasker 
once said, ``If you think research is expensive, try disease.'' 
Diseases cost this country hundreds of billions of dollars annually. 
Last year, federally supported research on Alzheimer's disease totalled 
$300 million, yet it is estimated that $90 billion is expended annually 
on care. Federally supported research on diabetes totals $290 million, 
yet it is estimated that $25 billion is expended annually on care. 
Federally supported research on mental health totals $613 million, yet 
it is estimated that $130 billion is expended annually on care.
  As we struggle in the coming months to achieve a balanced budget, we 
must embrace policies that enable us to make the most out of our scarce 
Federal dollars. Federal funding for medical research should be a top 
priority because without new knowledge to develop new strategies to 
prevent disease, new treatments to delay the progression of disease and 
new interventions to cure disease; health care costs will continue to 
spiral out of control. Disease drives the cost of health care. A 
concerted Federal assault on disease will not only save precious funds, 
but it will provide hope to the afflicted.
  Watching a medical catastrophe affect a family or individual is one 
of the greatest tragedies we face in this country. The impacts are 
accentuated when this misfortune comes in the form of an incurable 
disease. Loved ones are left with no hope, and feeling powerless as 
they watch the debilitating effects of disease overcome the individual. 
I know many of my colleagues in the Senate have experienced this sense 
of powerlessness. They have watched helplessly while family members 
deteriorate from the effects of a deadly disease. The vibrant 
individual that they knew and loved is reduced to a withering shell of 
a human being. The one thing, and the only thing that provides comfort 
to the afflicted and to their loved ones, is hope. Hope for an end to 
the suffering. Hope for a return to a normal life. Hope for a cure. 
This hope does not have to be great, even the faintest glimmer brings 
happiness to someone faced with a fatal future.

  Medical research is the sole hope we can provide to millions of 
Americans who will experience disease and disability either in their 
own lives or in their families. We can care for them in our hospitals 
and clinics but we cannot alleviate their pain or end their suffering 
without cures and preventative treatments. Cures are the direct result 
of our investment in medical research.
  This legislation is important because it will help provide a more 
sustainable funding base for medical research. During the debate on the 
budget resolution, I offered an amendment to restore $7 billion of the 
nearly $8 billion cut for the NIH proposed by the Senate budget 
resolution over the next 7 years. This amendment passed by a vote of 
85-14. While this was a short-term victory for the NIH, it demonstrates 
the need for a stable endowment for medical research. The war against 
disease can not be fully waged if medical researchers have to engage in 
yearly squabbles with Congress over funding levels.

[[Page S 13730]]

  As most of my colleagues know, I am a practical man. I do not 
underestimate the difficulty any tax increase has in the current 
political climate, but I submit we must listen to the people who put 
the new Republican majority in power.
  A recent Harris Poll has shown that Americans strongly support health 
research and are willing to put their money behind their words. The 
poll asked Americans which type of scientific research they favored--66 
percent favored medical research and a pitiful 4 percent preferred 
defense research. This same poll determined that if assured that the 
funds would be spent for medical research, 74 percent of Americans are 
willing to spend $1 more in taxes. Other polling data consistently 
shows that more than two-thirds of Republican and Democratic voters, 
including voters in tobacco-growing States, favor raising tobacco 
taxes.
  These results make it clear that our constituents desire a strong 
Federal commitment to medical research, even if it means an increase in 
taxes. An increase in tobacco taxes is easily the most appropriate 
source of funding for this bill. The Centers for Disease Control and 
Prevention reports that the Federal Government spends more than $20 
billion per year to pay for the direct health care costs caused by 
tobacco. Tobacco taxes will help offset and reduce the economic costs 
of smoking. Taxes on tobacco products are a proven source of revenue 
around the world. Most major industrialized nations tax tobacco at $2 
to $3.60 per package.
  The increase in the tobacco tax will provide extensive health 
benefits. Tobacco use is the greatest cause of preventable death in 
America. About 1.3 million children and adults will be discouraged from 
smoking by a 25-cent tobacco tax. Because about half of all long-term 
smokers die of diseases caused by smoking, a 25-cent tobacco tax will 
save the lives of more than 300,000 Americans alive today. I hope these 
heart-wrenching statistics will put an end to the congressional 
coddling of the almighty tobacco lobby. Tobacco use imposes a great 
price on our society, and those who profit from tobacco use should 
contribute their fair share to this devastation.
  This legislation has everything to do with providing our Nation with 
a brighter future. While sustainable resources for medical research are 
essential for our Nation's prosperity, our young people will ultimately 
determine the future of our Nation. Zenia Kim, a finalist in the Miss 
Oregon Pageant, and an aspiring medical researcher, provides me with a 
personal impetus to progress on this legislation. Like many Zenia had 
not given disease or medical research much thought until a close 
relative was stricken with cancer. After seeing her family member 
experience the terrors of chemotherapy, she dedicated her life to 
finding a cure to cancer.
  Zenia has vigorously pursued this pledge by working during her 
college summers at Oregon Health Sciences University. It was here, at 
one of our Nation's top academic medical centers, that she encountered 
the problems of insufficient funds for medical research. This inspired 
her to develop a comprehensive proposal to cure cancer. The main 
component of this proposal is research. Kim writes, ``as a future 
medical scientist, I would like to know that there will be enough 
funding available to pursue my research endeavors.''
  I would like Zenia to someday realize her goal and find a cure for 
cancer. I would like to assure Zenia, that when she graduates from 
medical school, we will have adequate funding for medical research. I 
urge my colleagues to support the National Fund for Medical Research to 
help Zenia and others like her to provide hope for those tormented by 
disease and disabilities.
  I ask unanimous consent to include in the Record, a copy of the bill, 
a question and answer summary, a sample of letters of support, and a 
list of nearly 200 organizations supporting this effort.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1251

       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 ``National Fund for Health 
     Research Act''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) Nearly 4 of 5 peer reviewed research projects deemed 
     worthy of funding by the National Institutes of Health are 
     not funded.
       (2) Less than 3 percent of the nearly one trillion dollars 
     our Nation spends on health care is devoted to health 
     research, while the defense industry spends 15 percent of its 
     budget on research.
       (3) Public opinion surveys have shown that Americans want 
     more Federal resources put into health research and are 
     willing to pay for it. Polling data consistently shows that 
     more than two-thirds of all voters support a major tobacco 
     tax increase if revenues generated are dedicated to health-
     related programs.
       (4) Ample evidence exists to demonstrate that health 
     research has improved the quality of health care in the 
     United States. Advances such as the development of vaccines, 
     the cure of many childhood cancers, drugs that effectively 
     treat a host of diseases and disorders, a process to protect 
     our Nation's blood supply from the HIV virus, progress 
     against cardiovascular disease including heart attack and 
     stroke, and new strategies for the early detection and 
     treatment of diseases such as colon, breast, and prostate 
     cancer clearly demonstrates the benefits of health research.
       (5) Health research which holds the promise of prevention 
     of intentional and unintentional injury and cure and 
     prevention of disease and disability, is critical to holding 
     down costs in the long term.
       (6) The state of our Nation's research facilities at the 
     National Institutes of Health and at universities is 
     deteriorating significantly. Renovation and repair of these 
     facilities are badly needed to maintain and improve the 
     quality of research.
       (7) Because the Concurrent Resolution on the Budget for 
     fiscal year 1996 (H. Con. Res. 67) freezes discretionary 
     spending for the next 5 years, the Nation's investment in 
     health research through the National Institutes of Health is 
     likely to decline in real terms unless corrective legislative 
     action is taken.
       (8) A health research fund is needed to maintain our 
     Nation's commitment to health research and to increase the 
     percentage of approved projects which receive funding at the 
     National Institutes of Health.
       (9) Each year 419,000 Americans die directly from tobacco 
     use and thousands more die from diseases caused by exposure 
     to environmental tobacco smoke. This year one out of every 
     five Americans who die will die from tobacco use.
       (10) A recent study by the Centers for Disease Control and 
     Prevention estimates that the Federal Government expended 
     more than $20,000,000,000 in 1993 alone to treat illnesses 
     associated with tobacco use.
       (11) A 25 cent increase in the tobacco tax would discourage 
     1,300,000 Americans from smoking and prevent more than 
     300,000 premature deaths.
       (12) An estimated 90 percent of all smokers start when they 
     are teenagers or younger.
       (13) Voluntary income tax checkoffs for medical research 
     for specific diseases exist in some States and have proven 
     successful in generating funds for such research.
               TITLE I--NATIONAL FUND FOR HEALTH RESEARCH

     SEC. 101. ESTABLISHMENT.

       (a) Establishment.--There is established in the Treasury of 
     the United States a fund, to be known as the ``National Fund 
     for Health Research'' (hereafter in this section referred to 
     as the ``Fund''), consisting of such amounts as are 
     transferred to the Fund under subsection (b) and any interest 
     earned on investment of amounts in the Fund.
       (b) Transfers to Fund.--
       (1) In general.--The Secretary of the Treasury shall 
     transfer to the Fund amounts equivalent to--
       (A) taxes received in the Treasury under section 5701 of 
     the Internal Revenue Code of 1986 (relating to taxes on 
     tobacco products) to the extent attributable to the increase 
     in such taxes resulting from the amendments made by title II 
     of the National Fund for Health Research Act; and
       (B) the amounts designated under section 6097 (relating to 
     designation of overpayments and contributions to the Fund).
       (2) Transfers based on estimates.--The amounts transferred 
     by paragraph (1) shall annually be transferred to the Fund 
     within 30 days after the President signs an appropriations 
     Act for the Departments of Labor, Health and Human Services, 
     and Education, and related agencies, or by the end of the 
     first quarter of the fiscal year. Proper adjustment shall be 
     made in amounts subsequently transferred to the extent prior 
     estimates were in excess of or less than the amounts required 
     to be transferred.
       (c) Obligations from Fund.--
       (1) In general.--Subject to the provisions of paragraph 
     (4), with respect to the amounts made available in the Fund 
     in a fiscal year, the Secretary of Health and Human Services 
     shall distribute--
       (A) 2 percent of such amounts during any fiscal year to the 
     Office of the Director of the National Institutes of Health 
     to be allocated at the Director's discretion for the 
     following activities:
       (i) for carrying out the responsibilities of the Office of 
     the Director, including the Office of Research on Women's 
     Health and the 

[[Page S 13731]]
     Office of Research on Minority Health, the Office of Alternative 
     Medicine, the Office of Rare Disease Research, the Office of 
     Behavioral and Social Sciences Research (for use for efforts 
     to reduce tobacco use), the Office of Dietary Supplements, 
     and the Office for Disease Prevention; and
       (ii) for construction and acquisition of equipment for or 
     facilities of or used by the National Institutes of Health;
       (B) 2 percent of such amounts for transfer to the National 
     Center for Research Resources to carry out section 1502 of 
     the National Institutes of Health Revitalization Act of 1993 
     concerning Biomedical and Behavioral Research Facilities;
       (C) 1 percent of such amounts during any fiscal year for 
     carrying out section 301 and part D of title IV of the Public 
     Health Service Act with respect to health information 
     communications; and
       (D) the remainder of such amounts during any fiscal year to 
     member institutes and centers, including the Office of AIDS 
     Research, of the National Institutes of Health in the same 
     proportion to the total amount received under this section, 
     as the amount of annual appropriations under appropriations 
     Acts for each member institute and Centers for the fiscal 
     year bears to the total amount of appropriations under 
     appropriations Acts for all member institutes and Centers of 
     the National Institutes of Health for the fiscal year.
       (2) Plans of allocation.--The amounts transferred under 
     paragraph (1)(D) shall be allocated by the Director of the 
     National Institutes of Health or the various directors of the 
     institutes and centers, as the case may be, pursuant to 
     allocation plans developed by the various advisory councils 
     to such directors, after consultation with such directors.
       (3) Grants and contracts fully funded in first year.--With 
     respect to any grant or contract funded by amounts 
     distributed under paragraph (1), the full amount of the total 
     obligation of such grant or contract shall be funded in the 
     first year of such grant or contract, and shall remain 
     available until expended.
       (4) Trigger and release of monies and phase-in.--
       (A) Trigger and release.--No expenditure shall be made 
     under paragraph (1) during any fiscal year in which the 
     annual amount appropriated for the National Institutes of 
     Health is less than the amount so appropriated for the prior 
     fiscal year.
       (B) Phase-in.--The Secretary of Health and Human Services 
     shall phase-in the distributions required under paragraph (1) 
     so that--
       (i) 25 percent of the amount in the Fund is distributed in 
     fiscal year 1997;
       (ii) 50 percent of the amount in the Fund is distributed in 
     fiscal year 1998;
       (iii) 75 percent of the amount in the Fund is distributed 
     in fiscal year 1999; and
       (iv) 100 percent of the amount in the Fund is distributed 
     in fiscal year 2000 and each succeeding fiscal year.
       (5) Administrative expenses.--Amounts in the Fund shall be 
     available to pay the administrative expenses of the 
     Department of the Treasury directly allocable to--
       (A) modifying the individual income tax return forms to 
     carry out section 6097 of the Internal Revenue Code of 1986; 
     and
       (B) processing amounts received under such section 6097 and 
     transferring such amounts to such Fund.
       (d) Budget Treatment of Amounts in Fund.--The amounts in 
     the Fund shall be excluded from, and shall not be taken into 
     account, for purposes of any budget enforcement procedure 
     under the Congressional Budget Act of 1974 or the Balanced 
     Budget and Emergency Deficit Control Act of 1985.
                     TITLE II--FINANCING PROVISIONS

     SEC. 201. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

     SEC. 202. INCREASE IN EXCISE TAXES ON TOBACCO PRODUCTS.

