[Congressional Record Volume 142, Number 24 (Tuesday, February 27, 1996)]
[Senate]
[Pages S1346-S1368]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. BOND:
  S. 1574. A bill to provide Federal contracting opportunities for 
small business concerns located in historically underutilized business 
zones, and for other purposes; to the Committee on Small Business.


                        The HUBZone Act of 1996

  Mr. BOND. Mr. President, I rise today to introduce a measure called 
the HUBZone Act of 1996. The purpose underlying this bill is to create 
new opportunities for growth through small business opportunities in 
distressed urban and rural communities which have suffered economic 
decline. This legislation will provide for an immediate infusion of 
cash and the creation of new jobs in our Nation's economically 
distressed areas.
  During the 8 years I served as Governor of Missouri, I met frequently 
with community leaders who were seeking help in attracting businesses 
and jobs to their cities and towns. We tried various programs. The 
enterprise zone concept met with some limited success in Missouri but 
the concept was good. Our incentives were limited to State tax relief, 
which was not a very significant element, but I believe that the idea 
of providing incentives for locating businesses in areas of high 
unemployment makes sense.
  Now, in my position representing my State and serving as chairman of 
the Committee on Small Business, I continue to receive pleas for help. 
We have not yet found the perfect formula to bring economic hope and 
independence to these communities. But I believe we are working on it. 
I think we are on the right track.
  The message for help has changed somewhat. Although help has been 
forthcoming from the Federal Government, high unemployment and poverty 
remain. One community leader, for example, has stressed to me that his 
city has all the job training funds it is capable of using. He said, 
``Don't send us any more training funds. Send us some jobs.'' What the 
city, the inner city, and people there need is more jobs.
  Too many of our Nation's cities and rural areas have suffered 
economic decline while others have prospered often with Federal 
assistance. In October of last year, I chaired a hearing before the 
Senate Committee on Small Business on ``Revitalizing America's Rural 
and Urban Communities.'' We heard insightful testimony about the 
importance of changing the U.S. Tax Code, for example, and providing 
other incentives to attract businesses to the communities in need of 
economic opportunity. Their recommendations have merit, and I urge my 
colleagues in the committees with jurisdiction over appropriate 
legislation to take swift action to bring these legislative changes to 
the Senate floor.
  What distinguishes the HUBZone Act of 1996 from other excellent 
proposals is that there is an immediate impact this bill can have on 
economically distressed communities. The HUBZone proposal would benefit 
entire communities by creating meaningful incentives for small 
businesses to operate and provide employment within America's most 
disadvantaged inner-city neighborhoods and rural areas.
  Specifically, the HUBZone Act of 1996 creates a new class of small 
businesses eligible for Federal Government contract set-asides and 
preferences. To be eligible, a small business must be located in a 
historically underutilized business zone--that is the basis for the 
acronym ``HUBZone''--and not less than 35 percent of its work force 
would have to reside in a HUBZone.
  I will contrast the HUBZone proposal in this legislation today with a 
draft Executive order that is being circulated by the Clinton 
administration to establish an empowerment contracting program. I 
commend the President and the administration for focusing on the value 
of targeting Federal Government assistance to low-income communities. 
However, I think that program falls short of meeting the goal of 
helping low-income communities and its residents.
  For example, under the President's proposal, any business, large or 
small, located in a low-income community would qualify for a valuable 
contracting preference, even if it does not employ one resident of the 
community. This is clearly a major deficiency or loophole when trying 
to assist the unemployed and underemployed who live in those target 
areas. A further weakness in the President's proposal is the failure to 
define clearly and objectively the criteria which makes a community 
eligible for his program. We need to avoid creating a new Federal 
program that ends up helping well-off individuals and companies while 
failing to have a significant impact on the poor.
  The HUBZone Act of 1996 makes the contracting preference available 
only if the small business is located in the economically distressed 
area and employs 35 percent of its work force from a HUBZone. That is a 
significant difference. It is one that is clearly designed to attack 
deep-seated poverty in geographic locations within the United States.
  To qualify for the program, the small business would have to certify 
to the Administrator of the U.S. Small Business Administration that it 
is located in a HUBZone and that it will comply with certain rules 
governing subcontracting. In addition, a qualified small business must 
agree to perform at least 50 percent of the contract in a HUBZone 
unless the terms of the contract require that the efforts be conducted 
elsewhere; in other words, a service contract requiring the small 
business' presence in Government-owned or leased buildings, for 
example. In the latter case, no less than 50 percent of the contract 
would have to be performed by employees of the eligible small business.
  Mr. President, the HUBZone Act of 1996 is designed to cut through 
Government redtape while stressing a streamlined effort to place 
Government contracts and new jobs in economically distressed 
communities.
  Many of my colleagues are familiar with the SBA's 8(a) minority small 
business program and some of the rules which are cumbersome for small 
businesses seeking to qualify for the program. Typically, an 8(a) 
program applicant has to hire a lawyer to help prepare the application 
and shepherd it through the SBA procedure, which can often take months. 
In fact, Congress was forced to legislate the maximum time the agency 
could review an application as a last-ditch effort to speed up the 
process. Today, it still takes the SBA at least 90 days, the statutory 
maximum, to review an application.
  The HUBZone Act of 1996 is specifically designed to avoid 
bureaucratic roadblocks that have delayed and discouraged small 
business from taking advantage of Government programs. Simply put, if 
you are a small business located in the HUBZone, employing people from 
a HUBZone, you are eligible. Once eligible, the small business notifies 
the SBA of its participation in the HUBZone program, and it is 
qualified to receive Federal Government contract preferences.
  Our goal in introducing this measure is to have new Government 
contracts being awarded to small businesses in economically distressed 
communities. Therefore, we have included some ambitious goals for each 
Government agency. In 1997, 1 percent of the total value of all prime 
Government contracts would be awarded to small businesses located in 
HUBZones. The goal would increase to 2 percent in 1998, 3 percent in 
1999, and 4 percent in 2000 and each succeeding year.
  HUBZone contracting is a bold undertaking. Passage of the HUBZone Act 
would create hope for inner cities and distressed rural areas that have 
long been ignored. Most importantly, passage of the HUBZone bill will 
create hope for the hundreds of thousands of unemployed or 
underemployed people who long ago thought our country had given up on 
them. This hope is tangible; it is jobs and income.
  We are going to be holding hearings before the Committee on Small 
Business on the HUBZone Act of 1996 and the role our Nation's small 
business community can play in revitalizing our distressed cities and 
rural communities. I really think the HUBZone proposal has great merit. 
I ask my colleagues to look at it, offer comments, 

[[Page S1347]]
if you agree with what we are trying to do, the goal of this program 
and its objective. I welcome cosponsors. I welcome constructive 
discussion and input from those who have an interest in seeing economic 
opportunity brought back to inner-city areas and distressed rural 
communities.
  Mr. President, I ask unanimous consent that the text of the bill and 
a section-by-section analysis of its provisions be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1574

       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 ``HUBZone Act of 1996''.

     SEC. 2. HISTORICALLY UNDERUTILIZED BUSINESS ZONES.

       (a) Definitions.--Section 3 of the Small Business Act (15 
     U.S.C. 632) is amended by adding at the end the following new 
     subsection:
       ``(o) Definitions Relating to Historically Underutilized 
     Business Zones.--For purposes of this section, the following 
     definitions shall apply:
       ``(1) Historically underutilized business zone.--The term 
     `historically underutilized business zone' means any area 
     located within one or more qualified census tracts or 
     qualified nonmetropolitan counties.
       ``(2) Small business concern located in a historically 
     underutilized business zone.--The term `small business 
     concern located in a historically underutilized business 
     zone' means a small business concern--
       ``(A) that is owned and controlled by one or more persons, 
     each of whom is a United States citizen;
       ``(B) the principal office of which is located in a 
     historically underutilized business zone; and
       ``(C) not less than 35 percent of the employees of which 
     reside in a historically underutilized business zone.
       ``(3) Qualified areas.--
       ``(A) Qualified census tract.--The term `qualified census 
     tract' has the same meaning as in section 42(d)(5)(C)(i)(I) 
     of the Internal Revenue Code of 1986.
       ``(B) Qualified nonmetropolitan county.--The term 
     `qualified nonmetropolitan county' means, based on the most 
     recent data available from the Bureau of the Census of the 
     Department of Commerce, any county--
       ``(i) that is not located in a metropolitan statistical 
     area (as that term is defined in section 143(k)(2)(B) of the 
     Internal Revenue Code of 1986); and
       ``(ii) in which the median household income is less than 80 
     percent of the nonmetropolitan State median household income.
       ``(4) Qualified small business concern located in a 
     historically underutilized business zone.--
       ``(A) In general.--A small business concern located in a 
     historically underutilized business zone is `qualified', if--
       ``(i) the small business concern has certified in writing 
     to the Administrator that--

       ``(I) it is a small business concern located in a 
     historically underutilized business zone;
       ``(II) it will comply with the subcontracting limitations 
     specified in Federal Acquisition Regulation 52.219-14;
       ``(III) in the case of a contract for services (except 
     construction), not less than 50 percent of the cost of 
     contract performance incurred for personnel will be expended 
     for employees of that small business concern or for employees 
     of other small business concerns located in historically 
     underutilized business zones; and
       ``(IV) in the case of a contract for procurement of 
     supplies (other than procurement from a regular dealer in 
     such supplies), the small business concern (or a 
     subcontractor of the small business concern that is also a 
     small business concern located in a historically 
     underutilized business zone) will perform work for not less 
     than 50 percent of the cost of manufacturing the supplies 
     (not including the cost of materials) in a historically 
     underutilized business zone; and

       ``(ii) no certification made by the small business concern 
     under clause (i) has been, in accordance with the procedures 
     established under section 30(c)(2)--

       ``(I) successfully challenged by an interested party; or
       ``(II) otherwise determined by the Administrator to be 
     materially false.

       ``(B) Change in percentages.--The Administrator may utilize 
     a percentage other than the percentage specified in under 
     subclause (III) or (IV) of subparagraph (A)(i), if the 
     Administrator determines that such action is necessary to 
     reflect conventional industry practices among small business 
     concerns that are below the numerical size standard for 
     businesses in that industry category.
       ``(C) Construction and other contracts.--The Administrator 
     shall promulgate final regulations imposing requirements that 
     are similar to those specified in subclauses (III) and (IV) 
     of subparagraph (A)(i) on contracts for general and specialty 
     construction, and on contracts for any other industry 
     category that would not otherwise be subject to those 
     requirements. The percentage applicable to any such 
     requirement shall be determined in accordance with 
     subparagraph (B).
       ``(D) List of qualified small business concerns.--The 
     Administrator shall establish and maintain a list of 
     qualified small business concerns located in historically 
     underutilized business zones, which list shall--
       ``(i) include the name, address, and type of business with 
     respect to each such small business concern;
       ``(ii) be updated by the Administrator not less than 
     annually; and
       ``(iii) be provided upon request to any Federal agency or 
     other entity.''.
       (b) Federal Contracting Preferences.--The Small Business 
     Act (15 U.S.C. 631 et seq.) is amended--
       (1) by redesignating section 30 as section 31; and
       (2) by inserting after section 29 the following new 
     section:

     ``SEC. 30. HISTORICALLY UNDERUTILIZED BUSINESS ZONES PROGRAM.

