[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).

                          ____________________