       (a) Cigarettes.--Subsection (b) of section 5701 is 
     amended--
       (1) by striking ``$12 per thousand ($10 per thousand on 
     cigarettes removed during 1991 or 1992)'' in paragraph (1) 
     and inserting ``$24.5 per thousand'', and
       (2) by striking ``$25.20 per thousand ($21 per thousand on 
     cigarettes removed during 1991 or 1992)'' in paragraph (2) 
     and inserting ``$51.45 per thousand''.
       (b) Cigars.--Subsection (a) of section 5701 is amended--
       (1) by striking ``$1.125 cents per thousand (93.75 cents 
     per thousand on cigars removed during 1991 or 1992)'' in 
     paragraph (1) and inserting ``$13.64 per thousand'', and
       (2) by striking ``equal to'' and all that follows in 
     paragraph (2) and inserting ``equal to 26.03 percent of the 
     price for which sold but not more than $61.25 per thousand.''
       (c) Cigarette Papers.--Subsection (c) of section 5701 is 
     amended by striking ``0.75 cent (0.625 cent on cigarette 
     papers removed during 1991 or 1992)'' and inserting ``1.53 
     cents''.
       (d) Cigarette Tubes.--Subsection (d) of section 5701 is 
     amended by striking ``1.5 cents (1.25 cents on cigarette 
     tubes removed during 1991 or 1992)'' and inserting ``3.06 
     cents''.
       (e) Smokeless Tobacco.--Subsection (e) of section 5701 is 
     amended--
       (1) by striking ``36 cents (30 cents on snuff removed 
     during 1991 or 1992)'' in paragraph (1) and inserting 
     ``$3.69'', and
       (2) by striking ``12 cents (10 cents on chewing tobacco 
     removed during 1991 or 1992)'' in paragraph (2) and inserting 
     ``$1.45''.
       (f) Pipe Tobacco.--Subsection (f) of section 5701 is 
     amended by striking ``67.5 cents (56.25 cents on pipe tobacco 
     removed during 1991 or 1992)'' and inserting ``$4.85''.
       (g) Application of Tax Increase to Puerto Rico.--Section 
     5701 is amended by adding at the end the following new 
     subsection:
       ``(h) Application to Taxes to Puerto Rico.--Notwithstanding 
     subsections (b) and (c) of section 7653 and any other 
     provision of law--
       ``(1) In general.--On tobacco products and cigarette papers 
     and tubes, manufactured or imported into the Commonwealth of 
     Puerto Rico, there is hereby imposed a tax at the rate equal 
     to the excess of--
       ``(A) the rate of tax applicable under this section to like 
     articles manufactured in the United States, over
       ``(B) the rate referred to in subparagraph (A) as in effect 
     on the day before the date of the enactment of the National 
     Fund for Health Research Act.
       ``(2) Shipments to puerto rico from the united states.--
     Only the rates of tax in effect on the day before the date of 
     the enactment of this subsection shall be taken into account 
     in determining the amount of any exemption from, or credit or 
     drawback of, any tax imposed by this section on any article 
     shipped to the Commonwealth of Puerto Rico from the United 
     States.
       ``(3) Shipments from puerto rico to the united states.--The 
     rates of tax taken into account under section 7652(a) with 
     respect to tobacco products and cigarette papers and tubes 
     coming into the United States from the Commonwealth of Puerto 
     Rico shall be the rates of tax in effect on the day before 
     the date of the enactment of the National Fund for Health 
     Research Act.
       ``(4) Disposition of revenues.--The provisions of section 
     7652(a)(3) shall not apply to any tax imposed by reason of 
     this subsection.''
       (h) Effective Date.--The amendments made by this section 
     shall apply to articles removed (as defined in section 
     5702(k) of the Internal Revenue Code of 1986, as amended by 
     this Act) after December 31, 1995.
       (i) Floor Stocks Taxes.--
       (1) Imposition of tax.--On tobacco products and cigarette 
     papers and tubes manufactured in or imported into the United 
     States or the Commonwealth of Puerto Rico which are removed 
     before January 1, 1996, and held on such date for sale by any 
     person, there is hereby imposed a tax in an amount equal to 
     the excess of--
       (A) the tax which would be imposed under section 5701 of 
     the Internal Revenue Code of 1986 on the article if the 
     article had been removed on such date, over
       (B) the prior tax (if any) imposed under section 5701 or 
     7652 of such Code on such article.
       (2) Authority to exempt cigarettes held in vending 
     machines.--To the extent provided in regulations prescribed 
     by the Secretary, no tax shall be imposed by paragraph (1) on 
     cigarettes held for retail sale on January 1, 1996, by any 
     person in any vending machine. If the Secretary provides such 
     a benefit with respect to any person, the Secretary may 
     reduce the $500 amount in paragraph (3) with respect to such 
     person.
       (3) Credit against tax.--Each person shall be allowed as a 
     credit against the taxes imposed by paragraph (1) an amount 
     equal to $500. Such credit shall not exceed the amount of 
     taxes imposed by paragraph (1) on January 1, 1996, for which 
     such person is liable.
       (4) Liability for tax and method of payment.--
       (A) Liability for tax.--A person holding cigarettes on 
     January 1, 1996, to which any tax imposed by paragraph (1) 
     applies shall be liable for such tax.
       (B) Method of payment.--The tax imposed by paragraph (1) 
     shall be paid in such manner as the Secretary shall prescribe 
     by regulations.
       (C) Time for payment.--The tax imposed by paragraph (1) 
     shall be paid on or before April 1, 1996.
       (5) Articles in foreign trade zones.--Notwithstanding the 
     Act of June 18, 1934 (48 Stat. 998, 19 U.S.C. 81a) and any 
     other provision of law, any article which is located in a 
     foreign trade zone on January 1, 1996, shall be subject to 
     the tax imposed by paragraph (1) if--
       (A) internal revenue taxes have been determined, or customs 
     duties liquidated, with respect to such article before such 
     date pursuant to a request made under the 1st proviso of 
     section 3(a) of such Act, or
       (B) such article is held on such date under the supervision 
     of a customs officer pursuant to the 2d proviso of such 
     section 3(a).
       (6) Definitions.--For purposes of this subsection--
       (A) In general.--Terms used in this subsection which are 
     also used in section 5702 of the Internal Revenue Code of 
     1986 shall have the respective meanings such terms have in 
     such section, as amended by this Act.
       (B) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury or his delegate.
       (7) Controlled groups.--Rules similar to the rules of 
     section 5061(e)(3) of such Code shall apply for purposes of 
     this subsection.
       (8) Other laws applicable.--All provisions of law, 
     including penalties, applicable 

[[Page S 13732]]
     with respect to the taxes imposed by section 5701 of such Code shall, 
     insofar as applicable and not inconsistent with the 
     provisions of this subsection, apply to the floor stocks 
     taxes imposed by paragraph (1), to the same extent as if such 
     taxes were imposed by such section 5701. The Secretary may 
     treat any person who bore the ultimate burden of the tax 
     imposed by paragraph (1) as the person to whom a credit or 
     refund under such provisions may be allowed or made.

     SEC. 203. MODIFICATIONS OF CERTAIN TOBACCO TAX PROVISIONS.

       (a) Exemption for Exported Tobacco Products and Cigarette 
     Papers and Tubes To Apply Only to Articles Marked for 
     Export.--
       (1) Subsection (b) of section 5704 is amended by adding at 
     the end the following new sentence: ``Tobacco products and 
     cigarette papers and tubes may not be transferred or removed 
     under this subsection unless such products or papers and 
     tubes bear such marks, labels, or notices as the Secretary 
     shall by regulations prescribe.''
       (2) Section 5761 is amended by redesignating subsections 
     (c) and (d) as subsections (d) and (e), respectively, and by 
     inserting after subsection (b) the following new subsection:
       ``(c) Sale of Tobacco Products and Cigarette Papers and 
     Tubes for Export.--Except as provided in subsections (b) and 
     (d) of section 5704--
       ``(1) every person who sells, relands, or receives within 
     the jurisdiction of the United States any tobacco products or 
     cigarette papers or tubes which have been labeled or shipped 
     for exportation under this chapter,
       ``(2) every person who sells or receives such relanded 
     tobacco products or cigarette papers or tubes, and
       ``(3) every person who aids or abets in such selling, 
     relanding, or receiving,
     shall, in addition to the tax and any other penalty provided 
     in this title, be liable for a penalty equal to the greater 
     of $1,000 or 5 times the amount of the tax imposed by this 
     chapter. All tobacco products and cigarette papers and tubes 
     relanded within the jurisdiction of the United States, and 
     all vessels, vehicles, and aircraft used in such relanding or 
     in removing such products, papers, and tubes from the place 
     where relanded, shall be forfeited to the United States.''
       (3) Subsection (a) of section 5761 is amended by striking 
     ``subsection (b)'' and inserting ``subsection (b) or (c)''.
       (4) Subsection (d) of section 5761, as redesignated by 
     paragraph (2), is amended by striking ``The penalty imposed 
     by subsection (b)'' and inserting ``The penalties imposed by 
     subsections (b) and (c)''.
       (5)(A) Subpart F of chapter 52 is amended by adding at the 
     end the following new section:

     ``SEC. 5754. RESTRICTION ON IMPORTATION OF PREVIOUSLY 
                   EXPORTED TOBACCO PRODUCTS.

       ``(a) In General.--Tobacco products and cigarette papers 
     and tubes previously exported from the United States may be 
     imported or brought into the United States only as provided 
     in section 5704(d). For purposes of this section, section 
     5704(d), section 5761, and such other provisions as the 
     Secretary may specify by regulations, references to 
     exportation shall be treated as including a reference to 
     shipment to the Commonwealth of Puerto Rico.
       ``(b) Cross Reference.--

  ``For penalty for the sale of tobacco products and cigarette papers 
and tubes in the United States which are labeled for export, see 
section 5761(c).''
       (B) The table of sections for subpart F of chapter 52 is 
     amended by adding at the end the following new item:

``Sec. 5754. Restriction on importation of previously exported tobacco 
              products.''

       (b) Importers Required To Be Qualified.--
       (1) Sections 5712, 5713(a), 5721, 5722, 5762(a)(1), and 
     5763 (b) and (c) are each amended by inserting ``or 
     importer'' after ``manufacturer''.
       (2) The heading of subsection (b) of section 5763 is 
     amended by inserting ``Qualified Importers,'' after 
     ``Manufacturers,''.
       (3) The heading for subchapter B of chapter 52 is amended 
     by inserting ``and Importers'' after ``Manufacturers''.
       (4) The item relating to subchapter B in the table of 
     subchapters for chapter 52 is amended by inserting ``and 
     importers'' after ``manufacturers''.
       (c) Repeal of Tax-Exempt Sales to Employees of Cigarette 
     Manufacturers.--
       (1) Subsection (a) of section 5704 is amended--
       (A) by striking ``Employee Use or'' in the heading, and
       (B) by striking ``for use or consumption by employees or'' 
     in the text.
       (2) Subsection (e) of section 5723 is amended by striking 
     ``for use or consumption by their employees, or for 
     experimental purposes'' and inserting ``for experimental 
     purposes''.
       (d) Repeal of Tax-Exempt Sales to United States.--
     Subsection (b) of section 5704 is amended by striking ``and 
     manufacturers may similarly remove such articles for use of 
     the United States;''.
       (e) Books of 25 or Fewer Cigarette Papers Subject to Tax.--
     Subsection (c) of section 5701 is amended by striking ``On 
     each book or set of cigarette papers containing more than 25 
     papers,'' and inserting ``On cigarette papers,''.
       (f) Storage of Tobacco Products.--Subsection (k) of section 
     5702 is amended by inserting ``under section 5704'' after 
     ``internal revenue bond''.
       (g) Authority To Prescribe Minimum Manufacturing Activity 
     Requirements.--Section 5712 is amended by striking ``or'' at 
     the end of paragraph (1), by redesignating paragraph (2) as 
     paragraph (3), and by inserting after paragraph (1) the 
     following new paragraph:
       ``(2) the activity proposed to be carried out at such 
     premises does not meet such minimum capacity or activity 
     requirements as the Secretary may prescribe, or''.
       (h) Special Rules Relating to Puerto Rico and the Virgin 
     Islands.--Section 7652 is amended by adding at the end the 
     following new subsection:
       ``(h) Limitation on Cover Over of Tax on Tobacco 
     Products.--For purposes of this section, with respect to 
     taxes imposed under section 5701 or this section on any 
     tobacco product or cigarette paper or tube, the amount 
     covered into the treasuries of Puerto Rico and the Virgin 
     Islands shall not exceed the rate of tax under section 5701 
     in effect on the article on the day before the date of the 
     enactment of the Health Partnership Act of 1995.''
       (i) Effective Date.--The amendments made by this section 
     shall apply to articles removed (as defined in section 
     5702(k) of the Internal Revenue Code of 1986, as amended by 
     this Act) after December 31, 1995.

     SEC. 204. IMPOSITION OF EXCISE TAX ON MANUFACTURE OR 
                   IMPORTATION OF ROLL-YOUR-OWN TOBACCO.

       (a) In General.--Section 5701 (relating to rate of tax), as 
     amended by section 701, is amended by redesignating 
     subsections (g) and (h) as subsections (h) and (i) and by 
     inserting after subsection (f) the following new subsection:
       ``(g) Roll-Your-Own Tobacco.--On roll-your-own tobacco, 
     manufactured in or imported into the United States, there 
     shall be imposed a tax of $4.85 per pound (and a 
     proportionate tax at the like rate on all fractional parts of 
     a pound).''
       (b) Roll-Your-Own Tobacco.--Section 5702 (relating to 
     definitions) is amended by adding at the end the following 
     new subsection:
       ``(p) Roll-Your-Own Tobacco.--The term `roll-your-own 
     tobacco' means any tobacco which, because of its appearance, 
     type, packaging, or labeling, is suitable for use and likely 
     to be offered to, or purchased by, consumers as tobacco for 
     making cigarettes.''
       (c) Technical Amendments.--
       (1) Subsection (c) of section 5702 is amended by striking 
     ``and pipe tobacco'' and inserting ``pipe tobacco, and roll-
     your-own tobacco''.
       (2) Subsection (d) of section 5702 is amended--
       (A) in the material preceding paragraph (1), by striking 
     ``or pipe tobacco'' and inserting ``pipe tobacco, or roll-
     your-own tobacco'', and
       (B) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) a person who produces cigars, cigarettes, smokeless 
     tobacco, pipe tobacco, or roll-your-own tobacco solely for 
     the person's own personal consumption or use, and''.
       (3) The chapter heading for chapter 52 is amended to read 
     as follows:

    ``CHAPTER 52--TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES''.

       (4) The table of chapters for subtitle E is amended by 
     striking the item relating to chapter 52 and inserting the 
     following new item:

``Chapter 52. Tobacco products and cigarette papers and tubes.''

       (d) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to roll-your-own tobacco removed (as defined in section 
     5702(k) of the Internal Revenue Code of 1986, as amended by 
     this Act) after December 31, 1995.
       (2) Transitional rule.--Any person who--
       (A) on the date of the enactment of this Act is engaged in 
     business as a manufacturer of roll-your-own tobacco or as an 
     importer of tobacco products or cigarette papers and tubes, 
     and
       (B) before January 1, 1996, submits an application under 
     subchapter B of chapter 52 of such Code to engage in such 
     business,
     may, notwithstanding such subchapter B, continue to engage in 
     such business pending final action on such application. 
     Pending such final action, all provisions of such chapter 52 
     shall apply to such applicant in the same manner and to the 
     same extent as if such applicant were a holder of a permit 
     under such chapter 52 to engage in such business.