       ``(a) In General.--There is established within the 
     Administration a program to be carried out by the 
     Administrator to provide for Federal contracting assistance 
     to qualified small business concerns located in historically 
     underutilized business zones in accordance with this section.
       ``(b) Contracting Preferences.--
       ``(1) Contract set-aside.--
       ``(A) Requirement.--The head of an executive agency shall 
     afford the opportunity to participate in a competition for 
     award of a contract of the executive agency, exclusively to 
     qualified small business concerns located in historically 
     underutilized business zones, if the Administrator determines 
     that--
       ``(i) it is reasonable to expect that not less than 2 
     qualified small business concerns located in historically 
     underutilized business zones will submit offers for the 
     contract; and
       ``(ii) the award can be made on the restricted basis at a 
     fair market price.
       ``(B) Covered contracts.--Subparagraph (A) applies to a 
     contract that is estimated to exceed the simplified 
     acquisition threshold.
       ``(2) Sole-source contracts.--
       ``(A) Requirement.--The head of an executive agency, in the 
     exercise of authority provided in any other law to award a 
     contract of the executive agency on a sole-source basis, 
     shall award the contract on that basis to a qualified small 
     business concern located in a historically underutilized 
     business zone, if any, that--
       ``(i) submits a reasonable and responsive offer for the 
     contract; and
       ``(ii) is determined by the Administrator to be a 
     responsible contractor.
       ``(B) Covered contracts.--Subparagraph (A) applies to a 
     contract that is estimated to exceed the simplified 
     acquisition threshold and not to exceed $5,000,000.
       ``(3) Price evaluation preference in full and open 
     competitions.--In any case in which a contract is to be 
     awarded by the head of an executive agency on the basis of 
     full and open competition, the price offered by a qualified 
     small business concern located in a historically 
     underutilized business zone shall be deemed as being lower 
     than the price offered by another offeror (other than another 
     qualified small business concern located in a historically 
     underutilized business zone) if the price offered by the 
     qualified small business concern located in a historically 
     underutilized business zone is not more than 10 percent 
     higher than the price offered by the other offeror.
       ``(4) Relationship to other contracting preferences.--
       ``(A) Subordinate relationship.--A procurement may not be 
     made from a source on the basis of a preference provided in 
     paragraph (1), (2), or (3) if the procurement would otherwise 
     be made from a different source under section 4124 or 4125 of 
     title 18, United States Code, or the Javits-Wagner-O'Day Act.
       ``(B) Superior relationship.--A procurement may not be made 
     from a source on the basis of a preference provided in 
     section 8(a), if the procurement would otherwise be made from 
     a different source under paragraph (1), (2), or (3) of this 
     subsection.
       ``(5) Definitions.--For purposes of this subsection, the 
     terms `executive agency', `full and open competition', and 
     `simplified acquisition threshold' have the meanings given 
     such terms in section 4 of the Office of Federal Procurement 
     Policy Act.
       ``(c) Enforcement; Penalties.--
       ``(1) In general.--The Administrator shall enforce the 
     requirements of this section.
       ``(2) Verification of eligibility.--In carrying out this 
     subsection, the Administrator shall establish procedures 
     relating to--
       ``(A) the filing, investigation, and disposition by the 
     Administration of any challenge to the eligibility of a small 
     business concern to receive assistance under this section 
     (including a challenge, filed by an interested party, 
     relating to the veracity of a certification made by a small 
     business concern under section 3(o)(4)(A)); and
       ``(B) verification by the Administrator of the accuracy of 
     any certification made by a small business concern under 
     section 3(o)(4)(A).
       ``(3) Random inspections.--The procedures established under 
     paragraph (2) may provide for random inspections by the 
     Administrator of any small business concern making a 
     certification under section 3(o)(4).
       ``(4) Provision of data.--Upon the request of the 
     Administrator, the Secretary of Labor 

[[Page S1348]]
     and the Secretary of Housing and Urban Development shall promptly 
     provide to the Administrator such information as the 
     Administrator determines to be necessary to carry out this 
     subsection.
       ``(5) Penalties.--In addition to the penalties described in 
     section 16(d), any small business concern that is determined 
     by the Administrator to have misrepresented the status of 
     that concern as a `small business concern located in a 
     historically underutilized business zone' for purposes of 
     this section, shall be subject to the provisions of--
       ``(A) section 1001 of title 18, United States Code; and
       ``(B) sections 3729 through 3733 of title 31, United States 
     Code.''.

     SEC. 3. TECHNICAL AND CONFORMING AMENDMENTS TO THE SMALL 
                   BUSINESS ACT.

       (a) Performance of Contracts.--Section 8(d) of the Small 
     Business Act (15 U.S.C. 637(d)) is amended--
       (1) in paragraph (1)--
       (A) in the first sentence, by striking ``,, small business 
     concerns owned and controlled by socially and economically 
     disadvantaged individuals'' and inserting ``, qualified small 
     business concerns located in historically underutilized 
     business zones, small business concerns owned and controlled 
     by socially and economically disadvantaged individuals''; and
       (B) in the second sentence, by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones,'' after ``small business concerns,'';
       (2) in paragraph (3)--
       (A) by inserting ``qualified small business concerns 
     located in historically underutilized business zones,'' after 
     ``small business concerns,'' each place that term appears; 
     and
       (B) by adding at the end the following new subparagraph:
       ``(F) For purposes of this contract, the term `qualified 
     small business concern located in a historically 
     underutilized business zone' has the same meaning as in 
     section 3(o) of the Small Business Act.'';
       (3) in paragraph (4)--
       (A) in subparagraph (D), by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones,'' after ``small business concerns,''; and
       (B) in subparagraph (E), by striking ``small business 
     concerns and'' and inserting ``small business concerns, 
     qualified small business concerns located in historically 
     underutilized business zones, and'';
       (4) in paragraph (6), by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones,'' after ``small business concerns,'' each 
     place that term appears; and
       (5) in paragraph (10), by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones,'' after ``small business concerns,''.
       (b) Awards of Contracts.--Section 15 of the Small Business 
     Act (15 U.S.C. 644) is amended--
       (1) in subsection (g)(1)--
       (A) by inserting ``qualified small business concerns 
     located in historically underutilized business zones,'' after 
     ``small business concerns,'' each place that term appears; 
     and
       (B) by inserting after the second sentence the following: 
     ``The Governmentwide goal for participation by qualified 
     small business concerns located in historically underutilized 
     business zones shall be established at not less than 1 
     percent of the total value of all prime contract awards for 
     fiscal year 1997, not less than 2 percent of the total value 
     of all prime contract awards for fiscal year 1998, not less 
     than 3 percent of the total value of all prime contract 
     awards for fiscal year 1999, and not less than 4 percent of 
     the total value of all prime contract awards for fiscal year 
     2000 and each fiscal year thereafter.'';
       (2) in subsection (g)(2)--
       (A) in the first sentence, by striking ``,, by small 
     business concerns owned and controlled by socially and 
     economically disadvantaged individuals'' and inserting ``, by 
     qualified small business concerns located in historically 
     underutilized business zones, by small business concerns 
     owned and controlled by socially and economically 
     disadvantaged individuals'';
       (B) in the second sentence, by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones,'' after ``small business concerns,''; and
       (C) in the fourth sentence, by striking ``by small business 
     concerns owned and controlled by socially and economically 
     disadvantaged individuals and participation by small business 
     concerns owned and controlled by women'' and inserting ``by 
     qualified small business concerns located in historically 
     underutilized business zones, by small business concerns 
     owned and controlled by socially and economically 
     disadvantaged individuals, and by small business concerns 
     owned and controlled by women''; and
       (3) in subsection (h), by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones,'' after ``small business concerns,'' each 
     place that term appears.
       (c) Offenses and Penalties.--Section 16 of the Small 
     Business Act (15 U.S.C. 645) is amended--
       (1) in subsection (d)(1)--
       (A) by inserting ``, a `qualified small business concern 
     located in a historically underutilized business zone','' 
     after `` `small business concern',''; and
       (B) in subparagraph (A), by striking ``section 9 or 15'' 
     and inserting ``section 9, 15, or 30''; and
       (2) in subsection (e), by inserting ``, a `small business 
     concern located in a historically underutilized business 
     zone','' after `` `small business concern',''.

