Congressional Record, Volume 142 Issue 10 (Thursday, January 25, 1996)

[Congressional Record Volume 142, Number 10 (Thursday, January 25, 1996)]
[Senate]
[Pages S377-S389]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. COHEN:
S. 1525. A bill to amend title 18 of the United States to prevent
economic espionage and to provide for the protection of United States
proprietary economic information in interstate and foreign commerce,
and for other purposes; to the Committee on the Judiciary.

the economic espionage and protection of proprietary economic
information act of 1995

Mr. COHEN. Mr. President, when France, Germany, Japan, and South
Korea are included in a list of nations, we automatically assume that
this must be a list of America's allies--our military and political
partners since the end of the Second World War. Unfortunately, this is
not only a list of America's trustworthy friends, it is also a list of
governments that have systematically practiced economic espionage
against American companies in the past--and continue to do so to this
day.
The term ``espionage'' evokes images of the cloak-and-dagger side of
the United States-Soviet confrontation in the cold war. Since the end
of the East-West struggle, however, an equally damaging and pervasive
form of spying has received increasing attention--the spying that
nations undertake against foreign-owned corporations in order to give
their own firms an advantage in the increasingly cut-throat world of
international business.
Unlike the politico-military espionage of the cold war, economic
espionage pits friendly nations against each other. Instead of military
strategy and weapon technologies, the sought-after secrets in economic
espionage are marketing strategies and production technologies. While
the cost of politico-military espionage was reduced military security,
and damage from economic espionage comes in the form of billions of
dollars annually in lost international contracts, pirated products and
stolen corporate proprietary information. The direct cost of this
espionage is borne by America's international corporations. The
indirect costs are borne by the American economy as a whole--jobs and
profits are lost; the competitive edge is stolen away.
The 103d Congress adopted an amendment I sponsored requiring the
President to submit an annual report on foreign industrial espionage
targeted against U.S. industry.
The unclassified version of the President's first annual report,
which is very understated compared to the classified version,
acknowledged ``the post-cold-war reality that economic and
technological information are as much a target of foreign intelligence
collection as military and political information.'' The report goes on
to state:

In today's world in which a country's power and stature are
often measured by its economic/industrial capability, foreign
government ministries--such as those dealing with finance and
trade--and major industrial sectors are increasingly look
upon to play a more prominent role in their respective
country's (economic) collection efforts. While a military
rival steals documents for a state-of-the-art weapon or
defense system, an economic competitor steals a U.S.
companies proprietary business information or government
trade strategies. Just as a foreign country's defense
establishment is the main recipient of US defense-related
information, foreign companies and commercially oriented
government ministries are the main beneficiaries of US
economic information. That aggregate losses that can mount as
a result of such efforts can reach billions of dollars per
year, constituting a serious national security concern.

According to Joseph Recci of the American Society for Industrial
Security, ``American corporations are losing billions of dollars each
year in valuable technology and proprietary information to foreign
espionage.'' In a recent survey of Fortune 500 companies, the society
notes that the number of corporations reporting that they have been
victims of economic espionage has grown by 260 percent since 1985.
Peter Schweizer, in his 1994 study of state-sponsored economic
espionage, ``Friendly Spies,'' estimated that such espionage costs
American business upwards of $100 billion annually.
This alarming trend in foreign corporate and state-sponsored economic
espionage will continue in coming years. Intelligence agencies in
industrialized nations have found themselves with a lot of time on
their hands since the end of the cold war, and the governments of these
nations have come to see economic competition as the new central threat
to their national security. In testimony before the Senate Select
Intelligence Committee earlier this year, then acting Director of
Central Intelligence Adm. William Studeman predicted, ``the threat to
U.S. economic interests will absolutely increase as foreign governments
attempt to ensure the success of their companies.''
A few examples of actual cases should illustrate how pervasive the
problem has become:
Pierre Marion, the former head of the French intelligence agency, the
DGSE, has admitted that up to 15 hotel rooms of foreign business
executives are broken into in Paris every day by DGSE agents.
Proprietary papers are copied, and this information is then passed on
to French companies to give them an edge in competition and
negotiation.

Japanese, Korean, and German intelligence agents and corporations
have

[[Page S378]]
been known to recruit as spies midlevel managers and scientists at
American high-technology corporations. In exchange for money, these
Americans have provided the foreign agents with valuable trade secrets
and formulas, destroying American companies' market leadership.
The foreign offices of American corporations are often subjected to
wiretaps on their phones and infiltration of their foreign national
staff by agents of the host country's intelligence service. American
competitiveness, profits, and jobs are the cost.
I refer my colleagues to a statement I made on March 10, 1994--140 S
2731-38--for further examples of the foreign corporate and state-
sponsored economic espionage that American firms face.
The United States has taken some steps to counter this pervasive
problem, but action has been neither strong enough nor smart enough to
make a real dent in foreign corporate and state-sponsored economic
espionage in the United States and against Americans abroad. Admiral
Studeman testified in January, ``the private sector's concerns about
increasing signs of `economic espionage' * * * are well founded.
Despite the continuing necessity to protect sensitive sources and
methods, more can and must be done against state-sponsored economic
espionage.'' As the President's report delicately puts it: ``efforts
across the government to investigate and counter economic and
industrial intelligence collection activities were fragmented and
uncoordinated * * * resulting in many partially informed decisions and
diverging collection and analytical efforts.'' U.S. efforts, in plain
English, are chaotic and largely ineffective, which is why I wrote last
year's legislation requiring the President to report not only on the
threat but also on how the Federal Government is organized to counter
the threat and what changes in Federal organization and law could
improve that effort.
In the closing days of the Bush administration, the Justice
Department confirmed to me that legislation was required to improve law
enforcement officials' ability to investigate and prosecute foreign
industrial espionage. But it was not until this past year that Federal
officials, after consulting with industry representatives, were able to
identify for me specific legislative changes to accomplish this
objective, and we have spent several months refining bill language.
I rise today, Mr. President, to offer the product of these efforts,
the Economic Espionage and Protection of Proprietary Economic
Information Act of 1995.
The act is designed to counter this threat by creating a criminal
offense for engaging in foreign corporate or state-sponsored economic
espionage. The bill also clarifies existing provisions of criminal
statutes relating to stolen property and racketeering to make clear
that they apply to foreign corporate and state-sponsored economic
espionage. Finally, the bill punishes individuals and/or corporations
found guilty of practicing foreign-sponsored economic espionage by
fining them and banning them from import-export activity in the United
States for 5 years following their conviction.
This bill has been carefully crafted in coordination with Federal law
enforcement authorities and industry representatives. In establishing
this criminal offense, the bill provides for those officials ordering
the espionage to be held liable, as well as those who commit the act.
It provides for forfeiture of any proceeds of and assets used in such
espionage in accordance with the provisions of the Comprehensive Drug
Abuse Prevention and Control Act of 1970. These provisions would apply
to espionage committed outside the United States if committed by a U.S.
citizen or if committed against an American and resulting in an affect
in the United States. Finally, the bill would allow a court to take
appropriate measures to ensure that protection of proprietary
information during the prosecution of economic espionage cases.
Mr. President, it is imperative that the United States send a clear
message to individuals and foreign governments and corporations--both
our friends and our foes--that this country does not accept
international corporate and state-sponsored economic espionage as a
legitimate business practice. We must demonstrate our resolve to combat
this unfair economic practice, regardless of who engages in it.
The free market system has been the source of America's prosperity
and her world economic might. I ask you all to join me in supporting
this legislation to fight a practice which is polluting the
international free market and robbing our Nation's firms and workers of
the success that their technological innovation and marketing know-how
has earned them.
In a report entitled ``Economic Espionage: a Threat to U.S.
Industry,'' the GAO stated the situation clearly: ``The loss of
proprietary information and technology through espionage activity will
have broadening detrimental consequences to both U.S. economic
viability and our national security interests.''
I urge my colleagues to support the Economic Espionage Act to send a
message to nations around the world that America will not tolerate
unjust practices in international trade and the subverting of American
firms' ability to compete fairly in the world marketplace.
______

By Mr. JOHNSTON:
S. 1526. A bill to provide for retail competition among electric
energy suppliers, to provide for recovery of standard costs
attributable to an open access electricity market, and for other
purposes; to the Committee on Energy and Natural Resources.

THE ELECTRICITY COMPETITION ACT OF 1996

Mr. JOHNSTON. Mr. President, I am pleased today to introduce the
Electricity Competition Act of 1996. This bill is intended to establish
a framework for the transition of the electric industry from a
regulated industry to a competitive, and deregulated, industry. Where
markets are competitive, society should be saved the costs of unneeded
regulation. America's electric system is the most technologically
advanced and operationally safe electric system in the world. There is
no doubt today that electric service can be supplied to all consumers--
even retail consumers--in a fully competitive market.
Our goal then, should be to ensure that electricity markets will
become competitive so that regulation will be unnecessary. Our goal
must be to ensure price competition for electricity, which will create
savings, efficiencies, and innovation.
This is not pie-in-the-sky economic theory. This bill will mean real
savings for real people. For American families in the lowest 20-percent
income bracket, a household's total utility bills are about equal to
the total of mortgage/rent payments, taxes, and maintenance costs.
Utility bills take slightly less of a middle-class family's disposable
income, but the fact remains--a decrease in the average electric bill
for the majority of middle-class Americans could achieve even greater
benefits than a middle-class tax cut, without the drain on revenue
which a tax cut would mean. We have the potential to gain these
benefits, and we must seize this opportunity to do so.
There are six main elements of this legislation:
First, retail access. It's essential to clarify that the States are
not preempted from ordering retail access. This clarification will
enable the States to go forward with retail access programs without the
fear of Federal preemption. Overlooking this clarification will bring
years of litigation, impeding American consumers from receiving the
benefits of lower electricity prices.
Second, stranded costs. When this industry moves from regulation to
competition, there will be created what industry insiders refer to as
``stranded costs.'' This means the high costs of serving all customers
under the old regulatory system, which cannot be recovered in a
competitive market.
It is true that similar predicaments faced firms in other once
regulated markets--railroads, airlines, natural gas, and
telecommunications, for instance. But the electric utility industry is
completely unique, and therefore, we must account for this difference.
First, the electric industry transition cannot take the same course
as deregulatory efforts in other industries due to the staggering
capital requirements necessary to generate electricity. The electric
industry is the most capital intensive industry by far. The Edison

[[Page S379]]
Electric Institute [EEI] estimates that for every dollar of electricity
revenue, on average, $3.03 of capital assets is required. This is
almost twice the amount of capital necessary for the next highest
industry--mining, $1.74 and, three times higher than the communications
industry--$1.09. Moodys Investors Service estimates that 87 of the
largest investor owned utilities could lose $135 billion in stranded
investment in the next 10 years. This is more than 80 percent of the
total equity of these companies. Make no mistake about it. If we force
the utilities to eat stranded costs, we will have a bankrupt industry.
Second, the vast majority of potential stranded costs--nuclear
generation and alternative energy contracts under the Public Utility
Regulatory Policies Act of 1978 [PURPA]--are the direct result of past
Government energy policies. One analyst estimates that stranded cost
potential for the nuclear industry is about $70 billion. This is just
under two-thirds of the book value of the Nation's 108 nuclear
operating plants. In addition, EEI estimates that PURPA contracts have
committed utilities to pay at least $38 billion above market prices.
Cambridge Energy Research Associates has estimated that standard costs
attributable to PURPA in California alone are between $6.6 billion and
$10.8 billion.
The old regulatory compact almost guaranteed recovery of the costs of
Government energy policies. With competition, however, the market--not
regulators--determines cost recovery. It is simply unfair to leave
utilities holding the bag for the energy policies of the past.

