[Congressional Record Volume 142, Number 11 (Friday, January 26, 1996)]
[Senate]
[Pages S492-S514]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DeWINE (for himself and Mr. Glenn):
  S. 1529 A bill to provide for the Federal treatment of certain 
relocation 

[[Page S493]]
National Football League franchises, and for other purposes; to the 
Committee on Finance.


          the team relocation taxpayers protection act of 1996

  Mr. DeWINE. Mr. President, I rise today to introduce, along with my 
distinguished colleague from Ohio, Senator John Glenn, legislation that 
will get U.S. taxpayers out of the business of subsidizing NFL 
franchise moves.
  It is clear by now that these franchise moves have a very substantial 
impact not only on communities, on the economy, but also, frankly, on 
the future of professional sports.
  Mr. President, I have already on this floor in days past addressed at 
length the question of the proposed move of the Cleveland Browns to 
Baltimore. I believe, as do many Ohioans--indeed, as do many 
Americans--that this move is simply wrong. I have discussed on this 
floor the great tradition of the Browns, the love the people of 
Cleveland and the people of Ohio have for the Browns.
  Candidly, whether you care about the Browns or do not, whether you 
are a sports fan or not a sports fan, you and every taxpayer are paying 
for this move--every taxpayer in the entire country. Whether you live 
in Cleveland, OH, or Los Angeles, CA, the Federal Government is 
reaching into your pocket to pay for this move. I believe the taxpayers 
will be shocked to know this, and they should be. The sports fan who 
have followed all the back and forth of this move, very few of them are 
aware today as I speak from the Senate floor that the Federal 
Government, is subsidizing this purported move by $36 million--$36 
million of taxpayers' money.
  That provides the occasion and the rational and the public policy 
reason for the legislation Senator Glenn and I are introducing today. 
Quite frankly, I can see no moral justification for taxpayers, for the 
people of Cleveland or anywhere else to reward a sports team with 
public money to assist that team in breaking its word and deserting the 
community. I believe that to do this is unconscionable and is simply 
wrong.
  Let me put it in real terms. To force a family in Parma, OH, or 
Euclid, or in Cleveland, or in Columbus, OH, to take there tax dollars, 
to send them to Washington and to have Washington turn around and 
subsidize Baltimore, MD, to steal the team from the Browns and to do it 
with $36 million in Federal taxpayers' money makes absolutely no sense. 
I believe that we must stop the insanity. We must act to get the 
Government out of this subsidy business.
  Mr. President, today, more and more public money is being used to 
support professional football franchises. Communities are making 
significant public investments to lure and keep NFL teams in there 
area. In each one of these cases, in return for the public investment, 
teams are agreeing to stay in the community for a specifically defined 
period of time. There is a deal made. The local community will offer 
financial incentives, will support the team, and in return the owner 
agrees to stay in that community during the term of the lease. It is 
fairly simple. Unfortunately, however, some franchises are breaking 
their part of the deal by seeking to relocate before the term of the 
deal has expired, before the lease is over.
  That is why I am introducing legislation that will get the Federal 
taxpayer out of the business of subsidizing this particular kind of 
relocation. The enactment of this bill will result, frankly, in less 
Government involvement in professional sports, not more. Under the 
current system, when a city or State wants to raise funds to build a 
stadium and thereby secure a professional team, it authorizes a 
governmental entity such as a stadium authority to issue bonds. In 
other words, to sell the debt to anyone who wants to buy the debt. The 
stadium authority can then use the proceeds to build the stadium and 
the people who have invested pay no tax on the interest they earn--tax-
free bonds. The tax exemption allows the stadium authority to pay lower 
interest rates and thus keep more money for itself. They can build the 
stadium at less of a cost--in this particular case in Baltimore it is 
$36 million less cost. That is the difference between issuing the 
bonds, building the stadium with taxable bonds versus building that 
stadium with nontaxable bonds.

  Mr. President, because the bondholder does not pay Federal tax on 
interest, the interest amounts to a Federal subsidy for stadium 
authority bondholders. For example, in the case of the Browns move, 
this subsidy is worth, as I have stated, $36 million to the Browns.
  The legislation that Senator Glenn and I are introducing today will 
prohibit the use of these Federal subsidies in bond deals associated 
with the relocation of an NFL team, when that team breaks an existing 
deal with the community that has supported the team. In short, new 
Federal subsidies under this bill cannot be used to help a team violate 
an existing commitment where that commitment includes public money.
  The bill's criteria are straightforward. There are five separate 
criteria and each one of these has to be met before our bill applies: 
First, if the franchise is currently in a public facility; second, if 
the proposed relocation will be to a new public facility; third, if fan 
support in the current location, the current team's local area--in this 
case, Cleveland--has been at least 75 percent of stadium capacity in 
the preceding season; fourth, if the current lease with the public 
entity has not expired--in other words, they are breaking the lease; 
and fifth, if asked, voters in the current jurisdiction have approved 
the use of further tax dollars to improve the current facility or to 
build a new one.
  If all five of these criteria apply, then our bill provides as 
follows: No expenditure of Federal funds including grants, awards, 
loans, guarantees, tax credits, exemptions, allowances or any use of 
Federal tax-exempt financing may be used to benefit the franchise 
seeking to relocate.
  In short, Mr. President, if you own a football team and you want to 
break your lease and the local community has done everything it can to 
support the team, you can do it; Congress will not stop you, not under 
this bill, but--but--the Federal taxpayers will not help you do it. 
They will not encourage you with a subsidy to do it. The Federal 
taxpayers will not subsidize your breach of faith. That is the message 
that the bill will send to NFL owners. If you want to go build your own 
stadium, you can do that, too, but the Federal taxpayers will not help 
you do it. If you want to rely only on State, local dollars, not 
Federal dollars, you can do that, too, but Federal taxpayers simply 
will not help you do it. If you want to break a deal in the community 
and the community you are leaving has done everything it can to keep 
its part of the bargain, then the Federal taxpayer will not get 
involved.
  Mr. President, it is important to discuss this issue in the context 
of everything else that is occurring today and this past year in 
Washington. In the Senate, we have been consumed with decisions on 
Federal spending. How can we slow the rate of growth of spending? What 
Federal budget should we pass? How can we balance the Federal budget? 
We are making very tough decisions on health care for poor people, 
welfare reform, Medicare, Medicaid, the education of our youth.
  I do not need to tell anyone in this Chamber that these are very 
difficult decisions, but here is an easy decision. As I stated earlier, 
in just this case, the case of the Browns purported move to Baltimore, 
it is estimated that the Federal tax subsidy is $36 million. That is 
over and above any local taxpayer subsidy--$36 million of Federal tax 
money, $36 million that will benefit one professional sports franchise.
  The American people want to know what we mean by corporate welfare. 
This, Mr. President, is corporate welfare. This is what we mean. Paying 
the Browns $36 million of Federal money is, simply, morally wrong.
  For me, the question is, under our serious budget constraints, what 
in the world justifies taking $36 million from taxpayers, including the 
ones in Cleveland whose trust with the Browns has been broken, to pay 
for this move? Absolutely nothing justifies it.
  Mr. President, I have spoken at length regarding the impact of sports 
franchise relocation on the communities that love their teams. I have 
mentioned the pride that the people of Cleveland, the people of all of 
Ohio have in the Browns. I have discussed the unbroken bonds of 
affection that stretch from the days after the Second 

[[Page S494]]
World War, when the Browns started playing in Cleveland, to today's 
fans who, frankly, still cannot believe that the Browns are trying to 
leave town. I will not replow that field here except to say simply 
this: Loyalty counts. Loyalty is not transferable.
  The Cleveland story is very important precisely because the Browns 
are the heart and soul of Cleveland and because the people of Cleveland 
have done all they can to save the Browns. The Cleveland situation is, 
Mr. President, the worst-case scenario. If the Browns can leave 
Cleveland, any team can leave any town any time.
  This was an ad that was paid for by Browns fans that appeared in USA 
Today. I think it pretty much summarizes the situation. If this can 
happen in Cleveland, Mr. President, this can happen to any team, to any 
sports fans in the country.
  Mr. President, I ask unanimous consent for an additional 4 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DeWINE. Mr. President, in the last several weeks we have seen 
much activity surrounding the Browns' move to Baltimore. The State of 
Maryland has filed an antitrust lawsuit against the NFL. The city of 
Cleveland sued the Browns. The city of Cleveland also sued the city of 
Baltimore. Who knows, there may be more lawsuits coming.
  My bill does one very important thing: It gets the American taxpayer 
out of the middle of all this. Whatever the economic factors that cause 
teams to go and to come, whatever the circumstances that lead city to 
sue city, teams to sue teams, and the league to sue teams and 
individuals, the American taxpayer should be left out of it. The 
taxpayers' burden is high enough. It is wrong to make the taxpayers 
pay.
  My bill does not seek to manage the NFL team relocation process. It 
does not intend to have more regulation of the NFL. But it does say 
that the Federal Government will not help them leave and that the 
Federal taxpayers will not subsidize these moves.
  Mr. President, I considered naming my bill after our beloved 
``Dawgs'' and the hard-core Browns fans who are represented in this 
particular ad. You see in the ad the ``Big Dawg,'' who is certainly 
famous in Cleveland, around the country, a great fan looking at this 
empty stadium after the last home game. I considered naming my bill 
after the Dawgs, and the Dawgs, of course, is, in this case, spelled d-
a-w-g-s. In this case, the Dawgs would stand for ``don't allow welfare 
for greedy sports owners.''
  While that title would express very accurately the deepest feelings 
of the people of Ohio, I have decided on a title that would tell all 
Americans why they should support this particular bill. I have called 
the bill the Team Relocation Taxpayer Protection Act. The bill is 
called the Team Relocation Taxpayer Protection Act.
  If you are a taxpayer and you think we have better things to spend 
Federal money on than corporate greed, you should support this bill.
  Mr. President, I ask unanimous consent that the full text of this 
bill, the Dawgs bill, the Team Relocation Taxpayer Protection Act, be 
printed in the Record.
  Mr. SPECTER. Mr. President, before proceeding to the purpose for 
which I have sought recognition, I would like to express my support for 
the proposition outlined by the distinguished Senator from Ohio. I 
believe that Baltimore ought to have a football team, and that is the 
Colts. I think that Indianapolis is entitled to an expansion team.
  I believe that Senator DeWine has articulated the issue cogently and 
forcefully on a travesty which is being perpetrated on many American 
cities and on many American taxpayers. There is really a situation 
where sports teams are entrusted with a public interest.
  The movement of the Dodgers from Brooklyn to Los Angeles was the 
start of pirating in America of sports franchises and should never have 
been allowed, accompanied by the movement of the Giants from New York 
to San Francisco.
  We have seen that matter proliferate. It is hard to understand why 
the taxpayers of Maryland and Baltimore have to be in a bidding 
contest, which, as I understand it, approximates some $200 billion to 
bring a football team to Baltimore. Certainly Baltimore ought to have a 
football team, and it ought to be the Colts, which moved out of 
Baltimore in the middle of the night to go to Indianapolis.
  American has a love affair with sports. I just came from a brief 
sporting event in the office of Senator Kay Bailey Hutchison, where she 
and Senator Santorum and I articulated a bet on the Super Bowl game. If 
you cannot see this on C-SPAN 2, this is an unusual tie for me to wear. 
It is a Steelers tie.
  I am going to be going to the Super Bowl, weather permitting and 
Senate schedule permitting. Who knows, we may be in session Sunday the 
way things are going. But I have participated in America's love affair 
with sports since I was a youngster in Wichita, KS, reading the box 
scores from the Wichita Eagle every morning because of my love and 
passion for baseball.
  I have been attending the Phillies games and the Eagles games, and 
when I can, in Pittsburgh, the Pirates games and the Steeler games 
because of my love of the sport. It is tremendously exciting.
  Just basically, it is unfair for the Browns--I was about to say the 
Indians--for the Browns to be taken out of Cleveland. I hope we can do 
something about it. I hope that with the complications of free agency 
and franchise removal, salary caps and revenue sharing, that we will be 
able to address this matter in a sane way in the Congress.
  Baseball enjoys an antitrust exemption. Football enjoys a limited 
antitrust exemption from revenue sharing for television. I believe 
those sports are under an obligation to work out the rules so that the 
teams do not get themselves pirated from one city to another.
  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. 1529

       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 ``Team Relocation Taxpayer 
     Protection Act of 1996''.

     SEC. 2. TREATMENT OF RELOCATING NATIONAL FOOTBALL LEAGUE 
                   FRANCHISES.

       (a) Effect on Interstate Commerce.--
       (1) Findings.--The Congress finds that the conduct of a 
     National Football League franchise occurs in interstate 
     commerce and has a substantial effect on interstate commerce 
     and that when the facts and circumstances described in 
     subsection (c)(1) are combined, there arises substantial 
     potential for harmful effects on interstate commerce.
       (2) Purpose.--The purpose of this section is to deter such 
     harmful effects.
       (3) No preemption of state or local actions.--Such other 
     actions as may be taken by a State or local governmental unit 
     or entity referred to in subsection (c)(1)(A) to address the 
     facts and circumstances described in subsection (c)(1) are 
     not preempted by this section and do not burden interstate 
     commerce.
       (b) Federal Treatment.--Notwithstanding any other provision 
     of law--
       (1) any entity or person described in paragraph (1) or (2) 
     of subsection (c)--
       (A) may not benefit, directly or indirectly, from any 
     expenditure of Federal funds, and
       (B) shall not be allowed any Federal tax exclusion, 
     deduction, credit, exemption, or allowance,

     in connection with or in any way related to the relocation of 
     a National Football League franchise of an entity or person 
     described in subsection (c)(1); and
       (2) the interest paid or accrued on any bond, any portion 
     of the proceeds of which is used or is to be used to provide 
     facilities that are used or are to be used in whole or in 
     part by any entity or person described in paragraph (1) or 
     (2) of subsection (c), shall not be exempt from any Federal 
     tax.
       (c) Entity or Person Described.--For purposes of this 
     section--
       (1) General description.--An entity or person is described 
     in this paragraph if--
       (A) the entity or person has conducted regular season home 
     football games through ownership of a franchise in the 
     National Football League in facilities--
       (i) which are owned, directly or indirectly, by a State or 
     local governmental unit or entity, or
       (ii) which are financed by a Federal, State, or local 
     governmental unit or entity;
       (B) the entity or person has publicly announced that such 
     entity or person has the intention to conduct such football 
     games outside the facilities described in subparagraph (A) 
     before the expiration of the period during which such 
     governmental unit or entity has authorized the entity or 
     person to use such facilities;
       (C) the entity or person has publicly announced that such 
     entity or person has the 

[[Page S495]]
     intention to conduct such football games in facilities--
       (i) to be owned, directly or indirectly, by a State or 
     local governmental unit or entity, or
       (ii) to be financed by a Federal, State, or local 
     governmental unit or entity;
       (D) in the National Football League season preceding the 
     announcement of the intention of the entity or person to 
     relocate, attendance at the regular season home football 
     games of such entity or person averaged at least 75 percent 
     of normal capacity as previously published by the National 
     Football League with respect to such season; and
       (E) within the period of 1 year before or after such 
     announcement by the entity or person, an election or 
     referendum has been held by the State or local governmental 
     unit in which the facilities described in subparagraph (A) 
     are located and the voters have approved a tax increase or 
     extension of a tax, or have failed to repeal any such tax 
     increase or extension, intended by such governmental unit to 
     be used as part of the financing for improved facilities or 
     new facilities for such football games of such entity or 
     person.
       (2) Related person.--
       (A) In general.--An entity or person is described in this 
     paragraph if such entity or person is a related person to an 
     entity or person described in paragraph (1).
       (B) Application of certain rules.--For purposes of this 
     paragraph, a person or entity shall be treated as a related 
     person to an entity or person described in paragraph (1) if--
       (i) under the terms of section 144(a)(3) of the Internal 
     Revenue Code of 1986, such person or entity would be treated 
     as a related person to an entity or person described in 
     paragraph (1), or
       (ii) such person or entity is a successor in interest to an 
     entity or person described in paragraph (1) or to any related 
     person.
       (C) Rules regarding certain relationships.--In determining 
     whether a person or entity is a related person to an entity 
     or person described in paragraph (1), the rules of sections 
     144(a)(3), 267, 707(b), and 1563 of the Internal Revenue Code 
     of 1986 shall be applied--
       (i) by substituting ``at least 25 percent'' for ``more than 
     50 percent'' each place it appears therein and by determining 
     such percentage on the basis of the highest percentage of the 
     stock or other indices of ownership that any person or entity 
     has owned directly or indirectly at any time after December 
     31, 1991,
       (ii) by treating a person's step-children or step-
     grandchildren as the person's natural children or 
     grandchildren, and
       (iii) by treating all children and step-children of such 
     person as if they have not attained the age of 21 years.
       (d) Bankruptcy Venue.--Notwithstanding any other provision 
     of law, including titles 11 and 28 of the United States Code, 
     any case under such title 11 with respect to an entity or 
     person described in paragraph (1) or (2) of subsection (c) 
     may be commenced only in the district court for the judicial 
     district in which the principal place of business in the 
     United States of such entity or person has been located 
     during the greatest part of the 3-year period immediately 
     preceding the commencement of such case.
       (e) Effective Date.--This section shall apply to--
       (1) any expenditure of Federal funds on or after the date 
     of the introduction of this Act,
       (2) any case commenced under title 11, United States Code, 
     after November 1, 1995, and
       (3) any Federal tax exclusion, deduction, credit, 
     exemption, or allowance for any taxable period ending after 
     December 31, 1994.