     SEC. 4. OTHER TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Title 10, United States Code.--Section 2323 of title 
     10, United States Code, is amended--
       (1) in subsection (a)(1)(A), by inserting before the 
     semicolon the following: ``, and qualified small business 
     concerns located in historically underutilized business zones 
     (as that term is defined in section 3(o) of the Small 
     Business Act)''; and
       (2) in subsection (f), by inserting ``or as a qualified 
     small business concern located in a historically 
     underutilized business zone (as that term is defined in 
     section 3(o) of the Small Business Act)'' after ``subsection 
     (a))''.
       (b) Federal Home Loan Bank Act.--Section 21A(b)(13) of the 
     Federal Home Loan Bank Act (12 U.S.C. 1441a(b)(13)) is 
     amended--
       (1) by striking ``concerns and small'' and inserting 
     ``concerns, small''; and
       (2) by inserting ``, and qualified small business concerns 
     located in historically underutilized business zones (as that 
     term is defined in section 3(o) of the Small Business Act)'' 
     after ``disadvantaged individuals''.
       (c) Small Business Economic Policy Act of 1980.--Section 
     303(e) of the Small Business Economic Policy Act of 1980 (15 
     U.S.C. 631b(e)) is amended--
       (1) in paragraph (1), by striking ``and'' at the end;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(3) qualified small business concerns located in 
     historically underutilized business zones (as that term is 
     defined in section 3(o) of the Small Business Act).''.
       (d) Small Business Investment Act of 1958.--Section 
     411(c)(3)(B) of the Small Business Investment Act of 1958 (15 
     U.S.C. 694b(c)(3)(B)) is amended by inserting before the 
     semicolon the following: ``, or to a qualified small business 
     concern located in a historically underutilized business 
     zone, as that term is defined in section 3(o) of the Small 
     Business Act''.
       (e) Title 31, United States Code.--
       (1) Contracts for collection services.--Section 3718(b) of 
     title 31, United States Code, is amended--
       (A) in paragraph (1)(B), by inserting ``and law firms that 
     are qualified small business concerns located in historically 
     underutilized business zones (as that term is defined in 
     section 3(o) of the Small Business Act)'' after 
     ``disadvantaged individuals''; and
       (B) in paragraph (3)--
       (i) in the first sentence, by inserting before the period 
     ``and law firms that are qualified small business concerns 
     located in historically underutilized business zones'';
       (ii) in subparagraph (A), by striking ``and'' at the end;
       (iii) in subparagraph (B), by striking the period at the 
     end and inserting ``; and''; and
       (iv) by adding at the end the following new subparagraph:
       ``(C) the term `qualified small business concern located in 
     a historically underutilized business zone' has the same 
     meaning as in section 3(o) of the Small Business Act.''.
       (2) Payments to local governments.--Section 6701(f) of 
     title 31, United States Code, is amended--
       (A) in paragraph (1)--
       (i) in subparagraph (A), by striking ``and'' at the end;
       (ii) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following new subparagraph:
       ``(C) qualified small business concerns located in 
     historically underutilized business zones.''; and
       (B) in paragraph (3)--
       (i) in subparagraph (A), by striking ``and'' at the end;
       (ii) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following new subparagraph:
       ``(C) the term `qualified small business concern located in 
     a historically underutilized business zone' has the same 
     meaning as in section 3(o) of the Small Business Act.''.
       (3) Regulations.--Section 7505(c) of title 31, United 
     States Code, is amended by striking ``small business concerns 
     and'' and inserting ``small business concerns, qualified 
     small business concerns located in historically underutilized 
     business zones, and''.
       (f) Office of Federal Procurement Policy Act.--
       (1) Enumeration of included functions.--Section 6(d) of the 
     Office of Federal Procurement Policy Act (41 U.S.C. 405(d)) 
     is amended--
       (A) in paragraph (5)(C), by inserting ``and of qualified 
     small business concerns located in historically underutilized 
     business zones'' after ``other minorities'';
       (B) in paragraph (10), by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones (as that term is defined in section 3(o) of 
     the Small Business Act),'' after ``small businesses,''; and
     
[[Page S1349]]

       (C) in paragraph (11), by inserting ``qualified small 
     business concerns located in historically underutilized 
     business zones (as that term is defined in section 3(o) of 
     the Small Business Act),'' after ``small businesses,''.
       (2) Procurement data.--Section 19A of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 417a) is amended--
       (A) in subsection (a)--
       (i) by inserting ``the number of qualified small business 
     concerns located in historically underutilized business 
     zones,'' after ``Procurement Policy''; and
       (ii) by inserting a comma after ``women''; and
       (B) in subsection (b), by adding at the end the following: 
     ``For purposes of this section, the term `qualified small 
     business concern located in a historically underutilized 
     business zone' has the same meaning as in section 3(o) of the 
     Small Business Act.''.
       (g) Energy Policy Act of 1992.--Section 3021 of the Energy 
     Policy Act of 1992 (42 U.S.C. 13556) is amended--
       (1) in subsection (a)--
       (A) in paragraph (2), by striking ``or'';
       (B) in paragraph (3), by striking the period and inserting 
     ``; or''; and
       (C) by adding at the end the following new paragraph:
       ``(4) qualified small business concerns located in 
     historically underutilized business zones.''; and
       (2) in subsection (b), by adding at the end the following 
     new paragraph:
       ``(3) The term `qualified small business concern located in 
     a historically underutilized business zone' has the same 
     meaning as in section 3(o) of the Small Business Act.''.
       (h) Title 49, United States Code.--
       (1) Project grant application approval conditioned on 
     assurances about airport operation.--Section 47107(e) of 
     title 49, United States Code, is amended--
       (A) in paragraph (1), by inserting before the period ``or 
     qualified small business concerns located in historically 
     underutilized business zones (as that term is defined in 
     section 3(o) of the Small Business Act)'';
       (B) in paragraph (4)(B), by inserting before the period 
     ``or as a qualified small business concern located in a 
     historically underutilized business zone (as that term is 
     defined in section 3(o) of the Small Business Act)''; and
       (C) in paragraph (6), by inserting ``or a qualified small 
     business concern located in a historically underutilized 
     business zone (as that term is defined in section 3(o) of the 
     Small Business Act)'' after ``disadvantaged individual''.
       (2) Minority and disadvantaged business participation.--
     Section 47113 of title 49, United States Code, is amended--
       (A) in subsection (a)--
       (i) in paragraph (1), by striking the period at the end and 
     inserting a semicolon;
       (ii) in paragraph (2), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following new paragraph:
       ``(3) the term `qualified small business concern located in 
     a historically underutilized business zone' has the same 
     meaning as in section 3(o) of the Small Business Act.''; and
       (B) in subsection (b), by inserting before the period ``or 
     qualified small business concerns located in historically 
     underutilized business zones''.
                                                                    ____


   Historically Underutilized Business Zone Act of 1995--Section-by-
                            Section Analysis


                         Section 1. Short Title

       Historically Undercutilized Business Zone Act of 1995, 
     hereinafter referred to as the ``HUBZone Act of 1995.''


          Section 2. Historically Underutilized Business Zones

     Definitions--
       Historically Underutilized Business Zone (HUBZone) is any 
     area located within a qualified metropolitan statistical area 
     or qualified non-metropolitan area.
       Small business concern located in a Historically 
     Underutilized Business Zone is a small business whose 
     principal office is located in a HUBZone and whose workforce 
     includes at least 35% of its employees from one or more 
     HUBZones.
       Qualified Metropolitan Statistical Area is an area where 
     not less than 50% of the households have an income of less 
     than 60% of the metropolitan statistical area median gross 
     income as determined by the Department of Housing and Urban 
     Development.
       Qualified Non-metropolitan Area is an area where the 
     household income is less than 80% of the non-metropolitan 
     area median gross income as determined by the Bureau of the 
     Census of the Department of Commerce.
       Qualified Small Business Concern must certify in writing to 
     the Small Business Administration (SBA) that it (a) is 
     located in a HUBZone, (b) will comply with subcontracting 
     rules in the Federal Acquisition Regulations (FAR), (c) will 
     insure that not less than 50% of the contract cost will be 
     performed by the Qualified Small Business.
     Contracting preferences--
       Contract Set-Aside to a qualified small business located in 
     a HUBZone can be made by a procuring agency if it determines 
     that 2 or more qualified small businesses will submit offers 
     for the contract and the award can be made at a fair market 
     price.
       Sole-source Contracts can be awarded to a qualified small 
     business if it submits a reasonable and responsive offer and 
     is determined by SBA to be a responsible contractor. Sole-
     source contracts cannot exceed $5 million.
       10% Price Evaluation Preference in full and open 
     competition can be made on behalf of the Qualified Small 
     Business if its offer is not more than 10% higher than the 
     other offeror, so long as it is not a small business concern.
     Enforcement; penalties
       The SBA Administrator or his designee shall establish a 
     system to verify certifications made by HUBZone small 
     businesses to include random inspections and procedures 
     relating to disposition of any challenges to the accuracy of 
     any certification. If SBA determines that a small business 
     concern may have misrepresented its status as a HUBZone small 
     business, it shall be subject to prosection under title 18, 
     section 1001, U.S.C., False Certifications, and title 31, 
     sections 3729-3733, U.S.C., False Claims Act.


 Section 3. Technical and Conforming Amendments to the Small Business 
                                  Act

     HUBZone preference
       The Small Business Act is amended to give qualified small 
     business concerns located in HUBZones a higher preference 
     than small business concerns owned and controlled by socially 
     and economically disadvantaged individuals (8(a) 
     contractors).
     HUBZone goals
       This section sets forth government-wide goals for awarding 
     government contracts to qualified small business. In Fiscal 
     Year 1997, the goal will be not less than 1% of the total 
     value of all prime contracts awarded to qualified small 
     businesses located in HUBZones. In FY 1998, this goal will 
     increase to 2%; in FY 1999, it will be 3%; and it will reach 
     4% in FY 2000 and each year thereafter.
     Offenses and penalties
       This section provides that anyone who misrepresents any 
     entity as being a qualified small business in order to obtain 
     a government contract or subcontract can be fined up to 
     $500,000 and imprisoned for not more than 10 years and be 
     subject to the administrative remedies prescribed by the 
     Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801-
     3812).


          Section 4. Other Technical and Conforming Amendments

       This section makes technical amendments to other federal 
     government agency programs that have traditionally provided 
     contract set asides and preferences to disadvantaged small 
     business by expanding each program to include small business 
     located in an Historically Underutilized Business Zone.
                                 ______

      By Mr. LAUTENBERG:
  S. 1575. A bill to improve rail transportation safety, and for other 
purposes; to the Committee on Commerce, Science, and Transportation.


                      The Rail Safety Act of 1996

 Mr. LAUTENBERG. Mr. President, today I introduce legislation, 
the Rail Safety Act of 1996, to improve railroad safety.
  Mr. President, over the last 2 weeks, there has been a rash of 
railroad accidents, including two involving large numbers of 
passengers. The first of these accidents occurred in my home State of 
New Jersey on Friday, February 9. In the middle of the morning rush 
hour, two New Jersey Transit commuter trains collided outside of 
Secaucus, NJ. The crash killed two engineers and one passenger, and 
injured more than 235 others. The trains were carrying more than 700 
passengers combined, and the death and injury toll easily could have 
been much higher.
  One week later, right here in the Capital area, 11 people lost their 
lives when a Maryland commuter train collided with an Amtrak train.
  These accidents have revealed significant gaps in rail safety and the 
failure to use existing technology to improve safety. I personally 
visited the site of the New Jersey crash and was chilled by the 
devastation. There is no way that one could see what happened in New 
Jersey and Maryland without feeling a great sense of responsibility 
about the need to improve the safety of our rail system.
  Each day, over half a million Americans use commuter railroads to get 
to work. Each year, Amtrak carries an additional 22 million passengers 
on its national routes. In addition to those who take the train are the 
millions of Americans who live near congested freight train routes 
which pose their own dangers during accidents, such as spills of 
hazardous materials and fires.
  I recognize that passenger rail service is among the safest forms of 
travel. And I think it important that we not scare the public into 
believing otherwise. At the same time, in my view, there is much we 
should be doing to make rail service more safe.
  Just consider our Nation's commitment to rail safety compared to our 
commitment to safety on commercial aircraft, which have the better 
safety 