     SEC. 205. DESIGNATION OF OVERPAYMENTS AND CONTRIBUTIONS FOR 
                   THE NATIONAL FUND FOR HEALTH RESEARCH.

       (a) In General.--Subchapter A of chapter 61 (relating to 
     returns and records) is amended by adding at the end the 
     following new part:

   ``PART IX--DESIGNATION OF OVERPAYMENTS AND CONTRIBUTIONS FOR THE 
                   NATIONAL FUND FOR HEALTH RESEARCH

``Sec. 6097. Amounts for the National Fund for Health Research.

[[Page S 13733]]


     ``SEC. 6097. AMOUNTS FOR THE NATIONAL FUND FOR HEALTH 
                   RESEARCH.

       ``(a) In General.--Every individual (other than a 
     nonresident alien) may designate that--
       ``(1) a portion (not less than $1) of any overpayment of 
     the tax imposed by chapter 1 for the taxable year, and
       ``(2) a cash contribution (not less than $1),
     be paid over to the National Fund for Health Research. In the 
     case of a joint return of a husband and wife, each spouse may 
     designate one-half of any such overpayment of tax (not less 
     than $2).
       ``(b) Manner and Time of Designation.--Any designation 
     under subsection (a) may be made with respect to any taxable 
     year only at the time of filing the original return of the 
     tax imposed by chapter 1 for such taxable year. Such 
     designation shall be made either on the 1st page of the 
     return or on the page bearing the taxpayer's signature.
       ``(c) Overpayments Treated as Refunded.--For purposes of 
     this section, any overpayment of tax designated under 
     subsection (a) shall be treated as being refunded to the 
     taxpayer as of the last day prescribed for filing the return 
     of tax imposed by chapter 1 (determined with regard to 
     extensions) or, if later, the date the return is filed.
       ``(d) Designated Amounts Not Deductible.--No amount 
     designated pursuant to subsection (a) shall be allowed as a 
     deduction under section 170 or any other section for any 
     taxable year.
       ``(e) Termination.--This section shall not apply to taxable 
     years beginning in a calendar year after a determination by 
     the Secretary that the sum of all designations under 
     subsection (a) for taxable years beginning in the second and 
     third calendar years preceding the calendar year is less than 
     $5,000,000.''
       (b) Clerical Amendment.--The table of parts for subchapter 
     A of chapter 61 is amended by adding at the end the following 
     new item:

``Part IX. Designation of overpayments and contributions for the 
              National Fund for Health Research.''

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


      National Fund for Health Research Act--Questions and Answers

       What does the proposal call for?
       A National Fund For Health Research would be established to 
     provide additional resources for health research over and 
     above those provided to the National Institutes of Health 
     (NIH) in the annual appropriations process. The Fund would 
     greatly enhance the quality of health care by investing more 
     resources in finding preventive measures, cures and cost 
     effective treatments for the major illnesses and conditions 
     that strike Americans.
       Financing for the Fund comes from an increase in federal 
     tobacco taxes--25 cents per pack of cigarettes and an 
     equivalent tax on other tobacco products. This tax would 
     raise an estimated $4.2 billion annually. In addition to 
     providing revenue for the Fund, raising tobacco taxes will 
     protect children and save lives. Every day more than 3,000 
     children become smokers and more than 1,000 of them will 
     eventually die as a result of smoking. Raising tobacco taxes 
     is a highly effective way to reduce tobacco use by children. 
     A 25-cent tax will discourage an estimated 1.3 million 
     children and adults from smoking and will save the lives of 
     more than 300,000 Americans alive today.
       Each year amounts within the Fund would automatically be 
     allotted to each of the NIH Institutes and Centers. Five 
     percent of the monies would be directed to extramural 
     construction and renovation of research facilities, the 
     National Library of Medicine, and the Office of the Director. 
     So that an appropriate range of basic and applied research is 
     supported, each Institute and Center would receive the same 
     percentage of the remaining Fund monies as they received of 
     the total NIH appropriation for that fiscal year. In order to 
     insure that the additional funds generated do not simply 
     replace regularly appropriated NIH funds, monies from the 
     Fund would be released only if the total appropriated for the 
     NIH in that year equal or exceed the prior year 
     appropriations.
       Additional monies for the Fund would be generated by a 
     voluntary federal income tax check-off. Every year, when 
     filing their Federal income tax returns, Americans would have 
     the opportunity to designate tax overpayments and 
     contributions for health research. Monies from the check-off 
     would be deposited in the Fund.
       Why is this proposal necessary?
       Health research has brought us the advances in treatment 
     and prevention of disease and disability that define our 
     current high standards of medical practice. Perhaps more than 
     any other component of our health care system, health 
     research holds the promise of both reducing medical costs and 
     improving the quality of life of Americans. Yet, because the 
     federal budget agreement freezes discretionary spending for 
     the next four years, Federal funding for health research will 
     likely not even keep up with inflation unless a separate 
     funding stream is established.
       Will the Fund simply replace existing monies appropriated 
     to NIH?
       No. Monies generated by the Fund would be in addition to, 
     not in replacement of those provided to each of the NIH 
     Institutes in the normal appropriations process. Monies from 
     the Fund could not be allotted unless total NIH 
     appropriations in that year were equal to or greater than the 
     prior year appropriations. Therefore, the Fund could not be 
     used as a mechanism to replace or reduce regularly 
     appropriated funds.
       How would money from the Fund be allocated among research 
     priorities?
       The proposal does not pick winners and losers among areas 
     of health research. It does not interfere with the funding 
     decisions made through the normal appropriations process. 
     Funds would be allocated to each of the NIH Institutes and 
     Centers based on the percentage that each of these entities 
     received of the total NIH appropriation for that year. Monies 
     allotted to each NIH entity would be spent according to a 
     plan developed by the entities' advisory council in 
     consultation with the NIH Director. Each Institute would 
     decide the appropriate distribution of Fund monies among 
     various research priorities within the Institute.
       In recognition of the poor state of many medical research 
     facilities, 2 percent of the total Fund would be taken off 
     the top for extramural construction and renovation of 
     research building and facilities. In accordance with 
     traditional funding patterns, 1 percent of the total Fund 
     would go to the National Library of Medicine. An additional 2 
     percent would go to the NIH Director for intramural 
     construction and renovation and other activities supported by 
     the Office of the Director.
       Isn't research a major reason why the cost of health care 
     is so high in this country? Won't an increase in research 
     funding lead to an increase in health care costs?
       Absolutely not. Funding for research can be an effective 
     means of controlling health costs in the long run. Investment 
     in research pays off in terms of lower medical expenses, 
     reduced worker absenteeism, and improved productivity. For 
     example, according to NIH statistics, an investment of $1.2 
     million in the development of a mass screening device for 
     neonatal hypothyroidism in newborns has the potential 1-year 
     saving of over $206 million. An investment of slightly over 
     $679,000 for a treatment for preventing the recurrence of 
     kidney stones saves close to $300 million in annual treatment 
     costs and lost days work.
       Today, many families are anxiously looking for a treatment 
     and cure of Alzheimer's disease. Federally supported funding 
     for research on Alzheimer's disease totals $300 million 
     annually on caring for people with Alzheimer's. A cure or 
     treatment for Alzheimer's, in addition to relieving 
     suffering, would result in enormous savings.
       Won't more research lead to the development and over 
     utilization of new tests and expensive equipment?
       There are legitimate concerns about the over utilization 
     and duplication of expensive technologies. These concerns 
     should be addressed by an increased emphasis on outcomes and 
     effectiveness research. We should solve the problem of over 
     utilization of services but not at the expense of improving 
     quality and coming up with more effective treatments and 
     cures.
       Do the American people support increases in tobacco taxes 
     to pay for increases in health research?
       Polling data consistently show that more than two-thirds of 
     Republican and Democratic voters, including voters in 
     tobacco-growing states, favor raising tobacco taxes if 
     revenues are dedicated to health-related activities.
       Does the proposal include prevention research?
       Absolutely. Research is our first line of defense. It is 
     the ultimate investment in prevention. Research provides the 
     building blocks for prevention--research has produced 
     immunizations, critical information about the importance of 
     diet and exercise in preventing disease, and a screening test 
     to prevent the transmission of HIV through blood products. 
     Research is the key to prevention.
                                                                    ____


               Cancer Understanding and Research Efforts

                        (Statement of Zenia Kim)

       The CURE program is designed to focus on two areas of 
     cancer treatment: prevention and research.


                              introduction

       I remember when I was attending Junior High and High 
     School, I never really learned about cancer or the risk 
     factors involved. When I was a senior in high school, a very 
     close relative of mine became very ill and was diagnosed with 
     cancer. She started chemotherapy treatment but things got 
     worse. I promised myself at that moment that I was going to 
     perform my own research on cancer. What caused this disease 
     and why wasn't my loved one getting better? I began 
     volunteering at our local hospital in the Pathology lab, 
     where I observed doctors examining various forms of cancers. 
     I learned how to spot cancers of all sorts. As I continued my 
     education at Brigham Young University, I continued with my 
     cancer research. I worked with a Chemistry professor by the 
     name of Dr. James Thorne, and he assisted me in understanding 
     the chemical aspect of cancer research. We worked on a 
     treatment called Photodynamic Therapy. This form of cancer 
     treatment became very appealing because it did not have as 
     many negative side effects that chemotherapy had. I became so 
     involved with the research that I wrote my own paper on 
     Photodynamic Therapy. I am still continuing my research with 
     Dr. Thorne for the third year, and hope that this is our real 
     breakthrough in curing cancer. While I 

[[Page S 13734]]
     was performing research on Photodynamic Therapy, I really wanted to 
     continue my volunteer work in a hospital setting. I 
     volunteered at Utah Valley Regional Medical Center in the 
     Oncology Department. Here, I got to experience the other 
     side, the patient's side. I remember talking with many cancer 
     patients and listening to their distress, their hopeless 
     feelings. I became so determined . . . that I was going to 
     find a cure for cancer. As my research continued at BYU, I 
     discovered that research funds were very limited. The 
     national funding organizations can hardly support any of the 
     proposals coming in. As a future medical research specialist, 
     I became disheartened. Over the summer, I worked at Oregon 
     Health Sciences University Medical School performing medical 
     cancer research, and there too discovered the limited funding 
     available for research. This is why I became so inspired to 
     develop my own program called the CURE.


               cancer understanding and research efforts

       The CURE focuses on two areas of cancer treatment. The 
     first is prevention. I believe that if many students learned 
     about the risks involved with cancer as a junior high or high 
     school student, there would be a significant decrease in the 
     incidents of cancer. I would like to see a unit integrated 
     within the health curriculum that emphasizes the risks of 
     cancer. Furthermore, I would like to invite guest speakers, 
     perhaps one who has fought and recovered from cancer or the 
     loved ones of a cancer victim, to tell about their side of 
     their story. I think that by personalizing a real situation, 
     students feel more sensitive and more in tune with the 
     problem. That is exactly what we need. We need students to 
     feel realistic, sad, or even scared so that they won't 
     associate with any of the risks involved with cancer. The 
     decisions that students in their junior high and high school 
     years make can indefinitely affect the course of their lives. 
     Furthermore, this is the time that they opt to engage in such 
     acts as smoking, using tobacco, sun tanning, etc. So, 
     by integrating a cancer unit within secondary education, 
     the hope is that the future generations will choose to 
     stay risk free and beat the battle against cancer.
       The second area of cancer treatment that the CURE focuses 
     on is research. Prevention is great to eliminate cancer but 
     for those already afflicted with cancer, there must be 
     another alternative. I would like to personally declare, to 
     those of all ages, that research is the first and most 
     important step towards cancer cure. By understanding the 
     mechanism of how cancer cells undergo their uncontrolled rate 
     of division, we can come closer to finding the right reagents 
     to stop it. I know that cancer research has been going on for 
     many years, and I believe that we are coming so much closer 
     to the cure. We really need to support the research funding. 
     I have sadly discovered that less than 10 percent of all the 
     proposals that are sent to large funding organizations, such 
     as the National Institute of Health, actually get funded. 
     This to me is a horrifying reality. But the question always 
     seems to be, ``Where are we going to get the money?'' I 
     believe that we can first start with larger corporations. 
     They have elicited a certain percentage of their profits into 
     donations. I would like to encourage those corporations to 
     donate more of their profits into research. Also, I support 
     Senator Hatfield's and Senator Harkin's Trust Fund Proposal 
     in allocating more money towards research from a tobacco tax. 
     By raising the tobacco tax by a small fraction, we will not 
     destroy the tobacco industry and we will be able to fund more 
     scientific discoveries. As a future medical scientist, I 
     would like to know that there will be enough funding 
     available to pursue my research endeavors. I love research 
     and I thrive off making new scientific discoveries. I just 
     hope that I can continue my love for research when I work in 
     my own laboratory someday soon.
       As Miss Tri-Valley, I have actually had the opportunity to 
     speak to students in junior high and high schools throughout 
     the Beaverton/Portland area. I always emphasize these two 
     important points that I have established in the CURE Program: 
     Prevention and Research--these are our two means of defeating 
     cancer.
                                                                    ____