  Mr. GLENN. Mr. President, I rise today in strong support of the 
legislation being offered by my colleague from Ohio. We have worked 
together very closely on the whole issue of professional sports team 
relocation. It should come as no surprise this is an issue that hits 
home for the people of our States.
  Organized, professional sports have always played a prominent role in 
American life. Individuals, cities, States, and even the entire nation 
have come together and rallied around sports teams. And professional 
sports teams have helped local economies rally and revitalized our 
inner cities, creating whole new sectors of economic opportunity.
  This week, many Americans' eyes are on Tempe, AR, where the Dallas 
Cowboys will take on the Pittsburgh Steelers to determine who will win 
a fifth NFL championship. Think of some of the other major sports 
events that have riveted the nation's attention over the past months.
  How about those Cleveland Indians and their amazing season which 
culminated in a World Series appearance?
  Who hasn't heard all the talk this winter about the return of Michael 
Jordan and the Chicago Bulls' dominance of the NBA.
  And who can forget the elation we all felt watching Cal Ripken, Jr., 
take his historic lap around Camden Yards?
  What can be more American, or says more about our country, than 
stories such as these? Or how we bask in a team's victories, 
commiserate over the losses, and cheer exciting and dramatic exploits 
on the field or on the court?
  But there is a story that overshadows these and threatens this 
spirit, that is community pride. Of course, I am speaking of team 
relocation. And the relocation which has shocked the nation involves 
the Cleveland Browns. Let me tell you a little about Cleveland and the 
Browns.
  The Cleveland Browns have been a symbol of undying and unwavering fan 
support. Week after week, 70,000 people cram into Lakefront Memorial 
Stadium to root on the Browns. The ``Dawg Pound'' is a national symbol 
of fan support. Through 3-13 seasons, 13-3 season, exciting play-off 
victories, demoralizing play-off defeats, Browns fans have been through 
it all and still support their team.
  There's no talk of getting on or off a bandwagon in Cleveland--every 
fan is there, through thick and thin.
  That's what makes the announcement that the Browns intend to desert 
their home of 50 years the toughest to take. The Browns have enjoyed 
backing from generations of fans, only to be told that it doesn't 
matter.
  Well, it does matter. It matters to the season ticket holder who has 
been going to games for 30 years. It matters to the worker who sells 
hot dogs at the stadium. It matters to businesses selling Browns t-
shirts, hats, and other paraphernalia. It matters to restaurants and 
hotels that cater to fans and players. It matters to those raised as 
Browns fans looking forward to passing along that tradition.
  It should matter to every football, baseball, hockey, and basketball 
fan across the country, because if it can happen to Cleveland, it can 
happen to you.
  And it should matter to every single taxpayer in America who are 
going to end up footing part of the bill for the Browns' move and 
others as relocation fever sweeps the country. It's shocking, but 
Federal tax subsidies are going to help ease the cost of the Cleveland 
Browns' relocation. It absolutely makes no sense that we should allow 
taxpayer dollars to back up this kind of deal.
  Why should taxpayers in Cleveland, or any American city, help foot 
the tab for their local team to pull stakes and move to another city? 
Talk about adding insult to injury. That's why I am pleased to join my 
colleague from Ohio today in introducing this legislation.
  Let me stress that this legislation does not put an all-out ban on 
the use of public money in such situations. In fact, it is a very 
narrowly tailored bill which says: if a team already took advantage of 
tax dollars to build its existing stadium; and there has been 
tremendous fan loyalty and support; and voters in the current 
jurisdiction have approved of the means to improve the team's current 
facility or build a new one; and the team's current lease has not 
expired; then, we're not going to allow Federal tax dollars to 
subsidize the move.
  I think that's pretty reasonable. We shouldn't be in the business of 
giving Federal tax subsidies to a team that already received the 
benefit of public money to build their existing stadium, that intends 
to turn its back on loyal fans and a community commitment to build or 
improve their stadium, and a team that has broken its lease--that team 
should not receive a Federal tax subsidy.
  Right now, Washington is embroiled in a very nasty and partisan 
debate about how our Government can reach a balanced budget. One of the 
key issues in this debate centers on tax cuts--who should get them, who 
shouldn't benefit.
  Well, I put to my colleagues the question: should tax breaks go to 
professional sports teams when they turn their back on an ironclad 
commitment that is already backed by a Federal subsidy? I'm sure my 
colleagues and all Americans know the answer to that question.
  The Senate has a unique opportunity to start putting an end to the 
chaos in professional sports. The bill we are introducing today is the 
second step in that effort. I intend to continue pushing our Fans 
Rights Act through Congress. We still need to grant leagues a limited 
anti-trust exemption related to team transfers. I am pleased that many 
of the witnesses at a Judiciary Committee yesterday agreed with this 

[[Page S496]]
point. I hope there is Senate action on that bill, and the one we are 
introducing today, early this season.
  Mr. President, I am pleased to have worked with my colleague from 
Ohio on this important legislation. It will provide a solution to a 
serious, yet limited, problem. I urge all Senators to support this 
bill.
                                 ______

      By Mr. BUMPERS:
  S. 1530. A bill to create a government corporation to own and operate 
the naval petroleum reserves and naval oil shale reserves, and for 
other purposes; to the Committee on Armed Services.


       the naval petroleum reserves and naval oil shale reserves 
                      corporatization act of 1996

 Mr. BUMPERS. Mr. President, I introduce the Naval Petroleum 
Reserves and Naval Oil Shale Reserves Corporatization Act of 1996. This 
bill would: First, create a government corporation to own and operate 
the naval petroleum reserves and naval oil shale reserves; and second, 
authorize the privatization of the corporation within 5 years if the 
taxpayers receive a fair return.
  The naval petroleum reserves consist of three fields: Elk Hills in 
California; Buena Vista Hills in California and Teapot Dome in Wyoming. 
The Federal Government owns 100 percent of both Buena Vista Hills and 
Teapot Dome. However, the Government owns only 78 percent of Elk Hills. 
The remaining 22 percent is owned by Chevron. Elk Hills is by far the 
most significant area, making it one of the largest fields in the 
United States. In fact, Elk Hills produces approximately $400 million 
per year in revenues for the Federal Treasury.
  Similarly, there are three naval oil shale reserves. Naval oil shale 
reserves 1 and 3 are located in northwest Colorado. Naval oil shale 
reserve 2 is located in eastern Utah. Unlike the Naval Petroleum 
reserves, there is no production from the oil shale reserves because 
development of oil shale is not currently economical. However, there is 
also recoverable natural gas.
  Both the administration and the majority party in Congress have, at 
various times, proposed that the naval petroleum reserves be sold and 
the administration has also proposed that two of the three oil shale 
reserves be privatized as well. While I am not necessarily opposed to 
the notion of removing the Government from the oil production business, 
I am troubled that the various proposals do not put the taxpayers' 
interests first. The Congressional Budget Office [CBO] has estimated 
that the sale of the naval petroleum reserves as originally proposed 
would produce $1.55 billion in receipts. CBO also determined that the 
sale would actually cost the Government $992 million over 7 years 
because the reserves would produce approximately $2.5 billion in 
revenues in the Government retains the assets during that same time 
period. While the CBO estimate does not take into account the 
appropriated expenditures made annually for operation and maintenance 
of the petroleum reserves, the sale of the assets would eliminate 
possibly billions of dollars worth of additional revenue that would be 
derived from the continued operation of the naval petroleum reserves 
over the life of the assets.
  From 1987 until this year, Congress prohibited revenue derived from 
the sale of Government assets from being scored for budget purposes. I 
strongly opposed the change made to the asset sale scoring rule in this 
year's budget resolution for exactly the reasons exemplified by the 
proposed sale of the naval petroleum reserves. It makes no sense to 
sell an asset for some quick cash when, in the long run, the loss of 
revenues from the sold Government asset outweighs the funds derived 
from the sale. However, that is exactly what the budget rules now 
permit and, in fact, promote.

  Mr. President, as I mentioned earlier, I am not necessarily opposed 
to the privatization of the naval petroleum reserves and the naval oil 
shale reserves. However, I am opposed to selling these assets for far 
less than they are worth to their current owners--the Americans 
taxpayers.
  The bill I am introducing today is designed to ensure that the value 
of these assets are maximized. First, by creating a Government 
corporation, the naval petroleum reserves can be operated in a more 
efficient manner in the absence of burdensome restrictions placed on 
Government agencies. Second, the corporation will have the time to 
adequately evaluate the worth of the naval petroleum reserves and naval 
oil shale reserves to make sure that if they are sold, the taxpayers 
receive an adequate return. Finally, my bill authorizes the corporation 
to privatize, but only if the price paid by private investors is at 
least equal to the net present value if the corporation remained in 
Government hands.
  Government corporatization is not a new idea. In fact, the Department 
of Energy [DOE] proposed creating a Government corporation to own and 
operate the naval petroleum reserves in 1993. An internal DOE analysis 
determined that a Government corporation is the option that would 
produce the greatest net present value associated with the naval 
petroleum reserves through 2040. In addition, in 1994 the National 
Academy of Public Administration [NAPA] recommended that the naval 
petroleum and oil shale reserves be owned and operated by a Government 
corporation. In fact, the Academy estimated that the net present value 
of the naval petroleum reserves, if they were owned by a Government 
corporation, would be $4.1 billion. This is far greater than the $1.55 
billion which CBO estimates the sale of the petroleum reserves would 
produce.
  Mr. President, our constituents have sent us to Washington, in part, 
to act as their guardians by ensuring that their interests, as 
taxpayers, are protected. Our obligations are not limited to making 
sure that the funds provided by their taxes are spent wisely. It is 
also the duty of everyone in this body to require that when taxpayer-
owned assets are disposed of, that the taxpayers receive a fair return. 
It is beyond belief that anyone could argue that selling the naval 
petroleum reserves for $1.55 billion is a better choice than creating a 
Government corporation to own and operate the reserves which will 
provide more than $4 billion adjusted for net present value.
  Mr. President, I urge my colleagues to join me by cosponsoring the 
Naval Petroleum Reserves and Naval Oil Shale Reserves Corporatization 
Act of 1996. I ask unanimous consent that the full text of the bill 
appear in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1530

       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 referred to as the ``Naval Petroleum 
     Reserves and Naval Oil Shale Reserves Corporatization Act of 
     1995''.

  TITLE I--ESTABLISHMENT OF THE NAVAL PETROLEUM RESERVES CORPORATION.

     SEC. 101. ESTABLISHMENT OF THE CORPORATION.

       (a) There is established a body corporate to be known as 
     the ``Naval Petroleum Reserves and Naval Oil Shale Reserves 
     Corporation'' (referred to in this Act as ``the 
     Corporation'').
       (b) The Corporation is a for-profit, wholly owned 
     Government Corporation subject to chapter 91 of title 31, 
     United States Code (the Government Corporation Control Act). 
     The Corporation is an agency of the United States, subject to 
     annual apportionment under section 1512 of title 31, United 
     States Code.
       (c) Jurisdiction and Control.--The Corporation has 
     exclusive jurisdiction and control over all of the Naval 
     Petroleum Reserves and Naval Oil Shale Reserves.

     SEC. 102. CORPORATE OFFICES.

       The Corporation shall maintain an office for the service of 
     process and papers in the District of Columbia, and is 
     considered, for purposes of venue in civil actions, to be a 
     resident of the District of Columbia. The Corporation may 
     establish offices in any other place it determines necessary 
     or appropriate in the conduct of its business.

     SEC. 103. GENERAL POWERS AND FUNCTIONS OF THE CORPORATION.

       The Corporation--
       (a) may adopt, alter, and use a corporate seal, which shall 
     be judicially noticed;
       (b) may settle and adjust claims, sue and be sued in its 
     corporate name, and be represented by its own attorneys in 
     all administrative and, with prior approval of the Attorney 
     General, judicial proceedings, including appeals from 
     decisions of Federal courts;
       (c) shall adopt and may amend and repeal bylaws, and may 
     adopt, amend and repeal corporate orders and directives, 
     governing the manner in which its business may be conducted 
     and the powers granted to it by law may be exercised and 
     enjoyed;
       (d) may acquire, purchase, lease, and hold the real and 
     personal property it considers necessary to conduct its 
     business;
     
[[Page S497]]

       (e) may sell, lease, grant, and dispose of property as it 
     considers necessary to conduct its business;
       (f) with the consent of the agency concerned, may utilize 
     or employ the services, records, facilities, or personnel, of 
     any Federal, State, or local government agency;
       (g) may enter into contracts and incur liabilities;
       (h) may retain or use up to $250 million annually of its 
     revenues, without further appropriation, for reasonable 
     capital and operating expenses of the Corporation;
       (I) shall have the priority of the United States with 
     respect to the payment of debts out of bankrupt, insolvent, 
     and decedents' estates;
       (j) may request from the Administrator of General Services 
     the services the Administrator is authorized to provide 
     agencies of the United States, and Administrator shall 
     furnish the requested services to the Corporation on the 
     same basis those services are provided agencies of the 
     United States;
       (k) may accept gifts or donations of services or of real, 
     personal, mixed, tangible, or intangible property to conduct 
     its business; the Corporation shall establish written rules 
     setting forth the criteria to be used in determining whether 
     the acceptance of gifts or donations of real, personal, 
     mixed, tangible, or intangible property to conduct its 
     business under this subsection would reflect unfavorably upon 
     the ability of the Corporation or any employee to carry out 
     its responsibilities or official duties in a fair and 
     objective manner, or would compromise the integrity or 
     appearance of integrity of its programs or any official 
     involved in those programs;
       (1) may execute all instruments necessary or appropriate in 
     the exercise of its powers;
       (m) may acquire liability insurance or act as self-insurer;
       (n) shall pay any settlement or judgment entered against it 
     from the Corporation's own funds and not from the judgment 
     fund established under section 1304 of title 31, United 
     States Code; section 1346(b) and chapter 171 of title 28, 
     United States Code do not apply to claims against the 
     Corporation; and
       (o) may request the Secretary of the Treasury to invest 
     monies of the Corporation in public debt securities having 
     maturities suitable to the needs of the Corporation, and 
     bearing interest at rates determined by the Secretary of the 
     Treasury, taking into consideration current market yields on 
     outstanding obligations of the United States of comparable 
     maturity.

     SEC. 104. SPECIFIC POWERS AND FUNCTIONS OF THE CORPORATION.

       The Corporation--
       (a) shall explore, prospect, develop, use, produce, and 
     operate the Reserves to maximize the economic value of these 
     properties to the Nation;
       (b) may enter into joint, unit, or other cooperative plans, 
     leases, or other agreements and transactions as may be 
     necessary in the conduct of its business;
       (c) subject to section 109(c) shall administer and may 
     amend existing contracts, including the Unit Plan Contract, 
     and other agreements transferred to the Corporation under 
     section 109(a) of this subtitle;
       (d) may construct, acquire, or contract for the use of 
     storage and shipping facilities, and pipelines and associated 
     facilities, on and off the Reserves, for transporting 
     petroleum from the Reserves to the points where the 
     production from the Reserves will be refined and shipped;
       (e) may store, for appropriate reimbursement reasonably 
     reflecting fair market value, petroleum owned or managed by 
     other Federal agencies and instrumentalities and may store 
     petroleum owned or managed by non-Federal entities at rates 
     consistent with subsection (j) of this section;
       (f) may acquire privately owned lands and leases inside the 
     Reserves, or outside those Reserves on the same geologic 
     structure, by exchange or contract, and in order to protect 
     the Reserves from drainage, and if unable to arrange an 
     exchange or contract, by purchase or condemnation;
       (g) may acquire any pipeline in the vicinity of the Reserve 
     not otherwise operated as a common carrier by condemnation, 
     if necessary, if the owner refuses to accept, convey, and 
     transport without discrimination and at reasonable rates any 
     petroleum produced at the Reserve;
       (h) may acquire a right-of-way for new pipelines and 
     associated facilities by eminent domain under the Act of 
     February 26, 1931 (40 U.S.C. 258a-258e), and the prospective 
     holder of the right-of-way is ``the authority empowered by 
     law to acquire the lands'' within the meaning of that Act; 
     new pipelines shall accept, convey, and transport any 
     petroleum produced at the Reserves at reasonable rates;
       (i) may use, store, or sell its share of the petroleum 
     produced from the Reserves and lands covered by joint, unit, 
     or other cooperative plans;
       (j) shall establish prices for products, materials, and 
     services on a basis that will allow it to maximize the 
     financial return to the Government;
       (k) shall give priority to assisting in national security 
     matters when requested by the Secretary of Defense; and
       (l) shall transfer annually to the Treasury all revenues in 
     excess of that needed for reasonable capital and operating 
     expenses of the Corporation, but in no event may the revenues 
     retained or used for those purposes in any fiscal year exceed 
     $250 million.

     SEC. 105. CHIEF EXECUTIVE OFFICER.

       The powers and functions of the Corporation are vested in a 
     Chief Executive Officer to be appointed by the Secretary. The 
     Chief Executive Officer serves at the pleasure and under the 
     supervision of, and may be removed at the discretion of, the 
     Secretary. The Secretary shall set the compensation of the 
     Chief Executive Officer, not to exceed Executive Level III.

     SEC. 106. EMPLOYEES.

       (a) Appointments.--
       (1) The Chief Executive Officer may appoint officers and 
     employees of the Corporation without regard to the provisions 
     in title 5, United States Code, governing appointments in the 
     competitive service, and may fix compensation without regard 
     to chapter 51 and subchapter III of chapter 53 of title 5, 
     United States Code, governing general schedule 
     classifications and pay. In appointing officers of the 
     Corporation and setting their compensation, which may not 
     exceed Executive Level IV, the Chief Executive Officer 
     shall consult with the Secretary. Any officer or employee 
     of the Corporation may be removed at the discretion of the 
     Chief Executive Officer except as specified in subsection 
     (b) of this section.
       (2) Section 3132(a)(1) of title 5, United States Code, is 
     amended by adding at the end the following:
       ``(E)'' the United States Navel Petroleum Reserves and 
     Naval Oil Shale Reserves Corporation;''.
       (b) Transfer of Functions.--An officer or employee of the 
     Department who the Secretary determines is performing 
     functions vested in the Corporation by this subtitle is 
     transferred to the Corporation under section 3503 of title 5, 
     United States Code. Such an officer or employee retains the 
     compensation in effect immediately prior to the transfer to 
     the Corporation until changed by the Chief Executive Officer, 
     and may not be separated involuntarily by reason of the 
     transfer (but may be separated for cause) for a period of one 
     year from the date of the transfer to the Corporation.
       (c) Payments for Employee Benefits.--
       (1) The Corporation shall make those payments to the 
     Employees' Compensation Fund which are required by section 
     3147 of title 5, United States Code.
       (2) The Corporation shall pay to the Civil Service 
     Retirement and Disability Fund--
       (A) those employee deductions and agency contributions 
     which are required by sections 3334, 3422, and 3423 of title 
     5, United States Code.
       (B) those additional agency contributions which are 
     determined necessary by the Office of Personnel Management to 
     pay, in combination with sums under paragraph (2)(A) of this 
     subsection, the normal cost (determined using dynamic 
     assumptions) of retirement benefits for the employees of the 
     Corporation who are subject to subchapter III of chapter 83 
     of title 5, United States Code; and
       (C) those additional amounts, not to exceed two percent of 
     the amounts under paragraphs (2)(A) and (2)(B) of this 
     subsection, which are determined necessary by the Office of 
     Personnel Management to pay the costs of administering 
     retirement benefits for the Corporation's employees and 
     retirees and their survivors (which months shall be available 
     to the Office as provided in section 3343(a)(1)(B) of title 
     5, United States Code).
       (3) The Corporation shall pay to the Employees' Life 
     Insurance Fund--
       (A) those employees deductions and agency contributions 
     which are required by sections 8707 and 8708(a) of title 5, 
     United States Code; and
       (B) those amounts which are determined necessary by 
     the Office of Personnel Management under paragraph (5) of 
     this subsection to reimburse the Office for contributions 
     under sections 8708(d) of title 5, United Stated Code.
       (4) The Corporation shall pay to the Employees Health 
     Benefits fund--
       (A) those employees payments and agency contributions which 
     are required by section 8906 (a)-(f) of title 5, United 
     States Code; and
       (B) those amounts which are determined necessary by the 
     Office of Personnel Management under paragraph (5) of this 
     subsection to reimburse the Office for contributions under 
     section 8708(d) of title 5, United States Code.
       (4) The Corporation shall pay to the Employees Health 
     Benefits fund--
       (A) those employee payments and agency contributions which 
     are required by section 8906 (a)-(f) of title 5, United 
     States Code; and
       (B) those amounts which are determined necessary by the 
     Office of Personnel Management under paragraph (5) of this 
     subsection to reimburse the Office for contributions under 
     section 8906(g)(1) of title 5, United States Code.
       (5) The amounts required under paragraphs (3)(B) and (4)(B) 
     of this subsection are the Government contributions for 
     retired employees who retire from the Corporation after the 
     date of transfer, the survivors of those retired employees, 
     and survivors of the employees of the Corporation who die 
     after the date of the transfer, prorated to reflect the 
     portion of the total civilian service of such employee and 
     retired employees that was performed for the Corporation 
     after the date of transfer.
       (6) The Corporation shall pay to the Thrift Savings Fund 
     those employee and agency contributions that are required by 
     section 8432 of title 5, United States Code.
       (d) Separation Incentive Payments.--The Corporation shall 
     pay any voluntary separation incentive payments authorized, 
     but not yet paid, by the Department prior to the 

[[Page S498]]
     transfer of functions under subsection (b) of this section.

     SEC. 107. EXEMPTION FROM TAXATION.

       The Corporation, including the Reserves and all other 
     corporate property, all corporate activities, and all 
     corporate income are exempt from taxation in any manner or 
     form by any State or local government entity.

     SEC. 108. APPLICABILITY OF OTHER LAWS.