[[Page S1350]]
record. On planes, there are elaborate safety procedures for each 
flight. Flight attendants explain emergency measures at the beginning 
of each trip. Automatic emergency mechanisms are required in each 
plane, highly sophisticated technology tells pilots when problems arise 
and emergency exits are well identified and easy to operate.
  By contrast, many of today's railroad safety signals and procedures 
date back almost to the last century. For some reason, the 
technological revolution seems to have left rail safety back at the 
station. Compounding matters, much of our railroad regulatory system 
has been unchanged for decades.
  Congress should act promptly to address this problem. We need to 
review a wide variety of laws and regulations, with one overriding 
philosophy: The safety of our Nation's rail passengers must come first.
  Just because railroad passengers only ride 32 inches off the ground 
does not mean they deserve less attention or protection than those who 
ride 32,000 feet above the ground. That does not mean we should rush to 
impose unrealistic mandates that would drive up costs beyond the 
capacity to support changes. But, it still requires that we search for 
ways to take on the issues that have been allowed to drag on for too 
many years, while rail passengers continue to be exposed to danger 
unnecessarily.
  The Rail Safety Act of 1996 proposes important steps that I think we 
should take immediately.
  One of the most critical matters that we should address is the 
current law that establishes the hours of service that rail engineers 
may work. This law was developed in 1907 and has changed very little 
over the past 90 years. Under the law, it is perfectly legal for a 
locomotive engineer to work 24 hours in a 32-hour period.
  Mr. President, those kinds of hours, combined with the demands and 
stresses of an engineer's job, is a recipe for disaster. We would never 
allow pilots or truck drivers to work these kinds of hours; 
restrictions on these operators are severe. Yet engineers, who are 
responsible for hundreds and hundreds of people at a time, continue to 
work under these archaic rules.
  The Federal Railroad Administration is in the process of studying the 
issue of fatigue, as is the industry. But those studies could be years 
from completion. The adverse effect of fatigue on the ability of an 
individual to perform their job is well documented. We should act now. 
I believe the FRA should have the ability to regulate hours of service 
for railroad engineers. The FAA has authority to regulate hours of 
service for pilots and the Office of Motor Carriers has the authority 
to regulate hours of service for commercial drivers. Why should the 
railroad industry be treated differently?
  My legislation would direct the Federal Railroad Administration, not 
later than 180 days after enactment of the bill, to promulgate 
regulations concerning limitations on duty hours of train employees. 
The bill does not prejudge the FRA's process. It encourages FRA to 
develop regulations in a negotiated rulemaking process so that the 
interests of all parties are fully represented. My bill protects 
railroad employees by prohibiting any FRA rules from being less 
stringent than the current hours of service law. This provision will 
ensure that a future Administration could not abuse its discretion by 
actually increasing the burdens on engineers, contrary to congressional 
intent.
  Beyond changing the hours of service requirements, we need to explore 
ways to use technology to prevent rail accidents. For more than 75 
years, automatic train control systems have been available that can 
warn engineers about a missed signal and automatically stop the train. 
These systems are right in the train cab. Both visually and audibly 
these automatic train control systems remind the engineer about their 
latest signal. In fact, such systems were installed on virtually our 
entire rail network years ago. Unfortunately, that technology has been 
removed from most tracks, and no related technology was in place to 
prevent the accidents in New Jersey and Maryland. This situation cannot 
be allowed to continue.
  Mr. President, I recognize that we should be careful before mandating 
the automatic train control system if more advanced, satellite-based 
technology will be available in the immediate future. But, we cannot 
continue to drift. Therefore, my bill directs the FRA, not later than 1 
year after the date of enactment, to determine the feasibility of 
satellite-based train control systems to provide positive train control 
for railroad systems in the United States. Positive train control 
systems use a constant flow of information to anticipate potentially 
dangerous situations and order the appropriate measures long before an 
accident might occur.
  Under this legislation, all rail systems would be required to install 
automated train control technology. However, this requirement would be 
waived for those systems that establish, to the satisfaction of the 
Department of Transportation, that they will install an effective 
satellite-based train control system not later than the year 2001. This 
seems a reasonable period to me, though I would invite comments from 
interested parties on whether a different period would be more 
appropriate.
  Mr. President, we need to make a judgment about the prospects for the 
new satellite-based train control technology, one way or the other. 
Otherwise, we will find ourselves back here again in another few years, 
asking the same questions while families grieve and others lie in pain 
in hospital beds.
  Another set of issues raised by the two passenger accidents is 
emergency escape, crash worthiness of passenger cars, fuel tank 
integrity, and signal placement. All have contributed to the loss of 
life and injury.
  My bill would direct the FRA to examine the possibility of developing 
automatic escape systems. Not later than 1 year after the date of 
enactment of my bill, the Department of Transportation would be 
required to complete a study of the technical, structural, and economic 
feasibility of automatic train escape devices. If the report is 
positive, the Secretary is authorized to promulgate regulations in this 
area.
  Mr. President, there is reliable, off-the-shelf technology that is 
used to inflate air bags during violent automobile accidents. That same 
technology could be used to automatically open escape routes in violent 
train accidents. Such technology might have saved the lives of 
passengers in the Maryland accident, who apparently survived the crash, 
but who were unable to escape the fire and smoke.
  Another step I am proposing is to have FRA establish minimum safety 
standards for locomotive fuel tanks. Not later than 180 days after the 
date of enactment of my bill, the Department of Transportation would be 
required to establish minimum safety standards for fuel tanks of 
locomotives that take into consideration environmental protection and 
public safety. The Secretary would be given the authority to limit the 
applicability of the standards to new locomotives.
  The Maryland accident demonstrated the terrifying nature of fuel-fed 
fires. Many in the industry already are investing in less vulnerable 
fuel tank configurations. But we need to ensure in the future that no 
locomotives have the kind of exposed, vulnerable fuel tank that 
contributed to the Maryland disaster.
  It is also important to ensure that passenger rail cars are produced 
and configured in a safe manner. Not later than 1 year after the date 
of enactment of my bill, the Department of Transportation would be 
required to determine whether to promulgate regulations to require 
crash posts at the corners of rail passengers cars, safety locomotives 
on rail passenger trains, and minimum crashworthiness standards for 
passenger cab cars.
  The death toll in both the New Jersey and Maryland accidents might 
have been less if the passenger compartments were stronger or if some 
had not been exposed by the lack of a locomotive at the front of the 
train. Amtrak is investigating the possibility of using decommissioned 
locomotives at the front of their push trains in order to provide 
engineers with a safe platform from which to work and to provide 
additional protection to the first passenger car in case of a 
collision. The National Transportation Safety Board has suggested that 
passenger cars be equipped with crash posts at the corner of each car. 

[[Page S1351]]


  The FRA is developing new safety standards for rail cars. My bill 
would direct the FRA to consider crash posts and safety locomotives, 
and to make a specific finding about these alternatives.
  Also, after touring the scene of New Jersey Transit's sideswipe 
accident, I am convinced that unprotected passenger cab cars should be 
held to a higher standard than other passenger cars. The bill therefore 
requires FRA to evaluate the possibility of establishing minimum 
crashworthiness standards for these passenger cab cars, and to issue a 
report about their conclusions.
  In addition, the bill directs the FRA to look into signal placement. 
Not later than 1 year after the date of enactment of my bill, the 
Department of Transportation would be required to determine whether 
regulations should be promulgated to require that a signal be placed 
along a railway at each exit of a rail train station; and if 
practicable, a signal be placed so that it is visible only to the train 
that the signal is designed to influence. If the study determines such 
regulations should be promulgated, the Department of Transportation is 
given the authority to promulgate those regulations. Signals should be 
positioned in the best places possible to minimize human error.
  Mr. President, I recognize that some in the rail community may object 
to the costs of additional safety measures. And these costs cannot be 
ignored. Last year, Federal operating and capital assistance to transit 
agencies was cut by some 20 percent from the previous year's funding 
level. This reduction represented the single largest cut of any 
transportation mode in the Transportation appropriations bill.
  Our Nation derives economic, social, and environmental benefits from 
public transit agencies. We expect these agencies to provide safe 
services. Yet, we cut their funding and then wonder why safety is 
affected. We must continue to support mass transit or else we will 
force commuters off relatively safe buses, subways, and trains and onto 
our Nation's roads, which annually cause the premature death of some 
40,000 Americans.
  Mr. President, it remains critically important to improve rail 
safety. I challenge skeptics to visit with the families of loved ones 
who died in New Jersey and Maryland. See first hand what it means when 
we compromise on safety. You will not come away unmoved.
  Mr. President, we in the Congress have an obligation to protect the 
public. After the Chase, MD, accident of 1987 Congress mobilized and 
quickly enacted sweeping rail safety legislation. As a result, untold 
Americans have been saved through the mandated use of automatic train 
controls on the Northeast corridor, the creation of minimum federal 
standards for licensing of railroad engineers, certification 
requirements for predeparture inspections and whistle blower 
protections for rail employees. I am proud of the part that I played in 
developing that legislation and believe that it has been very 
effective. However, more should be done. The lives and health of 
literally millions of Americans are at stake.
  Mr. President, both the Washington and the New York editorials of 
February 21, 1996, make the case for increasing rail safety. I ask 
unanimous consent that they be inserted in the Record as part of my 
statement.
  I hope my colleagues will support this legislation. I believe it is a 
responsible approach to rail safety that builds on the lessons we have 
learned from our Nation's recent rail safety accidents.
  Mr. President, I ask unanimous consent that the text of the bill and 
additional material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1575

       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 ``Rail Safety Act of 1996''.

     SEC. 2. DEFINITIONS.

       For purposes of this Act, the following definitions shall 
     apply:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Federal Railroad Administration.
       (2) Passenger cab car.--The term ``passenger cab car'' 
     means the leading cab car on a passenger train that does not 
     have a locomotive or safety locomotive at the front of the 
     train.
       (3) Safety locomotive.--The term ``safety locomotive'' 
     means a cab-car locomotive (whether operational or not) that 
     is used at the front of a rail passenger train to promote 
     passenger safety.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Transportation.
       (5) Train employee.--The term ``train employee'' has the 
     same meaning as in section 21101(5) of title 49, United 
     States Code.

     SEC. 3. HOURS OF SERVICE.

       (a) In General.--
       (1) Regulations.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary, in consultation with 
     the Administrator, shall promulgate regulations concerning 
     limitations on duty hours of train employees that contain--
       (A) requirements concerning hours of work for train 
     employees and interim periods available for rest that are no 
     less stringent than the applicable requirements under section 
     21103 of title 49, United States Code, as in effect on the 
     day before the effective date of subsection (b); and
       (B) any other related requirements that the Secretary 
     determines to be necessary to protect public safety.
       (2) Negotiated rulemaking.--
       (A) In general.--In promulgating regulations under this 
     subsection, the Secretary shall use negotiated rulemaking, 
     unless the Secretary determines that the use of that process 
     is not appropriate.
       (B) Procedures for negotiated rulemaking.--If the Secretary 
     determines under subparagraph (A) that negotiated rulemaking 
     is appropriate, the Secretary, in consultation with the 
     Administrator, shall carry out the negotiated rulemaking in 
     accordance with the procedures under subchapter III of 
     chapter 5 of title 5, United States Code.
       (b) Repeal.--
       (1) In general.--Section 21103 of title 49, United States 
     Code, is repealed.
       (2) Effective date.--This subsection shall take effect on 
     the date on which the Secretary promulgates final regulations 
     under subsection (a).