It is clear that we need a healthy utility industry. One analyst
surveying utility executives found that 50 percent of them believed
that utility bankruptcies would increase in the near future. Under
competition there will remain a very important role for utilities to
serve core customers, including poor and rural customers. Many
customers will want to stay with a traditional company, or will not
shop for their electricity. Also, the market is best served by having
many different players compete, including utilities. Because of the
important role these companies play, the public interest is not served
if utilities go bankrupt.
The final reason for stranded cost recovery is the legitimate
expectation of investors. Utility investors stand to lose billions of
dollars if stranded costs are not recovered. Who are these investors?
Not Wall Street sharks--they are ordinary citizens who considered
utility stocks to be a safe investment. According to an EEI survey of
shareholder demographics, the majority of utility investors are of
retirement age, or are approaching retirement age. The economic effect
on these investors of stranded cost losses must not be forgotten.
We must encourage utilities to embrace competition. To do this, we
must ensure that all costs incurred under the old regulatory compact
are fully recovered in the transition to competition. Competition in
this industry must be on a level playing field.
Recovery of all stranded costs is imperative. The Federal Energy
Regulatory Commission has taken the lead on wholesale stranded cost
recovery, and has done a great job. I believe FERC has the authority to
also permit recovery of retail stranded costs, but it is essential that
we clarify this authority through legislation. It is important to
mandate that FERC ensure recovery of legitimate, prudent and verifiable
retail stranded costs--only to the extent those costs slip through the
cracks at the retail level. I would note that the Nuclear Regulatory
Commission, which is primarily a licensing commission, certainly does
not have the authority to require recovery of nuclear investments or
nuclear decommissioning costs.
In short, if we do not enact legislation ensuring stranded cost
recovery, most utilities will be reluctant to embrace competition. If
we do not enact legislation, the transition to competition and lower
electricity prices will be slower. If we do not enact legislation,
corporate risk becomes unmanageable, and bankruptcies may occur. This
is not in the public interest.
The third aspect of the bill is shared Federal and State
responsibility. This bill respects the historical jurisdictional divide
over the electric industry. The bill gives States the opportunity to
structure their retail markets with programs suited to their local
situations. Yet, the bill still holds State programs to one key Federal
benchmark: competition. This gives a broad Federal policy ensuring
competition, but leaves implementation to the States.
This bill would require States to begin proceedings to examine their
local markets. States have three choices.
No. 1: set up a competitive wholesale procurement market.
No. 2: establish a program of retail access for all consumers; or
No. 3: devise their own program, as long as it ensures no self
dealing and no unfair subsidies to alternative energy generators.
Utilities who aren't regulated by FERC or State PUC's would be
required to make similar decisions. Also, States which are already in
the process of moving forward with their own competitive programs would
not have to start all over again.
The bill establishes a balanced framework. The Federal/State
jurisdiction issue is a fine line to walk. Some will say the States
should be given unfettered authority. Others will say that competition
cannot wait, and that a federally mandated competitive market cannot
come soon enough. In my view, a balanced policy which respects
traditional federalism is the best policy.
Fourth, we have to establish a timetable for the transition to
competition. We need a date certain when retail access will be the law
of the land, although that may be some years down the road. A definite
timetable for restructuring would remove this uncertainty. The
timetable in the bill--2010--recognizes the need for the States to
implement their own competition programs, and for the industry to get
comfortable with retail competition.

Fifth, we must have a level playing field, and this means PURPA
reform and repeal of the Public Utility Holding Company Act.
The bill provides for prospective PURPA reform. Utilities relied on
the old regulatory system, and their legitimate expectations of
recovery should be respected. The same is true for the contractual
expectations of non-utility generators. Reform of PURPA is therefore
appropriate on a prospective basis.
I believe PUHCA repeal is also essential even though it is not a part
of this bill. I am the cosponsor of a bill with Senator D'Amato and
others which is currently before the Senate Banking Committee. The goal
of that legislation is to put all electric utility companies on a level
playing field, and to remove regulatory barriers which are no longer
appropriate. I believe PUHCA repeal, with certain consumer protections,
can go forward on a stand alone basis, but must be a part of
comprehensive restructuring.
Sixth, the bill ensures nuclear decommissioning cost recovery, which
is essential for the protection of public health and safety. Nuclear
decommissioning costs are an extremely large percentage of many
utilities' embedded costs. Several utilities have estimated their
decommissioning liability to be in the billions of dollars. The law of
the land should be that all nuclear decommissioning costs are
recoverable. Moreover, no nuclear licensee should be able to avoid
decommissioning liability.
This Nation cannot afford to miss this opportunity. This legislation
is needed to avoid a patchwork of state policies, to bring competition
to consumers on a rational timetable, and to standardize stranded cost
recovery. It is essential that we make this commitment now, and set
competition in motion. Every year, every month, every day that we lose
debating the fine points of this transition means a loss of prosperity
for this Nation. We are now fighting tooth and nail in a global economy
where every dollar counts. Accordingly, this legislation is essential.
We all know that competition and deregulation have lowered prices in
the national economy. What may not be so apparent is the huge ripple
effect which lower electricity prices will create America. Consider
these figures:
Some 90 percent of the U.S. gross domestic product is produced by the
residential, commercial and industrial sectors. These sectors use 99.9
percent of

[[Page S380]]
the Nation's electricity, and yet account for only 34 percent of the
Nation's oil consumption The other 10 percent of the Nation's GDP--
transportation--uses 66 percent of the Nation's oil. In many ways,
electricity is overwhelmingly more important to America's economy than
oil.
America recently spent $262 billion on electricity in 1 year. The
data suggest that electricity consumption is almost three times the
amount spent on the next highest commodity, natural gas. Also,
electricity consumption is almost four times the amount spent on
unleaded gasoline.
In addition, the economy has become increasingly dependent on
electricity. Between 1973 and 1993 the U.S. industrial sector grew 70
percent. Industrial electricity use increased 45 percent during that
time period, while combustible fuel use declined 12 percent.
This trend is expected to continue. The Energy Information
Administration estimates that by the year 2010, 60 percent of all
industrial, commercial, and residential fuel use will be consumed by
utilities to generate electricity in order to meet electricity demand.
In contrast, in 1973, only about 30 percent of all fuel use for these
purposes went to generate electricity.
As these statistics demonstrate, changes in electricity prices have
profound economic consequences. Lower electricity prices mean more
jobs, more economic output, and more personal income. States with the
lowest electricity prices are the most likely to attract new businesses
and jobs.
The benefits of lowering electricity prices are staggering.
Technological changes have enabled new generators to produce
electricity at a price between 3 and 5 cent/kWh. However, costs in some
regions of the Nation are anywhere between 9 and 15 cents/kWh. That's
at least a factor of two, and at the most, a factor of five between
regional delivered electricity prices. Considering that electricity
makes up about 30 percent of production costs for steel manufacturing,
to give an example, you can see that lower electricity prices will have
a significant impact.
From this point forward, competition must be the electric industry
standard. This bill will accomplish that goal.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1526

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

SECTION. 1. SHORT TITLE.

This Act may be cited as the ``Electricity Competition Act
of 1996.''

SEC. 2. DEFINITIONS.

For purposes of this Act:
(1) The term ``affiliate'' means, with respect to a person,
any other person that controls, is controlled by, or is under
common control with such person.
(2) The term ``Commission'' means the Federal Energy
Regulatory Commission.
(3) The term ``electric consumer'' has the meaning given
the term in section 3(5) of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2602(5)).
(4) The term ``electric utility'' has the meaning given the
term in section 3(4) of the Public Utility Regulatory
Policies Act of 1978 (16. U.S.C. 2602(4)).
(5) The term ``Federal agency'' has the meaning given the
term in section 3(7) of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2602(7)).
(6) The term ``new contract electricity'' means electric
energy or capacity which is sought to be procured from a
party other than the purchaser for a period exceeding 60
days.
(7) The term ``new generating source'' means electric
generating capacity requirements, planned to be acquired by
construction, which cannot be met from existing resources or
entitlements, and which may be met through procurement of
electric capacity.
(8) The term ``new renewable electric generation'' means
electric generation from solar, wind, waste, biomass,
hydroelectric or geothermal resources constructed after the
enactment of this Act.
(9) The term ``nonregulated retail electric utility'' means
any retail electric utility other than a State regulated
retail electric utility.
(10) The term ``person'' has the meaning given the term in
section 3(4) of the Federal Power Act (16 U.S.C. 796(4)).
(11) The term ``qualifying cogeneration facility'' has the
meaning given the term in section 3(18)(B) of the Federal
Power Act (16 U.S.C. 796(18)(B)).
(12) The term ``qualifying cogenerator'' has the meaning
given the term in section 3(18)(C) of the Federal Power Act
(16 U.S.C. 796(17)(D)).
(13) The term ``qualifying small power producer'' has the
meaning given the term in section 3(17)(D) of the Federal
Power Act (16 U.S.C. 796(17)(D)).
(15) The term ``retail electric utility'' means any person,
State agency, or Federal agency which makes retail sales of
electric energy to the public or distributes such energy to
the public.
(16) The term ``State'' means a State admitted to the Union
or the District of Columbia.
(17) The term ``State agency'' has the meaning given the
term in section 3(16) of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2602(16)).
(18) The term ``State regulated retail electric utility''
means any retail electric utility with respect to which a
State regulatory authority has ratemaking authority.
(19) The term ``State regulatory authority'' means any
State agency which has ratemaking authority with respect to
the rates of any retail electric utility (other than such
State agency), and in the case of a retail electric utility
with respect to which the Tennessee Valley Authority has
ratemaking authority, such term means the Tennessee Valley
Authority.
(20) The term ``unbundled local distribution services''
means local distribution services which are offered by the
seller of such services without the requirement that the
purchaser of such local distribution services also purchase
electric energy as a condition of the purchase of such local
distribution services.