       (a) Federal Laws Governing Acquisition and Disposal.--The 
     Corporation shall not be considered to be a department, 
     agency, establishment, or instrumentality of the United 
     States for purposes of Federal laws, regulations, or other 
     requirements concerning acquisition of services and supplies, 
     and the acquisition, use, and disposal of real and personal 
     property, including the Federal Property and Administrative 
     Services Act (40 U.S.C. 471, et seq.), except that the 
     Corporation shall be considered to be a department, agency, 
     establishment, or instrumentality of the United States for 
     the purposes of the Davis-Bacon Act (40 U.S.C. 276a-276-7), 
     the McNamara-O'Hara Service Contract Act (41 U.S.C. 351, 
     et seq.), the Contract Work Hours and Safety Standards Act 
     (40 U.S.C. 327, et seq.), and civil rights laws and 
     regulations applicable to Federal contractors and 
     subcontractors.
       (b) Exemption From Administrative Procedural Provisions.--
     Chapter 5 of title 5, United States Code, does not apply to 
     the Corporation.

     SEC. 109. TRANSFERS TO THE CORPORATION.

       (a) Transfer of Assets.--Subject to subsection (c) of this 
     section, the Secretary shall transfer to the Corporation the 
     contracts, records, unexpended balance of appropriations and 
     other monies available to the Department (including funds set 
     aside for accounts payable and all advance payments), 
     accounts receivable, and all other assets that are related to 
     the powers and functions vested in the Corporation by this 
     subtitle.
       (b) Transfer of Liabilities and Judgments.--
       (1) All liabilities attributable to the operation of the 
     Reserves by the Department are transferred to the 
     Corporation.
       (2) Any judgment entered against the Department imposing 
     liability arising out of the operation of the Reserves by the 
     Department is considered a judgment against and is payable 
     solely by the Corporation.
       (c) Unit Plan Contract Dispute Resolution.--The Secretary 
     shall retain, and shall not transfer, dispute resolution 
     authority under section 9 of the Unit Plan Contract.
       (d) Payment of Interest to the Treasury.--From time to 
     time, and at least at the close of each fiscal year, the 
     Corporation shall pay into the Treasury as miscellaneous 
     receipts interest on any Federal financial capital utilized 
     by the Corporation, as determined by the Director of the 
     Office of Management and Budget. The rate of such interest 
     shall be determined by the Secretary of the Treasury, taking 
     into consideration prevailing market yields, during the month 
     preceding each fiscal year, on outstanding obligations of the 
     United States with remaining periods to maturity of 
     approximately one year.

               TITLE II--PRIVATIZATION OF THE CORPORATION

     SEC. 201. STRATEGIC PLAN FOR PRIVATIZATION.

       (a) Within 5 years after the establishment of the 
     Corporation, the Corporation shall prepare a strategic plan 
     for transferring ownership of the Corporation to private 
     investors. The Corporation shall revise the plan as needed.
       (b) The plan shall include consideration of alternative 
     means for transferring ownership of the Corporation to 
     private investors, including public stock offering, private 
     placement, or merger or acquisition. The plan may call for 
     the phased transfer of ownership or for complete transfer at 
     a single point of time. If the plan calls for phased transfer 
     of ownership, then--
       (1) privatization shall be deemed to occur when 100 percent 
     of ownership has been transferred to private investors;
       (2) prior to privatization, such stock shall be nonvoting 
     stock; and
       (3) at the time of privatization, such stock shall convert 
     to voting stock.
       (c) The plan shall evaluate the relative merits of the 
     alternatives considered and the estimated return to the 
     Government's investment in the Corporation achievable through 
     each alternative. The plan shall include the Corporation's 
     recommendations on its preferred means of privatization.
       (d) The Corporation shall transmit copies of the strategic 
     plan for privatization to the President and Congress upon 
     completion.

     SEC. 202. PRIVATIZATION.

       (a) Subsequent to transmitting a plan for privatization 
     pursuant to section 101, and subject to subsections (b) and 
     (c), the Corporation may implement the privatization plan if 
     the Corporation determines, in consultation with appropriate 
     agencies of the United States, that privatization will result 
     in a return to the United States at least equal to the net 
     present value of the Corporation.
       (b) The Corporation may not implement the privatization 
     plan without the approval of the President.
       (c) The Corporation shall notify the Congress of its intent 
     to implement the privatization plan. Within 30 days of 
     notification, the Comptroller General shall submit a report 
     to Congress evaluating the extent to which--
       (1) the privatization plan would result in any ongoing 
     obligation or undue cost to the Federal Government; and
       (2) the revenues gained by the Federal Government under the 
     privatization plan would represent at least the net present 
     value of the Corporation.
       (d) The Corporation may not implement the privatization 
     plan less than 60 days after notification of the Congress.
       (e) Proceeds from the sale of capital stock of the 
     Corporation under this section shall be deposited in the 
     general fund of the Treasury.
                                 ______

      By Mr. McCAIN:
  S. 1531. A bill to reimburse States and their political subdivisions 
for emergency medical assistance provided to illegal aliens under their 
custody as a result of Federal action; to the Committee on the 
Judiciary.


           immigration and naturalization service legislation

 Mr. McCAIN. Mr. President, this legislation would require the 
Immigration and Naturalization Service to reimburse States and 
localities for the cost of emergency ambulance services provided to 
illegal aliens injured while crossing the border. Currently, border 
communities pay the high cost associated with providing emergency 
ambulance services to illegal aliens. Although Federal authorities 
consistently have placed illegal aliens injured crossing the border in 
State and local custody in order to obtain medical services, the 
Federal authorities have failed to reimburse local Governors for the 
emergency ambulance services provided. As a result, Federal authorities 
have left border States and localities to pick up the tab for a Federal 
responsibility. This cannot continue.
  In my home State of Arizona, the border city of Nogales has been 
particularly impacted by the failure of Federal authorities to 
reimburse the city for the costs of transporting aliens injured while 
crossing the border. Between April 22 and July 31, 1995, 44 calls were 
made by the Border Patrol to the city requesting ambulance service for 
illegal aliens injured while crossing the border. Because these 
patients rarely pay their own ambulance transport bill, the financial 
burden on the city has become very heavy. The city has paid almost 
$200,000 in ambulance costs in the past 6 years. This cost is 
significant to Nogales, a border community which has only 20,000 
inhabitants, a low tax base, and recently reported a $100,000 deficit. 
The devaluation of the peso has left many Southwestern border 
communities in a similarly depressed financial position. Illegal 
immigration is a Federal matter and our Nation's border communities 
cannot afford and should not be forced to pay for emergency ambulance 
services provided at the request of Federal authorities. Again, that is 
a Federal responsibility.
  I recognize that a separate and much broader debate is being waged 
across the Nation concerning a State's obligation to provide health 
care and other social services to illegal aliens residing within its 
borders. That issue is much larger and remains to be resolved. Today, 
however, I believe we can all agree that Federal authorities who call 
upon local emergency ambulance services for injured illegal aliens 
should be required to pay for those ambulance services. Our border 
States and communities should not be saddled with this additional 
financial burden.
                                 ______

      By Mr. SIMON:
  S. 1532. A bill to provide for the continuing operation of the Office 
of Federal Investigations of the Office of Personnel Management, and 
for other purposes; to the Committee on Governmental Affairs.


     THE OFFICE OF FEDERAL INVESTIGATIONS PRIVATIZATION ACT OF 1996

 Mr. SIMON. Mr. President, 1 year ago, as part of the National 
Performance Review, the administration announced that the Office of 
Personnel Management [OPM] would privatize its investigative branch, 
the Office of Federal Investigations [OFI]. The Treasury and Postal 
Service conference report directs OPM not to implement a reduction in 
force before March 31, 1996, in order to allow the GAO to conduct a 
cost-benefit analysis. OPM is prepared to initiate an employee stock 
ownership plan [ESOP], which would have a sole source contract with OPM 
for the first 2 to 3 years, after which contracts would be offered to 
private firms. I am very concerned that privatization is 

[[Page S499]]
not the best approach in this important area.
  Today I offer legislation that would prevent immediate privatization 
of this extremely important Government function. For over 40 years, the 
OFI has been responsible for conducting background investigations for 
potential employees of various agencies within the Federal Government, 
including the Department of Energy, the Department of Justice, and the 
Treasury Department. Overall, OFI conducts about 40 percent of all 
Federal background investigations for positions ranging from 
bureaucratic responsibilities to high-ranking positions requiring 
substantial security clearances. In my view, shifting this 
responsibility to the private sector raises a host of extremely 
important questions which must be addressed before the decision to 
privatize is made.
  First, we must ensure that our national security is not in any way 
jeopardized by a move to privatization. Currently, OFI does background 
checks on individuals that will ultimately have access to top secret 
information, including weapons systems and nuclear energy data. We need 
to ask ourselves if this is the type of information that we want a 
private investigator to have access to. If the answer is ``yes,'' 
certainly we need to carefully review the safeguards needed to ensure 
that our national interests remain secure.
  The ability of private firms to maintain the privacy of sensitive 
records is another area that needs to be looked at closely. A private 
contractor would potentially have the ability to amass large quantities 
of information on Government employees. Although OPM has suggested that 
they would have the ability to keep records private, I have not heard 
specific measures that could be taken to guarantee this. Serious study 
must be given to what measures can and should be taken to protect 
privacy.
  We must also ensure that quality investigations will continue to be 
conducted. The Federal Government currently uses private investigators 
for a very small fraction of background checks. The only experience 
with private investigators on a large scale produced numerous 
investigations that were not up to standard, or, even in a fraction of 
cases, were falsified. This must not happen again. What safeguards can 
and should OPM put in place to ensure that quality is maintained? We 
must be certain that quality can be maintained before we make the 
decision to privatize.
  It is also important to ask ourselves if private investigators will 
be able to provide the best available information to Government 
agencies. Will they have difficulty obtaining vital information from 
law enforcement officials? In a preliminary study, the General 
Accounting Office [GAO] determined that law enforcement officials may 
be reluctant to give out sensitive information to private 
investigators. This issue deserves further study.
  I have asked the GAO, as part of their ongoing cost-benefit analysis, 
to address my concerns and report their findings to me before the end 
of January, 1996. In addition, I sent a letter to a number of Federal 
agencies asking for their input on the effect of privatization. In 
response to my inquiry, I was told that privatization could cause 
disruptions to operations and that the quality of investigations could 
suffer. I urge my colleagues to think carefully about the negative 
impact that may be created by privatization.
  My comments are not meant to imply that private contractors cannot 
perform top quality investigations while also ensuring privacy and 
protecting our national security. It is certainly conceivable that they 
could. However, before this decision is made, we must be sure that 
adequate study of the potential impact has been conducted.
  The legislation I offer today would prevent privatization from 
occurring for 2 years, during which time OFI would be prohibited from 
reducing its number of full-time employees. In addition, the bill would 
require OPM and the GAO to issue a comprehensive report detailing the 
likely effect of privatization on all of the issues that I have 
addressed.
  I urge my colleagues to support this legislation. While I certainly 
support the goals of the Clinton administration's National Performance 
Review, and applaud efforts to eliminate Government waste, Federal 
investigators employed by the government have served all of us 
extremely well, and we should proceed with great caution before 
changing this role.
                                 ______

      By Mr. McCAIN:
  S. 1533. A bill to provide an opportunity for community renewal and 
economic growth in empowerment zones and enterprise communities, and 
for other purposes; to the Committee on Finance.


       the community renewal and economic opportunity act of 1996

 Mr. McCAIN. Mr. President, today, I am pleased to introduce 
the Community Renewal and Economic Opportunity Act of 1996.
  The bill contains 10 major initiatives to revive communities 
afflicted by joblessness and crime and to help the neediest Americans 
better provide for themselves and their families.
  Included in the bill are measures to foster new job opportunities and 
economic development in America's poorest communities through targeted 
tax incentives; to improve public infrastructure in blighted areas by 
channeling a greater percentage of Federal grant monies to the neediest 
communities and by lowering the cost of project construction; to 
invigorate the fight against violent crime which most seriously affects 
low-income neighborhoods by allowing local law enforcement agencies to 
keep a greater amount of forfeited criminal assets and by requiring 
family opportunities for needy innocent victims; to increase family 
opportunities for needy children by banning racial discrimination in 
adoption; and to promote voluntarism by protecting volunteers against 
liability.
  All Americans, no matter who they are, where they live, or the color 
of their skin, deserve the opportunity to provide for their families, 
to pursue their aspirations and to share fully in the American dream.
  History teaches us that there's no panacea for poverty and crime, 
but, no matter how intractable the problem, it is the essence of the 
American character to constantly advance our society so that the social 
and economic progress of each generation exceeds that of its 
predecessor. No American is unimportant. As a nation, we have a solemn 
obligation to help those in need to help themselves. Our success in 
that endeavor is bound only by the limits of our energy and 
imagination.
  It is painfully clear that the traditional welfare state response to 
poverty and community decay has been a miserable failure. Over the past 
30 years, we have spent over $5 trillion on poverty programs, yet 
millions of Americans remain ensnared in the grinding cycle of 
dependence and need. The time is now for new ideas and approaches to 
restore hope and increase economic opportunity for all Americans.
  The most effective way to revive American communities mired in 
poverty and to improve the quality of life is to provide job 
opportunities and sustainable economic development. A job and a 
paycheck are the most effective welfare programs. And, as any mayor or 
city council member in our country can attest, a healthy tax base 
produced by an employed population is the most potent prescription for 
community renewal.
  Accordingly, the first title of the bill authorizes a battery of new 
and expanded tax incentives to attract businesses to blighted areas and 
to hire economically disadvantaged residents.
  Four years ago, Congress designated 9 of the poorest communities in 
America as enterprise zones and 90 others as enterprise communities. 
The designation made these communities eligible for a host of tax 
incentives and other community renewal programs. This was an excellent 
step but inadequate in scope.
  Currently, the law provides special tax benefits only to enterprise 
zone businesses which hire at least 35 percent of their employees from 
the local community. The bill I'm introducing would enhance the tax 
incentive by allowing firms to take an additional ten percent tax 
credit if they increase their local hiring rate to 50 percent.
  Furthermore, the bill extends eligibility for the credit beyond 
enterprise zones to include qualified businesses within the 90 
enterprise communities, as well as 90 additional poverty stricken 
economic recovery areas--areas 

[[Page S500]]
which will be designated by the Secretary of Housing and Urban 
Development.
  Many communities are suffering economic distress as deeply as the 
areas we have officially designated as enterprise zones, and they 
deserve the opportunity to attract the jobs and economic development 
they so desperately need.
  Mr. President, the 10-percent tax credit will serve as a strong 
incentive for businesses to form within economically depressed areas 
and to increase the hiring of local residents. However, the bill I'm 
introducing today would also authorize what I believe might be an even 
more powerful alternative inducement--a low 10-percent flat tax.
  The bill would allow businesses within federally designated 
enterprise zones, enterprise communities, and economic renewal areas 
which hire at least half of their employees from the local community to 
pay a simple 10-percent flat tax. Simplifying taxes and offering a low 
incentive rate as an alternative to today's excessive and byzantine tax 
rules, might prove to be the most potent inducement for businesses to 
invest in places and in people that need the helping hand.
  I look forward to hearing from employers on the relative merits of 
the flat tax and the credit option.
  No matter which option an employer might choose, it's clear that once 
a company has opted to locate within a blighted area and to assume the 
associated risk, one of the biggest challenges will be to attract the 
capital and investment necessary for the enterprise to survive and 
grow.
  To address this need, the bill once again would use our tax system to 
stimulate the necessary investment. Specifically, the bill would make 
stock dividends from qualified enterprise zone and enterprise community 
businesses nontaxable, and it would eliminate the capital gains tax for 
investments held at least 5 years within designated enterprise zones, 
enterprise communities and economic recovery areas. Exempting dividends 
and capital gains within our poorest areas from taxes should attract a 
healthy flow of job-producing capital investment.
  So, Mr. President, this bill provides substantial new tax-based 
incentives for companies to assume the risk of locating within blighted 
areas and to invest in their human resources. However, we must 
recognize that poverty and economic disadvantage do not confine 
themselves within certain municipal boundaries. Economically 
disadvantaged people reside in practically every community and we have 
an obligation to help these Americans even if they do not happen to 
live within areas of the most severe poverty.
  Accordingly, the bill would expand the work opportunity tax credit 
passed by Congress last year. The bill would raise the credit from 35 
percent for the first $6,000 in wages for a targeted economically 
disadvantaged employee to 35 percent for the first $12,000 in wages.
  Expanding the credit will provide a greater incentive for businesses, 
no matter where they are located, to hire economically disadvantaged 
individuals; and will discourage the practice of rapidly turning over 
employees in order to maximize the tax credit.
  Most importantly, the bill expands the list of individuals who 
qualify for the work opportunity tax credit. As currently conceived, 
the credit would be available only to residents of enterprise zones and 
enterprise communities; recipients of AFDC; vocational rehabilitation 
recipients and Summer Youth. The bill extends the credit to individuals 
who have been chronically unemployed, have few assets, and have been 
living for a significant period of time under the poverty level.
  A flexible, transportable, and more widely applied credit will help 
needy individuals no matter where they reside or by whom they are 
employed.
  Mr. President, we all recognize that it's one thing to attract 
businesses to the poorest communities and encourage them to hire the 
most economically disadvantaged Americans by sweetening the tax 
incentives, but ensuring that such firms are sustainable and can 
overcome the many risks they assume to succeed in quite another.
  Accordingly, the second major thrust of the bill's first title is to 
use the purchasing power of the Federal Government to assist risk-
taking entrepreneurs and corporations who are willing to help poor 
Americans.
  The bill would accomplish that goal by reforming the Small Business 
Administration's (8)(a) set-aside program. The current program provides 
Federal contract set-asides to businesses based on the race or 
ethnicity of the business owner. The bill would reorient the program by 
making the set-asides available to businesses that hire economically 
disadvantaged Americans regardless of their race, creed, or color.
  As my colleagues are aware, the current (8)(a)program has been rife 
with fraud and abuse. The record is replete with unsavory examples of 
unscrupulous individuals establishing shell corporations to obtain set-
aside benefits and cases in which very wealthy and successful 
enterprises remain in the program when they can and should compete 
quite nicely through the normal competitive contracting process.
  Mr. President, America is based on the concept of equality among all 
people. As a society that aspires full equality and color blindness, 
the time for special programs that focus on the race and ethnicity of 
particular Americans rather than their economic status is past. A needy 
American is a needy American no matter their race, creed, color, or 
gender. Certainly, the Supreme Court's decision in the Adarand case 
emphasized that reality that, by and large, race-based set-asides do 
not comport with the fundamental tenets of equality and equal 
protection.
  The original purpose of the 8(a) program was to assist economically 
disadvantaged Americans without regard to race or gender. I believe we 
can return the program to its original intent, and assist far more 
needy people than today's ownership-based program by providing set-
asides to businesses located within enterprise zones and communities as 
well as to other firms which train and employ a significant percentage 
of economically disadvantaged individuals.
  Exactly how do we determine who is an ``economically disadvantaged 
individual''? For purposes of this bill, EDI's are defined as: (1) 
individuals who live within EZ's or EC's; (2) individuals who have 
assets no greater than the ceiling allowed for AFDC eligibility; who 
were not claimed as a dependent for 4 years preceding the date of their 
hiring; and whose income did not exceed the poverty level in either the 
year before their hiring nor in 3 of the 4 years before their hiring; 
or (3) individuals with a dependent; who have assets no greater than 
the ceiling allowed for AFDC eligibility; who were not claimed as a 
dependent for 4 years preceding the date of their hiring; and whose 
income did not exceed the poverty level during the year prior to their 
hiring.
  Once designated as an EDI an individual would retain the designation 
for 5 years, which should be ample time for the employee to receive 
training and to establish a work history. Reorienting the 8(a) program 
as provided by this bill will help us to achieve the goals of assisting 
economically disadvantaged individuals more fairly and effectively.
  Finally, Mr. President, the first title of the bill recognizes the 
important role private entrepreneurship can and should play in serving 
the needs of our poorest communities and that we must do a better job 
of promoting start-up enterprises. Toward that end, the bill would 
establish a business mentor program under the auspices of the Small 
Business Administration. The program would pair businesses owned by 
economically disadvantaged individuals with mentor businesses and 
lending institutions.
  Pairing start-up enterprises owned by individuals who live within 
poverty stricken areas with established mentor businesses will enhance 
the success of first-time business owners creating additional jobs and 
economic opportunity.
  Mr. President, again, I want to stress a bill cannot be written that 
will solve the problem of joblessness and poverty. But, I believe we 
can make significant gains by employing the kinds of incentives 
proposed by the bill I've introduced today. The incentives are not 
perfect and I look forward to a detailed debate on the initiatives to 
ensure that we craft incentives that will be as appropriate and cost-
effective as possible.
  Mr. President, the second major title of this bill is designed to 
assist depressed communities in improving their infrastructure. Strong 
infrastructure and dependable public works such 