     SEC. 4. SATELLITE-BASED TRAIN CONTROL SYSTEMS.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary, acting through the 
     Administrator, shall conduct a study to determine the 
     feasibility of requiring satellite-based train control 
     systems to provide positive train control for railroad 
     systems in the United States by January 1, 2001.
       (b) Time Frame for Operation; Automated Train Control 
     Systems.--
       (1) Regulations to cover impracticability of satellite-
     based train control systems.--Subject to paragraph (3), if, 
     upon completion of the study conducted under subsection (a), 
     the Secretary, acting through the Administrator, determines 
     that the installation of an effective satellite-based train 
     control system referred to in subsection (a) could not be 
     accomplished practicably by January 1, 2001, the Secretary 
     shall promulgate regulations to require, as soon as 
     practicable after the date of promulgation of the 
     regulations, the use of automated train control technology 
     that is available on that date.
       (2) Regulations to cover practicability of satellite-based 
     train control systems.--
       (A) In general.--Subject to paragraph (3), if upon 
     completion of the study conducted under subsection (a), the 
     Secretary, acting through the Administrator, determines that 
     the installation of an effective satellite-based train 
     control system referred to in subsection (a) could be 
     accomplished practicably by January 1, 2001, the Secretary, 
     in consultation with the Administrator, shall promulgate 
     regulations to require, as soon as practicable after the date 
     of promulgation of the regulations, the use of automated 
     train control technology that is available on that date.
       (B) Waivers.--If the appropriate official of a railroad 
     system establishes, to the satisfaction of the Secretary, and 
     in a manner specified by the Secretary, that the railroad 
     system will have in operation a satellite-based train control 
     system by January 1, 2001, the Secretary shall issue a waiver 
     for that railroad system to waive the application of the 
     regulations promulgated under subparagraph (A) for that 
     railroad system, subject to terms and conditions established 
     by the Secretary.
       (3) Conditions.--In promulgating regulations under this 
     subsection, the Secretary, in consultation with the 
     Administrator, shall provide for any exceptions or conditions 
     that the Secretary, in consultation with the Administrator, 
     determines to be necessary.
       (4) Monitoring.--
       (A) In general.--If the Secretary issues a waiver for a 
     railroad system under paragraph (2)(B), the railroad system 
     shall, during the period that the waiver is in effect, 
     provide such information to the Secretary as the Secretary, 
     acting through the Administrator, determines to be necessary 
     to monitor the compliance of the railroad system with the 
     conditions of the waiver, including information concerning 
     the progress of the railroad system in achieving an 
     operational satellite-based train control system.
     
[[Page S1352]]

       (B) Revocation of waivers.--If, at any time during the 
     period that a waiver issued under paragraph (2)(B) is in 
     effect, the Secretary determines that the railroad system 
     issued the waiver is not meeting the terms or conditions of 
     the waiver, or is not likely to have in operation a 
     satellite-based train control system by January 1, 2001, the 
     Secretary shall revoke the waiver.

     SEC. 5. AUTOMATIC TRAIN ESCAPE DEVICE STUDY.

       (a) Study.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary, acting through the 
     Administrator, shall conduct a study of the technical, 
     structural, and economic feasibility of automatic train 
     escape devices.
       (b) Report.--Upon completion of the study conducted under 
     this section, the Secretary, acting through the 
     Administrator, shall--
       (1) prepare a report that contains the findings of the 
     study; and
       (2) submit a copy of the report to the appropriate 
     committees of the Congress.
       (c) Regulations.--If, by the date specified in subsection 
     (a), the Secretary makes a determination (on the basis of the 
     findings of the study) that automatic train escape devices 
     should be required on rail passenger trains, the Secretary, 
     in consultation with the Administrator, shall, not later than 
     180 days after such date, promulgate regulations to require 
     automatic train escape devices on rail passenger trains as 
     soon as practicable after the date of promulgation of the 
     regulations.

     SEC. 6. LOCOMOTIVE FUEL TANKS.

       (a) In General.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary, in consultation with 
     the Administrator, shall establish, by regulation, minimum 
     safety standards for fuel tanks of locomotives of rail 
     passenger trains that take into consideration environmental 
     protection and public safety.
       (b) Applicability.--The Secretary, in consultation with the 
     Administrator, may limit the applicability of the regulations 
     promulgated under subsection (a) to new locomotives (as 
     defined by the Secretary, in consultation with the 
     Administrator) if the Secretary determines that the 
     limitation is appropriate.

     SEC. 7. PASSENGER CAR CRASH-WORTHINESS.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary, in consultation with 
     the Administrator, shall determine whether to promulgate 
     regulations, for the purpose of protecting public safety, 
     to--
       (1) require crash posts at the corners of rail passenger 
     cars;
       (2) require safety locomotives on rail passenger trains;
       (3) establish minimum crash-worthiness standards for 
     passenger cab cars; or
       (4) carry out any combination of paragraphs (1) through 
     (3).
       (b) Regulations.--If, the Secretary, acting through the 
     Administrator, determines that promulgating any of the 
     regulations referred to in subsection (a) are necessary to 
     protect public safety, the Secretary, in consultation with 
     the Administrator, shall, not later than 180 days after such 
     date, promulgate such regulations in final form, to take 
     effect as soon as practicable after the date of promulgation 
     of the regulations.
       (c) Report.--If the Secretary determines under subsection 
     (a) that taking any action referred to in paragraphs (1) 
     through (3) of such subsection is not necessary to protect 
     public safety, not later than the date of the determination, 
     the Secretary shall submit a report to the appropriate 
     committees of the Congress that provides the reasons for the 
     determination.

     SEC. 8. SIGNAL PLACEMENT.

       (a) Study.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary, acting through the 
     Administrator, shall conduct a study of the placement of rail 
     signals along railways. In conducting the study, the 
     Secretary, acting through the Administrator, shall determine 
     whether regulations should be promulgated to require--
       (1) that a signal be placed along a railway at each exit of 
     a rail station; and
       (2) if practicable, that a signal be placed so that it is 
     visible only to the train employee of a train that the signal 
     is designed to influence.
       (b) Regulations.--If, upon completion of the study 
     conducted under subsection (a), the Secretary determines that 
     the regulations referred to in that subsection are necessary 
     for the protection of public safety, the Secretary shall, not 
     later than 180 days after the completion of the study, 
     promulgate those regulations.
       (c) Report.--If, upon completion of the study conducted 
     under subsection (a), the Secretary determines that 
     promulgating any of the regulations referred to in subsection 
     (a) is not necessary for the protection of public safety, not 
     later than the date of completion of the study, the Secretary 
     shall submit a report to the appropriate committees of the 
     Congress that provides the reasons for that determination.
                                                                    ____


               [From the Washington Post, Feb. 21, 1996]

                    Lessons From the Train Disaster

       The horrifying details of death by fire and smoke--of 
     people frantically seeking escape from a mangled commuter-
     train-turned-furnace Friday night--continue to prompt 
     questions about rail safety policies in general and about 
     what happened in Silver Spring specifically. Some answers 
     must await the findings of investigators from the National 
     Transportation Safety Board. But there are safety procedures, 
     policies and equipment that have been the subjects of debate 
     in the industry for years, and that haunt every autopsy of a 
     train wreck:
       Signals. What, if any, signals did engineer Richard Orr, 
     aboard Maryland commuter train 286, notice or remember in the 
     final miles before this train slammed into Amtrak's Capitol 
     Limited? Before arriving in Kensington, he passed a signal 
     that should have warned him to be prepared to stop. The 
     signal system is considered highly reliable. But there is a 
     more effective system that goes back to the 1920s: With it, 
     even if the engineer fails to spot or continue to remember 
     the warning signal, he sees a small light in his cab, and 
     each time his train goes through a restrictive signal he 
     hears a whistle. Should he fail to push a lever to 
     acknowledge the signal and then slow down or stop, the train 
     would do so automatically. Why isn't every train equipped 
     with this?
       They used to be--on any line that was to travel faster than 
     80 mph--under a 1947 Interstate Commerce Commission order. 
     But over time, railroads were permitted on a case-by-case 
     basis to remove the system, in part because the age of fast 
     passenger trains was seen as ending. Besides, railroads 
     argued that the systems were expensive and that the braking 
     systems caused other safety problems for freight trains. 
     Today's signal system for MARC, like those for most lines, 
     does not provide automatic train control.
       Although railroads today have a better safety record than 
     at any time in history, this history includes earlier 
     crashes--in Seabrook, Prince George's County, in 1978 and in 
     Chase, Md., in 1987--that prompted the NTSB to recommend that 
     all trains in the Northeast Corridor be equipped with 
     automatic stopping devices. They now are.
       Passenger Escape. Yesterday, federal regulators issued 
     emergency regulations that, in addition to setting 30 mph 
     limits on non-automatic control lines for trains between a 
     station stop and the first signal, included a call for more 
     visible exit signs on train cars. Visible, uncomplicated 
     instructions for opening windows, doors and escape routes 
     ought to be posted everywhere. How about instructions on the 
     back of every seat?
       Train Design. Though America's trains are among the 
     sturdiest pieces of equipment moving on land or in the skies, 
     there is the question of the Amtrak train's exposed diesel 
     fuel tanks, which splashed the fuel that ignited the terrible 
     fire. Newer models don't have this feature; the sooner the 
     old models are gone the better.
       ``Push-Pull.'' The MARC train was being pushed by its 
     locomotive, a common practice for quick back-and-forth runs. 
     Passengers may feel safer with a locomotive in front of them, 
     but there is no hard evidence that safety is compromised when 
     it is pushing instead of pulling.
       Another issue affects public confidence in railroad travel: 
     Maryland transit officials issued conflicting, inaccurate and 
     constantly changing reports on the accident for hours Friday. 
     At first they were telling television stations that no MARC 
     passengers were involved; they gave out a telephone number 
     that assured callers that no passengers on the train had been 
     injured. This was occurring as televised scenes and witness 
     accounts were indicating otherwise. Whatever MARC may have 
     had as an emergency preparedness plan, it failed. Amtrak, on 
     the other hand, seemed to be issuing as much information as 
     it could.
       More questions are sure to arise as the fact-finding 
     continues. A safe transportation system of any kind requires 
     more than the mere recitation of probability statistics. 
     Public confidence must be taken into account not only by 
     government regulators but also by the industry officials.
                                                                    ____