                                    American Lung Association,

                                               September 14, 1995.
     Hon. Mark Hatfield,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Hatfield: The American Lung Association 
     strongly endorses the legislation you are introducing today, 
     Research Trust Fund Act. Enactment of the Research Trust Fund 
     Act will be a win-win proposition for the health and well-
     being of the American people.
       The Research Trust Fund Act will save lives through 
     prevention. Each year 419,000 Americans die from causes 
     directly related to tobacco use and thousands more die from 
     diseases caused by exposure to environmental tobacco smoke. 
     These preventable deaths represents a huge human loss to our 
     society. The proposed $0.25 increase in the federal excise 
     tax on tobacco products will help reduce the number of people 
     who smoke. It is estimated that for every $0.25 increased in 
     the federal tobacco tax, about one million people living 
     today will be discouraged from smoking and 200,000 to 300,000 
     premature deaths will be prevented.
       The Research Trust Fund Act will save health care dollars. 
     The cost of treating people who suffer from tobacco related 
     illnesses places a staggering financial burden on the 
     American health care system. Although smokers tend to die 
     younger, over the course of their life, current and former 
     smokers generate an estimated $501 billion in excess health 
     care costs. Treating tobacco related illnesses cost the $21 
     billion per year, with an additional estimated cost of $47 
     billion in lost productivity. Reducing the number of people 
     who use tobacco products by increasing the federal tobacco 
     tax will help reduce the economic burden tobacco consumption 
     places on the U.S. health care system.
       The Research Trust Fund Act will save lives through 
     improved treatments and cures. The estimated $4 billion to $5 
     billion generated by the Research Trust Fund will provided 
     needed additional funding for biomedical research sponsored 
     by the National Institutes of Health. Through increased 
     support of basic and clinical biomedical research at the 
     National Institutes of Health, researchers will continue to 
     broaden our understanding of life sciences and develop new 
     approaches to preventing, treating, and curing disease.
       The American Lung Association and its volunteers stand 
     ready to work with you and Congress to enact this important 
     legislation. I would also like to take this opportunity to 
     commend you for your leadership and foresight in introducing 
     the Research Trust Fund Act. The Research Trust Fund will go 
     a long way to improving the health of all Americans.
           Sincerely,
                                  Jacqueline D. McLeod, MPH, M.Ed,
     President.
                                                                    ____

                                            Federation of American


                           Societies for Experimental Biology,

                                 Bethesda, MD, September 11, 1995.
     Hon. Mark Hatfield,
     Chair, Senate Appropriations Committee, U.S. Senate, 
         Washington, DC.
       Dear Mr. Chairman: The Federation of American Societies for 
     Experimental Biology (FASEB) supports with enthusiasm your 
     efforts to provide supplemental resources for NIH and 
     biomedical research.
       The Federation concurs that the federal commitment to 
     health research is grossly underfunded. Less than 3 percent 
     of the nearly one trillion dollars our Nation spends on 
     health care is devoted to health research, while the defense 
     industry spends 15 percent of its budget on research. Ample 
     evidence exists to demonstrate that health research has 
     improved the quality of health care in the United States, and 
     is one of the best methods of health care cost containment.
       Therefore, FASEB supports the proposal to create an 
     additional source of biomedical funding, such as through the 
     National Fund for Health Research Act. We are confident that 
     these additional funds would not be used to offset regular 
     appropriations.
           Sincerely,
                                         Ralph A. Bradshaw, Ph.D.,
     President.
                                                                    ____

         National Committee To Preserve Social Security and 
           Medicare,
                               Washington, DC, September 14, 1995.
     Hon. Mark O. Hatfield,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Hatfield: On behalf of the nearly six million 
     members and supporters of the National Committee to Preserve 
     Social Security and Medicare, I am writing in strong support 
     of your legislation to increase medical research funding to 
     the National Institutes of Health (NIH).
       Increased research into the causes and potential cures of 
     many diseases related to aging could have a profound impact 
     on the lives of older Americans and their families. 
     Alzheimer's disease, a degenerative brain disorder, afflicts 
     about 4 million people in the United States, and costs the 
     nation an estimated $80 billion to $100 billion a year. 
     Osteoporosis, which causes fragile bones and painfully 
     crippling fractures, costs an estimated $10 billion a year. 
     When families can no longer meet the care needs of relatives 
     with these illnesses, disabled people often end up in nursing 
     homes, where bills totaled $69.6 billion in 1993.
       The Hatfield/Harkin Research Fund legislation to be 
     introduced today is a significant step forward to find cures 
     or better treatments, save lives and dollars. We commend you 
     on your long-time commitment to medical research.
           Sincerely,
                                                Martha A. McSteen,
     President.
                                                                    ____

                                                    Association of


                                    American Medical Colleges,

                               Washington, DC, September 15, 1995.
     Hon. Mark O. Hatfield,
     U.S. Senate, Hart Senate Office Building, Washington, DC.

     Hon. Tom Harkin,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senators Hatfield and Harkin: The Association of 
     American Medical Colleges (AAMC) strongly endorses your 
     proposal to create a National Fund for Health Research. The 
     debate on this year's budget makes it clear that we must 
     identify additional, sustainable sources of funding to 
     supplement the regular appropriation for the National 

[[Page S 13735]]
     Institutes of Health [NIH] if we are to continue to rely upon 
     scientific discovery to improve the health and quality of 
     life for all Americans. In addition, sustained support for 
     the NIH is needed if the United States is to maintain its 
     position as the world's leader in biomedical and behavioral 
     research. The fund you propose is an innovative and necessary 
     complement to NIH funding.
       The Federal Government plays a necessary role in the 
     support of this nation's biomedical and behavioral research 
     efforts. The investment that the Federal Government has made 
     in the NIH has produced a comprehensive network of 
     scientists, physicians, and technicians at more than 1,700 
     institutions across the United States dedicated to the 
     continued pursuit of fundamental knowledge and the 
     application of this information to the prevention, diagnosis, 
     and treatment of disease. NIH-supported scientists have made 
     enormous contributions to the nation's health. In addition, 
     NIH-sponsored research has made significant economic 
     contributions, both locally and nationally. The role that the 
     U.S. biotechnology industry plays globally is just one 
     example of the economic benefits to be derived from NIH 
     research.
       Moreover, your proposal addresses a major cause of disease 
     and death in this country: tobacco. As health professionals, 
     we must do everything in our power to reduce the use of 
     tobacco in this country, particularly among children and 
     teenagers. Your bill is an important part of that strategy. 
     We will work with you to urge all health-related 
     organizations and institutions to support this proposal and 
     to encourage other Senators to cosponsor it.
       Finally, on behalf of the Association's members, I wish to 
     thank you for your leadership and unfailing commitment to a 
     strong, vital medical research effort in this country. We 
     appreciate the continued support and trust that you have 
     placed in the NIH, and by implication in our institutions and 
     faculty. We look forward to continuing to work with you to 
     sustain this national treasure that is so critically 
     important to the nation's health.
           Very sincerely yours,
                                             Jordan J. Cohen, M.D.
     President.
                                                                    ____

                                          American Cancer Society,


                                National Public Issues Office,

                               Washington, DC, September 15, 1995.
     Hon. Mark Hatfield,
     U.S. Senate,
     Washington, DC.
       Dear Senator Hatfield: On behalf of more than two million 
     American Cancer Society volunteers, I am writing to commend 
     you and Senator Harkin for your leadership in introducing the 
     National Fund for Health Research Act. Your proposal combines 
     two critical initiatives: increasing biomedical research 
     funding and protecting children from tobacco addiction by 
     raising tobacco taxes. The American Cancer Society strongly 
     supports this bill.
       Increasing funding for biomedical research is a top 
     priority for all health organizations that understand the 
     role such research plays in treating diseases, reducing 
     suffering, improving the efficiency of our health care system 
     and improving the health status of the entire nation. The 
     American Cancer Society is particularly concerned about the 
     rise in cancer rates. Cancer will become the leading cause of 
     death in the United States by the year 2000. Biomedical 
     research performed by the National Institutes of Health is of 
     vital importance in the fight against cancer. The United 
     States currently devotes less than 3 percent of health care 
     spending to research. This amount is unacceptably low as a 
     matter of health and economics.
       There is no more appropriate way to finance this bill than 
     through a tobacco tax increase. By itself, this tax will 
     discourage about 1.3 million children and adults from smoking 
     and will ultimately save the lives of more than 300,000 
     Americans alive today. Raising tobacco taxes is one of the 
     most important measures we can take to reduce the current 
     epidemic of tobacco use by teenagers.
       More than two-thirds of Republican and Democratic voters, 
     including voters from tobacco-growing states, supports 
     raising tobacco taxes for health-related purposes such as 
     this.
       You have our full support. We look forward to working with 
     you and your staff.
           Sincerely,
                                                 Kerrie B. Wilson,
       National Vice President for Government Relations, American 
     Cancer Society.
                                                                    ____


  Medical Research and Health Care Concerns: A Survey of the American 
                                 Public

          (Conducted by Louis Harris & Associates, June 1995)

       A nationwide Harris telephone poll was conducted of 1004 
     adults in the United States from June 8-11, 1995. Figures for 
     age, sex, race, education, and region were weighted where 
     necessary to bring them into line with their actual 
     proportions in the population. The margin of error for the 
     survey is approximately 3.1 percent.
       Research! America, a national not-for-profit organization 
     dedicated to raising public awareness of and support for 
     medical research, commissioned Louis Harris & Associates to 
     ask questions about medical research as a part of a larger 
     survey focusing on a broad range of current issues.


                               HIGHLIGHTS

       1. Americans oppose cuts in medical research dollars.
       Respondents were told that one impact of proposed changes 
     in the Federal budget would be less money going to 
     universities and their hospitals which teach medical students 
     and do medical research. When asked whether they favored or 
     opposed these changes in the Federal budget, 65% opposed 
     proposed cuts in Federal support for universities and 
     hospitals.
       The younger those surveyed, the higher their response: 
     Among 18-24 year-olds, the opposition to the proposed cuts 
     rises to 75%; among 15-29 year-olds, the opposition to the 
     proposed cuts is 72%.
       2. Americans would pay higher taxes to support medical 
     research.
       73% would be willing to pay a dollar more perweek in taxes 
     if they knew the money would be spent on medical research to 
     better diagnose, prevent and treat disease.
       Results from a November, 1993 Harris Poll were very 
     similar--74% were willing to pay a dollar more per week in 
     taxes if spent on medical research.
       3. Americans urge Congress to provide tax incentives for 
     private industry to conduct medical research.
       61% of those surveyed want their Senators and 
     Representatives to support legislation that would give tax 
     credits to private industries to conduct more medical 
     research.
       4. Americans are willing to designate tax refund dollars 
     for medical research.
       45% would probably, and 15% would definitely check off a 
     box on their federal income tax return to designate tax 
     refund money specifically for medical research.
       When asked how much money they would be willing to 
     designate to medical research, the median amount reported was 
     $23.
       5. Americans overwhelmingly value maintaining the United 
     States' position as a leader in medical research.
       94% of those surveyed believe that it is important that the 
     United States maintains its role as a world leader in medical 
     research!
       6. Americans heartily endorse having the Federal Government 
     support basic science research.
       Those surveyed were asked if they agree or disagree with 
     the following: ``Even if it brings no immediate benefits, 
     basic science research which advances the frontiers of 
     knowledge is necessary and should be supported by the Federal 
     Government.''
       69% of respondent agree; 79% of young people ages 18-24 
     agree with the need to support basic research.
       7. Medical research takes second place only to national, 
     defense for tax dollar value.
       While 45% gave federal defense spending the highest rating 
     for tax dollar value, second place went to medical research 
     with 37% of the respondents giving it a favorable tax dollar 
     value.
       Public education and federal anti-crime efforts ranked the 
     lowest.
       8. Americans want more information about medical research 
     in the print and broadcast media.
       61% of the Americans surveyed would like to see more 
     medical research information in newspaper, magazines and on 
     television.
       77% of young people 18-24 want more medical research 
     information from these sources.
       For further information on the survey or other Research! 
     America activities, contact Tracy Turner at (703) 739-2577; 
     Fax (703) 739-2372.
                                                                    ____


 Organizations Endorsing the Hatfield-Harkin Research Fund Proposal as 
                         of September 14, 1995

       Academy of Radiology Research.
       Alliance for Aging Research.
       Alliance for Eye and Vision Research.
       Alzheimer's Association.
       American Academy of Allergy, Asthma & Immunology.
       American Academy of Child and Adolescent Psychiatry.
       American Academy of Dermatology.
       American Academy of Medical Acupuncture.
       American Academy of Neurology.
       American Academy of Ophthalmology.
       American Academy of Orthopaedic Surgeons.
       American Academy of Otolaryngology--Head and Neck Surgery.
       American Academy of Pediatrics.
       American Association for Cancer Education.
       American Association for Cancer Research.
       American Association for Dental Research.
       American Association of Anatomists.
       American Association of Blood Banks.
       American Association of Colleges of Nursing.
       American Association of Colleges of Pharmacy.
       American Association of Critical-Care Nurses.
       American Association of Dental Schools.
       American Association of Immunologists.
       American Association of Pharmaceutical Scientists.
       American Cancer Society.
       American College of Cardiology.
       American College of Chest Physicians.
       American College of Clinical Pharmacology.
       American College of Medical Genetics.
       American College of Preventive Medicine.
       American College of Rheumatology.
       American Diabetes Association.
       American Federation for Clinical Research.
       American Gastroenterological Association.
       American Geriatrics Society.