[[Page S501]]
as roads, utilities, schools, and other public accommodations, are 
critical to improving the quality of life and to fostering sustainable 
community development. This bill would lower the cost of constructing 
and operating public facilities by repealing the the Davis-Bacon Act 
within enterprise zones and enterprise communities.
  The Davis-Bacon Act requires that the prevailing union wages be paid 
on all contracts and subcontracts for construction projects that 
utilize Federal monies. This costly Federal mandate inflates the price 
of infrastructure and disproportionately impacts poorer communities. 
Moreover it makes it more difficult for entry level job seekers to 
obtain training and work.
  In addition, the bill would channel a greater share of Federal 
Community Development Block Grant moneys to the neediest counties and 
cities.
  The Federal CDBG program was created to promote local economic and 
community development. Current law requires that 70 percent of these 
grant monies be channeled to disadvantaged communities. The bill 
increases the amount to 75 percent and cuts the percentage allowed for 
administrative overhead from 20 percent to 10 percent so that more 
dollars can flow to bricks and mortar projects in needy areas.
  Furthermore, the bill would require wealthier communities to cost-
share any CDBG grants they may receive. Greenwich, CT and Beverly 
Hills, CA are fine communities, but we should not be spending scarce 
Federal economic development aid in communities that can well afford to 
meet their own needs, at the expense of much needier areas.
  The third title of the bill seeks to improve educational 
opportunities in the poorest communities. Quality education is the key 
to improving the lives of our youth and helping to break the cycle of 
poverty.
  The bill authorizes a Federal school voucher system within enterprise 
zones and enterprise communities. Empowering parents to send their 
children to the schools that best meet their needs will increase the 
quality of educational opportunity. The program would in no way require 
the affected local school districts to diminish or reallocate their own 
funding. The Federal monies would be additional to the local funds 
currently used to run the affected school districts.
  The fourth title of the bill seeks to make our streets safer. The 
gravest threat to quality of life and community redevelopment within 
blighted areas is violent crime. The streets must be made safer and 
victims must be treated compassionately and justly.
  The bill allows counties and cities which have a high rate of violent 
crime to retain a higher share of Federal asset forfeiture proceeds 
under the Racketeer Influenced Corrupt Organization (RICO) statutes.
  Current law allows local law enforcement agencies which participate 
in a Federal RICO operation to have a share of the proceeds from asset 
forfeiture. The bill would authorize an additional 25 percent share for 
communities that suffer from inordinately high rates of violent crime. 
The additional resources would be used for violent crime control 
programs.
  In addition, the safe streets title authorizes mandatory restitution 
for certain violent crimes, and increases victim assistance resources 
by boosting fines against Federal felons. This title mirrors 
legislation that I had the privilege to work on with Senator Hatch, 
Senator Nickles, Senator Biden, and other Members last year.
  The bill's fifth title seeks to promote family opportunities for poor 
children. The family unit is the foundation of our society. A loving 
and supportive family is the key to a child's development into a 
healthy and productive member of the community.
  The bill prohibits racial discrimination in adoption. Many adoption 
agencies make adoption decisions based on inappropriate racial 
considerations. Consequently, countless children, many of them 
minorities from the inner city remain in foster care, denied the 
opportunity for a loving family.
  Finally, the bill seeks to promote voluntarism. America has a proud 
tradition of neighbor helping neighbor which must be nurtured and 
sustained if we are to revitalize America's communities, particularly 
those poverty stricken areas most needful of help.
  The bill encourages states to pass laws protecting volunteers against 
lawsuits. The provision is modeled after legislation introduced by 
Congressman John Porter of Illinois. It's fundamentally unfair that we 
continue to subject volunteers to the threat of liability when they 
share their time, resources and expertise to help the community. 
Increasing exposure to liability in our ever litigious society will 
chill voluntarism to the detriment of all communities.
  Mr. President, as I said, I do not pretend this bill is the answer to 
all our inner city problems. Far from it. But, I believe it provides 
some excellent initiatives which will help us make a real difference in 
improving lives and communities of areas that need and deserve the help 
of a caring nation.
  Moreover, I am convinced we can enact these or very similar 
initiatives without worsening the deficit. The programs that require 
outlays or offsets, such as the package of tax credits, can be paid for 
by reductions in non-essential programs that are of a lower priority 
including, I might add, corporate pork.
  This bill is by no means perfect or complete. I believe it is a 
starting point for more vigorous debate and action to meet the 
challenges of the poorest Americans and the neediest communities. I 
look forward to a dialogue on the bill and the issues it raises, and to 
hearing the many other suggestions about how most effectively to end 
the cycle of poverty and dependence.
  One suggestion I would make is that the appropriate committees hold 
field hearings and engage the Americans who live in the poorest 
communities in the debate over how best we can help them to meet the 
needs of their families and their neighborhoods.
  Too often politicians cloak themselves within the insulated, and many 
times, out of touch environs of the Capitol as we devise the policies 
that affect millions of lives. Perhaps it's time we more diligently 
consult and work with real people and address their realities as we 
endeavor to meet our oath of office and the needs of our great Nation.
  I am pleased to note that his bill is strongly supported by Secretary 
Jack Kemp of Empower America. Such an endorsement is germane and is as 
fitting as it is welcome, because personal and community empowerment is 
what this bill is about. It's about new alternatives to the failed 
prescriptions of the past. It's about recognizing that every American 
counts and that a leg up to self-sufficiency is more lasting, 
meaningful, and compassionate than a handout; and that a caring nation 
can and must help all of those who truly need assistance to participate 
in the social, economic and political freedom that is the essence of 
the American dream.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         Community Renewal and Economic Opportunity Act of 1996


                 title i--jobs, paychecks, and tax base

       The most effective way to revive America's poverty stricken 
     communities and to improve the quality of life for 
     economically disadvantaged residents is to stimulate job 
     creation and sustainable economic development--jobs, 
     paychecks and tax base. This title provides a battery of new 
     and expanded incentives for businesses to form and capitalize 
     within blighted areas and to hire local residents.
     I. Tax credits and businesses that hire economically 
         disadvantaged individuals within blighted areas
       Enables each qualified business located within a federally 
     designated Enterprise Zone and Enterprise Community to deduct 
     ten percent of its tax liability if 50 percent of its 
     employees are residents of the zone.
       Current law provides special tax incentives to businesses 
     within the 9 designated Enterprise Zones if 35 percent of 
     their employees are residents of the area. Increasing the 
     incentive and expanding it to the 90 enterprise communities 
     and beyond (see below) will increase employment opportunities 
     for residents of blighted areas.
       Authorizes the Secretary of Housing and Urban Development 
     to designate an additional 90 poverty stricken communities in 
     which businesses would be eligible for the 10 percent 
     negative surtax.
       Many communities are suffering the same economic distress 
     as areas designated to be Enterprise Zones and Communities. 
     Extending the credit to other economically distressed areas 
     will stimulate job creation and tax base.
     
[[Page S502]]

       Authorizes zero capital gains tax for investments held for 
     at least five years within Enterprise Zones and Economic 
     Communities.
       A zero capital gains tax will spur investment and economic 
     activity within economically depressed areas.
     II. Tax incentives for hiring economically disadvantaged 
         individuals regardless of business location or employee 
         residence
       Expands the Work opportunity Tax Credit from 35 percent for 
     the first $6,000 in wages for a targeted economically 
     disadvantaged employee to, 35 percent for the first $12,000 
     in wages.
       Expanding the credit will provide a greater incentive for 
     businesses, no matter where they are located, to hire 
     economically disadvantaged individuals; and will reduce the 
     rapid turnover of economically disadvantaged employees in 
     order for businesses to take maximum advantage of the credit.
       Expands the list of individuals who qualify for the Work 
     Opportunity Tax Credit to include individuals who have been 
     chronically unemployable.
       The current Work Opportunity Tax Credit is available to 
     residents within Economic Zones and Enterprise Communities; 
     Recipients of AFDC; Vocational Rehabilitation recipients; and 
     Summer Youth. The bill expands the list to include 
     individuals who have been chronically unemployed, have few 
     assets and have been living for a period of time under the 
     poverty level.
     III. Alternative flat tax for firms located in blighted areas 
         which hire local residents
       Authorizes businesses within enterprise Zones ad Enterprise 
     Communities to replace their current tax liability with a 10-
     percent flat tax option if 50 percent of their employees 
     reside within the zone.
       A low flat tax can be a powerful incentive for businesses 
     to locate within economically distressed areas, and to hire 
     residents of those communities.
     IV. Investor incentives to attract capital for firms located 
         in blighted areas
       Makes stock dividends from businesses within Enterprise 
     Zones and Economic Communities non-taxable.
       Tax free dividends will spur capital formation for 
     businesses which locate in economically distressed 
     communities and employ residents of high unemployment areas.
     V. Contracting set-asides for business who hire and train 
         economically disadvantaged individuals
       Transforms the SBA (8)(a) set-aside program from one that 
     provides federal contracting set-asides to businesses based 
     on the race or ethnicity of the owner, to one based on the 
     economic disadvantage of the business' employees.
       Providing set-aside contracts to businesses located within 
     EZ and EC's or which hire economically disadvantaged people 
     will enable the federal government to utilize its purchasing 
     power to help a greater number of needy people in a more fair 
     and racially blind manner.
       EDI's are defined as: (1) individuals who live within EZ's 
     or EC's, or (2) Individuals who have assets no greater than 
     the ceiling allowed for AFDC eligibility; who were not 
     claimed as a dependent for four years preceding the date of 
     their hiring; and whose income did not exceed the poverty 
     level in the year before their hiring nor in three of the 
     four years before their hiring, or (3) Individuals with a 
     dependent; who have assets no greater than the ceiling 
     allowed for AFDC eligibility; who were not claimed as a 
     dependent for four years preceding the date of their hiring; 
     and whose income did not exceed the poverty level during the 
     year prior to their hiring. Once designated as an EDI for 
     purposes of this program an individual retains the EDI 
     designation for a period of five years.
     VI. Business ownership mentor program
       Establishes a mentor program under the SBA to pair 
     businesses owned by economically disadvantaged individuals 
     with mentor businesses and lending institutions.
       Pairing start-up enterprises owned by individuals who live 
     within poverty stricken areas with mentor businesses will 
     enhance the success of first time business owners.


            title ii--utilities, schools and infrastructure

       Successful and sustainable community development depends 
     upon healthy infrastructure and public works including 
     transportation, utilities, schools and other public 
     accommodations. Lowering the cost of constructing and 
     operating public facilities and providing additional 
     resources to poverty stricken communities is vital to 
     improving the quality of life within these areas.
       Repeals Davis-Bacon within Enterprise Zones and Enterprise 
     Communities.
       The Davis-Bacon Act requires the payment of prevailing 
     union wages for any contract or subcontract which utilizes 
     federal funding. The rule inflates the cost of public 
     facilities and disproportionately impacts poverty stricken 
     communities which have fewer resources.
       Channels a greater share of federal Community Development 
     Block Grant monies to the neediest counties and cities.
       The federal CDBG program was created to assist communities 
     with economic and community development project. Currently, 
     70 percent of these grant monies are to be channeled to 
     disadvantaged communities. The bill increases the amount to 
     75 percent and cuts the percentage allowed for administrative 
     overhead from 20 to 10 percent and calls on wealthier 
     communities to cost share CDBG grants so that more dollars 
     can flow to bricks and mortar projects in needy areas.


                     title iii--educational choice

       Quality education is the key to improving the lives of our 
     youth and helping to break the cycle of poverty.
       Authorizes a federal school voucher program within 
     enterprise zones and enterprise communities.
       Empowering parents to send their children to the schools 
     that best meet their needs will increase and improve the 
     educational opportunity of Americans who reside within 
     blighted communities. Educational quality will dramatically 
     improve with competition. The bill would authorize voucher 
     payments to families within EZ and EC and would not redirect 
     or diminish the local funding of area schools.


                         title iv--safe streets

       The gravest threat to quality of life and community 
     redevelopment within blighted areas is violent crime. The 
     streets must be made safer and victims must be treated 
     compassionately and justly.
       Allows counties and cities which have a high rate of 
     violent crime to retain a higher share of federal asset 
     forfeiture proceeds under the Racketeer Influence Corrupt 
     Organization (RICO) statutes.
       Current law allows local law enforcement agencies which 
     participate in a federal asset seizure to a percentage of the 
     asset proceeds. The percentage reflects the level of 
     participation by the local agency. The bill allows an 
     additional 20 percent of the asset proceed to go to 
     communities that are disproportionately affected by violent 
     crime.
       Authorizes mandatory restitution for certain violent 
     crimes, and increases the federal Crime Victim Fund by 
     increasing fines against federal felons.
       Current law does not mandate that violent criminal 
     compensate their victims.


                      title vi--family opportunity

       The family unit is the foundation of our society. A loving 
     and supportive family is the key to a child's development 
     into a healthy and productive member of the community.
       Prohibits racial discrimination in adoption which deprives 
     millions of children from the opportunity to have a family.
       Many adoption agencies make adoption decisions based on 
     racial consideration. Consequently countless children, many 
     of them minorities from the inner city remain in foster care, 
     denied the opportunity for permanent family placement.


                         title vii--voluntarism

       America has a proud tradition of neighbor helping neighbor 
     which must be nurtured and sustained if we are to revitalize 
     America's communities, particularly those poverty stricken 
     areas most in need of a helping hand.
       Encourages states to pass laws protecting volunteers 
     against lawsuits.
       It's fundamentally unfair that we continue to subject 
     volunteers to the threat of liability when they share their 
     time, resources and expertise to help the community. The 
     exposure to liability in our increasingly litigious society 
     will chill voluntarism to the detriment of all 
     communities.
                                 ______


             By Mr. HATFIELD (for himself and Mr. Kennedy):

  S. 1534. A bill to amend the Public Health Service Act to provide 
additional support for and to expand clinical research programs, and 
for other purposes; to the Commission on Labor and Human Resources.


             THE CLINICAL RESEARCH ENHANCEMENT ACT OF 1996

 Mr. HATFIELD. Mr. President, the proud tradition of American 
leadership in science and health care has been an important factor in 
our international stature and our domestic quality of life. This 
tradition is however vulnerable and may wither if not nurtured. The CBO 
predicts that national expenditures for health will reach the 
astonishing sum of $1,613 billion by the year 2000. This an 
astronomical sum for a nation who seemingly can meet its health care 
needs. Investments in biomedical research offer the only reasonable 
hope of reducing not only monetary costs, but, more importantly, human 
suffering.
  Biomedical research is commonly thought of as existing in two 
spheres. The first is ``basic'' research in which fundamental 
biological principles are studied primarily in laboratories using 
molecules, cells or animals. The second is ``clinical'' or patient 
oriented research [POR], in which the scientific principles discovered 
in the lab are applied to patients with disease. To determine which of 
several medicines is most effective in curing a cancer, careful 
comparison of these drugs is necessary in large groups of real people. 
To understand which of several different types of treatment: medical, 
surgical, or nutritional is best in helping patients not merely for the 
short run but over time, the various treatment 

[[Page S503]]
options must be tried systematically on real people. The emphasis is on 
people. We must use the knowledge gained by biomedical research to help 
people get better.
  Both aspects of biomedical research are essential because they depend 
upon each other--without the foundation of basic research, clinical 
research would be impossible. For example the current successful 
treatment of sickle cell Anemia which so cruelly strikes young people, 
had its origins in basic research from the development of chicken 
embryos. Medications which modified chicken embryonic cells were found 
to also enable monkeys to manufacture certain types of hemoglobin, 
hemoglobin a component of blood cells necessary to combat thalassemia 
and sickle cell disease. The studies moved from basic research in 
chickens to monkeys and finally to clinical research in humans leading 
to a successful therapy for a previously terrible disorder.
  Yet despite their mutual importance clinical research has failed to 
receive the support necessary to permit us to fully benefit from the 
advances of basic research. The proposal for a national fund for health 
research which Senator Harkin and I have introduced goes a long way to 
prevent the possibility of robbing funds from Peter to pay Paul. We 
need more money in the system, but we also will have a better balance 
between basic and clinical research.
  The Institute of Medicine has recently published an exhaustive report 
which concludes that clinical research is in a state of crisis. A state 
which if not addressed will result in: a serious deficiency of clinical 
expertise; a paucity of effective clinical interventions; an increase 
in human suffering and disability; and ultimately an increase in the 
cost of medical care.
  Historically clinical research has resulted in marked improvements in 
care and costs. A $1.2 million investment in neonatal screening for 
subnormal thyroid has saved $206 million in treatment costs annually. A 
$679,000 investment in developing a treatment for recurring renal 
stones has resulted in an estimated savings of $300 million annually. A 
multicenter clinical trial of interventions in stroke prevention cost 
approximately $4.6 million. Its results could prevent 20 to 30,000 
strokes per year with an annual savings of $200 million. All of these 
and many other achievements have occurred because of the ability of 
clinical research to take knowledge derived from basic research to the 
bedside, bridging the gap between the laboratory and the patient.
  Yet despite its clear societal and economic benefits, clinical 
research is in crisis. The amount and proportion of personnel and 
fiscal resources devoted to clinical research, particularly at the NIH 
has fallen to levels which place our Nation at a severe disadvantage. 
Unable to capitalize on new discoveries, the quality of life of our 
patients slowly falls as ironically our costs continue to rise. The 
nature of this crisis is threefold a relative lack of: people involved 
in clinical research; an infrastructure to adequately select and 
support the best clinical research; and declining fiscal investment in 
biomedical research overall.


                                 PEOPLE

  While the United States continues to train large numbers of excellent 
young physicians the proportion of those choosing careers in clinical 
research becomes ever smaller. The Association of American Medical 
Colleges [AAMC] survey of 1994 medical graduates found that only 10 
percent of these young physicians intended to enter research careers. 
Students enrolled in public medical schools were much less likely to 
choose research careers than those attending private institutions.
  America's teaching hospitals have of necessity increased the 
proportion of their income derived from service from 12.2 percent 
1971-- to 38.5 percent--1988. As a result the proportion of physicians 
in those institutions who are active in research has fallen from 40 to 
25 percent. This leaves fewer clinicians available for instruction of 
students and fewer investigators for clinical research.