                [From the New York Times, Feb. 21, 1996]

                     In the Train Wrecks' Aftermath

       Two train collisions seven days apart have brought calamity 
     to the ordinarily quiet and safe commuter systems of New York 
     and Washington D.C. Federal and local officials are 
     responding with intense investigations and emergency 
     measures. They have already found some surprising soft spots 
     in the rail network's safety rules and practices.
       New Jersey Transit, responding to the metropolitan region's 
     worst commuter train crash in 38 years, quickly eliminated 
     the nighttime split shift that enabled an engineer to work 
     extra-long hours just before his train collided with another 
     on Feb. 9. There was no need to await final analyses of what 
     caused the accident to discontinue a work arrangement that 
     was inherently hazardous.
       The authorities are still investigating the accident, but 
     it appears that a train bound for Hoboken ran through yellow 
     and red lights that should have warned the engineer to stop 
     before entering tracks where an outbound train had the right 
     of way. The inbound train's engineer, John DeCurtis, was 
     operating during the morning rush hour at the end of a split 
     shift that had started 14\1/2\ hours earlier. He had a chance 
     to rest five hours during the middle of the night, but with 
     no cot or quiet space provided. Officials also need to weigh 
     whether Mr. DeCurtis's safety record, which included two 
     previous suspensions for running red lights, was a warning 
     that should have been heeded, and whether the installation of 
     automatic braking systems should be accelerated to prevent 
     such tragic accidents.
       Similarly in last Friday evening's collision between a 
     Washington-bound commuter 

[[Page S1353]]
     train and an Amtrak train headed north from Washington, the absence of 
     automatic train controls has already emerged as a safety gap 
     in the local system. Even more critically, the cars may have 
     lacked fully operational and clearly marked evacuation routes 
     with the kind of safety instructions that might have 
     prevented the death of eight young Job Corps trainees, who 
     were killed along with three crew members.
       The signal system on the Maryland track was inadequate. 
     There was a caution light just before a suburban station 
     where the train was stopping anyway, but no similar light 
     immediately after to remind the engineer not to accelerate to 
     a high speed. The train rounded a bend and slammed into the 
     Amtrak train that had been temporarily routed on the same 
     tracks.
       The Transportation Department responded yesterday with 
     belated but sensible stopgap rules. When a train leaves a 
     station, engineers must proceed no faster than 30 miles an 
     hour. They must call out to other crew members any warning 
     signal they see. All the nation's railroads are instructed to 
     test emergency exits and submit safety plans for Federal 
     review. Clearly, many safety hazards need examination and 
     correction as the result of these two tragedies.
                                 ______

      By Ms. MIKULSKI (for herself and Mr. Sarbanes):
  S. 1576. A bill to provide that Federal employees who are furloughed 
or are not paid for performing essential services during a period of a 
lapse in appropriations, may receive a loan, paid at their standard 
rate of compensation, from the Thrift Savings Fund, and for other 
purposes; to the Committee on Governmental Affairs.


                    THE FURLOUGH RELIEF ACT OF 1996

 Ms. MIKULSKI. Mr. President, today, I am introducing 
legislation with Senator Sarbanes called the Furlough Relief Act of 
1996. Our bill would help Federal employees weather the storm during 
Government shutdowns by allowing them access to interest free loans 
from their Thrift Savings Plans.
  About the only thing that Federal employees can rely on today is 
uncertainty. During the last year we have seen one attack after another 
aimed at Federal workers. Between assaults on earned retirement 
benefits, downsizing, and furloughs, these dedicated people have to be 
wondering what's coming next.
  Today we are operating much of the Government under an emergency 
continuing resolution. I fervently hope there will not be another 
shutdown, and I will be doing all I can to prevent one from happening. 
But there is no guarantee that Federal employees will be able to go to 
work and earn their paychecks after this continuing resolution expires 
on March 15. They could face yet another shutdown. That would mean more 
lost pay, more lost productivity, and more uncertainty.
  I am a Federal employee Senator. I believe in honest pay for hard 
work, and I know of no group of Americans that works harder than our 
Federal employees. That is why I am introducing legislation today that 
will help Federal employees who want to help themselves.
  As my colleagues know, Federal employees currently are allowed to 
borrow from their tax deferred Thrift Savings Plans for reasons such as 
furthering their education, buying a home, or undergoing a medical 
procedure. However, the approval process for a TSP loan can take weeks. 
There is also no guarantee that the loan will be approved, and if it is 
approved, the borrower must pay interest when paying back the loan.
  The Furlough Relief Act of 1996 would allow furloughed Federal 
employees to be automatically eligible for a TSP loan from their 
account during any Government shutdown. This loan would continue to be 
paid as long as the employee remains on furlough. It would help Federal 
employees make up for lost wages. When a furlough ends, the employee 
would be able to pay back the loan without interest.
  The Furlough Relief Act will cut through the redtape of the TSP loan 
process. It will provide a dependable source of income for Federal 
employees who have been denied their pay, and it will finally give a 
break to dedicated people who have not had many breaks in the past 
year.
  I think it's time to stop these assaults on Federal employees. We 
cannot continue to devalue Government workers and at the same time 
expect Government to work better. In my State of Maryland, there are 
thousands of Federal employees making Government work better and making 
a difference in the lives of all Americans. I salute them, and I 
dedicate myself to making a difference in their lives.
                                 ______


      By Mr. HATFIELD (for himself and Mr. Sarbanes):
  S. 1577. A bill to authorize appropriations for the National 
Historical Publications and Records Commission for fiscal years 1998, 
1999, 2000, and 2001; to the Committee on Rules and Administration.


      THE NATIONAL HISTORICAL PUBLICATIONS AND RECORDS COMMISSION 
                      REAUTHORIZATION ACT OF 1996

 Mr. HATFIELD. Mr. President, it is a great pleasure for me to 
today introduce a bill to reauthorize the functions of the National 
Historical Publications and Records Commission on which I serve. I am 
pleased to be joined by my good friend and colleague, Senator Sarbanes. 
Senator Sarbanes and I have a long association with the Commission.
  This important organization, closely associated with the National 
Archives and Records Administration, has been diligently performing 
some of the most vital archival preservation work in the country. 
Realizing the importance of preserving historical works and 
collections, Congress established the National Historical Publications 
and Records Commission in 1934. Its purpose was to collect, edit, and 
publish the papers of the Founding Fathers, the writings of other 
distinguished Americans, and the documentary histories of the First 
Congress, the Supreme Court, and the process of the ratification of the 
Constitution. In 1974, Congress expanded the Commission's 
responsibilities to include providing advice and assistance to public 
and private institutions in the development and administration of 
archival systems. In the same year, the NHPRC established a Historical 
Records Advisory Board in each State to help coordinate overall 
preservation strategies and to ensure that the Commission would have a 
strong Federal-State partnership for its records programs.
  Today, the National Historical Publications and Records Commission 
has not strayed from its original mission. The NHPRC continues to 
screen and determine the historical works it considers appropriate for 
preserving or publishing. The Commission administers grants to projects 
dedicated to preserving annals essential for historical research, 
publishing historical papers, and archiving nationally significant 
records. Without the preservation of these invaluable records, 
historians have little hope of accurately analyzing our Nation's 
history. Another important aspect of the Commission's objective is to 
encourage and instruct local agencies, schools, museums, and 
individuals to forge ahead in their actions to preserve and publish 
historical works; the tasks facing archival institutions, manuscript 
depositories, and scholars require more than the valiant efforts of a 
single Federal Commission. The valuable work of the Commission is a 
very good example of a healthy partnership between public and private 
institutions, Federal and State agencies. The NHPRC pays no more than 
one-third of the funds of the projects that it supports. Thus, the 
program is one of aiding and working closely with individuals and local 
institutions dedicated to preserving important facets of our history.
  The number of records that the Commission has preserved and published 
is an impressive tribute to its efficient organization. To date, the 
NHPRC has supported 1,056 archival projects in all 50 States, three 
territories, and the District of Columbia. These projects have 
published 717 documentary volumes. Recent project grants have gone to 
an agency in Illinois to preserve Abraham Lincoln's legal papers and to 
a center in Atlanta to publish the papers of Martin Luther King, Jr. In 
addition, the Commission has produced 8,280 reels of microfilm as well 
as 1,822 microfiche. Finally, the NHPRC has supported a total of 274 
documentary editing projects. As the numbers suggest, the Commission 
has been quite successful in its mission to preserve and publish the 
Nation's historical works.
  The bill I am introducing today seeks to extend authorization of 
appropriations for an additional 4 years in amounts up to $10 million 
annually. This appropriation would cover fiscal years 1998, 1999, 2000, 
and 2001. One hundred percent of the appropriations go 

[[Page S1354]]
entirely toward project grants; the National Archives bears the 
administrative costs. The American public may be assured that their 
investment is well spent by the NHPRC.
  Passage of this important legislation will reassure America's 
community of scholars, librarians, and archivists working closely with 
the NHPRC that Congress is committed to the important mission of the 
Commission. In the past, Congress has clearly supported the work of the 
NHPRC and has recognized the importance of the Commission's efforts to 
ensure that the words, thoughts, and ideas of our Nation's historic 
individuals are collected from fragile or deteriorating source material 
and placed in books or on microfilm. Passage of this bill will ensure 
that present and future generations of inquisitive minds will have 
access to our history.
  Mr. President, this bill will allow the NHPRC to continue its 
valuable work for the next 4 years--work that will be of the utmost 
benefit to scholars, researchers, libraries, and the public. Our 
Nation's history needs to be preserved, and the future generations of 
Americans deserve the right to have accurate records of their past. The 
preservation of our historical documents will protect and enrich our 
Nation's wonderful history. I am proud to be a sponsor of this 
legislation and confident in urging my colleagues to give their support 
to this important legislation.
  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. 1577

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

     SECTION 1. AUTHORIZATION OF APPROPRIATIONS FOR THE NATIONAL 
                   HISTORICAL PUBLICATIONS AND RECORDS COMMISSION.

       Section 2504(f)(1) of title 44, United States Code, is 
     amended--
       (1) in subparagraph (F) by striking out ``and'' after the 
     semicolon;
       (2) in subparagraph (G) by striking out the period and 
     inserting in lieu thereof a semicolon; and
       (3) by adding at the end the following new subparagraphs:
       ``(H) $10,000,000 for fiscal year 1998;
       ``(I) $10,000,000 for fiscal year 1999;
       ``(J) $10,000,000 for fiscal year 2000; and
       ``(K) $10,000,000 for fiscal year 2001.''