SEC. 3. PURPA REFORM.

(a) Definition.--For purposes of this section the term
``facility'' means a facility for the generation of electric
energy or an addition to or expansion of the generating
capacity of such a facility.
(b) Facilities.--Section 210 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 824a-3) shall not
apply to any facility which begins commercial operation after
the effective date of this Act, except a facility for which a
power purchase contract entered into under such section was
in effect on the effective date of this Act.
(c) Contracts.--After the effective date of this Act, no
electric utility shall be required to enter into a new
contract or obligation to purchase or sell electric energy
pursuant to section 210 of the Public Utility Regulatory
Policies Act of 1978.
(d) Savings Clause.--Notwithstanding subsections (b) and
(c), nothing in this Act shall be construed:
(1) as granting authority to the Commission, a state
regulatory authority, electric utility, or electric consumer,
to reopen, force the renegotiation of, or interfere with the
enforcement of power purchase contracts or arrangements in
effect on the effective date of this Act between a qualifying
small power producer and any electric utility or electric
consumer, or any qualifying cogenerator and any electric
utility or electric consumer; or
(2) to affect the rights and remedies of any party with
respect to such a power purchase contract or arrangement, or
any requirement in effect on the effective date of this Act
to purchase or to sell electric energy from or to a
qualifying small power production facility or qualifying
cogeneration facility.

SEC. 4. COMPETITIVE ELECTRICITY PROCEEDINGS.

(a) State Regulatory Authorities.--
(1) Competitive options.--Not later than six months after
the date of enactment of this Act, each state regulatory
authority not exempted from this section by section 7 shall
initiate proceedings applicable to all state regulated retail
electric utilities in the State to examine and consider--
(A) requirements which establish competitive electricity
procurement markets that meet the minimum requirements of
section 5 of this Act;
(B) a retail access plan which requires all state regulated
retail electric utilities in the State to provide
nondiscriminatory and unbundled local distribution services
to all electric consumers of such state regulated retail
electric utilities, in order that such electric consumers may
choose among competing electric energy suppliers by January
1, 2002; and
(C) an alternative plan which meets the minimum
requirements of section 6.
(2) Criteria.--In selecting among competitive options under
paragraph (1), each state regulatory authority not exempted
from this section by section 7 shall determine which option
best serves the public interest, considering reliability,
terms of service, and price.
(3) Decision and implementation.--Not later than 18 months
after the date of enactment of this Act, each state
regulatory authority not exempted from this section by
section 7 shall--
(A) select a competitive option provided for in paragraph
(1) based on the proceedings required under this subsection;
and
(B) render a decision by rule or order adopting such
competitive option; and
(C) begin implementation of such competitive option not
later than 60 days after rendering such a decision.
(b) Nonregulated Retail Electric Utilities.--
(1) Competitive options.--Not later than six months after
the date of enactment of this Act, each nonregulated retail
electric utility not exempted from this section by section 7
shall examine and consider, or

[[Page S381]]
where applicable, initiate proceedings to examine and consider--
(A) procedures for the acquisition of new contract
electricity and new generating sources by such nonregulated
retail electric utility which meet the minimum requirements
of section 5;
(B) a retail access plan which provides nondiscriminatory
and unbundled local distribution services to all electric
consumers of such nonregulated retail electric utility, in
order that such electric consumers may choose among competing
electric energy suppliers by January 1, 2002; and
(C) an alternative plan which meets the minimum
requirements of section 6.
(2) Criteria.--In selecting a competitive option under
paragraph (1), each nonregulated retail electric utility not
exempted from this section by section 7 shall determine which
option best serves the public interest, considering
reliability, terms of service, and price.
(3) Decision and implementation.--Not later than 18 months
after the date of enactment of this Act each nonregulated
retail electric utility not exempted from this section by
section 7 shall--
(A) select a competitive option provided for in paragraph
(1) based on the examination and consideration required under
this subsection;
(B) provide public notice of such selection; and
(C) begin implementation of such competitive option not
later than 60 days after providing such notice.

SEC. 5. PROCUREMENT MARKETS.

(a) Applicability.--
(1) Requirements or procedures to be established by a state
regulatory authority or nonregulated retail electric utility
pursuant to this section may apply to all or part of the new
contract electricity and new generating sources to be
procured by state regulated retail electric utilities within
the State or, in the case of a nonregulated retail electric
utility, to all or part of the new contract electricity and
new generating sources to be procured by such nonregulated
retail electric utility.
(2) If a state regulatory authority or nonregulated retail
electric utility establishes requirements or procedures
pursuant to this section that apply to only a part of the new
contract electricity and new electric generating capacity to
be procured by state regulated retail electric utilities
within the state or, in the case of a nonregulated retail
electric utility, to only a part of the new contract
electricity and new generating sources to be procured by such
nonregulated retail electric utility, such state regulatory
authority or nonregulated retail electric utility must ensure
that any other method of procuring new contract electricity
and new generating sources meets the requirements for an
alternative plan pursuant to section 6.
(b) Minimum Requirements.--Requirements or procedures to be
established by a state regulatory authority or nonregulated
retail electric utility pursuant to this section shall, at a
minimum--
(1) apply to all or part of the new contract electricity or
new generating sources to be procured by the state regulated
retail electric utilities within the State after the
effective date of requirements adopted pursuant to section
4(a)(1)(A), or in the case of a nonregulated retail electric
utility, to all or part of the new contract electricity or
new generating sources to be procured by such nonregulated
retail electric utility after the effective date of
procedures adopted pursuant to section 4(b)(1)(A);
(2) provide for public notice, by electronic bulletin
board, electronic trading system, or otherwise, of the
purchaser's offer to acquire new contract electricity or new
generating sources;
(3) provide an appropriate and reasonable time for
interested suppliers to respond to the notice of the
purchaser's offer to acquire, by electronic bulletin board,
electronic trading system, or otherwise, considering the size
and complexity of the offer to acquire;
(4) provide that no source or supplier of new contract
electricity and new generating sources is excluded from
competing to supply such new contract electricity or new
generating source;
(5) provide that the purchaser is not excluded from
supplying new electric generating capacity to itself, and
that any affiliate of the purchaser is not excluded from
supplying new contract electricity or new electric generating
capacity to the purchaser;
(6) provide selection of the lowest cost supplier that
otherwise meets the terms and conditions of the offer,
consistent with reliability; and
(7) permit the purchaser to rescind or modify the offer at
any time prior to the execution of a contract to supply
electric energy.

SEC. 6. ALTERNATIVE PLANS.

(a) State Regulatory Authorities.--
(1) Any alternative plan adopted by a state regulatory
authority must ensure that any state regulated retail
electric utility within the state may not unduly discriminate
in favor of its own sources of generation supply, or in favor
of its affiliate's sources of generation supply, or engage in
other forms of self dealing that could result in above market
prices to consumers; and
(2) Notwithstanding section 10, any alternative plan
adopted by a state regulatory authority shall ensure that any
above market costs of new renewable electric generation are
allocated on a non-discriminatory basis to all electric
consumers of all state regulated retail electric utilities
within the State, in order that no such electric consumer or
class of such electric consumers is required, without its
express consent, to subsidize the costs of such new renewable
electric generation to the advantage of any other such
electric consumer or class of such electric consumers.
(b) Nonregulated Retail Electric Utilities.--Any
alternative plan adopted by a nonregulated retail electric
utility must ensure that such nonregulated retail electric
utility does not unduly discriminate in favor of its own
sources of generation supply, or engage in other forms of
self dealing that could result in above market prices to
consumers.

SEC. 7. EXEMPTIONS.

(a) State Regulatory Authorities.--A state regulatory
authority shall be exempt from the requirements of section
4(a) if such state regulatory authority, as of the date of
enactment of this Act--
(1) has adopted requirements which establish competitive
electricity procurement markets that meet the minimum
requirements of section 5 of this Act; or
(2) has adopted a retail access plan which requires all
state regulated retail electric utilities in the State to
provide nondiscriminatory and unbundled local distribution
services to all electric consumers of such regulated retail
electric utilities, in order that such electric consumers may
choose among competing electric energy suppliers by January
1, 2004.
(b) Nonregulated Retail Electric Utilities.--A nonregulated
retail electric utility shall be exempt from the requirements
of section 4(b) if such nonregulated retail electric utility,
as of the date of enactment of this Act--
(1) has adopted procedures for its acquisition of new
contract electricity and new generating sources which meet
the minimum requirements of section 5; or
(2) has adopted a retail access plan which provides
nondiscriminatory and unbundled local distribution services
to all electric consumers of such nonregulated retail
electric utility, in order that such electric consumers may
choose among competing electric energy suppliers by January
1, 2004.
(c) Certification.--If a State regulatory authority or
nonregulated retail electric utility intends to attain exempt
status under this section, it shall certify its intention by
public notice no later than six months after the enactment of
this Act. Such notice shall specify the grounds upon which
the exemption is asserted. The notice shall constitute a
final decision of the state regulatory authority or
nonregulated retail electric utility for purposes of section
9.
(d) Voluntary Retail Access.--Any state regulated retail
electric utility shall be exempt from any requirement imposed
under sections 4, 5, or 6(a)(1) if such state regulated
retail electric utility has filed a tariff for
nondicriminatory and unbundled local distribution services,
approved by its state regulatory authority, which provides
such local distribution services to all electric consumers of
such state regulated retail electric utility, in order that
such electric consumers may choose among competing electric
energy suppliers.

SEC. 8. MANDATORY RETAIL ACCESS.

(a) Effective Date.--Beginning on January 1, 2010, no
retail electric utility shall prohibit any electric consumer
from purchasing nondicriminatory and unbundled local
distribution service or otherwise prohibit such electric
consumers from choosing among competing electric energy
suppliers.
(b) Enforcement.--If a State, state regulatory authority,
or retail electric utility fails to comply with the
requirements of this section, any aggrieved person may bring
an action against such person or persons to enforce the
requirements of this section in the appropriate federal
district court, which court may grant appropriate relief.

SEC. 9. REVIEW AND ENFORCEMENT.