                              INSTITUTIONS

  Our medical schools need to increase their focus on the training of 
students for clinical research careers. Fully 58 percent of 1994 
graduates reported inadequate instruction in research techniques. 
Unlike the situation in Ph.D. programs for basic research, there is no 
clear academic pathway into a clinical research career. Only 11 percent 
of physicians in clinical departments are principle investigators of 
NIH grants. This compares unfavorably to 27 percent rate for Ph.D.'s. 
As a result there are relatively fewer role models for young clinical 
researchers.
  Our ability to fund new research ideas has not been able to keep pace 
with the development of new initiatives. It is extremely difficult for 
young clinical investigators to even obtain research funding. Only 55 
percent of all applicants for NIH grants are ever funded. The overall 
number of research grant applications has increased by 42 percent from 
14,142 in 1980 to 20,154 in 1990. The number of new grant applications 
funded has actually fallen by 15 percent from 5,400 in 1989 to 4,600 in 
1990. This is complicated by the fact that the greatest proportion of 
research grants goes to continue funding previously granted awards, 70 
percent. So that ever increasing number of new projects compete with an 
ever smaller pool of resources.
  The emphasis is so heavily weighted toward basic research that the 
NIH has difficulty determining just what proportion of funded studies 
are directed at patients. The Institute of Medicine estimates that only 
10.4 percent of all NIH funded research is clinical research. Only 20 
percent of grant reviewers are physicians, therefore the expertise 
necessary to critically review clinical research applications is 
considerably less than that for basic research. With the proportion of 
funded proposals falling to approximately 25 percent of submissions the 
odds of gaining grant funding are now low enough that young 
investigators are turning away from clinical research careers. The NIH 
has recognized these deficiencies and has made recommendations to 
reverse this trend. Implementation however requires more resources.
  Implementation also requires cooperation from the community of health 
care providers. Many insurance companies and managed care plans 
discourage or prevent persons from participating in clinical studies. 
This limits access to potentially helpful therapies for patients, and 
inhibits the ability of researchers to find patients to work with and 
hence make new discoveries. Insurers who eventually benefit from new 
treatments which by alleviating illness lowers costs, must contribute 
to the process by encouraging rather than discouraging patient 
participation.


                                FUNDING

  The level of support for biomedical research, particularly for the 75 
general clinical research centers, has been relatively flat over the 
past 5 years, just barely keeping up with inflation.
  The resulting increased competition by more investigators for a piece 
of an ever smaller pie results in a stagnation and atmosphere where 
innovation and clinical research is sublimated for short term 
laboratory based projects which produce publishable results quickly.
  The legislation I and my colleague Senator Kennedy are introducing 
today, the Clinical Research Enhancement Act, will rectify these 
problems by: First, establishing a President's Research Advisory Panel 
within the Office of Science and Technology Policy, [OSTP]. This panel 
will regularly evaluate the status of clinical research in the United 
States so that we are continually aware of our progress. It will make 
recommendations for any necessary improvements in clinical research and 
monitor them to ensure that we reach our goals.
  Second, we will increase the involvement of the NIH in clinical 
research. The Director of NIH will establish intramural clinical 
research fellowship programs to train clinical researchers. There will 
be increases in the number of FIRST Grants for young investigators, and 
by implementing the recommendations of the NIH's own Clinical Research 
Study Group improve the merit review process for evaluating 
applications.
  Third, we will stabilize the funding of general clinical research 
centers. It is within these centers that much of the training of young 
investigators as well as actual clinical research is done.
  Fourth, we will create new opportunities for career development in 
clinical research. This through the development of clinical research 
career enhancement awards, and expansion of 

[[Page S504]]
the Loan Repayment Program for Clinical Researchers.
  Fifth, we will establish innovative medial service awards to 
stimulate the development of new and creative clinical research 
proposals.
  Rectifying the disparagement between support of basic and clinical 
research will serve to more effectively promote the types of 
discoveries that we have all come to expect. It is my hope that this 
proposal for clinical research enhancement is not seen as simply 
another cost of health care, but as a way, really the only way to 
eventually reduce costs both in terms of dollars and human life.
  I urge my colleagues to join us in supporting legislation to enhance 
the pipeline for clinical researchers.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

   The Clinical Research Enhancement Act of 1996--Section-by-Section 
                                Summary

       Section 1--Short Title: The Clinical Research Enhancement 
     Act of 1996
       Section 2--Findings and Purposes: Clinical research, 
     patient-oriented research requiring the participation of a 
     human subject, is in decline. Independent studies at the 
     National Research Council, the National Institute of Medicare 
     and the National Academy of Sciences have all addressed the 
     current problems in clinical research. The decline in young 
     clinical investigators is attributed to a heavy debt burden, 
     lack of a federal support system, and lack of a formal 
     training regime. It is the purpose of this Act to provide for 
     a mechanism to address these problems and a stimulus for 
     physicians to enter clinical research.
       Section 3--President's Clinical Research Panel: The 
     President shall establish within the Office of Science and 
     Technology Policy, a panel, to evaluate the status of the 
     national clinical research environment, and prepare periodic 
     progress reports to the President. It will be composed of 
     representatives from clinical research, insurance and 
     pharmaceutical companies, health maintenance organizations, 
     accreditation and certification organizations, academic 
     research administrators and patients. Its members will be 
     nominated by the President of the Institute of Medicine.
       Section 4--NIH Director's Advisory Committee on Clinical 
     Research: The Secretary of Health and Human Services shall 
     designate the advisory committee established by the Director 
     of NIH. This committee will report to the Director and the 
     President's Panel. It will review the status of clinical 
     research within NIH and implement changes as necessary.
       Section 5--Study Section Review: The President's Clinical 
     Research Panel shall direct the Office for Science and 
     Technology to review study section activities of all federal 
     agencies conducting or funding clinical research.
       Section 6--Increase the Involvement of the National 
     Institutes of Health in Clinical Research: The Director of 
     NIH shall:
       1. Increase the number of FIRST grants.
       2. Design test pilot projects.
       3. Establish an intramural clinical research fellowship 
     program at NIH.
       4. Support and expand resources available for the clinical 
     research community.
       5. Establish peer review mechanisms to evaluate 
     applications: for Instramural Fellowships; Clinical Research 
     Career Enhancement Awards; & Innovative Medical Science 
     Awards.
       Section 7--General Clinical Research Centers: The Director 
     shall award grants for General Clinical Research Centers to 
     provide the infrastructure for clinical research, training 
     and enhancement. Expand the activities of the centers through 
     increased use of telecommunications and telemedicine. 
     Establish grant programs at the centers. The Director of the 
     National Center for research Resources shall establish: 
     Clinical Career Enhancement Awards; and Innovative Medical 
     Science Awards.
       Section 8--Clinical Research Assistance: Expand the current 
     Loan Repayment Program Regarding Clinical Researchers from 
     Disadvantaged Backgrounds to include students with heavy debt 
     burdens. Increase the numbers of awards from 50 to 100. 
     Establish a minority set-aside of 50%.
       Section 9--Insurance coverage of investigational 
     treatments: A health plan shall allow individuals when 
     medically appropriate to participate in investigational 
     therapy.
       Section 10--Definition: Define ``clinical research'' as 
     ``patient oriented clinical research requiring the 
     participation of a human subject, or research on the causes 
     and consequences of disease in human populations.''
                                                                    ____


           Supporters of Hatfield Clinical Research Bill (79)

       Academy of Radiology Research.
       Alzheimer's Association.
       American Academy of Child and Adolescent Psychiatry.
       American Academy of Dermatology.
       American Academy of Neurology.
       American Academy of Ophthalmology.
       American Academy of Otolaryngology--Head and Neck Surgery.
       American Association of Anatomists.
       American College of Clinical Pharmacology.
       American College of Medical Genetics.
       American Diabetes Association.
       American Federation for Clinical Research.
       American Geriatrics Society.
       American Gastroenterological Association.
       American Neurological Association.
       American Nurses Association.
       American Orthopaedic Association.
       American Podiatric Medical Association.
       American Society for bone and Mineral Research.
       American Society for Clinical Pharmacology and 
     Therapeutics.
       American Society for Therapeutic Radiology and Oncology.
       American Society for Addiction Medicine.
       American Society of Hematology.
       American Society of Human Genetics.
       American Society of Nephrology.
       American Veterinary Medical Association.
       Arthritis Foundation.
       Association for Behavioral Sciences and Medical Education.
       Association of Anatomy, Cell Biology and Neurobiology 
     Chairs.
       Association of Behavioral Sciences and Medical Education 
     Association.
       Association of Academic Health Centers.
       Association of American Cancer Institutes.
       Association of Medical and Graduate Departments of 
     Biochemistry.
       Association of Pathology Chairs.
       Association of Professors of Dermatology.
       Association of Program Directors in Internal Medicine.
       Association of Schools of Public Health.
       Association of Subspecialty Professors.
       Association of Teachers of Preventive Medicine.
       Association of University Professors of Ophthalmology.
       Association of University Radiologists.
       Central Society for Clinical Research.
       Citizens for Public Action on Blood Pressure and 
     Cholesterol, Inc.
       Coalition for American Trauma Care.
       Cystic Fibrosis Foundation.
       Department of Orthopaedics/Rehabilitation at the University 
     of New Mexico.
       Department of Pathology and Laboratory Medicine at the 
     University of Southern California.
       Department of Physiology at the University of Florida 
     College of Medicine.
       Dystrophic Epidermolysis Bullosa Research Association of 
     America.
       The Epilepsy Foundation of America.
       Federation of Behavioral/Psychological and Cognitive 
     Sciences.
       Foundation for Ichthyosis and Related Skin Types.
       General Clinical Research Center Program Directors' 
     Association.
       General Clinical Research Center at the University of 
     Alabama at Birmingham.
       Joint Council of Allergy, Asthma and Immunology.
       Lupus Foundation of America, Inc.
       National Alopecia Areata Foundation.
       National Caucus of Basic Biomedical Science Chairs.
       National Committee to Preserve Social Security and 
     Medicare.
       National Foundation for Ectodermal Dysplasias.
       National Marfan Foundation.
       National Osteoporosis Foundation.
       National Organizations for Rare Disorders, Inc.
       National Perinatal Association.
       National Psoriasis Foundation.
       National Tuberous Sclerosis Association.
       The Orton Dyslexia Society.
       Scleroderma Research Foundation.
       Society for Academic Emergency Medicine.
       Society for Investigative Dermatology.
       Society for Neuroscience.
       Society for the Advancement of Women's Health Research.
       Society of Medical College Director of Continuing Medical 
     Education.
       Society of University Urologists.
       St. Jude Children's Research Hospital.
       The Endocrine Society.
       Tourette Syndrome Association.
       United Scleraderma Foundation.
       University of Alabama at Birmingham.
                                                                    ____

                                           American Federation for


                                            Clinical Research,

                                                 January 25, 1996.
     Hon. Mark Hatfield,
     Chairman, Committee on Appropriations,
     U.S. Senate, Washington, DC.
       Dear Senator Hatfield: On behalf of the American Federation 
     for Clinical Research, I write in strong support of the 
     ``Clinical Research Enhancement Act.'' The legislation you 
     are introducing today addresses critical problems facing our 
     country: the loss of a generation of young physician 
     scientists because of medical school tuition debts and 
     limited funding opportunities, the loss of our international 
     competitiveness in medicine as scientists in other nations 
     move ahead to capitalize on basic science discoveries with 
     new therapies and products, and the increasing difficulties 
     confronting patients who wish to participate in clinical 
     research but are limited by the unwillingness of insurance 
     companies to cover any investigational therapies.
       The Clinical Research Enhancement Act addresses these 
     problems through the creation of new career development and 
     research programs, the expansion of existing 

[[Page S505]]
     NIH loan repayment opportunities for physician scientist, and mandates 
     on insurance companies to expand coverage of investigational 
     treatments. Further, the creation of a Presidential 
     commission on clinical research will bring to the attention 
     of our nation's leaders critical obstacles to the advancement 
     of medical science.
       The 11,000 members of the American Federation for Clinical 
     Research are in strong support of this legislation and call 
     on the Congress to pass the Clinical Research Enhancement Act 
     before adjourning in the fall. America has led the world in 
     medical science. The bill you introduce today will help to 
     assure that we maintain that leadership.
           Sincerely,
                                          Veronica Catanese, M.D.,

                                                President.

                                 ______

      By Mr. ABRAHAM:
  S. 1535. A bill to strengthen enforcement of the immigration laws of 
the United States, and for other purposes; to the Committee on the 
Judiciary.


      the illegal immigration control and enforcement act of 1996

 Mr. ABRAHAM. Mr. President, I introduce the Illegal 
Immigration Control and Enforcement Act of 1996. This bill would crack 
down on the problem of illegal immigration without retreating from our 
historic commitment to legal immigration.
  There is a broad consensus that illegal immigration is a significant 
problem that demands immediate attention. But in addressing that 
problem, we must not blur the distinction between illegal and legal 
immigrants. The overwhelming majority of legal immigrants are law-
abiding, hard-working people who make a positive contribution to our 
economy and our society.
  An omnibus immigration bill recently reported out of the Judiciary 
Subcommittee for Immigration overlooks this distinction. Rather than 
focus on illegal immigration, the omnibus bill would reduce the quotas 
for certain categories of legal immigration, eliminate other categories 
altogether, and impose stifling new taxes and red tape on American 
businesses that employ talented immigrants. The omnibus bill would also 
burden every American worker and business with a new national-
identification system that would vastly expand the power of the Federal 
Government in the workplace.
  The bill I introduce today has a more targeted approach. First, the 
bill aims to take back control of our borders. It would nearly double 
the number of border patrol agents, adding 900 such agents for each of 
the next 5 fiscal years. It would provide new equipment and support 
personnel for these agents. And it would significantly increase the 
criminal penalties for the practice of smuggling aliens across our 
border.
  Second, the bill would for the first time address the problem caused 
by persons who overstay their visas. According to the INS, roughly half 
of all illegal aliens enter the United States with legal, nonimmigrant 
visas and then remain here after their visas expire. Yet, incredibly, 
under current law there is no penalty for overstaying one's visa. 
Moreover, visa overstayers are virtually never caught by the INS, so 
overstaying is for many aliens a risk-free choice. But the Illegal 
Immigration Control and Enforcement Act would change all this. Persons 
who overstay a visa would be ineligible for additional visas for at 
least 3 to 5 years. Since many visa overstayers hope to reside here 
legally one day, this penalty would have a significant deterrent 
effect. To help catch those persons who nevertheless stay here after 
their visas expire, the bill would authorize the addition of 300 new 
INS investigators in each of the next 3 fiscal years, who would focus 
exclusively on visa overstayers. The upshot should be a significant 
reduction in the numbers of these illegal aliens.
  Third, the bill would streamline the deportation of criminal aliens. 
Although, under current law, aliens convicted of felonies after entry 
are deportable, they are, in fact, rarely deported because of their 
ability to seek repeated judicial review of their deportation order. 
That would change under the provisions in my bill, which are stronger 
than those in the omnibus immigration bill. Under my bill, aliens who 
are convicted of serious crimes would simply be deported upon 
completion of their sentences without any further judicial review of 
their deportation order. These provisions would apply to nearly half a 
million alien felons currently residing in this country.
  Fourth, my bill would also respond to the pleas of businesses, 
particularly small businesses, who wish to follow the law but whose 
efforts to do so are thwarted by the bewildering array of documents 
that, under current law, are acceptable for employment verification. To 
help these employers, the bill would reduce the number of acceptable 
employment verification to a relative handful of documents familiar to 
all employers.
  Finally, Mr. President, the bill I introduce today also includes 
important welfare reforms similar to those in H.R. 4, the bill that was 
sent to the President and vetoed. Like H.R. 4, my bill would deny 
Federal means-tested benefits like welfare, food stamps, and SSI to 
illegal aliens and sharply restrict the eligibility of legal aliens to 
receive these benefits. Unlike the omnibus bill reported out of the 
Judiciary Subcommittee for Immigration, however, my bill would not 
continue to apply these provisions to immigrants who become citizens of 
the United States. In my view, we should not create classes of American 
citizens for this purpose.
  In summary, Mr. President, we need to focus our efforts on those 
areas where the real problem lies. By doing so, my bill would address 
our legitimate concerns about illegal immigration and welfare abuse 
without abandoning our commitment to family reunification, imposing new 
taxes and fees on American employers, or handing the Federal Government 
sweeping new powers in the workplace.
                                 ______

      By Mr. THOMPSON:
  S. 1536. A bill to amend title 18, United States Code, to permit 
Federal firearms licenses to conduct firearms business with other such 
licensees at out-of-State gun shows; to the Committee on the Judiciary.


           THE FIREARMS DEALERS REGULATORY RELIEF ACT OF 1996

  Mr. THOMPSON. Mr. President, today I am introducing legislation that 
will serve to correct and clarify section 923 of title 18 of the United 
States Code affecting licensed firearms dealers. The bill amends the 
United States Code to permit the 200,000 Federal firearms licensees to 
conduct firearms business with other licensees at out-of-State gun 
shows.
  This legislation is needed to address the problem that federally 
licensed gun dealers have when they buy, sell, or trade high-end 
collector's arms at out-of-State gun shows. Most of these firearms are 
in the $2,000 to $10,000 range and are not the target of illegal arms 
traffickers. Under current law, when licensed dealers meet at an out-
of-State gun show and conduct business, they must return home and ship 
the firearms via common carrier from their respective States of 
residence. In doing so, the dealers take great risk of loss, theft, or 
damage and great expense of shipping and insurance of what may be one-
of-a-kind items.
  The Bureau of Alcohol, Tobacco and Firearms, [BATF], has indicated 
that they would be willing to work with us ``to enact legislation which 
will reduce the regulatory burden on the legitimate firearms industry 
while maintaining adequate controls to combat the criminal misuse of 
firearms.'' They said they would have changed the regulations to allow 
these types of commerce if not for the prohibitions that they interpret 
to be in the law. I welcome this spirit of cooperation.
  This bill would make Congress' intent clear to the BATF that Federal 
firearms license holders are not the source of illegal gun trafficking. 
Federal firearms license [FFL] holders are already closely regulated by 
the Bureau as legitimate businesses. If a person is responsible enough 
to obtain a Federal firearms license in Tennessee, then he is 
responsible enough to conduct business in Kentucky, North Carolina, or 
California. The BATF already recognizes this fact but, because of the 
way the current law is written, it must, nonetheless, enforce the 
byzantine route to conduct business.
  All those concerned by the illegal use of firearms should support 
this bill, as direct transfer of firearms will improve the atmosphere 
ensuring that all guns will be recorded on dealers' books, thereby 
providing law enforcement agencies the records they need when firearms 
are used illegally.