 Mr. SARBANES. Mr. President, I am pleased to join today with 
Senator Hatfield in introducing legislation to reauthorize the National 
Historical Publications and Records Commission for 4 years.
  It has been my privilege to alternate with Senator Hatfield in 
serving as the representative of the U.S. Senate on the National 
Historical Publications and Records Commission, Senator Hatfield 
represented the Senate from 1983 to 1988, and I succeeded him until my 
term expired last year. The Commission has had strong bipartisan 
support throughout its history, and I trust will continue to do so.
  The NHPRC's statutory mandate is to promote the preservation and use 
of America's historical legacy. The work of the NHPRC assures all 
Americans that the history of our Nation will be documented, that vital 
historical records will be kept safe, and that historians and others 
will have ready access to those records.
  Grants awarded through the National Historical Publications and 
Records Commission are producing valuable results. In my own State of 
Maryland, the Commission is helping scholars edit, and presses publish, 
editions of papers that document the emancipation of slaves and the 
careers of important historical figures.
  Other important discoveries have resulted from grants awarded to 
scholars by the Commission. For example, NHPRC grants resulted recently 
in the discovery of the longest document yet known that Abraham Lincoln 
wrote in his own hand, a group of letters written to James Madison by a 
famous jurist in the era of our revolution, an the original drawing 
made by Architect William Thornton for the ground plan of the U.S. 
Capitol.
  Although the Commission has been doing this work since it was 
established by Congress in 1934, its efforts remain relevant to today's 
concerns. We have seen States and local governments across the country, 
with advice and assistance from the Commission, establish archival 
programs. We have seen the Commission launch several projects to deal 
with the growing problem facing archivists in controlling and accessing 
valuable electronic records, and helping historians make their 
documentary editions accessible electronically on the Internet.
  Mr. President, it is important that the Commission continue its 
respected work in preserving the heritage of our Nation. The 
reauthorization legislation I am joining Senator Hatfield in 
introducing is a practical and important step in ensuring continuity of 
the National Historical Publications and Records Commission. I urge my 
colleagues to join us in ensuring its swift passage.
                                 ______

      By Mr. FRIST (for himself and Mr. Harkin):
  S. 1578. A bill to amend the Individuals With Disabilities Education 
Act to authorize appropriations for fiscal years 1997 through 2002, and 
for other purposes; to the Committee on Labor and Human Resources.


   THE INDIVIDUALS WITH DISABILITIES EDUCATION ACT AMENDMENTS OF 1996

  Mr. FRIST. Mr. President, today I am pleased and proud to introduce 
the Individuals With Disabilities Education Act Amendments of 1996. 
These amendments will guide our actions into the next century as we 
plan and secure educational opportunities for over 5 million American 
children with disabilities. Many recent polls have ranked education as 
one of the top concerns of Americans. These polls are a wakeup call. We 
must help America's children succeed and be able to demonstrate that 
they have succeeded. We must find ways to affect the culture of 
education, not through intrusive mandates, but through incentives for 
partnership and innovation. We must not give up on any child. We must 
view planning a child's education as a collaborative process. These 
important goals are the basis of the reauthorization of the Individuals 
With Disabilities Education Act, commonly referred to as IDEA.
  As everyone knows I am new to this business of drafting Federal 
legislation. I am not new to the effects of Federal legislation on 
individual lives. In my surgical practice, I have sometimes been able 
to save lives because of Federal legislation and sometimes in spite of 
the barriers such legislation imposed on my efforts.
  Thus, I take my responsibility as chairman of the Disability Policy 
Subcommittee very seriously. I am grateful for the partnership of my 
colleague from Iowa, Senator Tom Harkin, who was a partner in the 
entire process, and whose past leadership of this subcommittee was and 
is an inspiration.
  I have been both cautious and careful as I have weighed 
recommendations for amendments bought to me to change IDEA.


  The Right of a Child with a Disability to an Education is Preserved

  IDEA is a civil rights statute. It guarantees access to a free 
appropriate public education for children with disabilities. This 
understanding was established clearly in the predecessor to IDEA, 
Public Law 94-142, which was enacted in 1975. IDEA is founded in the 
14th amendment of the Constitution, which is the equal protection 
clause. This connection is reinforced through 20 years of case law and 
bipartisan legislative history. The IDEA amendments introduced today 
will not undermine the civil right of any child with a disability to a 
free appropriate public education.
  Public Law 94-142 was based on five principles.
  First, educational planning for a child with a disability should be 
done on an individual basis. Public Law 94-142 required that an 
individualized education program [IEP] be developed for each child with 
a disability.
  Second, parents of a child with a disability should participate in 
the development of their child's IEP. Public Law 94-142 required such 
participation.
  Third, decisions about a child's eligibility and education should be 
based on objective and accurate information. Public Law 94-142 required 
evaluation of a child to establish his or her need for special 
education and related services and to determine the child's progress.
  Fourth, if appropriate for a child with a disability, he or she 
should be educated in general education with 

[[Page S1355]]
necessary services and supports. Public Law 94-142 required educational 
placements based on such determinations.
  Fifth, parents and educators should have a means of resolving 
differences about a child's eligibility, IEP, educational placement, or 
other aspects of the provision of a free appropriate public education 
to the child. Public Law 94-142 required that if the parents of a child 
requested one, they were entitled to an impartial due process hearing. 
And, if differences between parents and educators could not be resolved 
through administrative proceedings such as a local due process hearing 
or a State-level review of the facts in the situation, either side 
could use court to settle the matter. In 1986, the law was amended to 
clarify that the Federal courts have the power to require the awarding 
of attorneys' fees to parents who prevail in administrative proceedings 
or court actions.
  The amendments offered today will not undermine any of these five 
principles or their manifestation in IDEA.
  In fact, this reauthorization of IDEA reinforces its basic principles 
and adds to the law a viable set of tools with which to help adults 
help children with disabilities prepare for a successful future.


                    Focused Accountability Expected

  The amendments address accountability. People involved in educational 
planning for a child with a disability will be expected to show 
results--where a child is and where a child is going in terms of the 
general education curriculum. How does he or she do in the classroom? 
How does he or she do on local or statewide assessments of student 
progress? Is a child getting appropriate services and supports to 
demonstrate what he or she knows and can do? The amendments reshape 
expectations for children with disabilities and create a common frame 
of reference--the general education curriculum. Most children with 
disabilities can learn and benefit from the general education 
curriculum. Some may need to learn it at a slower pace or in a modified 
form. Some may need to demonstrate what they have learned in a 
different way than their peers. Nonetheless, they can learn and 
therefore, should have the opportunity to learn, what their brothers, 
sisters, and friends are learning.

  Unless we secure the general education curriculum as the educational 
anchor for most children with disabilities, their ability to succeed on 
district-wide and statewide assessments of student progress will be 
jeopardized. If they fail or perform poorly on such assessments, 
because they were taught from a watered-down general education 
curriculum or a different curriculum, we are reinforcing the beliefs of 
people who say that children with disabilities cannot learn as much or 
as well as other children. We also are reinforcing the beliefs of 
people who prefer separate educational opportunities for children with 
disabilities. Moreover, if children are taught from a watered-down 
general education curriculum or a different curriculum, we may 
inadvertently create a justification for ignoring children with 
disabilities when undertaking school reform initiatives.
  If the general education curriculum is the focus for planning for a 
child with a disability, it will improve communication throughout the 
system--a child with a disability and peers, educators and the child's 
parents, special education teachers and general teachers, related 
services professionals and teachers, and parents of children with and 
without disabilities. Such a focus also will affect expenditures and 
uses of personnel. The emphasis will shift to what services and 
supports are necessary in order for a child with a disability to 
succeed in the general education curriculum. This shift may save a 
school district money, while continuing an appropriate education for a 
child with a disability. Lines of responsibility will blend--the 
question will become--``How do we make the general education curriculum 
work for a particular child with a disability?'' If this blending of 
responsibility takes off, and I believe it will work, not only will 
children with disabilities benefit, but children at risk will benefit, 
because personnel will acquire new skills and supports that equip them 
to serve all children.


             Culture in the Educational Environment Changed

  The amendments will affect the culture of schools--to create new 
bases for teamwork, to reinforce existing partnerships, and to provide 
incentives to view the delivery of educational services to children 
with disabilities not as a distinct, separate mandate, but as an 
integral part of the overall business of education. I come to this 
conclusion from personal experience.
  Giving an individual a new heart, a chance at a longer life with 
quality, is the ultimate high. When that moment comes, I am filled with 
powerful emotions--pride, love, prayers of thanks, satisfaction, and a 
profound appreciation of the power of teamwork. Reaching that moment 
and the critical ones that follow it is not possible without teamwork, 
involving the transplant recipient, the donor's bereaved family, the 
organ donor coordinator, medical, surgical, technical and nursing 
staff, counselors, and the recipient's family. This process is long, 
complex, emotional and risky, but it is not a contest. Everyone has a 
common goal. Information is compiled and analyzed. Options are 
considered. Differences are aired. Decisions are made.
  As I became engaged in the reauthorization of IDEA I realized that 
planning the education of any child with a disability should not be 
viewed as a contest, but as an opportunity for teamwork. The bill 
includes many provisions which encourage and reinforce teamwork. 
Parents will be a source of information when compiling evaluation data 
on a child suspected of having or known to have a disability. Parents 
will have the opportunity to participate in all meetings in which 
decisions which affects their child's education are made. Parents of 
children with disabilities will have the opportunity to help develop 
school-based improvement plans designed to expand and improve 
educational experiences for their children. Teachers--those who do or 
could work with disabled children--will be involved in providing and 
interpreting information on the educational and social strengths, 
progress, and needs of children with disabilities, which would be used 
in IEP meetings.
  School districts will see a substantial reduction in paperwork under 
IDEA and will have increased flexibility on the use of personnel and 
the fiscal tracking of the use of personnel. Because of these 
amendments we will see more reasons for educators and parents to have 
common goals; fewer reasons for administrators to call IDEA burdensome; 
more general and special education teachers and related services 
personnel working together; more children with disabilities succeeding 
in the general education curriculum; more children with disabilities 
participating in school reform initiatives; and most important, more 
children at risk of failure will succeed.
  We will not see these changes overnight. They will take time. The 
amendments to IDEA restructure the 14 discretionary or support 
programs--totaling $254 million in authorizations--to facilitate and 
realize these changes, as well as others. Thirty million dollars are 
authorized for a new Systems Change State Grant Program. States will 
compete for access to these dollars. The purpose of this grant program 
is to provide funds to help States to address problems that have 
statewide implications. For example, States could use grant awards to 
design effective ways for general education and special education 
teachers to work in the same classrooms; to develop effective within-
school options for addressing behaviors subject to school disciplinary 
measures; or to arrange effective transitions for children with 
disabilities from early intervention to preschool programs, from high 
school to the adult world, or at other important times in a child's 
life.
  The amendments clearly link funding for personnel training and 
research to the needs of children with disabilities, their families, 
school personnel, and school districts. Any institution that seeks a 
training grant will be obligated to identify a personnel shortage that 
they intend to address. Any institution that seeks to train teachers to 
work with blind children must teach trainees how to teach Braille.
  With regard to research grants, I appreciate the fact that research 
takes extended effort. Research results are never immediate and are 
often modest building blocks toward some broader area of knowledge. 
Research infrastructure requires a sustained, predictable commitment to 
funding. However, 

[[Page S1356]]
the amendments offered today expect researchers to keep their eye on 
the child in the classroom, the teacher in the classroom, the principal 
in the school, the child's parents, the school district, or the State 
education agency. Researchers will be expected to provide information 
that benefits children with disabilities, their teachers, or other 
targeted audiences. Practical research will be valued. Through this 
reauthorization, the allocation of research dollars will emphasize 
lines of inquiry that will result in information that teachers or 
others can use to help children with disabilities succeed in the 
general education curriculum.