(a) State Authority.--Notwithstanding any other provision
of this section, neither the Commission nor any court of the
United States shall have jurisdiction to review the selection
by a state regulatory authority or a nonregulated electric
utility of a competitive option that meets the requirements
of sections 4(a)(1)(B), 4(b)(1)(B), 5, and 6. Appeal from
such a decision may be taken in accordance with applicable
state law.
(b) Commission Review.--(1) Any person aggrieved by--
(A) a final order of a state regulatory authority or a
nonregulated retail electric utility under section 4 or 7, or
(B) the failure of a state regulatory authority or
nonregulated retail electric utility to initiate a proceeding
or render a final decision in accordance with section 4 or
7--

may petition the Commission to enforce the requirements of
sections 4(a)(1)(B), 4(b)(1)(B), 5, and 6.
(2) In any proceeding under this section, the Commission
may:
(A) determine--
(i) whether the requirements or plan adopted by a state
regulatory authority or nonregulated retail electric utility
under sections 4(a)(1)(B), 4(b)(1)(B), 5, and 6 complies with
the requirements of this Act, or
(ii) whether any action taken by the state regulatory
authority or nonregulated retail electric utility to
implement the requirements or plan complies with the
requirements of this Act; and
(B) grant appropriate relief.
(c) Rehearing And Appeal.--Section 313 of the Federal Power
Act shall apply to orders

[[Page S382]]
of the Commission issued pursuant to this section.

SEC. 10. RENEWABLE ELECTRIC GENERATION.

Except as provided in subsection 6(a)(2), nothing in this
Act shall be construed to prohibit:
(1) a State from encouraging the production of renewable
electric generation under applicable State law; or
(2) the voluntary purchase of renewable electric generation
by any electric utility or electric consumer.

SEC. 11. AMENDMENTS TO FEDERAL POWER ACT.

(a) Transmission Access.--Section 212(h) of the Federal
Power Act (16 U.S.C. 824k(h)) is amended by striking the
following:
``Nothing in this subsection shall affect any authority of
any State or local government under State law concerning the
transmission of electric energy directly to an ultimate
consumer.'',

and inserting in lieu thereof:
``Notwithstanding the other provisions of this subsection,
the Commission may order, or condition orders upon, the
transmission of electric energy to an ultimate consumer if
the delivery of such electric energy would be accomplished
through the provision of unbundled local distribution
services under sections 4(a)(1)(B), 4(b)(1)(B), 7(a)(2) or
7(d) of the Electricity Competition Act of 1996.''.
(b) Retail Access and Stranded Costs.--The Federal Power
Act is amended further by adding the following new sections
after section 214.

``SEC. 215. STATE AUTHORITY TO ORDER RETAIL ACCESS.

``Nothing in this Act shall preclude a state regulatory
authority, acting under authority of state law, from
requiring an electric utility to provide local distribution
service to any electric consumer.

``SEC. 216. AUTHORITY TO PROVIDE FOR STRANDED COSTS.

``(a) Definitions.--For purposes of this section--
``(1) the term `utility' shall include any public utility,
transmitting utility or electric utility;
``(2) the term `stranded cost' shall be defined by the
Commission, and shall include any legitimate, prudently
incurred and verifiable cost previously incurred by a utility
in order to provide service to an electric consumer, which
cost:
(A) is not being, and except as provided in this section
would not otherwise be, recovered in rates; and
(B) the utility has made reasonable attempts to mitigate.
``(b) Authority.--Notwithstanding any other provision of
law, in determining or fixing rates, charges, terms and
conditions under sections 205 and 206 of this Part, the
Commission shall provide for the recovery of all stranded
costs incurred by any utility transmitting or distributing
electric energy not sold by such utility or any of its
affiliates (which electric energy is sold to a customer and
serves load of such customer previously served in whole or in
part by such utility), included costs incurred to serve such
customer not fully recovered at the time such distribution or
transmission service is undertaken.
``(c) Unbundled Local Distribution.--In acting pursuant to
subsection (b) when determining or fixing rates subject to
its jurisdiction, the Commission shall permit the recovery of
all stranded costs to the extent a State or State regulatory
authority requiring the provision of unbundled local
distribution service has not permitted the recovery of all
such costs in rates or lacks the authority under State law to
permit such recovery.
``(d) Limitation.--The Commission shall have authority to
determine or fix rates or charges under sections 205 and 206
for the provision of unbundled local distribution service by
a utility solely as necessary to permit the recovery of
stranded costs in accordance with this section.

``SEC. 217. RECIPROCITY.

``No retail electric utility or any affiliate of such
utility may sell electric energy to or for the benefit of an
ultimate consumer if the delivery of such electric energy
will be accomplished through the provision of unbundled local
distribution service under sections 4(a)(1)(B), 4(b)(1)(B),
7(a)(2), 7(b)(2) or 7(d) of the Electricity Competition Act
of 1996.''.

SEC. 12. NUCLEAR DECOMMISSIONING COSTS.

To ensure safety with regard to the public health and safe
decommissioning of nuclear generating units, the Commission,
and all state regulatory authorities, shall authorize and
ensure the recovery in rates subject to their respective
jurisdictions, of all costs associated with federal and state
requirements for the decommissioning of such nuclear
generating units.

SEC. 13. AMENDMENTS TO BANKRUPTCY REFORM ACT.

Section 503(b) of the Bankruptcy Reform Act of 1978, 11
U.S.C. 503(b), is amended by adding at the end of the
following new paragraph:
``(7) costs incurred in complying with Nuclear Regulatory
Commission regulations or orders governing the
decontamination and decommissioning of nuclear power reactors
licensed under section 103 or 104b. of the Atomic Energy Act
of 1954, 42 U.S.C. 2133 and 2134(b), regardless of whether
such costs are reduced to a fixed amount.''.
______

By Mr. GREGG:
S. 1527. A bill to amend the Internal Revenue Code of 1986 to treat
recycling facilities as solid waste disposal facilities under the tax-
exempt bond rules, and for other purposes; to the Committee on Finance.

THE ENVIRNONMENTAL INFRASTRUCTURE FINANCING ACT OF 1996

Mr. GREGG. Mr. President, I introduce the Environmental
Infrastructure Financing Act of 1996. The bill will amend the Internal
Revenue Code of 1986 to allow recycling facilities to be eligible for
tax-exempt bond financing.
A continuing problem in the development of recycling efforts is the
need for markets for the materials that are being collected. Processes
exist for remanufacturing the recycled materials into new products, but
they frequently require extensive capital investment.
An approach that is often attempted is the use of the Federal tax-
exempt bond program, which does have a subcategory for solid waste
projects. Solid waste recycling facilities should constitute a
legitimate application of these funds; however, certain sections of the
tax code define solid waste as being ``material without value.'' With
recycled materials now being traded as commodities they do, in fact,
have value, making the facilities which might process them ineligible
for tax-exempt financing. This definitional problem impedes the
construction of recycling facilities and hurts the development of
recycling materials markets.
My bill will correct this problem in the tax code and allow recycling
facilities to obtain tax-exempt financing. The Environmental
Infrastructure Financing Act of 1996 will foster the further
development of the recycling industry and promote increased recycling
on the State and local level.
______

By Mr. BRADLEY:
S. 1528. A bill to reform the financing of Senate campaigns, and for
other purposes; to the Committee on Rules and Administration.
S.J. Res. 47. A joint resolution proposing an amendment to the
Constitution to permit the Congress to limit contributions and
expenditures in elections for Federal office; to the Committee on the
Judiciary.

campaign finance reform legislation

Mr. BRADLEY. Mr. President, I rise to speak about the role of money
in politics, and its consequences. I rise also to introducing a
legislative proposal--a constitutional amendment and a bill--to free
democracy from the power of money.

Mr. President, last fall a man approached me in New Jersey. He said,
``Senator, I worked at this place, in one job, for 22 years, In that 22
years, three different companies owned the place. In not one of the
three companies did I vest for a pension, because none of them owned
the place long enough. So I am now retiring, after 22 years of working
here, without a pension, at all.''
A woman came up to me on my annual walk along the Jersey Shore and
said, ``six months ago, my husband lost his job. Two months ago, I lost
my job. We have three children and now we have no health insurance. I
went to our pediatrician and he said if the kids get sick, he'll take
care of them but Senator, this is America, and you shouldn't have to
have a friendly pediatrician in order to get health care for your
kids.''
In California, a white-collar worker named Ron Smith who lost his job
at McDonnell-Douglas 2 years ago told a journalist how his sense that
he was ``starting to lose my grip'' feeds into the divisiveness that is
tearing our country apart: ``I get angry, and a lot of anger is coming
out,'' he said. ``I'm blaming everyone, minorities, aliens coming
across the border. I don't know how much truth there is to it. I mean,
I don't think there are any planners and engineers coming across the
border. [But] it hurts when you go to an interview and you know damn
well you can do the job, and you know they are looking at you and
thinking, `Forget it.' ''.
In the last 7 years, 100,000 people lost their jobs with GE, 60,000
at IBM, 40,000 at Sears. The merger of Chase Manhattan with Chemical
Bank will mean the loss of 12,000 jobs. And AT&T just announced that
they will eliminate 40,000 more jobs, most of them this year.
My colleague Senator Biden recently told me that at the Hercules
Corp.'s research center outside Wilmington, the downsizing has
accelerated and become

[[Page S383]]
brutal. When employees arrive at their office building on Monday
morning, they know that they have been fired when they see a Pinkerton
security man standing outside their office door. Usually he tells them
that he's sorry and he knows they've worked hard for 22 years, but
could they please have their desk cleaned out by noon--and if they
don't mind, he'll stand at the door, because the company doesn't want
to take the chance that the computer system will be sabotaged. On
Mondays at the Hercules Center, no one carpools, because it is
impossible to predict who will be going home at noon.
The heavy footsteps of downsizing, relocation, part-time jobs, temp
jobs, middle age without health care and retirement without a pension
may be near or still distant, but they are heard in every home. People
are working harder for less. In 1973 the average production,
nonsupervisory wage was $315. In 1994 it was $256. That's about 70
percent of workers. During the first 6 months of 1993, the Clinton
administration announced that 1.3 million jobs had been created, to
which a TWA machinist replied, ``Yeah, my wife and I have four of
them.'' And indeed, over half of the newly created jobs were part time.
For all but the fabulously wealthy, the idea that working hard can
lead to a secure future, a chance to provide a better life for your
children, and an adequate retirement is slipping away. I hear this fear
everywhere: Among the urban working poor, in suburban living rooms, at
factory gates, and among engineers with Ph.D.'s and 30 years of
experience with large, still-profitable corporations.
The most painful part of it for me as someone who entered politics
with a belief that government could make people's lives better and more
secure, is that the political process seems deaf, almost willfully
deaf, to the economic anxieties of nonwealthy Americans. Instead of
using public power to balance the excesses of private power and enhance
opportunity, too many politicians continue playing the proverbial
fiddle while the lives of working people become more desperate.
Democrats and Republicans both march along the well-worn paths of
symbolic politics, waving flags labeled ``welfare,'' ``crime,'' and
``taxes'' to divide Americans and win elections. Republicans cling to
the illusion that government is the problem--even the enemy of
freedom--and that less government and free markets will automatically
relieve the fears of working Americans. Democrats cling to old
programs, like worker retraining, without ever stopping to ask whether
those programs are actually working to change lives for the better or
whether jobs are available for the workers we're training.
The political process is paralyzed. Democracy is at a standstill. The
budget stalemate is only the latest headline. The Federal Government
has not been able to act decisively and with public consensus behind it
in years. On health care, on taxes, on creating jobs, on reforming
welfare, we have been at continual deadlock.
Democracy is paralyzed not just because politicians are needlessly
partisan. The process is broken at a deeper level, and it won't be
fixed by replacing one set of elected officials with another, any more
than it was fixed in 1992 or 1994. Citizens believe that politicians
are controlled: by special interests who give them money, by parties
which crush their independence, by ambition for higher office that
makes them hedge their position rather than call it like they really
see it, and by pollsters who convince them that only the focus group
phrases can guarantee them victory. Citizens affected by the choices we
have to make about spending and regulation simply don't trust that the
choice was made fairly or independently, or in some cases even
democratically. They doubt that the facts will determine the result,
much less the honest convictions of the politicians. Voters distrust
government so deeply and so consistently that they are not willing to
accept the results of virtually any decision made by this political
process.