[[Page S506]]

  This bill has the support of the Collector Arms Dealer's Association 
which represents 50,000 gun dealers and collectors.
                                 ______

      By Mr. ROBB (for himself, Mr. Daschle, and Mr. Simpson):
  S. 1537. A bill to require the Administrator of the Environmental 
Protection Agency to issue a regulation that consolidates all 
environmental laws and health and safety laws applicable to the 
construction, maintenance, and operation of aboveground storage tanks, 
and for other purposes; to the Committee on Environment and Public 
Works.


 the aboveground storage tank consolidation and regulatory improvement 
                                  act

 Mr. ROBB. Mr. President, I introduce legislation to address an 
important gap in Federal environmental law: The regulation of 
underground releases from aboveground storage tanks.
  With this bill, we have an opportunity to work together with both 
industry and environmental groups to reform the Federal AST--
aboveground storage tank--program, reduce the regulatory burden on 
industry, and improve the environment. Following efforts in the 103d 
Congress to improve the safety of AST's, I am introducing the 
Aboveground Storage Tank Consolidation and Regulatory Improvement Act.
  For the past 6 years, those of us who live in northern Virginia have 
received an education on just how flawed the current Federal law is.
  In September 1990, a petroleum sheen was discovered in a neighborhood 
creek in the Mantua-Stockbridge community in Fairfax County, VA.
  It was the beginning of a continuing nightmare for a number of local 
residents, who have had to live with the knowledge that more than 
200,000 gallons of petroleum product-diesel oil, jet fuel and gasoline 
has leaked from the nearby Pickett Road tank farm.
  The exact size of the leak, and its precise causes, are still 
unknown. What we have seen however, is the fallout: negative health 
effects, environmental damage, and needless losses of millions of 
dollars. Some residents were temporarily relocated, others have simply 
moved, and still others continue to live with a cloud over their heads. 
All of these residents are still wondering when the Federal Government 
will move to address the issue of leaking aboveground storage tanks.
  To date, Star Enterprise, a Texaco affiliate, has expended in excess 
of $100 million in remediation costs, real estate transactions, 
settlement of claims, and compliance with new State AST requirements.
  Fairfax County has had to spend $500,000 to provide enforcement, 
oversight and community relations regarding the Pickett Road tank farm 
incident.
  Unfortunately, problems with leaking AST's are not restricted to 
northern Virginia. Across the Nation, there are hundreds of similar 
leaks from aboveground petroleum storage tanks.
  Major petroleum releases have occurred in Anchorage, AK; Torrance, 
CA; Port Everglades, FL; Hartford IL; Granger, IN; Cattlettsburg, KY; 
Charlotte, NC; Sparks, NV; Paulsboro, NJ; Syracuse, NY; Greensboro, NC; 
Ponca City, OK; Philadelphia, PA; Spartanburg, SC; Austin, TX; and 
Tacoma, WA.
  At least five involve releases larger than the Exxon Valdez oil 
tanker catastrophe.
  Whereas the Exxon Valdez spilled some 11 million gallons of oil, 
aboveground tanks in El Segundo, CA have released between 84 and 252 
million gallons.
  In Martinez, CA, 28 million gallons have been released.
  A Tulsa, OK facility has released between 25 and 28 million gallons, 
and a Whiting, IN facility released 17 million gallons.
  In Brooklyn, NY, residents are sitting on top of a 13 to million 
gallon release.
  According to the Environmental Defense Fund [EDF], between 20 and 25 
percent of AST's nationwide and their associated piping are likely to 
be leaking. A July 1994 American Petroleum Institute industry survey 
showed that over 85 percent of monitored refining and marketing 
facilities have confirmed ground water contamination; of the facilities 
with ground water contamination, a high percentage have off-site 
contamination--44 percent of refineries, at least 35 percent of 
marketing facilities, and 27 percent of transportation facilities.
  A 1995 General Accounting Office [GAO] study on aboveground oil 
storage tanks that I requested, reported that EPA has found leaks 
typically originate from the bases of tanks where contact with soil 
causes corrosion; from underground piping; and from overflows 
associated with the transfer of stored product.
  On the basis of age, the likelihood of developing corrosion leaks, 
and leak detection thresholds, EPA's preliminary estimates show that 
AST's with a storage capacity in excess of 42,000 gallons could be 
leaking between 43 million and 54 million gallons of oil annually.
  Because petroleum contracts and expands as temperatures vary, it is 
often difficult to detect leaks. And because petroleum is relatively 
cheap, it is often less expensive to allow a known leak to continue 
than to interrupt operations and make a repair.
  Because AST leaks are often slow and underground, they frequently do 
not receive the attention of the big oil tanker catastrophes, but are 
nonetheless dangerous.
  Petroleum releases can present serious health, safety, and 
environmental risks. Petroleum, including gasoline, contains extremely 
toxic compounds, like benzene.
  A plume of petroleum product can seep into basements and sewers, 
reaching toxic levels and causing explosions and the threat of fire.

  In addition, leaking AST's can permanently contaminate groundwater, a 
source of drinking water for more than half the Nation. And in many 
cases, groundwater contamination will inevitably lead to surface water 
contamination.
  While the extent of injuries is unknown, the 1995 GAO study reported 
that most injuries to human beings from exposure to oil have occurred 
as a result of inhaling its vapors. Effects on humans from exposure to 
petroleum include everything from lethargy, dizziness, and convulsions 
to coma, blood cancers (such as leukemia) and generalized suppression 
of the immune system from chronic exposure by inhalation.
  And we know now that these threats present unique challenges for 
sensitive subpopulations such as infants, pregnant women, the elderly, 
and those with AIDS and other debilitating diseases.
  What is astounding is that where underground storage tanks are highly 
regulated by a comprehensive Federal program, aboveground storage 
tanks, used to store some 100 billion gallons of oil nationwide, are 
only loosely regulated by a patchwork of confusing Federal regulations. 
In many cases, State fire codes regulate AST's.
  State authorities are beginning to take notice of the leaking AST 
problem, but only 20 States have regulations on the books, and only 5 
of these currently require genuine secondary containment, such as a 
double bottom or liner under a tank or piping.
  Unfortunately, State programs vary widely and present problems for 
tank owners with multistate operations.
  This is an enormous problem today; and it will likely continue to 
grow as storage tank owners seek to exploit the gaps in current Federal 
law by acquiring AST's over the more highly regulated underground 
storage tanks.
  According to a January 1993 survey conducted by the Steel Tank 
Institute, new tank purchases of aboveground tanks are running ahead of 
underground tanks by a 5:2 ratio. And according to many State 
regulators and industry experts, this trend is continuing into the 
future.
  This is troublesome from an environmental standpoint, and also from a 
fire safety perspective since aboveground tanks pose a much greater 
risk of fire hazard than underground tanks.
  In 1989, the GAO conducted a study of inland oil spills and found 
existing laws deficient. In its report GAO proposed seven 
recommendations to EPA that if implemented, would improve the safety of 
aboveground oil storage tanks.
  In 1995, Senator Daschle, Representative Moran, and I asked GAO to 
investigate the progress of EPA's implementation of the 
recommendations. This report found that overall EPA has failed to 
implement or take any action on the majority of the recommendations.
  At the most elementary level, current law does not even require 
comprehensive data collection or reporting 

[[Page S507]]
to know exactly how many aboveground storage tanks are leaking.
  In the 103d Congress, I sponsored legislation that would have 
established a comprehensive regulatory program for AST's and I 
cosponsored legislation offered by the distinguished Senator from South 
Dakota, Senator Daschle, to regulate the estimated 800,000 to 900,000 
petroleum aboveground tanks, nationwide.
  Residents in Senator Daschle's home State were victims in 1987 of a 
disastrous 20,000-gallon leak in which an elementary school had to be 
evacuated and abandoned after vapors began filtering up into the 
building.
  AST's are largely unregulated by Federal law; no single statute fully 
addresses prevention and cleanup of petroleum releases.
  The legislation I am introducing today in the Senate, and will be 
introduced by Representatives Jim Moran and Tom Davis in the House, 
takes a new approach to dealing with leaking AST's, but maintains the 
goal of improving the safety of aboveground storage tanks.
  The problem of leaking AST's has been gaining national attention. In 
the last 5 years, EPA has conducted studies and consulted with industry 
experts to better define the causes of AST leaks of petroleum; more 
States have begun to contemplate AST programs; and the petroleum 
industry has recently issued standards for aboveground storage tanks.
  In developing Federal legislation for the 104th Congress we moved 
away from the idea of a comprehensive regulatory program for 
aboveground storage tanks. Instead, the bill seeks to enhance, not 
duplicate efforts undertaken by States and the petroleum industry to 
improve AST safety.
  There is a patchwork of AST regulations and no less than five Federal 
offices with AST responsibilities. This is confusing to tank owners, 
costly to taxpayers and harmful to the environment.
  Tank owners and operators need to have clear, concise guidance on how 
to comply with Federal regulations.
  This new legislative proposal replaces the need for comprehensive 
reform; instead, it improves the organization of the current program 
and allows EPA to do more with less, while permitting tank owners the 
opportunity to embrace the newly developed industry standards.
  Reform in the Federal program will improve the effectiveness of 
current regulations, lead to greater prevention and containment of 
releases from AST's and improve the environment.
  Prevention is the key to avoiding costly and damaging petroleum 
releases.
  Specifically, the bill will:
  Consolidate all of the Federal offices responsible for AST regulation 
into one office at EPA. This will increase efficiency and improve 
organization at EPA;
  Require EPA to consolidate and streamline the current AST program. 
These steps will eliminate duplicative and conflicting regulations, 
create a user-friendly aboveground storage tank program and promote 
prevention measures such as secondary containment and corrosion 
protection;
  After consolidation, the bill allows EPA to correct gaps in the 
regulation of large--42,000 gallons and above--aboveground petroleum 
tanks and encourage prevention with narrow regulations based on 
industry standards and cost-benefit analysis; and
  Require reporting of releases and give limited emergency powers to 
the EPA Administrator to better assist tank owners and operators with 
speedier cleanups.
  Should a petroleum release occur, the bill gives EPA the authority to 
close the troublesome part of the storage tank facility, prohibiting 
further operation until the Administrator determines that the closure 
is not necessary to protect human health, public safety, or the 
environment.
  That is to say, after a release, the burden shifts to the tank owner 
to cease operations until it can prove there is no ongoing threat.
  The citizens in Fairfax were outraged when told that EPA lacked such 
authority; this bill provides it. These provisions are essential to 
provide predictability and peace of mind to residents living near large 
aboveground storage tanks that store petroleum.
  With reform of the Federal program it is estimated that $17.4 billion 
in savings will result from reduced leak cleanup costs, saved petroleum 
product, and decreased costs associated with compensating affected 
residents.
  This bill has been developed with the guidance and support of a 
diverse coalition of industry and environmental groups because it is a 
common sense proposal to regulatory reform.
  Although the bill could easily be incorporated into Clean Water Act 
reauthorization or Superfund reform legislation, I think the problem is 
of sufficient magnitude that the bill can and should move on its own. 
With the bill's broad support, I don't see a need to have it hung up in 
the complexity of reauthorization of the larger environmental statutes.
  It is my hope that the introduction of this legislation today will 
help move this issue forward.
  I would like to thank Senators Daschle and Simpson for their 
leadership on this issue. As original cosponsors, they have contributed 
greatly to my effort to reach consensus on this issue.
  We have tried to offer a more targeted version of earlier 
legislation, which will impose less cost on business, and pose less 
political obstacles, but still get to the heart of the problem: The 
large marketing and refining facilities which hold the potential for 
environmental catastrophe.
  In closing, Mr. President, I think the time has come to write the 
Aboveground Storage Tank Consolidation and Regulatory Improvement Act 
into law.
  The County of Fairfax, VA, has recently voted to endorse this bill 
because it is convinced that this legislation is necessary to prevent 
or reduce the impact of similar releases of petroleum in the future. I 
have a letter of support for the bill from the Fairfax County Board of 
Supervisors and I request unanimous consent that it be included in the 
Record.
  I look forward to working with my Senate colleagues and with the 
chairman of the relevant congressional committees to make this 
legislation a reality.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1537

       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 ``Aboveground Storage Tank 
     Consolidation and Regulatory Improvement Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) improvement of Federal regulation of aboveground 
     storage tanks will lead to greater prevention and containment 
     of releases from aboveground storage tanks and improvement of 
     the environment;
       (2) the Administrator of the Environmental Protection 
     Agency has not fully implemented any of the 7 recommendations 
     made in the 1989 report of the General Accounting Office on 
     inland oil spills;
       (3) consolidation of Federal aboveground storage tank 
     provisions will lead to simplification of the regulatory 
     program and will allow the Administrator to eliminate 
     duplication and conflicting aboveground storage tank 
     regulations; and
       (4) in order to promote environmental protection, 
     aboveground storage tank secondary containment structures 
     should meet a minimum permeability standard.

     SEC. 3. PURPOSES.

       The purposes of this Act are--
       (1) to promote protection of the environment;
       (2) to streamline the offices in the Environmental 
     Protection Agency and other departments and agencies that 
     administer laws governing aboveground storage tanks and 
     underground storage tanks;
       (3) to consolidate the laws governing aboveground storage 
     tanks and eliminate duplicative regulations; and
       (4) to encourage release prevention and fire protection 
     measures in the operation of aboveground storage tanks.

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) Aboveground petroleum storage tank.--The term 
     ``aboveground petroleum storage tank''--
       (A) means an aboveground storage tank that--
       (i) has a capacity of 42,000 gallons or more; and
       (ii) is or was at any time used to contain any accumulation 
     of a regulated petroleum substance; but
       (B) does not include an aboveground storage tank that is 
     used directly in the production of crude oil or natural gas.
     
[[Page S508]]

       (2) Aboveground storage tank.--The term ``aboveground 
     storage tank''--
       (A) means a stationary tank, including underground pipes 
     and dispensing systems connected to the stationary tank 
     within the facility in which the stationary tank is located, 
     that is or was at any time used to contain an accumulation of 
     a regulated substance, the volume of which tank (including 
     the volume of all piping within the facility) is greater than 
     90 percent above ground; and
       (B) includes any tank that is capable of being visually 
     inspected; but
       (C) does not include--
       (i) a surface impoundment, pit, pond, or lagoon;
       (ii) a storm water or wastewater collection system;
       (iii) a flow-through process tank (including a pressure 
     vessel or process vessel and oil and water separators);
       (iv) an intermediate bulk container or similar tank that 
     may be moved within a facility;
       (v) a tank that is regulated under the Surface Mining 
     Control and Reclamation Act of 1977 (30 U.S.C. 1201 et seq.);
       (vi) a tank that is used for the storage of products 
     regulated under the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 301 et seq.);
       (vii) a tank (including piping and collection and treatment 
     systems) that is used in the management of leachate, methane 
     gas, or methane gas condensate, unless the tank is used for 
     storage of a regulated substance;
       (viii) a tank that is used to store propane gas;
       (ix) any other tank excluded by the Administrator by 
     regulation issued under this Act; or
       (x) any pipe that is connected to a tank or other facility 
     described in this subparagraph.
       (3) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (4) Director.--The term ``Director'' means the Director of 
     the Office.
       (5) Environmental law.--The term ``environmental law'' 
     means 1 of the following statutes (and includes a regulation 
     issued under any such statute):
       (A) The Clean Air Act (42 U.S.C. 7401 et seq.).
       (B) The Comprehensive Environmental Response, Compensation, 
     and Liability Act of 1980 (42 U.S.C. 9601 et seq.).
       (C) The Federal Water Pollution Control Act (33 U.S.C. 1251 
     et seq.).
       (D) The Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.).
       (E) The Solid Waste Disposal Act (42 U.S.C. 6901 et seq.).
       (F) Any other statute administered by the Administrator.
       (6) Model fire code.--The term ``model fire code'' means--
       (A) fire code 30 or 30-a issued by the National Fire 
     Protection Association;
       (B) the fire code issued by the Uniform Fire Code 
     Institute;
       (C) the fire code issued by the Southern Building Code 
     Congress International; or
       (D) the fire code issued by the Building Offices and Code 
     Administrators International.
       (7) Office.--The term ``Office'' means the Office of 
     Storage Tanks established by section 5(a).
       (8) Petroleum.--The term ``petroleum'' means--
       (A) crude oil; and
       (B) any fraction of crude oil that is liquid at standard 
     conditions of temperature and pressure (60 degrees Fahrenheit 
     and 14.7 pounds per square inch absolute).
       (9) Regulated petroleum substance.--The term ``regulated 
     petroleum substance'' means--
       (A) petroleum; and
       (B) a petroleum-based substance comprised of a complex 
     blend of hydrocarbons derived from crude oil through 
     processes of separation, conversion, upgrading and finishing, 
     such as a motor fuel, jet fuel, distillate fuel oil, residual 
     fuel oil, lubricant, petroleum solvent, or used or waste oil.
       (10) Regulated substance.--The term ``regulated substance'' 
     means--
       (A) a substance (as defined in section 101 of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9601)), but not including a 
     substance that is regulated as a hazardous waste under 
     subtitle C of the Solid Waste Disposal Act (42 U.S.C. 6921 et 
     seq.); and
       (B) a regulated petroleum substance.
       (11) Underground storage tank.--The term ``underground 
     storage tank'' has the meaning stated in section 9001 of the 
     Solid Waste Disposal Act (42 U.S.C. 6991).

     SEC. 5. CONSOLIDATION OF OFFICES.

       (a) Office of Storage Tanks.--
       (1) Establishment.--The Office of Underground Storage Tanks 
     of the Environmental Protection Agency is redesignated and 
     established as the Office of Storage Tanks.
       (2) Director.--The Office shall be headed by a Director 
     appointed by the Administrator.
       (3) Functions.--The Director shall perform--
       (A) the functions that were vested in the Director of the 
     Office of Underground Storage Tanks on the day before the 
     date of enactment of this Act; and
       (B) the functions transferred to the Director (or to the 
     Administrator, acting through the Director) by subsection 
     (b).
       (b) Transfers of Authority.--
       (1) Intra-agency transfers.--There are transferred to the 
     Director all of the authorities of the following officers of 
     the Environmental Protection Agency, insofar as the 
     authorities relate to the regulation of aboveground storage 
     tanks and underground storage tanks under the environmental 
     laws:
       (A) The Assistant Administrator for Air.
       (B) The Assistant Administrator for Water.
       (C) The Director of the Office of Emergency and Remedial 
     Response.
       (D) Any other officer to whom the Administrator has 
     delegated authority.
       (2) Transfer from the secretary of labor.--There are 
     transferred to the Administrator, acting through the 
     Director, all of the authorities of the Secretary of Labor, 
     acting through the Assistant Secretary for Occupational 
     Safety and Health, insofar as the authorities relate to the 
     regulation of aboveground storage tanks and underground 
     storage tanks under the Occupational Safety and Health Act of 
     1970 (29 U.S.C. 651 et seq.) and section 126 of the Superfund 
     Amendments and Reauthorization Act of 1986 (Public Law 99-
     499; 29 U.S.C. 655 note).
       (3) Transfer from the secretary of transportation.--There 
     are transferred to the Administrator, acting through the 
     Director, all of the authorities of the Secretary of 
     Transportation, acting through the Administrator for Research 
     and Special Programs, acting through the Associate 
     Administrator for Pipeline Safety and the Associate 
     Administrator for Hazardous Materials Technology, insofar as 
     the authorities relate to the regulation of aboveground 
     storage tanks and underground storage tanks under chapter 601 
     of title 49, United States Code.
       (c) Transfer and Allocations of Appropriations and 
     Personnel.--There are transferred to the Environmental 
     Protection Agency, in accordance with section 1531 of title 
     31, United States Code--
       (1) the assets, liabilities, contracts, property, records, 
     and unexpended balances of appropriations, authorizations, 
     allocations, and other funds employed, used, held, arising 
     from, available to, or to be made available in connection 
     with the functions transferred by subsection (b) (2) and (3); 
     and
       (2)(A) the personnel employed in connection with those 
     functions; or
       (B) the amount of unexpended balances of appropriations 
     necessary to enable the Administrator to employ persons in 
     the number of full time equivalent positions as the persons 
     employed in connection with those functions on the day before 
     the date of enactment of this Act,

     as determined by the Director of the Office of Management and 
     Budget, in consultation with the Administrator, the Secretary 
     of Labor, and the Secretary of Transportation.

     SEC. 6. CONSOLIDATION OF APPLICABLE LAWS.