[[Page S 13736]]

       American Heart Association.
       American Institute of Nutrition.
       American Lung Association.
       American Nurses Association.
       American Orthopaedic Association.
       American Pediatric Society.
       American Physiological Society.
       American Podiatric Medical Association.
       American Porphyria Foundation.
       American Psychiatric Association.
       American Psychological Society.
       American Skin Association, Inc.
       American Sleep Disorders Association.
       American Society for Bone and Mineral Research.
       American Society for Cell Biology.
       American Society for Clinical Nutrition.
       American Society for Dermatologic Surgery.
       American Society for Investigative Pathology.
       American Society for Microbiology.
       American Society for Pharmacology and Experimental 
     Therapeutics.
       American Society for Reproductive Medicine.
       American Society for Therapeutic Radiology and Oncology.
       American Society for Virology.
       American Society of Addiction Medicine.
       American Society of Animal Sciences.
       American Society of Clinical Oncology.
       American Society of Hematology.
       American Society of Nephrology.
       American Society of Pediatric Hematology/Oncology.
       American Society of Tropical Medicine & Hygiene.
       American Speech-Language-Hearing Association.
       American Thoracic Society.
       American Urological Association.
       Amputee Coalition of America.
       Arizona Disease Prevention Center at the University of 
     Arizona.
       Arthritis Foundation.
       Association for Behavioral Sciences & Medical Education.
       Association for Professionals in Infection Control & 
     Epidemiology, Inc.
       Association for Research in Vision and Ophthalmology.
       Association of Academic Health Centers.
       Association of American Cancer Institutes.
       Association of American Medical Colleges.
       Association of American Veterinary Medical Colleges.
       Association of Medical Graduate Departments of 
     Biochemistry.
       Association of Medical School Microbiology and Immunology 
     Chairs.
       Association of Medical School Pediatric Department 
     Chairman.
       Association of Minority Health Profession Schools.
       Association of Pediatric Oncology Nurses.
       Association of Population Centers.
       Association of Professors of Dermatology.
       Association of Professors of Medicine.
       Association of Subspecialty Professors.
       Association of Teachers of Preventive Medicine.
       Association of University Environmental Health Sciences 
     Centers.
       Association of University professors of Ophthalmology.
       Association of University Programs in Occupational Health 
     and Safety.
       Autism Society of America.
       Cancer Research Foundation of America.
       Citizens for Public Action on Blood Pressure and 
     Cholesterol, Inc.
       Coalition for American Trauma Care.
       Coalition of Patient Advocates for Skin Disease Research.
        College on Problems of Drug Dependence.
       Columbia University.
        Columbia University, Health Sciences.
       Consortium for Skin Research.
       Peter C. & Pat Cook Health Sciences Research & Education 
     Institute at Butterworth Hospital.
       Cooley's Anemia Foundation.
       Cooper Hospital/University Medical Center.
       Corporation for the Advancement of Psychiatry.
       Council of Community Blood Centers.
       Cystic Fibrosis Foundation.
       Drew/Meharry/Morehouse Consortium Cancer Center.
       Digestive Disease National Coalition.
       Dystonia Medical Research Foundation.
       Dystrophic Epidermolysis Bullosa Research Association of 
     America.
       Ehlers Danlos National Foundation.
       The Endocine Society.
       Environmental Science Associates, Inc.
       Epilepsy Foundation of America.
       Families Against Cancer.
       Federation of American Societies for Experimental Biology.
       Federation of Behavioral, Psychological & Cognitive 
     Sciences.
       Foundation for Ichthyosis & Related Skin Types.
       Fox Chase Cancer Center.
       General Clinical Research Center Programs Directors' 
     Association.
       Genome Action Coalition.
       Fred Hutchinson Cancer Research Center.
       Arthur G. James Cancer Hospital & Research Institute.
       Johns Hopkins University.
       Johns Hopkins University, School of Medicine.
       Joint Council on Allergy, Asthma and Immunology.
       Joint Steering Committee for Public Policy.
       Louisiana State University Medical Center.
       Lupus Foundation of America, Inc.
       Lucille P. Markey Cancer Center.
       Medical College of Pennsylvania & Hahnemann University.
       Medical Center of Wisconsin Cancer Center.
       Medical Library Association.
       Myasthenia Gravis Foundation of America, Inc.
       National Alopecia Areata Foundation.
       National Association for Biomedical Research.
       National Association for the Advancement of Orthotics and 
     Prosthetics.
       National Association of Children's Hospitals.
       National Association of Pediatric Nurse Associates and 
     Practitioners.
       National Association of State Universities and Land Grant 
     Colleges.
       National Breast Cancer Coalition.
       National Caucus of Basic Biomedical Science Chairs.
       National Coalition for Cancer Research.
       National Committee to Preserve Social Security and 
     Medicare.
       National Diabetes Research Coalition.
       National Easter Seal Society.
       National Eczema Association.
       National Foundation for Ectodermal Dysplasias.
       National Health Council.
       National Marfan Foundation.
       National Multiple Sclerosis Society.
       National Organization for Rare Disorders.
       National Osteoporosis Foundation.
       National Perinatal Association.
       National Psoriasis Foundation.
       National Tuberous Sclerosis Association.
       National Vitiligo Foundation, Inc.
       National Vulvodynia Association.
       New England Society of Physical Medicine and 
     Rehabilitation.
       New York University Medical Center.
       Northwestern Memorial Hospital.
       Oncology Nursing Society.
       Orton Dyslexia Society, Inc.
       Paralyzed Veterans of America.
       Penn State Hershey Medical Center.
       Population Association of America.
       Radiation Research Society.
       The Family of Christopher Reeve.
       Research! America.
       St. Jude Children's Research Hospital.
       Scleroderma Federation, Inc.
       Scleroderma Research Foundation.
       Society for the Advancement of Women's Health Research.
       Society for Investigative Dermatology.
       Society for Neuroscience.
       Society for Pediatric Research.
       Society of Critical Care Medicine.
       Society of Medical College Directors of Continuing Medical 
     Education.
       Society of Toxicology.
       Society of University Otolaryngologists--Head and Neck 
     Surgeons.
       Society of University Urologists.
       Stanford University School of Medicine.
       Sturge Weber Foundation.
       Sudden Infant Death Syndrome Alliance.
       Sylvester Comprehensive Cancer Center.
       Teratology Society.
       Tourette Syndrome Association, Inc.
       Tufts University Dept. of Physical Medicine and 
     Rehabilitation.
       United Scleroderma Foundation Inc.
       University of Cincinnati Barrett Cancer Center.
       University of Miami School of Medicine, Division of 
     Genetics.
       University of Minnesota, Duluth, School of Medicine.
       University of Nevada, School of Medicine.
       University of Rochester Cancer Center.
       University of Virginia, School of Medicine.
       University of Washington, School of Medicine.
       Wake Forest University, Bowman Gray School of Medicine.
       Wisconsin Comprehensive Cancer Center.
       Yale University, School of Medicine.

  Mr. HARKIN. Mr. President, I rise today with Senator Hatfield to 
introduce the Fund for Health Research Act. This legislation is similar 
to legislation that the two of us introduced during the last Congress 
which gained broad bipartisan support in both the House and Senate.
  Our proposal would establish a national fund for health research to 
provide additional resources for health research over and above those 
provided to the National Institutes of Health [NIH] in the annual 
appropriations process. The fund would greatly enhance the quality of 
health care by investing more in finding preventive measures, cures and 
more cost effective treatments for the major illnesses and conditions 
that strike Americans.
  The fund would be financed by a 25-cent tax on each pack of 
cigarettes and an equivalent tax on other tobacco products such as 
snuff and chewing tobacco. This tax would raise an estimated $4.2 
billion annually.

[[Page S 13737]]

  Mr. President, in addition to providing revenue for health research, 
raising tobacco taxes will protect children and save lives. Every day 
more than 3,000 children become smokers and more than 1,000 of them 
will eventually die as a result of smoking. Raising tobacco taxes is a 
highly effective way to reduce tobacco use by children. A 25-cent tax 
will discourage an estimated 1.3 million children and adults from 
smoking and will save the lives of more than 300,000 Americans alive 
today.
  Additional moneys for the fund would be generated by a voluntary 
Federal income tax check-off. Every year, when filing their Federal 
income tax returns, Americans would be given the opportunity to 
designate tax overpayments and contributions for health research. 
Moneys from the check-off would be deposited in the fund.
  Each year under our proposal amounts within the national fund for 
health research would automatically be allocated to each of the NIH 
institutes and centers. Each institute and center would receive the 
same percentage as they received of the total NIH appropriation for 
that fiscal year.
  Last year Senator Hatfield and I argued that any health care reform 
plan should include additional funding for health research. Health care 
reform has been taken off the front burner but the need to increase our 
Nation's commitment to health research has not diminished.
  While health care spending devours nearly $1 trillion annually our 
medical research budget is dying of starvation. The United States 
devotes less than 2 percent of its total health care budget to health 
research. The Defense Department spends 15 percent of its budget on 
research. Does this make sense? The cold war is over but the war 
against disease and disability continues.

  Increased investment in health research is key to reducing health 
costs in the long run. If we can find the cure for a disease like 
Alzheimer's the savings would be enormous. Today, federally supported 
funding for research on Alzheimer's disease totals $300 million yet it 
is estimated that nearly $100 billion is expended annually on caring 
for people with Alzheimer's.
  Gene therapy and treatments for cystic fibrosis and Parkinson's could 
eliminate years of chronic care costs, while saving lives and improving 
patients' quality of life.
  Mr. President, Senator Hatfield and I do everything we can to 
increase funding for NIH through the appropriations process. But, given 
the current budget situation and freeze in discretionary spending what 
we can do is limited. Without action, our investment in medical 
research through the NIH is likely to continue to decline in real 
terms.
  The NIH is not able to fund even 25 percent of competing research 
projects or grant applications deemed worthy of funding. This is 
compared to rates of 30 percent or more just a decade ago. Science and 
cutting edge medical research is being put on hold. We may be giving up 
possible cures for diabetes, Alzheimer's, Parkinson's, and countless 
other diseases.
  Our lack of investment in research may also be discouraging our young 
people from pursuing careers in medical research. The number of people 
under the age of 36 even apply for NIH grants dropped by 54 percent 
between 1985 and 1993. This is due to a host of factors but I'm afraid 
that the lower success rates among all applicants is making biomedical 
research less and less attractive to young people. If the perception is 
that funding for research is impossible to obtain, young people that 
may have chosen medical research 10 years ago will choose other career 
paths.
  Mr. President, I am pleased that over 130 groups representing 
patients, hospitals, medical schools, researchers, and millions of 
Americans have already endorsed our proposal. And, polling data 
consistently show that more than two-thirds of Republican and 
Democratic voters, including votes in tobacco-growing States, favor 
raising tobacco taxes if funds will be devoted to health related 
programs.
  Mr. President, health research is an investment in our future--it is 
an investment in our children and grandchildren. It holds the promise 
of cure or treatment for millions of Americans.
                                 ______

      By Mr. ABRAHAM (for himself, Mr. Lieberman, Mr. Santorum, Ms. 
        Moseley-Braun, and Mr. DeWine):
  S. 1252. A bill to amend the Internal Revenue Code of 1986 to provide 
additional tax incentives to stimulate economic growth in depressed 
areas, and for other purposes; to the Committee on Finance.


                the enhanced enterprise zone act of 1995

 Mr. ABRAHAM. Mr. President, today, I am joined by Senators 
Lieberman, Santorum, DeWine, and Moseley-Braun in introducing the 
Enhanced Enterprise Zone Act of 1995, legislation to stimulate job 
creation and residential growth in America's most distressed rural and 
urban communities.
  In 1980, then-Representative Jack Kemp introduced the first 
enterprise zone legislation in the United States, the Urban Jobs and 
Enterprise Zone Act. Twelve years later, the Omnibus Budget 
Reconciliation Act of 1993 authorized over 100 enterprise and 
empowerment zones to receive a limited combination of tax benefits and 
other Federal assistance to support economic revitalization and 
community development.
  For truly distressed communities, however, there is concern that this 
package of benefits will not be sufficient to spur economic growth and 
job creation. This concern was reaffirmed by the Senate earlier this 
week during consideration of S. 4, the Work Opportunity Act of 1995. On 
Wednesday, September 13, the Senate unanimously adopted an amendment 
calling on Congress to enact enterprise zone legislation that includes 
stronger incentives for investment, job creation, and economic growth.
  At a time when Congress is debating the merits of the Federal welfare 
system and looking at reforms to our social safety net, it is 
imperative that we look for ways to stimulate new opportunities for 
work and growth in our most distressed neighborhoods.
  For that reason, today my colleagues and I are introducing 
legislation to supercharge existing enterprise communities and 
empowerment zones. These enhanced enterprise zones would encourage 
entrepreneurial and residential activity by:
  Establishing a capital gains rate of zero for the sale of any 
qualified investments that are held for at least 5 years;
  Permitting limited income deductions for the purchase of qualified 
stock in businesses located in an enterprise zone;
  Doubling the amount small business owners in these zones are allowed 
to expense;
  Providing a limited tax credit for low-income renovations;
  Loosening regulatory barriers to home ownership and job creation;
  Providing incentives and grants for resident management and home 
ownership of public housing; and
  Creating a pilot school choice program for the existing empowerment 
zones, supplemental empowerment zones, and Washington, DC.
  Mr. President, for economically troubled areas, attracting 
entrepreneurial businesses is the key to beginning the process of 
revitalization. The tax benefits of enhanced enterprise zones are 
targeted at addressing the principal hurdles facing small businesses 
when they are just getting started--raising capital and maintaining 
cash flow.
  First, we eliminate taxation on capital gains. The United States has 
some of the highest capital gains taxes in the world. For distressed 
communities seeking capital investments, these taxes inhibit investment 
and lockout sources of growth. Our bill establishes a capital gains 
rate of zero for the sale of any qualified zone stock, business 
property, or partnership interest that has been held for at least 5 
years.
  Second, we encourage investment in enterprise zones through the 
creation of enterprise zone stock. Ask small business entrepreneurs 
what their biggest hurdle is, and chances are they will reply--raising 
capital. This legislation allows individuals to deduct the purchase of 
qualified enterprise zone stock from their income--up to $100,000 in 
one year and $500,000 in their lifetime.
  Third, we provide small enterprise zone businesses with extra 
expensing. Another obstacle particularly difficult 

[[Page S 13738]]
for small businesses to overcome is maintaining an adequate cash flow. 
Our legislation would double the maximum allowable expensing for 
purchases of plant and equipment in the enterprise zones.
  Fourth, we encourage the renovation of deteriorated buildings located 
in the enterprise zones. This proposal is based upon legislation 
introduced by Senator Kay Bailey Hutchison and it is designed to 
encourage private investment in economically distressed areas by 
providing a targeted, limited tax credit to businesses to help defray 
their cost of construction, expansion, and renovation of buildings 
located within enhanced enterprise zones.
  Another obstacle to growth and jobs in distressed communities is the 
burden of regulation on small businesses. Our bill would create a 
process by which local governments could request a waiver or 
modification of regulations that hinder the job creation, community 
development, or economic revitalization objectives of the enterprise 
zone. The relevant Federal agencies would have the discretion to 
approve or disapprove of any regulatory waiver or modification. 
Furthermore, they would be prohibited from granting regulatory waivers 
that would violate the Fair Labor Standards Act or present a 
significant risk to public health, safety, or the environment.
  To help low-income families become homeowners with a stake in their 
communities, our legislation would establish an Enterprise Zone Home 
Ownership Program. Based upon Jack Kemp's proposals when he was the 
Secretary of Housing and Urban Development, this proposal would provide 
grants for: First, resident management of public housing; and second, 
home ownership of public housing, vacant and foreclosed properties, and 
financially distressed properties.
  Finally, within the nine empowerment zones, two supplemental 
empowerment zones, and Washington, DC, our bill would create a pilot 
school choice project to provide low-income parents and their children 
with financial assistance to enable them to select the public or 
private school of their choice. Under this plan, a designated grantee 
within each empowerment zone will provide parents with educational 
certificates to be used towards the cost of tuition and transportation 
for elementary or secondary schools within the empowerment zones.
  In conclusion, Mr. President, will enhanced enterprise zones work? 
The answer, quite simply, is yes. We know they will work because 35 
States and the District of Columbia already have enterprise zones that 
have produced over 663,000 jobs and $40 billion in capital investment. 
The enterprise zone concept has been endorsed by the National 
Governor's Association, the Conference of Black Mayors, the Council of 
Black State Legislators, and the U.S. Conference of Mayors.
  This bill represents an affirmative effort to create economic 
opportunities for the urban and rural poor by recognizing that private 
enterprise, not government, is the source of economic and social 
development. Taken as a whole, the incentives included in this 
legislation for investment, entrepreneurship, home ownership, and skill 
development will being economies in distressed areas back to life. They 
will encourage full participation in our market economy and public 
interest in local neighborhoods--resulting in economic growth and new 
jobs.
 Mr. LIEBERMAN. Mr. President, I'm delighted to join in the 
introduction of this important legislation, the Enhanced Enterprise 
Zone Act of 1995.
  Last week, this body unanimously approved an amendment calling on 
Congress to enact legislation to supercharge the enterprise communities 
and empowerment zones we created in 1993. While the 1993 legislation 
creating these entities was not perfect and the legislation did not go 
far enough, particularly for the enterprise communities, it represented 
a fundamental change in urban policy. I believe that legislation was a 
clear recognition of the fact that government does not have all the 
answers to the ills of poverty in this country and that American 
business can and must play a role in revitalizing poor neighborhoods.
  The 1993 legislation was a good start but it did not go far enough. 
The bill we are introducing today takes us further down the road of 
attacking the problems that plague our cities and economically 
distressed rural areas.
  I should note that I do have concerns with some of the provisions of 
the regulatory flexibility title of this bill. For example, I think we 
must work on making changes to provide greater assurance that any 
modifications or waivers of rules would not in any way compromise the 
benefits that are achieved through existing environmental protection 
and public health laws and regulations. I hope that these provisions 
can be worked on as this bill progresses through the legislative 
process.
  Given that reservation, I believe this is an important bill that will 
do much to provide an economic boost to the areas of this country that 
most desperately need that help.
  I urge my colleagues to join me in supporting this 
legislation.
                                 ______