Tell people in my State of New Jersey as I did in 1989-90 that the
Tax Reform Act of 1986 reduced their Federal taxes by $1 billion a year
and they don't believe you because their State and local tax increases
offset the reduction. It's gotten to the point that I've had
constituents call on the phone to ask how I voted on a particular bill.
When my office tells them that the vote hasn't occurred yet, they don't
believe you because a radio talk show host who hadn't done his homework
said otherwise. For at least 6 years, since the repeal of the
catastrophic care legislation in 1989, through the erosion of
environmental laws, to the failure of health care reform and the
backlash against the crime bill last year and the budget this year,
every major step government has taken has been jeopardized by this
mistrust, by a deep and widespread conviction that politicians are
acting is their own individual interests rather than acting as honest
representatives of the democratic will. There are several reasons for
this phenomenon, but one of them is money.
Those who think it's just a matter of perception that politics is
driven by money should consider the following facts:
In House-Senate negotiations over reform of telecommunications laws,
which are still in progress, one large telephone company, Ameritech,
appears to have won a special provision allowing it to build a monopoly
in the burglar and fire alarm business, while its competitors are
prohibited from entering that industry. Ameritech's PAC gave almost
half a million dollars last year in 600 separate contributions to
hundreds of Members of Congress of both parties, primarily those on
committees with jurisdiction over its industry.
Another company, Golden Rule Insurance, Inc., gives over $900,000 in
PAC money and soft money contributions to Members of Congress, and
hundreds of thousands more to organizations affiliated with Speaker
Gingrich. In return, the company wins endorsement of medical savings
accounts, an insurance product that only Golden Rule offers and which
would cost the Treasury $4 billion, as a centerpiece of the Republican
Medicare reform.
Lobbyists for big corporate contributors sit in the offices of
congressional leaders and write the legislation to repeal a century's
worth of environmental protections.
New Members of the congressional majority, while billing themselves
as reformers, collect on average more than $60,000 from Washington-
based political action committees in just the first 6 months in office,
a year and a half before they seek reelection. Some take more than
$100,000 in their first days.
State legislatures, where most politicians get their start and which
others treat as a modest, part-time contribution to citizenship, have
been taken over by the same forces of money that captured Congress.
State legislative races now routinely cost what congressional races
used to cost. In New Jersey last year, State Senate candidates spent a
record $8 million on 80 races, most of which were not competitive
contests. Illinois Assembly and Senate candidates raised $49 million,
$2.4 million of it from out-of-State interests, such as gambling
companies that seek licenses and new markets.
I have cited more examples involving the new Republican majority than
Democrats not because they are uniquely corrupt, but because these
incidents are more recent, and money apparently flows to the winners
when power shifts. While these abuses are not new, the amounts involved
and the level of conflict seem to multiply every few years, with this
year's congressional freshmen taking twice as much money from PAC's
right away than the freshmen who came to office in 1993. I saw one
estimate that said that, in total, at all levels of government in 1996,
nearly $1 billion would be spent.
So the story becomes clear. Economic anxiety eats away at people who
work in America. Government fails or refuses to respond. Voters develop
a profound and unyielding mistrust of the legislative process.
Legislators, including some of those posing as reformers, surrender
their offices and their consciences to corporate lobbyists and big
contributors with narrow interests to protect. Or, if they maintain
their integrity, as many do, they still have to swim in dirty water
which makes it even more difficult to stay clean. And amid biennial
promises of change, nothing ever changes.

[[Page S384]]

It's a story Americans have heard before. It's the story of the late
19th century, the era of the spoils system and recurrent scandal, when
politics became hostage to the money power of Wall Street financiers,
railroads, and industrialists, when each Senator was virtually the
property of whichever magnate had engineered his appointment. It was a
time when Washington was dominated by endless debates about the
tariff--a dispute between wealthy financiers and wealthy
manufacturers--quite willfully ignoring the economic plight of the vast
majority of Americans who were farmers, miners, and factory workers, or
women and African-Americans prohibited from voting. The theologian
Walter Rauschenbusch wrote of that time that ``In political life one
can constantly see the cause of human life pleading long and vainly for
redress, like the widow before the unjust judge. Then suddenly comes
the voice of property, and all men stand with hat in hand.''
Our Nation's history demonstrates that the conduct of democracy is
not an abstraction. When politics becomes hostage to money, as it did
in the late 19th century, and as it increasingly is today, people
suffer. Neither economic opportunity nor economic security is given the
place it deserves in our national ambitions. There is still a very
tangible relationship between the level of opportunity and security
available to every American family and the extent to which we can keep
our democracy secure and separate from the force of money.
The late 19th century was the last time, until now, that America's
prosperity failed to translate into higher wages and increased security
for American workers. Teddy Roosevelt called the moneymen of politics,
``the gloomy anticipations of our gold-ridden, capitalist-bestridden,
userer-mastered future.'' But the path to a better 20th century rested
on four progressive principles: Universal suffrage; direct election of
Senators; initiative and referendum to give the people a direct check
on policy; and campaign finance reform. Although Theodore Roosevelt
proposed that ``Congress provide an appropriation for the proper and
legitimate expenses of each of the great national parties [and] no
party receiving campaign funds should accept more than a fixed amount
from any individual,'' only modest disclosure requirements were adopted
at the time.
Until we had radically reformed our democracy, to take it away from
the Goulds and Vanderbilts and give it back to the people, we could not
become the kind of nation that protected seniors from abject poverty,
that protected children from abuse, that respected the heritage of the
land. But, over time, the failure to complete action on that last
reform, on the role of money in politics, became a more glaring
omission. As the television replaced the Grange hall, the saloon, or
the town square as the central forum for public debate, money became an
ever more important factor in who ran for office and who was elected.
Today we see people spend $28 million to run for the Senate, a
President raising $44 million for a primary campaign that doesn't
exist, and individuals contributing hundreds of thousands of dollars to
campaigns by funneling them through the various State parties.
Many accomplished and capable people are right now considering
whether to become candidates for the House and Senate. They should be
asking themselves, ``Can I work hard enough to do a good job?'' or ``Do
I have new ideas that would benefit my constituents?'' Instead, they
are wondering ``Can I find a thousand individuals and PAC's willing to
give me almost a million dollars?'' and ``Is there an interest group
willing to spend a lot of money to defeat my opponent?''
Money not only determines who is elected, it determines who runs for
office. Ultimately, it determines what government accomplishes--or
fails to accomplish. Under the current system, Congress, except in
unusual moments, will inevitably listen to the 900,000 Americans who
give $200 or more to their campaigns ahead of the 259,600,000 who
don't.
Real reform of democracy, reform as radical as those of the
progressive era, and deep enough to get government moving again, must
begin by completely breaking the connection between money and politics.
It must eliminate all the interested money--that is, money with strings
attached, from all congressional races.
We have to start by understanding what has happened to past efforts
to free politics from the grip of money. Three profound misconceptions
have led to the demise of every recent proposal to reform campaign
finance.
The first misconception is constitutional. The Supreme Court in 1976,
in the case of Buckley versus Valeo, held that a rich man's wallet is
no different than a poor man's soapbox. Restrictions on total campaign
spending, and on wealthy individuals using their own money to buy an
office, were held to be equivalent to restrictions on free speech. Even
reformers who found this logic absurd have felt it necessary to tiptoe
around the Supreme Court, building elaborate contraptions of incentives
and voluntary spending limits rather than risking the Court's wrath by
simply declaring it illegal to buy a seat in the House or Senate, with
your own money or someone else's. On something as crucial to democracy
as the role of money in elections, a role that has destructively
expanded every year I have been in the Senate, the Constitution is the
place to fix the thwarting of the people's will.
The second misconception is similar, but runs deeper. It is rooted in
a failure to understand that democracy and capitalism are separate
parts of the American dream, and that keeping that dream alive depends
on keeping one from corrupting the other. Speaker Gingrich, for
example, has accused those who advocate spending limits of
``nonsensical socialist analysis based on hatred of the free enterprise
system.'' He has compared the $600 million spent on congressional
elections with the $300 million spent to advertise three new antacids,
and concluded that politics is underfunded. Gingrich is not the only
person who holds this view, but he makes the sharpest accusations. I
would respond by saying that I have no hatred for the free enterprise
system, but it is not the same as democracy. Market share is not
political power. Democracy and civil society have a different ethic
from the marketplace. Democracy requires calm and thoughtful
deliberation, and a willingness to accept losing in a fair process, and
civil society proceeds from a belief that giving without expectation of
return is the highest human gift. Both ethics are much different from
the frenetic quest for market share and profit.
The third misconception is that different sources of money in
politics are more or less corrupting than others. When politicians
write what they call campaign finance laws they try to protect their
own sources of funding while cutting off those sources that primarily
go to their opponents. Thus the endless hairsplitting between political
action committees, individual contributors, personal wealth of
candidates, soft money, and independent expenditures. Some proposals
even draw distinctions among various types of political action
committees, banning some and protecting others.
The result, Mr. President, has been legislative proposals that tiptoe
around actually limiting spending on campaigns; that claim to reduce
corruption but don't challenge the idea that money should decide
elections; and that draw endless distinctions among different types of
money. If any of these proposals became law, they would make very
little difference. But the biggest problem with these tortured,
hairsplitting, incremental approaches is that voters can't understand
them. They don't see, just as I don't see, how these bills would
actually fix what's wrong with democracy. As a result, there are no
consequences for politicians who block these proposals, so that even
incremental reforms never pass, even when they appear to have momentum.
To free our democracy from the power of money, I believe we have to
start with two straightforward principles:
First, money is not speech. A rich man's wallet does not merit the
same protection as a poor man's soapbox.
Second, all interested money in politics is potentially corrupting.
Whether it comes from an individual, a PAC, or a candidate's own
investments, it sometimes comes with strings attached, and limiting one
source will only open up others. Money in politics