       (a) Restatement in Consolidated Form.--
       (1) In general.--Not later than 3 years after the date of 
     enactment of this Act, the Director, in consultation with the 
     States, shall evaluate all laws (including regulations) 
     administered by the Director and, after notice and 
     opportunity for public comment, issue a regulation that 
     restates those laws in consolidated form and streamlines, to 
     the extent practicable, the application of those laws to 
     owners and operators of aboveground storage tanks and 
     underground storage tanks.
       (2) Intent of congress.--In directing the Director in 
     paragraph (1) to restate the laws in consolidated form, it is 
     not the intent of Congress to direct or authorize the 
     Director to modify the requirements of those laws in any way, 
     except as necessary or appropriate to eliminate any 
     duplication or inconsistencies or to reduce any unnecessary 
     regulatory burdens and except as provided in subsections (b), 
     (c), and (d).
       (b) Model Fire Codes.--The regulation under subsection (a) 
     shall be consistent with and based on the model fire codes, 
     as in effect on the date of enactment of this Act or as they 
     may be amended.
       (c) Releases.--
       (1) Reporting requirements applicable to all aboveground 
     storage tanks.--The regulation under subsection (a) shall 
     require that an owner or operator of an aboveground storage 
     tank shall report a release of 42 gallons or more of a 
     regulated substance that occurs during a period of time 
     specified by the director, not to exceed 5 calendar days, 
     including a description of the corrective action taken in 
     response to the release, to the national response center 
     established under the Federal Water Pollution Control Act (33 
     U.S.C. 1251 et seq.), unless the release is required to be 
     reported, and is reported, under other Federal law.
       (2) Orders applicable to aboveground storage tanks.--After 
     a release from an aboveground storage tank containing a 
     regulated substance that is determined to be an imminent 
     threat to human health, public safety, or the environment, 
     the Administrator may issue an order prohibiting the use or 
     operation of all or any portion of a storage tank farm within 
     a facility in which the aboveground petroleum storage tank is 
     located, until the Administrator determines that--
       (A) the prohibition is not necessary to protect human 
     health, public safety, or the environment; or
       (B) adequate corrective action has been taken, in 
     accordance with the law regulating corrective action that is 
     in effect on the date on which the determination is made.
       (d) Correction of Deficiencies in the Law Applicable to 
     Aboveground Petroleum Storage Tanks.--
       (1) Additional authority.--In addition to the authority 
     transferred to the Director by 

[[Page S509]]
     section 5(b), the Director shall have authority to issue, and shall 
     include in the regulation under subsection (a), release 
     detection, prevention, and correction regulations applicable 
     to owners and operators of aboveground petroleum storage 
     tanks, as necessary to protect human health and the 
     environment.
       (2) Correction of deficiencies.--In conducting the 
     evaluation of laws and issuing the regulation under 
     subsection (a), the Director shall--
       (A) determine whether there are any deficiencies in the law 
     applicable to aboveground petroleum storage tanks on the day 
     before the date of enactment of this Act, specifically with 
     reference to secondary containment, overfill prevention, 
     testing, inspection, compatibility, installation, corrosion 
     protection, and structural integrity of aboveground petroleum 
     storage tanks; and
       (B) if the Director determines that any such deficiencies 
     exist--
       (i) examine industry standards that address the 
     deficiencies;
       (ii) give substantial weight to industry standards in 
     formulating the regulations required by paragraph (1); and
       (iii) design the regulation in the most cost-effective 
     manner to address the deficiencies.
       (e) Enforcement.--
       (1) In general.--The regulation under subsection (a) shall 
     make clear the statutory enforcement provisions and other 
     statutory provisions that apply to each provision of the 
     regulation.
       (2) Additional authority.--Any provision of the regulation 
     under subsection (c) or (d) that implements authority 
     conferred by this Act in addition to authority under law in 
     effect on the day before the date of enactment of this Act 
     shall be enforced under and in accordance with the procedures 
     stated in section 9006 of the Solid Waste Disposal Act (42 
     U.S.C. 6991e).

     SEC. 7. REPORTS.

       (a) Interim Report.--Not later than 2 years after the date 
     of enactment of this Act, the Director shall submit to 
     Congress a report describing the progress made and any 
     tentative conclusions drawn in the evaluation process under 
     section 6(a)(1).
       (b) Final Report.--Simultaneously with the issuance of the 
     regulation under section 6(a)(1), the Director shall submit 
     to Congress a final report that--
       (1) describes the evaluation made and the regulation issued 
     under section 6(a)(1); and
       (2)(A) states the extent to which the regulation implements 
     the recommendations made in the 1989 report of the General 
     Accounting Office on inland oil spills and the 1995 report of 
     the General Accounting Office on the status of the 
     Environmental Protection Agency's efforts to improve the 
     safety of aboveground storage tanks; and
       (B) to the extent that the consolidated regulation does not 
     implement the recommendations, describes the Director's plans 
     regarding the recommendations.
                                                                    ____

                                         Commonwealth of Virginia,


                                            County of Fairfax,

                                    Fairfax, VA, January 25, 1996.
     Hon. Charles S. Robb,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Chuck Robb: Fairfax County is aware that legislation 
     entitled ``The Aboveground Storage Tank Consolidation and 
     Regulatory Improvement Act of 1995'' is to be introduced in 
     the United States Congress in the very near future. It is the 
     County's impression that this bill is designed to consolidate 
     authorities and regulatory functions associated with both 
     aboveground and underground storage tanks for the purpose of 
     strengthening oversight and enforcement, as well as to 
     improve upon the development of regulations for those 
     facilities. We believe that the legislation as proposed has 
     the potential to positively impact the organization and focus 
     of responsibilities and authorities pertinent to the 
     regulation of storage tanks.
       Fairfax County is home to more than 20,000 commercial and 
     residential aboveground and underground storage tanks. During 
     the last several years the County has had first-hand 
     experience with the potential impacts these facilities pose 
     on public health, safety, and the environment. It has become 
     evident to the County that more focused, concise, and 
     adequate oversight is required to both prevent and correct 
     potential problems associated with storage tank facilities. 
     This view is supported by the County's experiences with the 
     hundreds of leaking underground storage tanks and the more 
     notable problems of the Fairax Bulk Petroleum Terminal 
     release in which over 189,000 gallons of petroleum was 
     discharged into the groundwater traveling into the 
     neighboring Mantua/Stockbridge residential community. The 
     proposed legislation provides the potential for a more 
     focused approach which might prevent or reduce the impact of 
     similar events in the future.
       On behalf of the citizens of Fairfax County, the Board of 
     Supervisors urges the members of Congress to seriously 
     consider the benefits of the proposed legislation. ``The 
     Aboveground Storage Tank Consolidation and Regulatory 
     Improvement Act of 1995'' and provide the appropriate support 
     to ensure its enactment during the current legislative 
     session. If the County or its staff can be of further 
     assistance with this matter, please do not hesitate to 
     contact me. Your consideration of the County's position is 
     appreciated.
           Sincerely,
                                              Katherine K. Hanley,
                                                 Chairman.
                                 ______

      By Mr. GLENN (for himself and Mr. Gorton):
  S. 1538. A bill to amend the Internal Revenue Code of 1986 to provide 
for the treatment of excess benefit arrangements for certain tax-exempt 
group medical practices, and for other purposes; to the Committee on 
Finance.


                  GROUP MEDICAL PRACTICES LEGISLATION

 Mr. GLENN. Mr. President, our Nation's few nonprofit medical 
practices have a well-deserved, international reputation for medical 
excellence. Among those prestigious institutions is the Cleveland 
Clinic, considered one of the world's finest medical facilities. The 
Cleveland Clinic and other outstanding facilities such as the Virginia 
Mason Clinic in Seattle, WA, and the Mayo Clinic in Rochester, MN, 
provide significant charity care, offer outstanding medical education 
and training, lead in medical research and are deeply involved in 
community service.
  However, compensation rules for non-profit employers--including 
teaching hospitals, community clinics, and integrated health systems, 
are governed by stringent limits on reasonable compensation which do 
not apply to physicians in private practice or in the for-profit 
sector.
  Today I am introducing along with the distinguished Senator from 
Washington [Mr. Gorton], legislation to amend the Internal Revenue Code 
to provide a limited exemption from IRC section 457 to eligible group 
medical practices. It would increase the dollar limitations for members 
and employees of those practices from the limitations of section 
457(c)(2).
  I believe that this change in law would be good public policy. With 
flexibility to offer reasonable deferred compensation packages, these 
clinics can continue to recruit and retain the high quality individuals 
whose training, skills, and experience are crucial to the patient 
population they serve.
  An important way to encourage physician groups and other medical 
professionals to continue to organize in a not-for-profit status. 
However, current law provides for disincentives for this not-for-profit 
status. This legislation would remove these obstacles.
  Mr. President, companion legislation has already been introduced in 
the House. I urge the Senate Finance to carefully review the issues 
that we raise in this legislation and I urge my colleagues to join me 
in support of this measure.
 Mr. GORTON. Mr. President, today Senator Glenn and I are 
introducing a limited, but important piece of legislation. This 
legislation will provide a solution to a vexing problem that afflicts 
many of the most distinguished not-for-profit group medical practices 
in this country, such as Virginia Mason Clinic in Seattle, the Mayo 
Clinic in Rochester, and the Cleveland Clinic in Cleveland.
  Our Nation's not-for-profit medical practices, which include teaching 
hospitals, community clinics, and integrated health systems, perform 
essential public services. They provide significant charity care to our 
Nation's poor and elderly, offer some of the finest medical education 
and training in the world, and are acknowledged leaders in medical 
research. Furthermore, not-for-profits perform these public services 
while maintaining a well-deserved, international reputation for medical 
excellence.
  Despite their excellent delivery of essential medical services, tax 
laws restrict not-for-profit group medical practices from offering 
their medical professionals a level of deferred compensation that is 
competitive with that available to physicians in the for-profit sector. 
These limits on deferred compensation exist even though medical 
professionals in nonprofit practices already sacrifice substantial 
personal benefits and competitive salaries in order to serve the most 
needy in their communities. This sacrifice on the part of nonprofit 
physicians has potentially damaging repercussions for society when 
physicians leave the nonprofit sector for the benefits of the private 
sector.
  Today, we seek to remove some of the disincentive that exist for 
medical professions to enter into the nonprofit area of health care. 
The bill we are introducing amends the Internal Revenue Code to provide 
a limited exemption from IRC section 457 to eligible group 

[[Page S510]]
medical practices. This amendment would increase the dollar limitations 
for members and employees of those practices, index the deferred amount 
for inflation, and exempt eligible medical group practices from 
limitations of section 457(c)(2).
  By providing nonprofit, teaching, medical centers the ability to 
offer deferred compensation packages to their professions at levels 
that are competitive with the for-profit sector, our nonprofit medical 
centers will be able to recruit and retain the caliber of individuals 
whose training skills, and expertise are crucial to the often inner-
city or rural patients they serve.
                                 ______

      By Mrs. HUTCHISON:
  S. 1539. A bill to establish the Los Caminos del Rio National 
Heritage Area along the Lower Rio Grande Texas-Mexico border, and for 
other purposes; to the Committee on Energy and Natural Resources.


       the los caminos del rio national heritage area act of 1996

 Mrs. HUTCHISON. Mr. President, along the Lower Rio Grande from 
Laredo, TX to the Gulf of Mexico, are found resources of immense 
economic, natural, scenic, historical, and cultural value. On both the 
United States and Mexican sides of the Rio Grande, important historical 
themes and resources of local, State, national, and international 
importance characterize the river communities and counties along the 
Lower Rio Grande. These include early 16th- and 17th-century Spanish 
and French explorations, 18th-century river settlements founded under 
the Spanish Crown, 18th-century ranches where the first American 
cowboys rode, Texas independence and establishment of the Republic of 
the Rio Grande in 1840, the first battle of the Mexican-American War in 
1846, the last land battle of the American Civil War fought near the 
mouth of the Rio Grande in 1865, a thriving steamboat trade in the late 
19th-century, and the development of the Rio Grande Valley as an 
agricultural empire. Today, the Lower Rio Grande is one of the most 
complex ecological systems in the United States, with a remarkable 
variety of species including 600 different vertebrates, such as the 
plain chachalaca, the only member of the curassow family found in the 
United States, and 11,000 different and unique plants, like the Texas 
strawberry cactus.
  Given the remarkable diversity and international importance of this 
area, local and regional governments, Federal and State agencies, 
businesses, private citizens and organizations in the United States and 
Mexico have expressed a desire to work cooperatively to preserve the 
most significant components of the natural and cultural heritage 
throughout the region, while accommodating sustainable growth and 
development.
  Mr. President, in conjunction with these efforts, I am pleased to 
introduce today the Los Caminos del Rio National Heritage Area Act of 
1996. This act will designate the Lower Rio Grande as a congressionally 
authorized national heritage area, thereby recognizing the unique and 
binational importance of the Lower Rio Grande region.
  The Los Caminos del Rio National Heritage Area Act of 1996 recognizes 
the special importance of the Lower Rio Grande region as a living 
historical legacy of the United States and Mexico. Los Caminos del Rio 
will create partnerships between public and private entities to finance 
projects and initiatives throughout the Lower Rio Grande while 
requiring local governments and private entities to share costs with 
the Federal Government. Furthermore, it will promote cooperation 
between Mexico and the United States while enhancing the economies of 
the many Rio Grande communities.
  Mr. President, in a time of fiscal constraints, national heritage 
areas are fiscally sound, budget-conscious alternatives to the 
traditional national park designation. That is why Senator Ben 
Nighthorse Campbell has introduced legislation to encourage such 
partnerships as an alternative to the traditional national park 
designation and why I am now introducing the Los Caminos del Rio 
National Heritage Area Act of 1996.
  Additionally, I should like to point out that my bill pays particular 
and close attention to the rights of private property owners. I have 
listened to and worked with various property advocacy groups in order 
to craft a bill that specifically addresses concerns through concrete 
protections preventing property rights infringement and diminishment of 
value. For example, my bill prohibits conditioning of Federal 
assistance on enactment or modification of any land-use restrictions, 
mandates quarterly public hearings within the heritage area, and 
specifically states that nothing in the bill shall modify, enlarge, or 
diminish any authority of Federal, State, or local government to 
regulate any zoning or use of land, including fish and wildlife 
management. I hope to continue working with these property groups as 
this legislation moves toward passage.
  The Los Caminos del Rio heritage project, which began in 1990 with a 
grant awarded to the Texas Historical Commission, has become a crucial 
unifier of the Lower Rio Grande region, facilitating contacts between 
small communities and their State and Federal Governments and with 
private philanthropy. That same process has occurred in Mexico, where 
border communities that have traditionally felt abandoned and 
overlooked have been able to take advantage of Los Caminos del Rio. 
Because they are part of a regional project, they are now part of 
national and State tourism and conservation programs.
  Mr. President, I look forward to working with Senator Campbell and 
others in passing this legislation to designate Los Caminos del Rio as 
a National Heritage Area, to establish guidelines for the designation 
of other such areas, and to offer security for owners of private 
property within such areas.
                                 ______

       By Mr. HATCH:

  S. 1540. A bill to amend chapter 14 of title 35, United States Code, 
to preserve the full term of patents; to the Committee on the 
Judiciary.


             THE FULL PATENT TERM PRESERVATION ACT OF 1996

  Mr. HATCH. Mr. President, I am pleased to rise today to introduce S. 
1540, the Full Patent Term Preservation Act of 1996. Very simply 
stated, this legislation will allow the Patent and Trademark Office 
[PTO] to restore patent term in cases in which patent life has been 
shortened due to unusual and unavoidable administrative delay.
  I wish to commend the majority leader, my good friend from Kansas, 
for first bringing this matter to my attention. I share Senator Dole's 
concern that patent term not be eroded due to unusual delays in 
evaluating patent applications by the PTO. The recent adoption of the 
new 20 year from time of filing patent term has created a need for 
legislation to address the issues giving rise to the Dole/Rohrabacher 
measure.
  As my colleagues are aware, the legislation implementing the General 
Agreement on Tariffs and Trade [GATT] passed by the Congress and signed 
by the President in December, 1994, contained a provision designed to 
achieve harmonization of patent standards in the international 
community. This was accomplished by changing our old system, which 
allowed for a patent term equal to 17 years from the date the patent 
was issued, to a new system in which patents are valid for 20 years 
from the date of application.
  There has been some concern expressed that the transition under GATT 
from a ``17-year from issuance'' to a ``20-year from filing'' patent 
term will cause some inventors to lose valuable patent term. This can 
occur when patent applications are under review at PTO for unusually 
long periods of time. To remedy this potential loss of patent term, the 
bill I am introducing today will allow the PTO to restore patent term 
for up to 10 years if such term are lost because of unusual and 
unavoidable administrative delay. The bill also provides an opportunity 
for an independent review of the Commissioner's determination.
  At present, the patent code does not allow for patent term 
restoration on the basis of ``unusual administrative delay.'' Such a 
provision was not included in previous legislation because it was 
believed that there were too few cases to warrant its inclusion. 
Nevertheless, the changes made by the GATT implementing legislation and 
several cited cases in which patent applications have taken up to 10 
years to be 

[[Page S511]]
processed have heightened an awareness of the need to address the 
potential diminution of patent life. If enacted, the Full Patent Term 
Preservation Act of 1996 will allow inventors to regain patent term 
lost due to unusual administrative delay.
  S. 1540 addresses the same general issue expressed by the 
distinguished majority leader, Senator Dole, and by Congressman 
Rohrabacher in their legislation this Congress. I am very sympathetic 
to the problem which led them to introduce their legislation and I want 
to work closely with them to resolve the matter. At the same time I 
must note my concern that previous legislative proposals pose at least 
two problems. First, a provision that allows each applicant to select 
the way in which the patent term will be measured could pose 
significant administrative problems. And second, I am still concerned 
that we have not done enough to address the problem of so-called 
submarine patents which was one of the motivating factors behind 
adopting the GATT change.
  As with the Dole/Rohrabacher legislation, the Full Patent Term 
Preservation Act of 1996 attempts to preserve a full term of patent 
protection for American inventors, thereby promoting creativity and 
investment and maintaining U.S. competitiveness in the rapidly growing 
high-tech global marketplace. However, by retaining the basic principle 
of measuring the patent term from the earliest filing date, my proposed 
legislation preserves the necessary incentives for patent applicants to 
diligently and expeditiously pursue the issuance of their patent.
  As chairman of the Judiciary Committee, it is my intention to hold 
hearings on these issues in the near future. I want to make clear to my 
colleagues that the measure I introduce today is an effort to start the 
process of finding a middle ground which will accommodate the interests 
of all parties. I intend for the Judiciary Committee to examine this 
issue very closely over the next few months and I look forward to 
working with Senator Dole and all other interested parties to make any 
necessary modifications.
  Before closing, I want to mention my interest in soliciting input on 
one particular provision of this legislation. Section 2 grants the PTO 
the authority to determine the circumstances under which a patent 
adjustment can be made. Some have questioned whether providing this 
authority to the very agency which caused the delay would be the most 
appropriate way to address the adjustment issue.
  Mr. President, I believe that S. 1540, the Full Patent Term 
Preservation Act of 1996 is a balanced legislative response to the 
problem of potential loss of patent term. It will protect the 
legitimate patent rights of American inventors, uphold our 
international treaty obligations under GATT, and provide the necessary 
incentives to ensure the responsible and timely pursuance of patent 
applications. I urge my colleagues to support this legislation and look 
forward to its timely consideration.
  I ask unanimous consent that the text and a section-by-section 
analysis of the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1540

       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 ``Full Patent Term 
     Preservation Act of 1996''.

     SEC. 2. PATENT TERM DETERMINATION AUTHORITY.