      By Mr. ABRAHAM (for himself, Mr. Kyl, Mrs. Feinstein, and Mr. 
        Shelby):
  S. 1253. A bill to amend the Controlled Substances Act with respect 
to penalties for crimes involving cocaine, and for other purposes; to 
the Committee on the Judiciary.
                                 ______

      By Mr. ABRAHAM (for himself, Mr. Hatch, Mr. Thurmond,  Mr. 
        Grassley,  Mr. Kyl, Mrs. Feinstein,  Mr. Shelby, and Mr. 
        Coverdell):
  S. 1254. A bill to disapprove of amendments to the Federal Sentencing 
Guidelines relating to lowering of crack sentences and sentences for 
money laundering and transactions in property derived from unlawful 
activity; read the first time.


                           DRUGS LEGISLATION

 Mr. ABRAHAM. Mr. President, I am today introducing two bills, 
both of which address one of the most serious problems facing this 
country today: the epidemic of drugs in our Nation.
  The purpose of each bill is simple. The first bill would prevent 
reductions in crack cocaine penalties proposed by the U.S. Sentencing 
Commission from taking effect. The second would raise the penalties for 
distributors of powder cocaine by applying existing mandatory minimums 
to a larger group of cocaine dealers.
  No problem has parents more worried than the drugs and violence so 
prevalent today in schools throughout the Nation. All of us spend a lot 
of time fretting about how to protect our kids and keep them from 
getting caught up in drugs and gangs and the terrible dangers they 
create.
  Nevertheless, on April 11, by a 4 to 3 vote, the Sentencing 
Commission proposed amendments to the sentencing guidelines dealing 
with crack distribution and possession.
  According to the Department of Justice, the effect of these 
amendments would be to lower base sentences dramatically for criminals 
who deal in crack cocaine. New sentences for these criminals would be 
between one-half and one-sixth their present length. Some drug dealers 
now subject to substantial prison sentences could end up serving no 
jailtime at all.
  In my judgment, this sends entirely the wrong message: that in the 
war against crack, society has blinked.
  That is not what we should be telling the crack dealers.
  That is not what we should be telling concerned parents across this 
Nation.
  And that is not what we should be telling the brave law-abiding 
members of our communities who are fighting back against the crack 
dealers.
  Accordingly, the first bill I am introducing simply says: This shall 
not happen. It blocks these guideline changes, changes that otherwise 
would automatically become effective on November 1.
  The principal reason the Sentencing Commission gave for lowering 
sentences for crack dealing was fairness. The Commission was concerned 
that a powder cocaine dealer has to distribute 100 times more powder 
cocaine than a crack dealer to receive the same sentence as the crack 
dealer.
  The Commission believes that this disparity creates a perception of 
unfairness because a substantial majority of convicted crack dealers 
are African-Americans, whereas a majority of convicted powder dealers 
are not. It further believes that the solution to this 

[[Page S 13739]]

perception is to drastically lower crack sentences.
  I believe the Commission is wrong on two scores. First, the 
Commission itself has given several strong reasons why it is entirely 
legitimate for our laws to punish crack distribution more severely than 
distribution of powder cocaine, and there are some reasons even beyond 
those the Commission gave.
  Second, there is some basis for believing that the differential in 
the sentences may be too great. But the answer is not to lower the 
crack sentences. The answer is to toughen the powder sentences. That is 
what I am proposing in the second bill I am introducing today.
  As to the first point: The Commission itself, in a report issued just 
this February, recognized that there is a strong foundation for 
Congress' original decision to punish distributors of crack more 
severely than distributors of powder cocaine.
  That is a judgment every U.S. Court of Appeals that has considered 
the question has shared. As the Commission explained, crack is more 
addictive, provides a more intense high, is easier to use, does greater 
harm, and is associated with greater violence than simple powder.
  Though powder cocaine and crack contain the same active ingredient, 
the cocaine alkaloid, crack is far more attractive and addictive. This 
is primarily because crack is easily smoked while powder is injected or 
snorted.
  Smoking is one of the quickest methods of maximizing the drugs 
effects. The quicker the cocaine reaches the brain, the greater the 
effect, the shorter the effects duration and the greater the likelihood 
cocaine use will lead to dependence and abuse.
  Furthermore, somebody who has never used drugs before is much more 
likely to try a drug by smoking it than by injecting it. It is 
unpleasant and requires some expertise to inject oneself with a foreign 
substance. Smoking seems casual and easy. Therefore it is no surprise 
that three times more people smoke cocaine than inject it.
  Crack is also associated with systemic violence to a greater degree 
than powder cocaine. Use and distribution of crack are also associated 
more generally with enhanced criminal activity of all types.
  Crack is also more dangerous in other ways. It produces more medical 
emergencies than snorting powder or injecting cocaine. And it is sold 
in small quantities at affordable, even cheap, prices--making it easier 
for small kids to get and use.
  In short, crack is a very dangerous drug. The response it calls for 
is surely not to lower penalties for the people who distribute it to 
one-half to one-sixth their present length.
  The second reason the Sentencing Commission's reasoning is unsound is 
that differential treatment of crack and powder cocaine is far from 
unique in drug sentencing. To the contrary, in other instances as well 
we treat source and derivative drugs differently in terms of the 
quantities an individual must distribute to trigger the same sentence.
  For example, a distributor of a given amount of heroin--a derivative 
of opium just as crack is a derivative of powder cocaine--gets the same 
sentence as somebody who has distributed 20 times that amount of opium. 
Similarly, a distributor of smokeable methamphetamine, or ice, gets the 
same sentence as somebody who has distributed ten times that amount of 
regular methamphetamine.
  Third, the Commission's proposed changes are incompatible with the 
statutory mandatory minimum sentences that Congress has established for 
distribution of crack cocaine.
  Congress set the trigger amounts based on its view of the seriousness 
of the crack epidemic and the key role played by retail distributors. 
Congress deliberately decided that Federal enforcement should focus on 
both traffickers in high places in the processing or distribution chain 
and the managers of retail level traffic. Congress thought both were 
serious traffickers because they keep the street markets going.
  The Commission recognized when it forwarded its amendments to the 
Congress that they are inconsistent with present law. Rather than 
adjusting its guidelines to conform with congressional directives, 
however, as has always previously been its practice, the Commission has 
instead elected to change the guidelines and ask Congress that it 
adjust the laws to accommodate the Commission's views.
  Finally, and most importantly, the Commission's solution to this 
unfairness is in fact quite unfair to the law abiding citizens 
everywhere trying to fight back against crack dealers. And many of 
these antidrug activists themselves are African-Americans.
  The Commission's proposals are not fair to the children in schools 
wracked by drug-induced violence. They are not fair to those children's 
parents, who want the Government to use every tool it can to protect 
their kids. And they are not fair to the vast majority of people living 
in communities, like Detroit, trying as hard as they can to defend 
their neighborhoods against unceasing attacks by crack dealers. The 
last thing most of these people want is for the Federal Government to 
relax its efforts in combatting the scourge of crack.
  That is not to say that I have no sympathy with the Sentencing 
Commission's concern that the higher crack sentences create a 
perception of unfairness. I am particularly troubled because present 
law has resulted, at least occasionally, in insufficiently severe 
punishment of kingpins at the top of crack distribution chains when 
compared with punishments meted out to retail dealers.
  The problem is that some of these kingpins take the precaution of 
distributing their product in powder rather than in crack form. Because 
of where the powder triggers are set, some of these individuals have 
received considerably less than the mandatory 5 year penalty even while 
the retail distributors, who are distributing the final product, are 
receiving at least 5 year sentences.
  As I said before, though, in my view, however, the answer to these 
problems is not to lower the crack sentences. Instead we should toughen 
the powder sentences.
  That is why the second bill I am introducing proposes to raise 
sentences for powder distribution by making the triggers for mandatory 
minimums 100 grams for 5 years and 1,000 grams for 10 years, rather 
than 500 and 5,000 as they are now. That would also mean that the 
quantity ratio for powder and crack would be 20 to 1, the same as the 
one between opium and its very dangerous and addictive derivative 
heroin.
  I am pleased that I have been joined in the effort to block the crack 
guideline changes by a number of distinguished colleagues, including my 
good friend the chairman of the Judiciary Committee Senator Hatch, the 
former chairman of that committee, Senator Thurmond, and Senators 
Grassley, Kyl, Feinstein, and Shelby.
  The Department of Justice likewise opposes the Sentencing 
Commission's proposals and has asked Congress to block them.
  It is my firm expectation that the Congress will act promptly on this 
measure to prevent these changes from taking effect on November 1.
  I also will ask the Congress to take up in short order my proposal to 
toughen the sentences for powder dealers. I look forward to working 
with my colleagues in promoting tough, fair sentences for all drug 
dealers.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


                                                                    ____
  Detroit Branch--National Association for the Advancement of Colored 
                                People,

                                      Detroit, MI, August 8, 1995.

                Detroit Branch--NAACP Official Statement

       Detroit, MI.--The current issue of the sentencing policy 
     regarding ``crack'' and powdered cocaine is one that grips at 
     the very heart and soul of our society. The jails are filled 
     with young people, particularly young African American and 
     Hispanic males and females, for the selling of these drugs.
       The Detroit Branch of the NAACP, which is the largest 
     branch in the nation with over 51,000 members, has 
     articulated a very specific concern in the gross inequities 
     in the sentencing policies for the sale of ``crack'' cocaine 
     as compared to the sale of powdered cocaine. Drugs are in 
     fact destroying the very spirit of our communities and are 
     usurping the energy and vitality of our youth. It has been 
     our very specific hope that legislation would be implemented 
     to equalize the penalties for identical quantities of 
     powdered cocaine and ``crack.'' 

[[Page S 13740]]
     Please note for the record that we do not condone, support, encourage 
     or sympathize with any of those who would sell this death and 
     destruction to our community. We believe that this is the 
     scourge of our nation. Yet, at the same time we recognize 
     that young African American and Hispanic individuals do not 
     fly, ship or transport these drugs into the streets of 
     Detroit, Chicago, Washington, D.C. or Los Angeles.
       We are very pleased to note the effort to address with a 
     more systematic commitment to equity, punishment that fits 
     the crime. We believe that reducing from 500 grams to 100 
     grams, the level of powdered cocaine determined in an illegal 
     sale of this drug does begin the process of a more equitable 
     application of crime and punishment. It is our belief that 
     both ``crack'' and powdered cocaine have a detrimental impact 
     on our community. Yet, we do not believe that the current 
     laws governing the illegal sale of ``crack'' cocaine versus 
     powdered cocaine and the subsequent sentencing for such 
     infractions are by any means fair and appropriate.
       Therefore, it is our position that the Senate Judiciary 
     Committee has a key opportunity to bridge the gap between 
     these inequities and to make more appropriate the type of 
     sentencing resulting from the sale of powdered cocaine. You 
     must know that the overwhelming sentiment within the African 
     American and Hispanic communities is that our young people 
     are being targeted, exploited and directed toward the jail 
     industrial complex. This is being done in numbers much 
     greater than those who sale more than they, profit more than 
     they and more often than not, are privileged more than they.
       We hope that both the Senate and the House will look 
     favorably on the recommendation to lower the level of powered 
     cocaine to maintain a mandatory, minimum, five-year sentence 
     for those guilty of the sale of this illegal drug.
                                             Rev. Wendell Anthony.
                                 ______

      By Mr. ROCKEFELLER:
  S. 1255. A bill to amend title XVIII of the Social Security Act to 
provide for Medicare contracting reforms, and for other purposes; to 
the Committee on Finance.


                 medicare contractor reform act of 1995

 Mr. ROCKEFELLER. Mr. President, I am pleased to introduce a bill to 
reform the way Medicare administers its health benefits. Under current 
law, Medicare is not allowed sufficient flexibility to award contracts 
to administer Medicare benefits based on performance, skill and 
expertise, or competition. This bill is long overdue and follows up on 
an oversight hearing I held as chairman of the Medicare subcommittee a 
few years ago.
  When Medicare was enacted 30 years ago, private health insurance 
companies were awarded the task of administering the program. GAO 
recently testified before the Finance Committee that when Medicare was 
enacted ``legislation essentially delegated many day-to-day 
administrative decisions to private insurers, to further lessen the 
risk of undue Federal interference and to better ensure that Medicare 
would treat its beneficiaries no differently than the private 
insured.'' Under my legislation, important administrative functions 
would still be performed by private sector companies but the pool of 
eligible companies would be broadened. Medicare would also have the 
opportunity to take advantage of private sector initiatives to improve 
customer service, lower administrative costs, and improve operational 
efficiency.
  Mr. President, there is bipartisan recognition that funding for 
Medicare's administrative operations is currently inadequate. Funding 
for contractors has actually declined over the last several years. When 
adjusted for inflation, Medicare's contractor budget actually declined 
by 37 percent over the last 6 years. The Finance Committee, on which I 
serve, has heard testimony from the General Accounting Office, the HHS 
Office of Inspector General, and others in support of higher spending 
for Medicare administrative services. Increased spending on payment 
safeguard activities can actually save the Medicare Program money. 
According to the GAO, every dollar spent on Medicare safeguard 
activities returns at least $11 to the Medicare Program.
  But, Mr. President, before we spend additional money on program 
administration we need to make sure that the Health Care Financing 
Administration [HCFA] has the ability to spend its contractor funds 
wisely and to enter into contracts with the most efficient entities.
  The legislation I am introducing today replaces outdated Medicare law 
and gives HCFA the tools to take full advantage of innovations and 
efficiencies in the private sector when it comes to utilization review, 
detecting fraud and abuse, and processing claims. No longer would all 
Medicare contractors be required to perform all Medicare administrative 
activities. This legislation would permit the Secretary of HHS to 
selectively contract with any agency or organization that is capable of 
carrying out specific administrative functions, such as fraud and abuse 
detection, customer service, or utilization review.