[[Page S385]]
is like ants in the kitchen. You have to close every hole, or they will
find a way in.
Today I want to present a specific legislative proposal that builds a
realistic structure for a new era in American democracy around these
basic principles.
I would start by amending the Constitution simply to clarify that
political money is not speech. I will put forward an amendment that
would give every State and the U.S. Congress explicit authority to
limit spending in campaigns and contributions from any sources. Such an
amendment, or a reconsideration by the Court of its decision in
Buckley, would be an essential underpinning of any real reform.
I have supported few constitutional amendments during my time in
public life, and I have been especially skeptical of those that sought
to limit rights. However, I am convinced that this amendment would
protect rights by strengthening democracy. It would not limit the first
amendment, but would clarify that the right to buy an election is not a
form of freedom of expression.
We should also consider the possibility that our current system of
campaign finance is as deeply unconstitutional as any reform might be.
Years ago the Court outlawed so-called white primaries, in which the
white voters who controlled Democratic parties in southern States met
to decide who their candidate would be. Today we have a wealth primary,
where wealthy contributors determine who has the opportunity to run for
office and who we have a chance to vote for. This amendment would
eliminate the wealth primary and give every American an opportunity not
only to run for office but to vote for who they want to.
With the constitutional misconception out of the way, I would start
from scratch. This proposal would focus on Senate elections, but would
provide a model for elections to the House, State legislatures,
governorships, or even the handling of referenda. I would give the
citizens of each State direct control over how much money would be
spent in their State's elections. I would say to each taxpayer, in each
State, you have an opportunity to give from $1 to $5,000 per year, but
only to a campaign in your State. You would contribute it by adding it
to your tax liability and sending the checks with your tax return. But
you would be contributing to the election campaign, not to a candidate.
All the money would go into a shared fund, and every Senate election
year, on Labor Day, the candidates would take the fund and divide it
equally among all qualified candidates--Republican, Democrat, or
qualified independent.
Outside of the money from the common fund, Senate candidates could
not raise or spend any money from PAC's, individual donors, the party,
or their own pocketbooks to further their candidacy. If the voters and
taxpayers concluded that they liked the level of information and
advertising they got from a $20 million campaign--if they agreed with
Speaker Gingrich, in other words--they could choose that kind of
election. If they wanted a cheaper election they could choose that
option by their votes on the tax return.
To ensure that all candidates have an opportunity, an equal
opportunity, to reach all voters, I would reclaim part of the public
airwaves as a public forum. Every broadcast licensee, radio or
television, would be required as a condition of licensing to provide 2
hours of free time to every candidate, 1 hour in prime time, in units
of at least 1 minute. The airwaves are public property. They now offer
the closest thing we have to a shared culture and a common forum for
discussion of ideas. That forum should not be available only to the
highest bidder. We have not only a right to insist that broadcasters
provide that space, but a responsibility to ensure that the public's
airspace is used in the interest of rebuilding democracy.
Who would be a qualified candidate, eligible to receive money from
the common fund and broadcast time? Any party that had received 10
percent of the vote in the previous two Senate elections would
automatically qualify once it selected a candidate. Independent
candidates and new parties would be required to obtain signatures of 5
percent of all eligible voters in the State, but once they qualified,
the candidates and their ideas would be treated equally. A candidate
who refused to participate in at least one debate would be completely
shut out--he could not participate in the shared fund or raise money
separately.
Candidates seeking the nomination of a major party would not receive
funds or broadcast time for the primary, and would be permitted to
raise private funds. But they would be required to raise 100 percent of
those funds in contributions of $100 or less.
That's it. For the general election there would be no PAC's. No
private contributions from wealthy individuals. No bundling of
contributions from the executives of a company to evade PAC limits. No
money from out of State. No candidates using their own funds. No
refusal to debate. All the sources of potential corruption in the
current system would be cut off. Speech would be protected; money would
be restricted.
This proposal won't sound like anything we've heard before. It will
take people a while to get used to it. Some people will worry that
there won't be enough money for good campaigns. But if that is so and
the people are less informed, that will be their choice. No longer will
special interests control it. But keep in mind that TV and radio
accounts for about 50 percent of the cost of campaigns. With free
broadcast time, the money which will be cut, if voters choose a low-
budget campaign, would be the money that candidates spend on polling,
consultants, gifts, and the rest. The process of providing information
to voters would more than likely be protected, but then again, if it
decreases, it will be the citizens' choice.

Other people will be offended at the idea of contributing to
democracy, rather than to a candidate. Some people said to me, ``I
don't want my money to be shared with Senator Helms?'' or ``Why should
I contribute to Senator Kennedy?'' That's a fair concern. But as things
now stand, an incumbent can raise as much as $17 million, $10 million
more than even a well-funded opponent. Putting that incumbent and his
or her opponents on a level playing field is far more important than
the $1,000 that any of us, as an individual, can give to either
candidate in that race. If you have the strength of your convictions,
there is no reason to fear a fair fight.
Others will say that the proposal helps incumbents, but incumbents
have an even bigger financial advantage in the present system and they
are defeated regularly. Besides, if doing your job well helps you get
reelected, who can criticize it?
Finally, still others may note that I have supported public financing
of campaigns in the past and this is not exactly public financing.
Indeed, it is not public financing. It does not take taxpayer dollars
and provide them to political campaigns. It is not public financing,
but it is public control of elections. As long as voters mistrust
politicians as they do, we're not going to get past the skepticism
about public financing. We have to rebuild that trust first, and I
think that giving voters control of campaigns is the way to do it.
I believe there is a deep hunger for this kind of reform. I have been
very impressed by the energy of activists at the State level, who are
using one breakthrough in democracy--the initiative and referendum--to
break down the barriers to another, campaign finance reform. Never
before have we seen so much grassroots activity on the issue of
campaign finance reform. In 1994, ballot initiatives won in Missouri,
Oregon, and Montana, as well as the District of Columbia in 1992. And,
so far, we can expect in 1996 initiatives in Maine, California, and
Alaska, Arkansas, and Colorado. Other States where groups are
considering initiative drives include Wisconsin, Nebraska, South
Dakota, and Illinois. The initiatives on the ballot this year are
radical and serious. Whether they emphasize modest public financing or
limiting contributions to $100, they are big, uncompromised reforms
that would go a long way toward freeing State legislatures from the
grip of moneyed interests. I consider those State activists my partners
in this reform proposal, and I believe they deserve to have a proposal
on the table in Washington that is as radical, as serious, and as real
as what people are talking about in the States.

[[Page S386]]

Many politicians and academics may focus on what they see as the
worst possible outcome of this proposal: that voters, given control,
might choose to sharply cut back the amount of money available in
campaigns. Indeed, they seem to be contributing less in the
Presidential checkoff. But if that happens, the worst consequence would
be a resurgence of door-to-door campaigning, of politicians listening
instead of polling, and of campaigns led by candidates and their ideas
rather than consultants and their focus-group-tested messages. In other
words, the system would adjust in what could very well be a way that
reinvigorates citizen participation. To argue against changing the
status quo that everyone knows compromises democracy is a terribly
pessimistic position. Now is the time to be bold.

At its best, however, I believe that giving voters control over
campaigns will be enough to return democracy to the people, freeing it
from the power of money. It could restore confidence and faith in the
legitimacy of democratic decisionmaking, freeing both Congress and the
Presidency from the cycle of gridlock, action, and backlash.
Ultimately, it will free our democracy to do what it can do when it
works well: use the power of government to build a structure of
economic security and economic opportunity for all American families.
Mr. President, I ask unanimous consent that a summary of the proposal
along with the text of both the constitutional amendment and the Senate
Campaign Finance Reform Act be included in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 1528

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 ``Senate Campaign Finance
Reform Act of 1996''.

SEC. 2. SENATE ELECTION CAMPAIGN FINANCING.

(a) Amendment of the Federal Election Campaign Act of
1971.--The Federal Election Campaign Act of 1971 is amended
by adding at the end the following new title:
``TITLE V--SENATE ELECTION CAMPAIGN FINANCING

``SEC. 501. SENATE CAMPAIGN FINANCING.

``No Senate candidate or authorized committee of a Senate
candidate shall accept any contribution with respect to a
general election or make any expenditures with respect to a
general election except as provided in this title.

``SEC. 502. REQUIREMENTS FOR RECEIPT OF BENEFITS.

``(a) Eligible Senate Candidate.--For purposes of this
title, a Senate candidate is an eligible Senate candidate if
the candidate files a declaration with the Secretary of the
Senate under penalty of perjury stating that--
``(1) the candidate agrees in writing to participate in at
least 2 debates, sponsored by a nonpartisan or bipartisan
organization, with all other candidates for that office who
are receiving payments under this title;
``(2) the candidate and the candidate's authorized
committees will not accept any contribution with respect to a
general election or make any expenditure with respect to a
general election except from funds provided under this title;
``(3) the candidate and the authorized committees of such
candidate did not accept contributions, or make expenditures,
for the primary or runoff election in excess of the
limitations under subsection (b); and
``(4) the candidate and the authorized committees of such
candidate--
``(A) will deposit all payments received under this title
in an account insured by the Federal Deposit Insurance
Corporation from which funds may be withdrawn by check or
similar means of payment to third parties; and
``(B) will furnish campaign records, evidence of
contributions, and other appropriate information to the
Commission.
``(b) Primary and Runoff Expenditure and Contribution
Limitations.--The requirements of this subsection are met
if--
``(1) the candidate and the candidate's authorized
committees have not received contributions from any
individual for the primary or runoff election which in the
aggregate exceed $100;
``(2) all contributions received by the candidate and the
candidate's authorized committees are from individuals; and
``(3) the candidate and the candidate's authorized
committees did not make expenditures for the primary or
runoff election in excess of 50 percent of the total amount
that will be available to all candidates in the State for the
general election under section 504(b) (based on the State's
estimate of the total amount made 30 days prior to the date
of the primary or runoff election).
``(c) Time for Filing.--The declaration under subsection
(a) shall be filed not later than 7 days after the earlier
of--
``(1) the date the candidate qualifies for the general
election ballot under State law; or
``(2) if, under State law, a primary or runoff election to
qualify for the general election ballot occurs after
September 1, the date the candidate wins the primary or
runoff election.

``SEC. 503. CERTIFICATION BY COMMISSION.