       (a) In General.--Section 154(b) of title 35, United States 
     Code, is amended to read as follows:
       ``(b) Determination of Patent Term.--
       ``(1) Basis for patent term adjustment.--
       ``(A) In general.--Subject to paragraph (2), the term of a 
     patent shall be adjusted to include the period of time for 
     which the issue of the original patent was delayed due to--
       ``(i) a proceeding under section 135(a) of this title;
       ``(ii) the imposition of an order pursuant to section 181 
     of this title;
       ``(iii) appellate review by the Board of Patent Appeals and 
     Interferences or by a Federal court where the patent was 
     issued pursuant to a decision in the review reversing an 
     adverse determination of patentability; or
       ``(iv) an unusual administrative delay by the Office in 
     issuing the patent.
       ``(B) Regulations.--The Commissioner shall prescribe 
     regulations to govern the determination of the period of 
     delay, including the particular circumstances determined to 
     be an unusual administrative delay under subparagraph (A).
       ``(2) Limitations.--
       ``(A) Maximum period of adjustment.--The total duration of 
     all adjustments of a patent term under this subsection shall 
     not exceed 10 years. No patent term may be adjusted by a 
     period greater than the actual period of time that the 
     issue of a patent was delayed as determined by the 
     Commissioner. To the extent that periods of delay 
     attributable to grounds specified in paragraph (1) 
     overlap, the period of any adjustment granted under this 
     subsection shall not exceed the actual number of days the 
     issuance of the patent was delayed.
       ``(B) Due diligence.--The period of adjustment of the term 
     of a patent under this subsection shall be reduced by a 
     period equal to the time during the processing or examination 
     of the application leading to the patent in which the 
     applicant did not act with due diligence to conclude 
     processing or examination of the application. The 
     Commissioner shall prescribe regulations establishing the 
     circumstances that constitute a failure of an applicant to 
     act with due diligence to conclude processing or examination 
     of an application.
       ``(C) Terminal disclaimer.--No patent, the term of which 
     has been disclaimed beyond a specified date, may be adjusted 
     under this section beyond the expiration date specified in 
     the disclaimer.
       ``(3) Notice to commissioner.--In a case in which a patent 
     term is adjusted under this subsection, the Commissioner 
     shall determine the period of any patent term adjustment 
     available under this section and shall include a copy of that 
     determination with the final notice. The Commissioner shall 
     prescribe regulations establishing procedures for the 
     application for, and notification of, patent term adjustments 
     granted by the Commissioner under this subsection.
       ``(4) Judicial review.--Any applicant dissatisfied with a 
     determination by the Commissioner under paragraph (3) may 
     have remedy by civil action in the United States Court of 
     Federal Claims if commenced within 60 days after the mailing 
     of the notice of allowance as the Commissioner appoints. The 
     initiation of a civil action under this section shall not 
     delay the issuance of a patent.''.
       (c) Technical Clarification.--Section 156(a) of title 35, 
     United States Code, is amended--
       (1) in the matter preceding paragraph (1) by inserting ``, 
     which shall include any patent term adjustment granted under 
     section 154(b),'' after ``the original expiration date of the 
     patent''; and
       (2) in paragraph (2) by inserting before the semicolon ``, 
     except as provided under section 154(b)''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by section 2 shall take effect on the 
     date of the enactment of this Act and shall apply to any 
     application filed on or after June 8, 1995.

     Full Patent Term Preservation Act Section-by-Section Analysis

       Section 1. Short Title.--This section titles the bill the 
     ``Full Patent Term Preservation Act of 1996.''
       Section 2. Patent Term Determination Authority.--This 
     section makes certain that the term of a patent will be 
     adjusted to include time attributable to certain delays in 
     review of patent applications.
       Specifically, section 2(b)(1) mandates that adjustments 
     will be made for time elapsed due to: proceedings designed to 
     determine the priority of invention (``interference'' under 
     section 135(a) Title 35 U.S.C.); orders pertaining to a 
     determination that the patent would be detrimental to the 
     national security (section 181 of Title 35); and cases in 
     which the Board of Patent Appeals and Interferences or a 
     Federal court reverses an adverse finding of patentability. 
     In addition, the Commissioner shall make adjustments due to 
     unusual administrative delay by the Patent and Trademark 
     Office (PTO) in issuing the patent.
       The PTO Commissioner is authorized to promulgate 
     regulations to govern how the period of delay is to be 
     determined, including the circumstances that constitute 
     ``unusual administrative delay.''
       Section 2(b) also establishes a 10 year limitation for 
     adjustments in patent terms under this section and precludes 
     adjustments in patent term beyond the actual number of days 
     that a patent was delayed. No adjustment in patent term may 
     be granted for time periods when the applicant did not act 
     with ``due diligence.'' The Commissioner is authorized to 
     promulgate regulations to define the application of the ``due 
     diligence'' provisions.
       Section 2(b) also instructs the Commissioner to notify the 
     applicant, on the day the patent issues, of any patent term 
     restoration the applicant is entitled to under this section. 
     Finally, section 2(b) provides the right to judicial review 
     in the United States Court of Federal Claims for those patent 
     applicants 

[[Page S512]]
     dissatisfied with the determination of the Commissioner with respect to 
     patent term adjustments.
       Section 2(c) makes certain technical conforming changes 
     between sections 154 and 156 of the patent provisions of 
     Title 35, U.S.C. Section 2(c) allows the patent term 
     adjustments provided in section 156 to restore patent term 
     lost due to Food and Drug Administration regulatory review to 
     be additive to any patent term restoration granted under 
     section 154 to compensate for patent term unavoidably lost in 
     the patent prosection process.
       Section 3. Effective Date.--This section makes the new 
     provisions contained in section 2 effective for any patent 
     application filed on or after June 8, 1995.
                                 ______

      By Mr. LUGAR (for himself, Mr. Dole, Mr. Helms, Mr. Cochran, Mr. 
        Craig, Mr. Grassley, Mr. Pressler, and Mr. Coverdell):
  S. 1541. a bill to extend, reform, and improve agricultural 
commodity, trade, conservation, and other programs, and for other 
purposes; read the first time.


                   agricultural market transition act

  Mr. LUGAR. Mr. President, I rise to support the Agricultural Market 
Transition Act of 1996. This legislation is identical to Title I of the 
Balanced Budget Act, with two changes which I shall mention shortly.
  Congress passed the Balanced Budget Act and the President, most 
unfortunately for the country, vetoed it. We hope that some spending 
cuts can be added to legislation raising the Federal debt limit. 
However, the veto creates a problem for U.S. agriculture.
  The problem is that commodity support programs for the next 7 years 
were part of the BBA. Existing authority for these programs has now 
expired. All that remain are outdated statutes from 1938 and 1949. The 
Clinton administration confirms that implementing these statues could 
add $10 to $12 billion to the cost of running farm programs for 1996 
crops alone.
  That is intolerable for taxpayers. Farmers do not support such an 
irresponsible policy. The solution is to enact a new farm bill.
  Farmers need to know what farm policies will be--not just for the 
next 12 months but for the next several years. We owe it to U.S. 
agriculture to enact a long-term plan, not a stopgap measure.
  This bill's agricultural provisions are a long-term plan endorsed by 
a broad spectrum of agricultural groups. From national groups like the 
American Farm Bureau Federation and the National Corn Growers 
Association, to state groups like the Kansas Association of Wheat 
Growers and the North Dakota Grain Growers, U.S. producer and 
agribusiness organizations support this plan.
  It is simple, in contrast to the needless complexity of current 
programs.
  It offers certainty. Farmers will know what their future payments 
will be. Taxpayers will know how much will be spent. U.S. agriculture 
will have security against future budget cuts.
  Finally, it is market-oriented. Farmers' payments will be the same 
even if they plant alternate crops. Producers' planting decisions will 
be based on the market--as they should be. Under the BBA, there will be 
full planting freedom, not arbitrary government production controls.
  Mr. President, I ask unanimous consent that a brief summary of this 
bill's provisions be printed in the Record.
  There being no objection, the summary was ordered to be printed in 
the Record, as follows:

           Subtitle A--Agricultural Market Transition Program

       Production flexibility contracts--Eligible producers (those 
     who had participated in the wheat, feed grains, cotton and 
     rice programs in any one of the past five years) can enter 
     into seven-year ``production flexibility contracts'' between 
     1996 and 2002. The deadline for entering into the contract 
     would be April 15, 1996. Payments would be made on September 
     30 of each year beginning in 1996. Farmers would also have 
     the option of receiving half of their annual payment by 
     December 15 of the previous year (except in 1996 when the 
     advance payment would be due within 60 days of the signing of 
     the contract.)
       Payment would be made on 85 percent of a farm's contract 
     acreage. On this acreage participants would be free to plant 
     any program crop, oilseed, industrial or experimental crop, 
     mung beans, lentils and dry peas. Planting of fruits and 
     vegetables would be prohibited on contract acres. These 
     commodity program changes will result in $8.6 billion in 
     budget savings over the next seven years.
       Peanuts--The legislation saves $434 million from the 
     federal peanut program, making it a no-cost program. The 
     price support program for peanuts is extended through 2002, 
     but the quota support rate is lowered from $678/tone to $610/
     ton. The price support escalator is eliminated. The 
     legislation eliminates the national poundage quota floor 
     (currently 1,350,000 tons) and undermarketing provisions of 
     current law. Previously considered reforms for quota 
     reduction, the sale, lease and transfer of quota across 
     county lines, and offers from handlers were removed from the 
     bill due to Byrd rule considerations. These reforms will 
     likely be taken up later as part of separate legislation.
       Sugar--In order to make the program more market-oriented, a 
     recourse loan system is implemented until imports reach 1.5 
     million short tons for FY 1997 1997-2002. The bill terminates 
     marketing allotments and implements a one cent penalty on 
     forfeited sugar. Provisions of current law that require the 
     Sugar Program to operate at no-net cost are retained in this 
     bill. It also retains the loan rate of raw cane sugar and 
     refined beet sugar at the 1995 levels, 18 cents and 22.9 
     cents respectively, and retains a nine-month loan. The 
     legislation would raise the assessment on sugar processors to 
     achieve $52 million in budget savings over seven years toward 
     deficit reduction.
       Nonrecourse marketing assistance loans--The conference 
     agreement establishes maximum loan rates at the following 
     (1995) levels: Rice: $6.50/cwt; Upland Cotton: $0.5192/lb; 
     Wheat: $2.58/bu; Corn: $1.89/bu; Soybeans: $4.92/bu; ELS 
     Cotton: $0.7965/lb.
       The Secretary would retain authority to make downward 
     adjustments to wheat and feed grains loan rates based on 
     specified stocks-to-use criteria. The bill also establishes a 
     minimum loan rate for rice at $6.50/cwt and cotton at $0.50/
     lb. The conference agreement also eliminates the 8-month 
     cotton loan extension. The loan rate provisions of the 
     conference agreement will save $107 million.
       Payment limitations--The conference agreement reduces the 
     current payment limitation by 20 percent, from $50,000 to 
     $40,000. The bill extends provisions of current law that 
     limit marketing loan gains and loan deficiency payments to 
     $75,000 per person per year. The payment limitation reduction 
     achieves $150 million in budget savings.
       Program authority elimination--This legislation repeals the 
     Agriculture Act of 1949 as well as the permanent law 
     provisions of the Agriculture Adjustment Act of 1938. Also 
     eliminated are authorities for the Farmer Owned Reserve and 
     the Emergency Livestock Feed Assistance Program.


                        subtitle b--conservation

       Conservation Reserve Program (CRP)--The CRP is capped at 
     the current level of 36.4 million acres for a savings of $569 
     million over seven years. Also adopted was an ``early out'' 
     provision to allow contract holders to terminate CRP 
     contracts upon written notification of the Secretary.
       Livestock Environmental Assistance Program (LEAP)--The 
     program is established to help livestock producers improve 
     environmental and water quality. The program makes available 
     $100 million annually to provide technical and cost-share 
     assistance in implementing structural and management 
     practices to protect water, soil and related resources from 
     degradation associated with livestock production.


         subtitle c--agricultural promotion and export programs

       Market Promotion Program (MPP)--MPP expenditures are capped 
     at $100 million through 2002 producing a savings of $60 
     million.
       Export Enhancement Program (EEP)--EEP expenditures are 
     capped at $350 million in 1996 and 1997; $500 million in 
     1998; $550 million in 1999; $579 million in 2000 and $478 
     million for 2001 and 2002. Total savings for EEP will be 
     $1.27 billion.


                       subtitle d--miscellaneous

       Crop insurance--The bill eliminates the mandatory nature of 
     catastrophic crop insurance, but requires producers to waive 
     all federal disaster assistance if they opt not to purchase 
     insurance. Dual delivery of crop insurance is eliminated in 
     those states that have adequate private crop insurance 
     delivery. The bill also corrects a provision of current law 
     by amending the Federal Crop Insurance Act to include seed 
     crops. The crop insurance provisions of the bill result in 
     net savings of $130 million.
       Agriculture quarantine and inspection--The bill amends the 
     Food, Agriculture, Conservation and Trade Act of 1990 to 
     allow the Secretary to collect and spend fees collected over 
     $100 million to cover the cost of providing quarantine and 
     inspection services for imports.
       Commodity Credit Corporation (CCC) interest rates--Rates on 
     CCC agriculture commodity loans are increased by 100 basis 
     points for a savings of $260 million over seven years.
  Mr. LUGAR. I would also like to mention two changes from the BBA as 
it passed the House and Senate.
  Under the Livestock Environmental Assistance Program, limits are 
placed on the size of operations that may receive benefits. The BBA 
contained 

[[Page S513]]
these limits but some felt that for dairy operations, the limits were 
too strict. Therefore, dairy operations of 700 or fewer cows will now 
be eligible.
  The other change deals with which crops may be planted on acres 
enrolled in income support contracts. The bill introduced today will 
treat fruit and vegetable crops in the same manner as current law--that 
is, they may not be planted on contract acres.
  Mr. President, the Agricultural Market Transition Act of 1996 
represents a bold departure from the past. It is a new direction for 
American agriculture. It will reduce Federal spending, reform price 
support programs, and prepare U.S. farmers for what promises to be an 
exciting new century, full of opportunities for the most efficient food 
producers in the world.
  Mr. GORTON. Mr. President, today I am pleased to join my colleagues 
Senators Craig, Dole, Lugar, Cochran, and Grassley, supporting a farm 
bill that will let our farmers farm according to the marketplace and 
stop the Federal Government from telling our farmers what crop to 
plant, when to plant, and how much to plant. These decisions belong to 
the farmer--not the Federal Government.
  On September 30 of last year the farm bill expired. Farmers in my 
State of Washington and across the country need to know what the farm 
program will be. They cannot wait any longer. Currently, farmers in my 
State are meeting with their bankers, making plans for this year's 
crop, determining their financial situation, and evaluating their 
equipment needs. As my good friend from Iowa, Senator Grassley, said on 
Tuesday, ``farmers of this country deserve to know what the farm 
program will be this year and they need to know as soon as possible.'' 
The senior Senator from Iowa is correct. We cannot in good conscience 
delay in passing a farm bill. We owe it to the American farmer to take 
action.
  Farmers in my State tell me that they want less Government, less red 
tape, and less paperwork. Farmers in my State simply want more 
flexibility; they want the Federal Government out of their lives. A 
market transition style farm program gives them what they have asked 
for and provides a seven year transition to full market-oriented 
farming.
  A market transition style farm program could not come at a better 
time. Many important developments have taken place since the completion 
of the Uruguay Round of the General Agreement of Tariffs and Trade 
[GATT]. I believe that GATT will continue to open new world markets for 
the United States, and with a farm program that allows our farmers to 
farm according to the marketplace we will provide them with the 
flexibility they need to respond quickly to the demands of emerging 
world markets.
  A market transition style farm program also moves us towards a 
balanced budget, saving nearly $13 billion in budget outlays over 7 
years. Since 1969, the last year in which there was a balanced budget 
in this country, we have piled debt on our shoulders and on the 
shoulders of our children and grandchildren of almost $5 trillion. That 
means, Mr. President, that a child born today inherits an obligation of 
some $187,000 during his or her life simply to pay interest on the 
national debt. This statistic alone starkly illustrates not just the 
fiscal and financial necessity, but the moral necessity of a sharp 
change in direction. This country can no longer continue goods and 
services for which it is unwilling to pay. If we do not change the way 
we do things here in Washington, DC, our children and grandchildren 
will suffer terribly.
  If we do balance the Federal budget we will provide American families 
and American farmers with better jobs, higher wages, lower interest 
rates, and economic certainty. All of this means more money in the 
pockets of American farmers. One thing is for certain, Mr. President: 
we must balance the budget and we must balance it now.
  For all of these reasons, Mr. President, I support my colleagues, 
Senators Craig, Dole, Lugar, Cochran, and Grassley, as we work together 
to provide American farmers with the flexibility they need to do what 
they do best: provide healthy, safe, and abundant food for families 
around the world.
                                 ______

      By Mr. SPECTER (for himself and Mr. Hollings):
  S.J. Res. 48. A joint resolution proposing an amendment to the 
Constitution of the United States relating to contributions and 
expenditures intended to affect elections; to the Committee on the 
Judiciary.


             campaign expenditures constitutional amendment

  Mr. SPECTER. Mr. President, I have sought recognition today for 
purposes, with the cosponsorship of the distinguished Senator from 
South Carolina, Senator Hollings, to introduce a constitutional 
amendment which is broader than any yet pending, which would authorize 
the Congress and the State legislatures to set spending limits on what 
any individual can spend of his or her own money in the context of a 
candidacy.

  I had wanted to introduce this amendment on January 30, which is next 
Tuesday, because January 30 is the 20th anniversary of the decision of 
the Supreme Court in Buckley versus Valeo, which said that an 
individual can promote his or her candidacy to the maximum extent he or 
she chooses with their own personal funds as a matter of first 
amendment protection of freedom of speech.
  It has always been a little hard for me to understand how anything 
from the freedom of speech is implicated in a matter of campaign 
financing. For the past 6 years, Senator Hollings and I and others have 
tried to advance this constitutional amendment, which is difficult 
because it picks on the first amendment.
  But in seeking to amend the first amendment, we do not seek to change 
the language of the first amendment, which I think is sacrosanct. What 
we seek to do is to overrule, in effect, a split decision by the 
Supreme Court of the United States in interpreting the first amendment.
  Money is the scourge of politics, and to buy high public office is, 
obviously, against public policy. There are many who have, in effect, 
bought public office, including some seats of the U.S. Senate. But it 
is only recently that this matter has come into sharp focus when a 
candidate for the Presidency of the United States, who is reputed to 
have assets in excess of $400 million, set out to, in effect, buy the 
White House.
  According to this morning's New York Times, some $15 million has 
already been expended on that effort. I think it is especially 
problemsome when a substantial part of that money is dedicated to 
negative advertising which, in effect, seeks to impugn the reputation 
of an opponent who spent more than 40 years in public life.
  I believe what is going on in the Presidential primaries, the 
Republican primaries, today has caused a great deal of focus of 
attention, and it is high time that we took some action to stop someone 
from buying public office, especially the Presidency of the United 
States, especially the White House.
  I will add, Mr. President, that I personally feel especially strong 
about this particular matter, because I filed for the U.S. Senate 
during the first election cycle following the enactment of the 1974 
legislation which limited the amount of moneys which could be spent on 
Federal elections.
  That 1974 statute said that for a State the size of Pennsylvania, 
with 12 million people, the most anyone could spend of his or her own 
money was $35,000. That year, I contested for that office with then-
Congressman John Heinz, who later I served with in the Senate as a 
colleague and who became one of my very, very best friends, a Senator 
we sorely miss in this body.
  But with the playing field somewhat leveled with the $35,000 maximum 
individual expenditure, I thought that race was one to be undertaken. 
Then, right in the middle of the campaign, on January 30--we had an 
August 22 primary in 1976; I declared my candidacy in November of 
1975--right in the middle of the campaign, the Supreme Court of the 
United States said any candidate can spend as much of his or her money 
that he or she wanted.
  Somewhat anomalous, my brother, who could have bankrolled my 
campaign--I do not know he would have, but he could have--was limited 
to $1,000 under the act, and that remained in place by the Supreme 
Court decision.
  It is a little hard to see the first amendment freedom of speech 
rights of 

[[Page S514]]
Specter being different than the freedom of speech rights of a 
candidate. We have lived with Buckley versus Valeo for 20 years, and it 
is bad legal construction. There is nothing in the first amendment, 
there is nothing in the logic of the law which suggests the first 
amendment gives an individual the right to spend as much of his or her 
own money as he or she chooses.
  It certainly is bad public policy to have someone seek to buy an 
office, especially the Presidency of the United States.
  So I urge my colleagues to join Senator Hollings and myself. As we 
have talked in the quarters and in the cloakrooms and on the floor of 
the Senate in these past several days, I believe that there is a 
growing sentiment in the Congress to do something about Buckley versus 
Valeo, to see to it that we do not have high public office up for sale 
in this great country.

                          ____________________