  Under current law, Medicare is restricted to contracting with health 
insurance companies. In the private sector, many large employers 
selectively contract with companies that specialize in, and have 
expertise in, utilization review or in adjudicating claims. The 
Medicare Program should not be prohibited from making similar 
competitive decisions. This flexibility will not only increase 
competition but it will enhance contractor performance by allowing 
Medicare to contract with entities who excel in a specific function.
  Under current law, Medicare is forced to pay the costs of terminating 
a Medicare administrative contract even if the contract is terminated 
for cause, including poor performance, outright fraud, or even if the 
contract merely expires. Medicare is the only Federal program required 
to pay for these extraordinary termination costs. This is inconsistent 
with the Federal contracting authority and should be changed 
immediately.
  Mr. President, my legislation would change current law that 
automatically renews Medicare's administrative contracts every year. 
More important, the decision on the awarding administrative contracts 
for part A would be given to HCFA while preserving a provider's right 
to choose its own fiscal intermediary. Because most hospitals have 
nominated the national Blue Cross-Blue Shield Association as their 
fiscal intermediary, when a State Blue Cross-Blue Shield plan leaves 
the Medicare Program the national Blue Cross-Blue Shield Association 
chooses which State Blue Cross-Blue Shield plan becomes the fiscal 
intermediary for the hospitals in that State. Under my legislation, new 
contractors would be awarded contracts using the same competitive 
requirements that apply throughout the Federal Government.
  Hospital and nursing homes would still be able to choose their fiscal 
intermediary every 5 years from a list of at least 3 approved 
contractors. This freedom of choice keeps pressure on contractors to 
continuously improve customer service to beneficiaries and health care 
providers.
  HCFA would also be allowed to monitor and respond to instances when a 
health insurance company is processing claims or auditing costs reports 
of health care providers that it owns. As the distinction between 
providers and insurers becomes blurred, a serious conflict of interest 
could emerge in these types of situations and HCFA must have the 
ability to safeguard the Medicare Trust Fund from these types of 
conflicts of interest.
  Just as Medicare has reformed its payments to doctors and hospitals 
over the past decade, and is considering changes to the way it pays 
health maintenance organizations, it is time to consider alternative 
ways to pay contractors. Current Medicare law that requires cost-based 
reimbursement is inconsistent with payment performance incentives and 
competitive bidding.
  Mr. President, I believe my legislation updates current Medicare law 
and is long overdue. This bill would equip the Health Care Financing 
Administration with the tools to move the Medicare Program into the 
next century. I ask unanimous consent that a copy of the legislative 
proposal be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1255

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

     SECTION 1. SHORT TITLE AND REFERENCES IN ACT.

       (a) Short Title.--This Act may he cited as the ``Medicare 
     Contractor Reform Act of 1995''.
       (b) References in Act.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference 

[[Page S 13741]]
     shall be considered to be made a section or other provision of the 
     Social Security Act.

     SEC. 2. INCREASED FLEXIBILITY IN CONTRACTING FOR MEDICARE 
                   CLAIMS PROCESSING.

       (a) Carriers To Include Entities That Are Not Insurance 
     Companies.--
       (1) Section 1842(a) (42 U.S.C. 1395u(a)) is amended in the 
     matter preceding paragraph (1) by striking ``with carriers'' 
     and inserting ``with agencies and organizations (hereafter in 
     this section referred to as `carriers')''.
       (2) Section 1842(f) (42 U.S.C. 1395u(f)) is repealed.
       (b) Choice of Fiscal Intermediaries by Providers of 
     Services; Secretarial Flexibility in Assigning Functions to 
     Intermediaries and Carriers.--
       (1) Section 1816(a) (42 U.S.C. 1395h(a)) to read as 
     follows:
       ``(a)(1) The Secretary may enter into contracts with 
     agencies or organizations to perform any or all of the 
     following functions, or parts of those functions (or, to the 
     extent provided in a contract, to secure performance thereof 
     by other organizations):
       ``(A) Determination (subject to the provisions of section 
     1878 and to such review by the Secretary as may be provided 
     for by the contracts) the amount of the payments required 
     pursuant to this part to be made to providers of services.
       ``(B) Making payments described in subparagraph (A).
       ``(C) Provision of consultative services to institutions or 
     agencies to enable them to establish and maintain fiscal 
     records necessary for purposes of this part and otherwise to 
     qualify as providers of services.
       ``(D) Serving as a center for, and communicate to 
     individuals entitled to benefits under this part and to 
     providers of services, any information or instructions 
     furnished to the agency or organization by the Secretary, and 
     serve as a channel of communication from individuals entitled 
     to benefits under this part and from providers of services to 
     the Secretary.
       ``(E) Making such audits of the records of providers of 
     services as may be necessary to ensure that proper payments 
     are made under this part.
       ``(F) Performance of the functions described under 
     subsection (d).
       ``(G) Performance of such other functions as are necessary 
     to carry out the purposes of this part.
       ``(2) As used in this title and title XI, the term `fiscal 
     intermediary' means an agency or organization with a contract 
     under this section.''.
       (2) Subsections (d) and (e) of section 1816 (42 U.S.C. 
     1395h) are amended to read as follows:
       ``(d) Each provider of services shall have a fiscal 
     intermediary that--
       ``(1) acts as a single point of contact for the provider of 
     services under this part,
       ``(2) makes its services sufficiently available to meet the 
     needs of the provider of services, and
       ``(3) is responsible and accountable for arranging the 
     resolution of issues raised under this part by the provider 
     of services.
       ``(e)(1)(A) The Secretary shall, at least every 5 years, 
     permit each provider of services (other than a home health 
     agency or a hospice program) to choose an agency or 
     organization (from at least 3 proposed by the Secretary, of 
     which at least 1 shall have an office in the geographic area 
     of the provider of services, except as provided by 
     subparagraph (B)(ii)(II)) as the fiscal intermediary under 
     subsection (d) for that provider of services. If a contract 
     with that fiscal intermediary is discontinued, the Secretary 
     shall permit the provider of services to choose under the 
     same conditions from 3 other agencies or organizations.
       ``(B)(i) The Secretary, in carrying out subparagraph (A), 
     shall permit a group of hospitals (or a group of another 
     class of providers other than home health agencies or hospice 
     programs) under common ownership by, or control of, a 
     particular entity to choose one agency or organization (from 
     at least 3 proposed by the Secretary) as the fiscal 
     intermediary under subsection (d) for all the providers in 
     that group if the conditions specified in clause (ii) are 
     met.
       ``(ii) The conditions specified in this clause are that--
       ``(I) the group includes all the providers of services of 
     that class that are under common ownership by, or control of, 
     that particular entity, and
       ``(II) all the providers of services in that group agree 
     that none of the agencies or organizations proposed by the 
     Secretary is required to have an office in any particular 
     geographic area.
       ``(2) The Secretary, in evaluating the performance of a 
     fiscal intermediary, shall solicit comments from providers of 
     services.''.
       (3)(A) Section 1816(b)(1)(A) (42 U.S.C. 1395h(b)(1)(A)) is 
     amended by striking ``after applying the standards, criteria, 
     and procedures'' and inserting ``after evaluating the ability 
     of the agency or organization to fulfill the contract 
     performance requirements''.
       (B) The first sentence of section 1816(f)(1) (42 U.S.C. 
     1395h(f)(1)) is amended--
       (i) by striking ``develop standards, criteria, and 
     procedures'' and inserting ``, after public notice and 
     opportunity for comment, develop contract performance 
     requirements'', and
       (ii) by striking ``, and the Secretary shall establish 
     standards and criteria with respect to the efficient and 
     effective administration of this part''.
       (C) The second sentence of section 1842(b)(2)(A) (42 U.S.C. 
     1395u(b)(2)(A)) is amended to read as follows: ``The 
     Secretary shall, after public notice and opportunity for 
     comment, develop contract performance requirements for the 
     efficient and effective performance of contract obligations 
     under this section.''.
       (D) Section 1842(b)(2)(A) (42 U.S.C. 1395u(b)(2)(A)) is 
     amended by striking the third sentence.
       (E) Section 1842(b)(2)(B) (42 U.S.C. 1395u(b)(2)(B)) is 
     amended in the matter preceding clause (i) by striking 
     ``establish standards'' and inserting ``develop contract 
     performance requirements''.
       (F) Section 1842(b)(2)(D) (42 U.S.C. 1395u(b)(2)(D)) is 
     amended by striking ``standards and criteria'' each place it 
     appears and inserting ``contract performance requirements''.
       (4)(A) Section 1816(b) (42 U.S.C. 1395h(b)) is amended in 
     the matter preceding paragraph (1) by striking ``an 
     agreement'' and inserting ``a contract''.
       (B) Paragraphs (1)(B) and (2)(A) of section 1816(b) (42 
     U.S.C. 1395h(b)) are each amended by striking ``agreement'' 
     and inserting ``contract''.
       (C) The first sentence of section 1816(c)(1) (42 U.S.C. 
     1395h(c)(1)) is amended by striking ``An agreement'' and 
     inserting ``A contract''.
       (D) The last sentence of section 1816(c)(1) (42 U.S.C. 
     1395h(c)(1)) is amended by striking ``an agreement'' and 
     inserting ``a contract''.
       (E) Section 1816(c)(2)(A) (42 U.S.C. 1395h(c)(2)(A)) is 
     amended in the matter preceding clause (i) by striking 
     ``agreement'' and inserting ``contract''.
       (F) Section 1816(c)(3)(A) (42 U.S.C. 1395h(c)(3)(A)) is 
     amended by striking ``agreement'' and inserting ``contract''.
       (G) The first sentence of section 1816(f)(1) (42 U.S.C. 
     1395h(f)(1)) is amended by striking ``an agreement'' and 
     inserting ``a contract''.
       (H) Section 1816(h) (42 U.S.C. 1395h(h)) is amended--
       (i) by striking ``An agreement'' and inserting ``A 
     contract'', and
       (ii) by striking ``the agreement'' each place it appears 
     and inserting ``the contract''.
       (I) Section 1816(i)(1) (42 U.S.C. 1395h(i)(1)) is amended 
     by striking ``an agreement'' and inserting ``a contract''.
       (J) Section 1816(j) (42 U.S.C. 1395h(j)) is amended by 
     striking ``An agreement'' and inserting ``A contract''.
       (K) Section 1816(k) (42 U.S.C. 1395h(k)) is amended by 
     striking ``An agreement'' and inserting ``A contract''.
       (L) Section 1842(a) (42 U.S.C. 1395u(a)) is amended in the 
     matter preceding paragraph (1) is amended by striking 
     ``agreements'' and inserting ``contracts''.
       (M) Section 1842(h)(3)(A) (42 U.S.C. 1395u(h)(3)(A)) is 
     amended by striking ``an agreement'' and inserting ``a 
     contract''.
       (5) Section 1816(f)(1) (42 U.S.C. 1395h(f)(1)) is amended 
     by striking the second sentence.
       (6)(A) Section 1816(c)(2)(A) (42 U.S.C. 1395h(c)(2)(A)) is 
     amended in the matter preceding clause (i) by inserting 
     ``that provides for making payments under this part'' after 
     ``this section''.
       (B) Section 1816(c)(3)(A) (42 U.S.C. 1395h(c)(3)(A)) is 
     amended by inserting ``that provides for making payments 
     under this part'' after ``this section''.
       (C) Section 1816(k) (42 U.S.C. 1395h(k)) is amended by 
     inserting ``(as appropriate)'' after ``submit''.
       (D) Section 1842(a) (42 U.S.C. 1395u(a)) is amended in the 
     matter preceding paragraph (1) by striking ``some or all of 
     the following functions'' and inserting ``any or all of the 
     following functions, or parts of those functions''.
       (E) The first sentence of section 1842(b)(2)(C) (42 U.S.C. 
     1395u(b)(2)(C)) is amended by inserting ``(as appropriate)'' 
     after ``carriers''.
       (F) Section 1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amended 
     in the matter preceding subparagraph (A) by inserting ``(as 
     appropriate)'' after ``contract''.
       (G) Section 1842(b)(7)(A) (42 U.S.C. 1395u(b)(7)(A)) is 
     amended in the matter preceding clause (i) by striking ``the 
     carrier'' and inserting ``a carrier''.
       (H) Section 1842(b)(11)(A) (42 U.S.C. 1395u(b)(11)(A)) is 
     amended in the matter preceding clause (i) by inserting ``(as 
     appropriate)'' after ``each carrier''.
       (I) Section 1842(h)(2) (42 U.S.C. 1395u(h)(2)) is amended 
     in the first sentence by inserting ``(as appropriate)'' after 
     ``shall''.
       (J) Section 1842(h)(5)(A) (42 U.S.C. 1395u(h)(5)(A)) is 
     amended by inserting ``(as appropriate)'' after ``carriers''.
       (7)(A) Section 1816(c)(2)(C) (42 U.S.C. 1395h(c)(2)(C)) is 
     amended by striking ``hospital, rural primary care hospital, 
     skilled nursing facility, home health agency, hospice 
     program, comprehensive outpatient rehabilitation facility, or 
     rehabilitation agency'' and inserting ``provider of 
     services''.
       (B) Section 1816(j) (42 U.S.C. 1395h(j)) is amended in the 
     matter preceding paragraph (1) by striking ``for home health 
     services, extended care services, or post-hospital extended 
     care services''.
       (8) Section 1842(a)(3) (42 U.S.C. 1395u(a)(3)) is amended 
     by inserting ``(to and from individuals enrolled under this 
     part and to and from physicians and other entities that 
     furnish items and services)'' after ``communication''.
       (c) Elimination of Special Provisions for Terminations of 
     Contracts.--
       (1) Section 1816(b) (42 U.S.C. 1395h(b)) is amended in the 
     matter preceding paragraph (1) is amended by striking ``or 
     renew''.