``(a) Request.--Each eligible Senate candidate seeking to
receive benefits under this title shall submit a request to
the Commission, at such time and in such manner as the
Commission may require in regulations, containing--
``(1) a copy of the declaration filed pursuant to section
502(a);
``(2) such additional information as the Commission may
require in regulations; and
``(3) a verification signed by the candidate and the
treasurer of the principal campaign committee of such
candidate stating that the information furnished in support
of the request is correct and fully satisfies the
requirements of this title.
``(b) Certification.--
``(1) Issuance.--Not later than 48 hours after a Senate
candidate files a request with the Commission to receive
benefits under this title, the Commission shall--
``(A) issue a certification to each candidate who satisfies
the requirements of section 502;
``(B) calculate the amount of payments to which such
candidate is entitled pursuant to section 504; and
``(C) transmit notification of the certification to the
Secretary of the Senate.
``(2) Revocation.--The Commission shall revoke such
certification if the Commission determines a candidate fails
to continue to satisfy the requirements of section 502.
``(c) Determinations by Commission.--All determinations
(including certifications under subsection (b)) made by the
Commission under this title shall be final and conclusive,
except to the extent that they are subject to judicial review
under section 505.

``SEC. 504. BENEFITS ELIGIBLE SENATE CANDIDATES ENTITLED TO
RECEIVE.

``(a) Use of Free Broadcast Time.--
``(1) In general.--Each eligible Senate candidate shall be
entitled to free broadcast time as provided under section
315A of the Communications Act of 1934.
``(2) Broadcast duration.--Free broadcast time shall be
used in segments of not less than 1 minute.
``(b) General Election Campaign Financing.--
``(1) Amount of payments.--(A) Each eligible Senate
candidate in a State shall receive a payment for the general
election in an amount equal to the State share divided by the
number of eligible Senate candidates in the State.
``(B) For purposes of this paragraph, the term `State
share' means, with respect to a State, the sum of--
``(i) 50 percent of the funds in the Senate Election
Campaign Fund which are attributable to donations from
taxpayers from such State and which remain in the fund after
the last election for the office of United States Senator in
that State, and interest allocable to such portion, plus
``(ii) 50 percent of the funds in the Senate Election
Campaign Fund which are attributable to donations from
taxpayers from such State after such election and before the
2d calendar year preceding the calendar year of the election,
and interest allocable to such portion, plus
``(iii) 100 percent of the funds in the Senate Election
Campaign Fund which are attributable to donations from
taxpayers from such State during the 2 calendar years
preceding the calendar year of the election, and interest
allocable to such portion.
``(C) For purposes of this paragraph, donations made to the
Senate Election Campaign Fund which are included with an
income tax return for a taxable year under section 6097 of
the Internal Revenue Code of 1986 shall be treated as made on
the last day of the calendar year in which the taxable year
ends.
``(2) Free broadcast time.--Free broadcast time provided
pursuant to subsection (a) shall not be used in calculating
the amount a candidate is entitled to receive under this
subsection.

``SEC. 505. JUDICIAL REVIEW.

``(a) Judicial Review.--Any agency action by the Commission
made under this title shall be subject to review by the
United States Court of Appeals for the District of Columbia
Circuit upon petition filed in such court not later than 30
days after the agency action by the Commission for which
review is sought. It shall be the duty of the Court of
Appeals, ahead of all matters not filed under this title, to
advance on the docket and expeditiously take action on all
petitions filed pursuant to this title.
``(b) Application of Title 5.--The provisions of chapter 7
of title 5, United States Code, shall apply to judicial
review of any agency action by the Commission.
``(c) Agency Action.--For purposes of this section, the
term `agency action' has the meaning given such term by
section 551(13) of title 5, United States Code.

``SEC. 506. PARTICIPATION BY COMMISSION IN JUDICIAL
PROCEEDINGS.

``(a) Appearances.--The Commission is authorized to appear
in and defend against any action instituted under this
section and under section 505 either by attorneys employed in
its office or by counsel whom it may appoint without regard
to the provisions of title 5, United States Code, governing
appointments in the competitive service,

[[Page S387]]
and whose compensation it may fix without regard to the provisions of
chapter 51 and subchapter III of chapter 53 of such title.
``(b) Institution of Actions.--The Commission is
authorized, through attorneys and counsel described in
subsection (a), to institute actions in the district courts
of the United States to seek recovery of any amounts
determined under this title to be payable to the Secretary of
the Treasury.
``(c) Injunctive Relief.--The Commission is authorized,
through attorneys and counsel described in subsection (a), to
petition the courts of the United States for such injunctive
relief as is appropriate in order to implement any provision
of this title.
``(d) Appeals.--The Commission is authorized on behalf of
the United States, to appeal from, and to petition the
Supreme Court for certiorari to review of, judgments or
decrees entered with respect to actions in which it appears
pursuant to the authority provided in this section.

``SEC. 508. PAYMENTS RELATING TO CANDIDATES.

``(a) Establishment of Campaign Fund.--
``(1) Establishment.--There is established on the books of
the Treasury of the United States a special fund to be known
as the `Senate Election Campaign Fund'.
``(2) Appropriations.--(A) There are appropriated to the
Fund for each fiscal year, out of amounts in the general fund
of the Treasury not otherwise appropriated, amounts equal to
any contributions by persons which are specifically
designated as being made to the Fund.
``(B) The Secretary of the Treasury shall, from time to
time, transfer to the Fund an amount not in excess of the
amounts described in subparagraph (A).
``(C) Amounts in the Fund shall remain available without
fiscal year limitation.
``(3) Availability of funds.--Amounts in the Fund shall be
available only for the purposes of making payments required
under this title.
``(4) Accounts.--The Secretary of the Treasury shall
maintain such accounts in the Fund as may be required by this
title or which the Secretary of the Treasury determines to be
necessary to carry out this title.
``(b) Payments Upon Certification.--Upon receipt of a
certification from the Commission under section 503, the
Secretary of the Treasury shall promptly pay the amount
certified by the Commission to the candidate out of the
Senate Election Campaign Fund.
``(c) Management of Fund.--The provisions of section 9602
of the Internal Revenue Code of 1986 shall apply to the
Senate Election Campaign Fund.

``SEC. 507. REPORTS TO CONGRESS; REGULATIONS.

``(a) Reports.--
``(1) Requirement.--The Commission shall, as soon as
practicable after each election, submit a full report to the
Senate setting forth--
``(A) the expenditures (shown in such detail as the
Commission determines appropriate) made by each eligible
Senate candidate and the authorized committees of such
candidate;
``(B) the amounts certified by the Commission under section
503 as benefits available to each Senate candidate; and
``(C) the balance in the Senate Election Campaign Fund, and
the balance in any account maintained by the Fund.
``(2) Printing.--Each report submitted pursuant to this
section shall be printed as a Senate document.
``(b) Rules and Regulations.--The Commission is authorized
to prescribe such rules and regulations, in accordance with
the provisions of subsection (c), to conduct such
examinations and investigations, and to require the keeping
and submission of such books, records, and information, as it
deems necessary to carry out the functions and duties imposed
on it by this title.
``(c) Statement to Senate.--Not later than 30 days before
prescribing any rule or regulation under subsection (b), the
Commission shall transmit to the Senate a statement setting
forth the proposed rule or regulation and containing a
detailed explanation and justification of such rule or
regulation.''.
(b) Provisions To Facilitate Voluntary Contributions to
Senate Election Campaign Fund.--
(1) General rule.--Part VIII of subchapter A of chapter 61
of the Internal Revenue Code of 1986 (relating to returns and
records) is amended by adding at the end the following:

``Subpart B--Designation of Additional Amounts to Senate Election
Campaign Fund

``Sec. 6097. Designation of additional amounts.

``SEC. 6097. DESIGNATION OF ADDITIONAL AMOUNTS.

``(a) General Rule.--Every individual (other than a
nonresident alien) who files an income tax return for any
taxable year may designate an additional amount which is not
less than $1 and not more than $5,000 to be paid over to the
Senate Election Campaign Fund established under section 508
of the Federal Election Campaign Act of 1971.
``(b) Manner and Time of Designation.--A designation under
subsection (a) may be made for any taxable year only at the
time of filing the income tax return for the taxable year.
Such designation shall be made on the page bearing the
taxpayer's signature.
``(c) Treatment of Additional Amounts.--Any additional
amount designated under subsection (a) for any taxable year
shall, for all purposes of law, be treated as an additional
income tax imposed by chapter 1 for such taxable year.
``(d) Income Tax Return.--For purposes of this section, the
term `income tax return' means the return of the tax imposed
by chapter 1.''.
(2) Conforming amendments.--(A) Part VIII of subchapter A
of chapter 61 of such Code is amended by striking the heading
and inserting:

``PART VIII--DESIGNATION OF AMOUNTS TO ELECTION CAMPAIGN FUNDS

``Subpart A. Presidential Election Campaign Fund.
``Subpart B. Designation of additional amounts to Senate Election
Campaign Fund.

``Subpart A--Presidential Election Campaign Fund''.

(B) The table of parts for subchapter A of chapter 61 of
such Code is amended by striking the item relating to part
VIII and inserting:

``Part VIII. Designation of amounts to election campaign funds.''.
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31,
1995.
(c) Amendment of Communications Act of 1934.--Title III of
the Communications Act of 1934 (47 U.S.C. 301 et seq.) is
amended by inserting after section 315 the following new
section:

``free broadcast time for senate candidates

``Sec. 315A. (a)(1) Notwithstanding section 315, a licensee
shall make available 2 hours of free broadcast time to each
eligible Senate candidate (as defined in section 502 of the
Federal Election Campaign Act of 1971) in each State within
its broadcast area. The licensee shall make at least 1 hour
of the free broadcast time available during a prime time
access period.
``(2) A licensee shall make free broadcast time available
pursuant to this section during the period beginning on the
date that is 90 days before the date of a general election or
special election for the Senate and ending on the day before
the date of the election.
``(3) As used in this subsection, the term `prime time
access period' means the time between 7 p.m. and 10 p.m. of a
weekday.
``(b) An appearance by a Senate candidate on a news or
public service program at the invitation of a broadcasting
station or other organization that presents such a program
shall not be counted toward time made available pursuant to
subsection (a).
``(c)(1) A licensee shall make available free broadcast
time in accordance with this subsection to any eligible
Senate candidate (as defined in section 502 of the Federal
Election Campaign Act of 1971) in each State within its
broadcast area if--
``(A) broadcast time was made available by the licensee and
the payment for such time constituted an independent
expenditure (as defined in section 301(17) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 431(17)); and
``(B) such independent expenditure was in opposition to, or
on behalf of an opponent of, such eligible Senate candidate.
``(2) A person who reserves broadcast time the payment for
which would constitute an independent expenditure within the
meaning of section 301(17) of the Federal Election Campaign
Act of 1971 (2 U.S.C. 431(17)) shall--
``(A) inform the licensee that payment for the broadcast
time will constitute an independent expenditure; and
``(B) inform the licensee of the names of all candidates
for the office to which the proposed broadcast relates.
``(3) Free broadcast time under this subsection shall be
provided within a reasonable period of time after the
broadcast time constituting the independent expenditure
described in paragraph (1), and shall be for the same class
and amount of time, and during the same period of the day, as
such broadcast time.''.

SEC. 3. SOFT MONEY OF POLITICAL PARTIES.

(a) Limitations on Political Party Committees.--Title III
of the Federal Election Campaign Act of 1971 is amended by
inserting at the end the following new section:

``POLITICAL PARTY COMMITTEES

``Sec. 324. (a) Limitations on National Committees.--(1) A
national committee of a political party, including the
congressional campaign committees of a political party, and
any entity that is established, financed, maintained, or
controlled by a national committee of a political party,
including the national congressional campaign committees of a
political party, and any officer or agents of such party
committees or entity, shall not solicit or accept
contributions or transfers not subject to the limitations,
prohibitions, and reporting requirements of this Act.
``(2) Any amount solicited, received, expended, or
disbursed directly or indirectly by a national, State,
district, or local committee of a political party during a
calendar year which might affect the outcome of a Federal
election shall be subject to the limitations, prohibitions,
and reporting requirements of this Act, including--
``(A) voter registration;
``(B) get-out-the-vote activity;
``(C) generic campaign activity; and
``(D) any communication that identifies a Federal candidate
(regardless of whether a State or local candidate is also
mentioned or identified).
``(b) State, District, and Local Committees.--(1)
Subsection (a) shall not apply to expenditures or
disbursements made by a State, district, or local committee
of a political party for--

[[Page S388]]

``(A) a contribution to a candidate other than for Federal
office, if such contribution is not designated or otherwise
earmarked to pay for activities described in subsection
(a)(2);
``(B) the costs of a State, district, or local political
convention;
``(C) the non-Federal share of a State, district, or local
party committee's administrative and overhead expenses
(excluding the compensation in any month of any individual
who spends more than 20 percent of his or her time on
activity during such month which may affect the outcome of a
Federal election), as determined under subsection (c);
``(D) the costs of grassroots campaign materials, including
buttons, bumper stickers, and yard signs, which solely name
or depict a State or local candidate; and
``(E) the cost of any campaign activity conducted solely on
behalf of a clearly identified State or local candidate,
excluding activities described under subsection (a)(2).
``(2) For purposes of paragraph (1)(C), the non-Federal
share of a party committee's administrative and overhead
expenses shall be determined by applying the ratio of the
non-Federal disbursements to the total Federal expenditures
and non-Federal disbursements made by the committee during
the previous Presidential election year to the committee's
administrative and overhead expenses in the election year in
question.
``(c) Fundraising Expenditures.--Any amount spent by a
national committee of a political party, including the
congressional campaign committees of a political party, and
any entity that is established, financed, maintained, or
controlled by a national committee of a political party,
including the national congressional campaign committees of a
political party, and any officer or agents of such party
committees or entity to raise funds that are used, in whole
or in part, in connection with the activities described in
subsection (b) shall be made from funds subject to the
limitations, prohibitions, and reporting requirements of this
Act.''.
(b) Restrictions on Fundraising by Candidates and
Officeholders.--Section 315 of the Federal Election Campaign
Act of 1971 (2 U.S.C. 441a) is amended by adding at the end
the following new subsection:
``(i)(1) The limitations, prohibitions, and reporting
requirements of this Act shall apply to the solicitation for,
and receipt of funds by, a candidate for Federal office, an
individual holding Federal office, or any agent of such
candidate or officeholder, in connection with any Federal
election.
``(2) Paragraph (1) shall not apply to the solicitation or
receipt of funds by an individual who is a candidate for a
non-Federal office if such activity is permitted under State
law.''.
(c) Reporting Requirements.--
(1) National committees.--Section 304 of the Federal
Election Campaign Act of 1971 (2 U.S.C. 434) is amended by
adding at the end the following new subsection:
``(d) Political Committees.--(1) The national committee of
a political party, any congressional campaign committee of a
political party, and any subordinate committee of either,
shall report all receipts and disbursements during the
reporting period, whether or not in connection with an
election for Federal office.
``(2) Any political committee to which paragraph (1) does
not apply shall report any receipts or disbursements that are
used in connection with a Federal election.
``(3) If a political committee has receipts or
disbursements to which this subsection applies from any
person aggregating in excess of $200 for any calendar year,
the political committee shall separately itemize its
reporting for such person in the same manner as required in
subsection (b) (3)(A), (5), or (6).
``(4) Reports required to be filed under this subsection
shall be filed for the same time periods required for
political committees under subsection (a).''.
(2) Report of exempt contributions.--Section 301(8) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 431(8)) is
amended by inserting at the end the following:
``(C) The exclusion provided in subparagraph (B)(viii)
shall not apply for purposes of any requirement to report
contributions under this Act, and all such contributions
aggregating in excess of $200 shall be reported.''.
(3) Reports by state committees.--Section 304 of the
Federal Election Campaign Act of 1971 (2 U.S.C. 434), as
amended by paragraph (1), is amended by adding at the end the
following new subsection:
``(e) Filing of State Reports.--In lieu of any report
required to be filed by this Act, the Commission may allow a
State committee of a political party to file with the
Commission a report required to be filed under State law if
the Commission determines such reports contain substantially
the same information.''.
(4) Other reporting requirements.--
(A) Authorized committees.--Section 304(b)(4) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 434(b)(4)) is
amended--
(i) by striking ``and'' at the end of subparagraph (H);
(ii) by inserting ``and'' at the end of subparagraph (I);
and
(iii) by adding at the end the following new subparagraph:
``(J) in the case of an authorized committee, disbursements
for the primary election, the general election, and any other
election in which the candidate participates;''.
(B) Names and addresses.--Section 304(b)(5)(A) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 434(b)(5)(A))
is amended--
(i) by striking ``within the calendar year''; and
(ii) by inserting ``, and the election to which the
operating expenditure relates'' after ``operating
expenditure''.

SEC. 4. PUBLIC SERVICE ANNOUNCEMENTS.

Beginning on September 1 and continuing through November 1
of each election year, the Federal Election Commission shall
carry out a program, utilizing public service announcements,
to provide basic information to the public about--
(1) voter registration, including locations and times; and
(2) voting requirements.

SEC. 5. EFFECTIVE DATE.

(a) In General.--Except as otherwise provided in this Act,
the amendments made by, and the provisions of, this Act shall
take effect on the date of enactment of this Act, but shall
not apply with respect to activities in connection with any
election occurring before December 31, 1996.
(b) Contributions and Expenditures Before Date of
Enactment.--This Act, and the amendments made by this Act,
shall not apply to contributions and expenditures made before
the date of enactment of this Act.
____

S.J. Res. 47

Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled (two-thirds of
each House concurring therein), That the following article is
proposed as an amendment to the Constitution of the United
States, which shall be valid to all intents and purposes as
part of the Constitution when ratified by the legislatures of
three-fourths of the several States within seven years from
the date of its submission by the Congress:

``Article--

``Section 1. The Congress shall have the power to set
limits on expenditures made by, in support of, or in
opposition to the nomination or election of any person to
Federal office.
``Section 2. The Congress shall have the power to set
limits on contributions by individuals or entities by, in
support of, or in opposition to the nomination or election of
any person to Federal office.
``Section 3. The Congress shall have the power to enforce,
by appropriate legislation, the provisions of this
article.''.
____

Giving Elections Back to Citizens--Summary of the Bradley Proposal

This proposal would restore democracy to American elections
by removing all the corrupting sources of money in campaigns
and giving voters direct control over how much money is spent
in a Senate election. It would not force taxpayers to fund
politics through public financing, but it would equalize
funding among candidates and provide free media time.
Candidates would have to compete on their ideas, and once
elected, to serve all their constituents without favoring
contributors.

1. constitutional amendment

Amend the Constitution to clarify that Congress has the
power to set limits on contributions and expenditures in
support of, or in opposition to, any candidate for Federal
office.
The spending limits implicit in the legislative proposal
directly confront the Supreme Court's 1976 ruling in Buckley
v. Valeo equating political money with free speech. If the
Court will not reconsider this ruling, this amendment will
correct it.

2. tax check-off

Add a new Senate General Election Campaign Fund line to
each tax return, and allow all filers to designate between $1
and $5,000 as an add-on to taxes. Funds added-on by taxpayers
in each state will be designated for Senate elections in that
state only.

3. distribution of funds among candidates

Each Senate election year, all funds received in the
preceding two years (plus one-half of any funds remaining
from previous years) will be divided among all qualified
candidates after the nomination process has been completed in
each state. All qualifying party candidates and independents
will receive an equal share.
To qualify, a party or an independent candidate must obtain
signatures of 5% of all registered voters in the state.
Parties that have received 10% of the vote in two of the
previous four Senate elections automatically qualify.
No candidate may accept or spend funds from any source
other than the common fund. All candidates must participate
in at least two debates with all other candidates.

4. broadcast time

Each broadcast licensee must make available to each
eligible Senate candidate two hours of free broadcast time,
of which at least one hour must be during prime time. Each
broadcaster must make time available to candidates in all
states in its broadcast area. Free time must be made
available during the 90 days preceding the election.
Appearances during news or public service programs will not
count.
Free broadcast time will be allocated in segments of 1-30
minutes, at the candidates' choice.
The Federal Election Commission will also be required to
develop a program of public

[[Page S389]]
service announcements providing basic information about voting
requirements, voter registration, and election dates and
locations, which broadcasters may carry in fulfillment of
their basic public service requirements.

5. nominating process

Candidates for any party's Senate nomination may accept
only contributions of $100 or less. No candidate for a
party's nomination may spend more than 50% of the total
amount that will be available in the total fund for
candidates in the general election, as estimated by the state
30 days before the primary.
A candidate for nomination who did not comply with these
rules would be ineligible for all funding and free broadcast
time in the general election.

6. party money/soft money

Contributions to state and national party organizations
will be limited to $1,000 from individuals.

7. independent expenditures

Broadcast licensees that accept independent expenditures
for advertisements that make reference to any Senate
candidate must provide equal, free time to allow any
candidate mentioned negatively in the original ad to respond.
If a candidate is mentioned positively, the licensee must
allow all opponents the same amount of time to respond.

sources of corruption eliminated in this proposal

PACs (eliminated by ban on outside contributions).
Wealthy individual contributors (same).
``Bundling'' to evade PAC limits (same).
Wealthy candidates (personal wealth cannot be used).
Out of state money (all money in common fund comes from in-
state taxpayers).
Money funneled through party committees without disclosure
or limits.
Lack of debates (debate participation required).

____________________