[[Page S 13742]]

       (2) The last sentence of section 1816(c)(1) (42 U.S.C. 
     1395h(c)(1)) is amended by striking ``or renewing''.
       (3) Section 1816(f)(1) (42 U.S.C. 1395h(f)(1)) is amended--
       (A) by striking ``, renew, or terminate'', and
       (B) by striking ``, whether the Secretary should assign or 
     reassign a provider of services to an agency or 
     organization,''.
       (4) Section 1816(g) (42 U.S.C. 1395h(g)) is repealed.
       (5) The last sentence of section 1842(b)(2)(A) (42 U.S.C. 
     1395u(b)(2)(A)) is amended by striking ``or renewing''.
       (6) Section 1842(b) (42 U.S.C. 1395u(b)) is amended by 
     striking paragraph (5).
       (d) Repeal of Fiscal Intermediary Requirements That Are Not 
     Cost-Effective.--Section 1816(f)(2) (42 U.S.C. 1395h(f)(2)) 
     is amended to read as follows:
       ``(2) The contract performance requirements developed under 
     paragraph (1) shall include, with respect to claims for 
     services furnished under this part by any provider of 
     services other than a hospital, whether such agency or 
     organization is able to process 75 percent of 
     reconsiderations within 60 days and 90 percent of 
     reconsiderations within 90 days.''.
       (e) Repeal of Cost Reimbursement Requirements.--
       (1) The first sentence of section 1816(c)(1) (42 U.S.C. 
     1395h(c)(1)) is amended--
       (A) by striking the comma after ``appropriate'' and 
     inserting ``and'', and
       (B) by striking ``subsection (a)''and all that follows 
     through the period and inserting ``subsection (a).''.
       (2) Section 1816(c)(1) (42 U.S.C. 1395h(c)(1)) is further 
     amended by striking the second and third sentences.
       (3) The first sentence of section 1842(c)(1) (42 U.S.C. 
     1395u(c)(1)) is amended--
       (A) by striking ``shall provide'' the first place it 
     appears and inserting ``may provide'', and
       (B) by striking ``this part'' and all that follows through 
     the period and inserting ``this part.''.
       (4) Section 1842(c)(1) (42 U.S.C. 1395u(c)(1)) is further 
     amended by striking the second and third sentences.
       (5) Section 2326(a) of the Deficit Reduction Act of 1984 is 
     repealed.
       (f) Competition Required for New Contracts and in Cases of 
     Poor Performance.--
       (1) Section 1816(c) (42 U.S.C. 1395h(c)) is amended by 
     adding at the end the following new paragraph:
       ``(4)(A) A contract with a fiscal intermediary under this 
     section may be renewed from term to term without regard to 
     any provision of law requiring competition if the fiscal 
     intermediary has met or exceeded the performance requirements 
     established in the current contract.
       ``(B) Functions may be transferred among fiscal 
     intermediaries without regard to any provision of law 
     requiring competition.''.
       (2) Section 1842(b)(1) (42 U.S.C. 1395u(b)(1)) is amended 
     to read as follows:
       ``(b)(1)(A) A contract with a carrier under subsection (a) 
     may be renewed from term to term without regard to any 
     provision of law requiring competition if the carrier has met 
     or exceeded the performance requirements established in the 
     current contract.
       ``(B) Functions may be transferred among carriers without 
     regard to any provision of law requiring competition.''.
       (g) Waiver of Competitive Requirements for Initial 
     Contracts.--
       (1) Contracts that have periods that begin during the 1-
     year period that begins on the first day of the fourth 
     calendar month that begins after the date of enactment of 
     this Act may be entered into under section 1816(a) of the 
     Social Security Act (42 U.S.C. 1395h(a)) without regard to 
     any provision of law requiring competition.
       (2) The amendments made by subsection (f) apply to 
     contracts that have periods beginning after the end of the 1-
     year period specified in paragraph (1).
       (h) Effective Dates.--
       (1) The amendments made by subsection (c) apply to 
     contracts that have periods ending on, or after, the end of 
     the third calendar month that begins after the date of 
     enactment of this Act.
       (2) The amendments made by subsections (a), (b), (d), and 
     (e) apply to contracts that have periods beginning after the 
     third calendar month that begins after the date of enactment 
     of this Act.
                                 ______

      By Mr. WELLSTONE:
  S. 1257. A bill to amend the Stewart B. McKinney Homeless Assistance 
Act to reauthorize programs relating to homeless assistance for 
veterans; to the Committee on Labor and Human Resources.


 the stewart b. mckinney homeless assistance act amendment act of 1995

  Mr. WELLSTONE. Mr. President, to save a highly cost effective 
and vital program that assists homeless veterans to find employment, I 
am today introducing a bill that would reauthorize the Homeless 
Veterans Employment Program [HVEP]--formerly called the Homeless 
Veterans Reintegration Project--for 3 years.
  As some of you may recall, during the debate on H.R. 1944, the 
rescissions bill, I expressed my dismay and strong opposition to the 
zeroing out of this low-cost national program--funded at just over $5 
million annually--that is so important to homeless veterans. In view of 
the fact that up to one-third of America's homeless are veterans--an 
estimated 271,000 can be found on the streets any given night--and 
Minnesota veterans have often told me about the effectiveness of HVEP, 
I was appalled when I learned that the program had fallen victim to a 
late-night leadership agreement with the administration on the 
rescissions package.
  Since it is such a small program, many of your may be unaware of 
HVEP's background and its impressive accomplishments. HVEP, which is 
administered by the Labor Department's Veterans Employment and Training 
Service, is a job-placement program begun in fiscal year 1989. HVEP 
provides grants to community based groups that employ flexible and 
innovative approaches to assist homeless, unemployed veterans to 
reenter the work force. Let me repeat--grants to community-based 
groups, not funding to some large impersonal Federal bureaucracy that 
some of my colleagues regularly deride.
  Permit me to briefly point out some of HVEP's strengths and 
accomplishments: It is one of the most successful job placement 
programs in the Federal Government. Since its inception it has placed 
11,000 veterans into jobs at approximately $1,000 per placement. HVEP 
grantees build complimentary relationships with VA, Job Training 
Partnership Act, and other programs--they do not duplicate any other 
services. HVEP is critical to the implementation and success of the 
innovative standdown projects that are held across the country.
  I have had the good fortune of attending several Minnesota 
standdowns, including one recently, and I have been consistently 
impressed with the effectiveness of this volunteer program of veterans 
helping homeless veterans. I've been deeply moved by the sight of 
veterans doing all they can to help their less fortunate buddies--
veterans exerting themselves to care for homeless veterans whom the 
rest of society tends to ignore and, sometimes even scorn. Standdowns 
are a unique point of light that need to be nourished, not strangled. 
And the same is true for the HVEP itself.

  In conclusion, I want to stress that the $5 million saved annually by 
terminating HVEP will quickly be offset by the enormous costs of 
providing public assistance to the veterans who will remain homeless 
due to the lack of a paying job. Reauthorization of HVEP will permit us 
to meet our obligation to men and women who fought bravely and 
unquestioningly for our country, but who are desperately seeking work 
to escape the misery and indignities of homelessness.
  Mr. President, I ask 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. 1257

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

     SECTION 1. JOB PLACEMENT FOR HOMELESS VETERANS.

       (a) Homeless Veteran Employment Program.--Section 738(e)(1) 
     of the Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 
     11448(e)(1)) is amended by striking out subparagraphs (A), 
     (B), and (C) and inserting in lieu thereof the following new 
     subparagraphs:
       ``(A) $10,000,000 for fiscal year 1996.
       ``(B) $10,000,000 for fiscal year 1997.
       ``(C) $10,000,000 for fiscal year 1998.
       (b) General Authorization of Appropriations.--Section 
     739(a) of such Act (42 U.S.C. 11449(a)) is amended by 
     striking out ``fiscal years 1994 and 1995'' and inserting in 
     lieu thereof ``fiscal years 1996, 1997, and 1998''.
       (c) Extension of Program.--Section 741 of such Act (42 
     U.S.C. 11450) is amended by striking out ``October 1, 1995'' 
     and inserting in lieu thereof ``October 1, 1998''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 1995.
                                 ______

      By Mr. KYL:
  S. 1258. A bill to amend the Internal Revenue Code of 1986 to allow a 
one-time election of the interest rate to be used to determine present 
value for purposes of pension cash-out restrictions, and for other 
purposes; to the Committee on Finance.


         uruguay round agreements act modification legislation

 Mr. KYL. Mr. President, I introduce legislation to make two 
modifications 

[[Page S 13743]]
to the pension-related provisions of the 1994 Uruguay Round Agreements 
Act.
  Mr. President, one of the greatest challenges facing Americans today 
is to save and invest for retirement. It is a challenge that is made 
difficult by all of the important matters that compete for a share of 
the American family's limited income day in and day out. Parents 
routinely ask themselves, for example, if they can afford to make a 
contribution to an individual retirement account when they still need 
to save for their child's college education.
  Sometimes, the choices people face are even more stark: Whether to 
set aside money for retirement, repair the family car so a mother or 
father can get to work, or just put food on the table or clothes on the 
kids' backs.
  Employers, too, must make similar choices. To attract and retain 
qualified employees, they want to be able to offer good pension 
benefits. But, they have to decide whether they can put more money into 
a pension plan for their employees when the business needs new 
equipment just to stay competitive.
  It's easy to relegate retirement to second place behind any of these 
other pressing needs--especially when retirement is 5, 10, 20, or 30 
years away. But, adequate planning for retirement is no less important 
or urgent. When the time comes, we will all need to draw upon the 
resources we have been able to set aside during our working years.

  Because there are so many competing demands placed on people's 
incomes--because it is so difficult to save for retirement even under 
the best of circumstances--the Federal Government should be sure to do 
what it can to encourage people to save and invest for their retirement 
years.
  One thing Congress could do in that regard is provide new incentives 
to save. The new chairman of the Finance Committee, Senator Bill Roth, 
has a plan to enhance and overhaul the Individual Retirement Account 
[IRA]. I am pleased to have cosponsored that proposal, S. 12, with him.
  Another thing we could do is simplify current law to make it easier 
for people and their employers to participate in retirement plans. 
Senator Pryor has an excellent proposal, S. 1006, the Pension 
Simplification Act, that I hope the Finance Committee will also 
consider when it acts on reconciliation in the near future.
  The bill that I am introducing today takes two additional steps in 
the direction of pension simplification, correcting two problems that 
were created by the Uruguay Round Agreements Act, last year's GATT 
bill.
  The first change in my bill relates to the interest rate used to 
calculate lump sum distributions from defined benefit pension plans. 
The GATT bill required use of the interest rate on 30-year Treasury 
securities, a rate that is proving too volatile for many retirement 
plans, particularly small plans. As Bruce Tempkin, an actuary and small 
business pension specialist at Louis Kravitz & Associates, put it 
recently, ``it is similar to taking out a varible-rate mortgage with no 
cap.'' You could find yourself getting ready to retire and expecting a 
lump sum distribution of a given amount, but being told that you will 
actually get a third less because the interest rate just changed.
  My bill would give plans a one-time option to choose a fixed interest 
rate between 5 and 8 percent instead of the floating 30-year Treasury 
rate. That will make it easier for employers to plan for the required 
contributions, and for employers and employees alike to understand what 
their lump sum benefits will ultimately be.
  The second change included in my bill would correct an anomaly that 
was created under section 415(b)(2)(E) of the code. As a result of the 
change made in last year's GATT bill, lump-sum distributions are 
calculated differently from--and thereby bear no relationship to--the 
actuarial equivalent of a monthly life annuity for early retirees. It 
is a result that, from all indications was unintended. My bill includes 
a technical correction to ensure that the two options--the monthly life 
annuity and the lump sum distribution--are indeed actuarially 
equivalent for early retirees.
  Mr. President, I invite my colleagues to join me as a cosponsor of 
this important initiative. I also 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. 1258

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

     SECTION 1. INTEREST RATE FOR DETERMINATION OF PRESENT VALUE 
                   FOR PURPOSES OF PENSION CASH-OUT RESTRICTIONS.

       (a) In General.--Subclause (II) of section 417(e)(3)(A)(ii) 
     of the Internal Revenue Code of 1986 (relating to 
     determination of present value) is amended by inserting ``, 
     or, at the irrevocable election of the plan, an annual 
     interest rate specified in the plan, which may not be less 
     than 5 percent nor more than 8 percent'' after ``prescribe''.
       (b) Conforming Amendment.--Subclause (II) of section 
     205(g)(3)(A)(ii) of the Employee Retirement Income Security 
     Act of 1974 (29 U.S.C. 1055(g)(3)(A)(ii)) is amended by 
     inserting ``, or, at the irrevocable election of the plan, an 
     annual interest rate specified in the plan, which may not be 
     less than 5 percent nor more than 8 percent'' after 
     ``prescribe''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of the 
     amendments made by section 767 of the Uruguay Round 
     Agreements Act.

     SEC. 2. MODIFICATION OF CERTAIN ASSUMPTIONS FOR ADJUSTING 
                   BENEFITS OF DEFINED BENEFIT PLANS FOR EARLY 
                   RETIREES.

       (a) In General.--Subparagraph (E) of section 415(b)(2) of 
     the Internal Revenue Code of 1968 (relating to limitation on 
     certain assumptions) is amended--
       (1) by striking ``Except as provided in clause (ii), for 
     purposes of adjusting any benefit or limitation under 
     subparagraph (B) or (C),'' in clause (i) and inserting ``For 
     purposes of adjusting any limitation under subparagraph (C) 
     and, except as provided in clause (ii), for purposes of 
     adjusting any benefit under subparagraph (B),'', and
       (2) by striking ``For purposes of adjusting the benefit or 
     limitation of any form of benefit subject to section 
     417(e)(3),'' in clause (ii) and inserting ``For purposes of 
     adjusting any benefit under subparagraph (B) for any form of 
     benefit subject to section 417(e)(3),''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of the 
     amendments made by section 767 of the Uruguay Round 
     Agreements Act.

                          ____________________