  The amendments also sustain and strengthen the Federal support for 
information that helps children with disabilities, their parents, 
teachers, related service personnel, early intervention professionals, 
administrators, researchers, teacher trainers, and others learn about, 
access, and use state-of-the-art tools and strategies to be effective 
as partners in the business of education. The amendments require 
grantees who are involved in the business of information gathering and 
dissemination and the grantees who are responsible for technical 
assistance to make a difference--to know their audiences, to provide 
them with information and assistance that they need and can use, and to 
verify that their efforts counted, not just in terms of numbers of 
people reached or pieces of paper disseminated, but in terms of lives 
changed.
  I certainly know the difference between an established and an 
experimental surgical procedure, and I know what it takes to teach new 
techniques to professionals across the country, and to do it well. It 
is my hope that the standards of information and dissemination and 
technical assistance achieved in medicine will come to be expected 
within the professional community serving infants, toddlers, children, 
and youth with disabilities. I think it is reasonable to expect that 
when anyone asks for information or assistance from a federally funded 
source, that source is prepared to say, ``This will work; or, this will 
work if certain conditions are present; or, this works 50 percent of 
the time; or this might work.'' This reauthorization moves us toward 
increased confidence in the information requested, received, or offered 
under information dissemination and technical assistance activities 
funded through IDEA. With increased confidence will come the 
opportunity to be a better equipped participant and partner in the 
identification, evaluation, selection or design of educational 
opportunities for children with disabilities.


           Helping Each Child Is an Investment in the Future

  The amendments also address another priority of many Americans--
intervening in the lives of children before they fail, before they are 
labeled, or before they are lost. Effective intervention and targeted 
prevention are themes that cut across many of the provisions in the 
reauthorization of IDEA.
  Early intervention. The bill reauthorizes part H, the Early 
Intervention Program, in IDEA. Part H was originally enacted in 1986. 
This program, in which all States participate, has been extremely 
effective in reaching infants and toddlers with disabilities early in 
their young lives, often at birth. This early intervention program 
helps these small ones, and their parents, unlock their abilities and 
become prepared to realize maximum benefits from their later preschool 
and school experiences.
  The amendments direct the Federal Government to develop a model 
definition and service delivery standards for infants and toddlers at 
risk of being developmentally delayed. Early intervention professionals 
are very successful at diagnosing and serving infants and toddlers with 
disabilities, that is, disabilities which are discernable before, 
during, or shortly after birth. These professionals are experienced in 
developing appropriate intervention strategies for such children. They 
are less successful in identifying infants and toddlers who show more 
subtle signs indicative of later disability. I anticipate that the 
model definition and service standards, which will draw from the 
experiences of States which currently are serving at-risk populations, 
eventually will provide early intervention professionals with the tools 
to identify and reach greater numbers of at-risk infants and toddlers.
  The amendments also give States increased administrative flexibility 
with regard to the transition of a child from an early intervention 
program funded by part H into a preschool program funded by section 619 
of part B of IDEA. This flexibility will provide an incentive to focus 
on what is best for a particular child--allowing the child to remain in 
an early intervention program after his or her third birthday during a 
school year and to transition to a preschool program in the next school 
year. This flexibility permits the child's individualized family 
services plan [IFSP] to be the child's IEP until planning is done for 
the next school year.
  As a surgeon I understand the importance and effect of early 
intervention in a medical situation. As a Senator I have been reminded 
of the benefits of Headstart and have witnessed the benefits of early 
intervention and preschool programs at the Kennedy Institute at 
Vanderbilt University. I have no doubt that as we continue to invest 
Federal funds in the very young lives of infants and toddlers with 
disabilities, we will deliver to our schools children who can learn 
more easily, participate more fully, and be less distinguishable from 
their peers in terms of expectations, progress, and friendships.
  Labeling deemphasized. These amendments lessen the need for and 
meaning of labels. School districts will be required to report the 
number of children with IEP's, and the number of students in each of 
two placement categories. They will not be required to continue 
reporting the numbers of children in twelve disability categories, by 
age group, or by multiple types of placements. This will significantly 
reduce the longstanding reporting burden imposed on school districts 
and States. I anticipate that this administrative relief will translate 
into less interest in and use of disability labels in schools and 
classrooms.
  The amendments encourage States to adopt placement-neutral funding 
formulas. Thus, over time there will be fewer incentives for 
segregated, label-driven educational placements for children with 
disabilities.
  Under certain conditions, school districts also will have the 
opportunity to commingle IDEA dollars with other funds when serving 
children with disabilities--when children with disabilities are in 
general education classrooms being taught by general and special 
education teachers; when children eligible for services under IDEA are 
being served with children identified as disabled under the Americans 
With Disabilities Act or section 504 of the Rehabilitation Act; or when 
a school has a school improvement plan in effect. This flexibility in 
the use of IDEA dollars will cause school officials to rethink how 
services may be delivered more efficiently and more effectively; cause 
labeling to be viewed as less relevant or necessary; and cause teachers 
to view their roles in reaching children as complementary and their 
responsibilities for helping all children succeed as a joint effort.

  The amendments recognize that many children from minority backgrounds 
are inappropriately identified as being eligible for special education 
and related services under IDEA. It is anticipated that with the 
opportunity to use IDEA funds in more flexible ways, parents, teachers, 
and administrators will not need to use the referral and evaluation 
procedures connected to special education as frequently as in the past 
to secure more or different services for children from minority 
backgrounds.
  No child to be lost or forgotten. The amendments take a broad view of 
the concept of ``dropout.'' In the amendments numerous, interrelated 
provisions have been crafted to reduce the likelihood that child with a 
disability will either figuratively or literally drop out of school and 
become disconnected from peers and professionals who can contribute to 
the child's growth and success in school. These provisions will require 
affirmative efforts on the part of educators, other professionals, and 
the parents of the child to keep the child connected in meaningful ways 
to the business of learning. Three sets of provisions particularly 
should result in fewer children with disabilities being lost or 
forgotten. 

[[Page S1357]]

  Integrated transition services for secondary school students with 
disabilities. Developing a secondary student's IEP for a particular 
year should not be an activity divorced from transition planning for 
the child that may encompass multiple years. Therefore, the amendments 
make transition planning for a child 14 or older a part of the IEP 
process. This clarification should result in simplification of 
administrative procedures. Secondary school personnel and personnel 
responsible for transition services, to the extent that they are 
different, will have a common process--the development or modification 
of a student's IEP--in which to make contributions and through which to 
influence what others may propose. Parents and students with 
disabilities will continue to have direct roles in the planning process 
as well. Students at the designated age of majority, in States where 
this is permitted, will be able to be the principal representative of 
their own interests and preferences.
  Clarification of fiscal responsibilities for related services. In 
order to succeed in school and connect to the social culture of school, 
children with disabilities may need more than specially designed 
instruction. They may need one of many related services, such as speech 
therapy, occupational therapy, physical therapy, or counseling. Such 
services may be critical at any time in the school years of a child 
with a disability, because they help a child acquire the tools to blend 
in and be accepted by peers and teachers--to communicate, to walk, to 
sit, to function more independently, to hold a pen, use a keyboard, or 
to use socially appropriate behavior. Accessing related services 
personnel can be costly and is not always easy, even when cost is not a 
factor. The amendments clearly establish that fiscal responsibility for 
such services extends beyond school districts; spell out the broader 
obligation of local and State agencies that could and should absorb 
such costs; and indicate that school districts have the opportunity to 
seek reimbursement from such agencies, when a child's eligibility for 
such services, funded by other than a local school district, is known.
  School discipline and civil rights. A few children with disabilities 
sometimes pose a danger to themselves or others, or are so disruptive 
that neither they or their classmates can learn. Such children should 
not, must not, be abandoned.
  How to best address such situations was the most contentious issue 
during the development of this reauthorization of IDEA. Educators 
reported that current provisions in IDEA prevent them from removing 
disabled students who are dangerous from school. One exception in 
current law is when a student with a disability brings a weapon to 
school. Such a student can be removed from his or her current 
educational placement for up to 45 days. Parents of children with 
disabilities argued strenuously that if IDEA were to make it easier for 
educators to remove disabled students who are dangerous or seriously 
disruptive from their educational placements, the law would give 
educators a reason to serve children with disabilities in more 
segregated settings or not at all. Moreover, parents argued that 
increasing educators' ability and discretion to remove children with 
disabilities from their current educational placements, without 
parental consent, would provide educators with the opportunity to 
divert responsibility for having inappropriately served children with 
disabilities in the first place and reward educators for the actions or 
inactions that led to the dangerous or disruptive behavior.
  The amendments to address this issue are not in the bill. I plan to 
continue working on this issue with my colleagues, with professional 
organizations and associations who have already contributed to this 
process, and especially with parents. I have come to consider both the 
contentions of educators and those of parents to be valid. I anticipate 
creation of an amendment that will strike a balance between the 
educators' responsibility to maintain safe schools and the right of 
children with disabilities, even when they engage in dangerous or 
seriously disruptive behavior, to continue their education.
  I anticipate negotiating a discipline amendment that will: Define 
dangerous behavior; sustain a commitment from schools to involve 
parents in their children's education before crises develop; reach an 
agreement on a mechanism that allows the removal of a student with a 
disability in an expedited manner when the student is truly a danger to 
himself or herself or to others; and that will allocate resources to 
train principals and to train teachers and students in conflict 
resolution strategies and related behavior management techniques.
  We have a long history of bipartisan commitment to IDEA. We must 
continue to be courageous, on both sides of the aisle, in our 
commitment to improve the lives of our citizens with disabilities, most 
especially children. We must continue to be courageous in our 
commitment to making American schools the best they can be for all of 
our children.

  In our hearings on IDEA in May 1995, a mother from Kentucky came in, 
even though her son Ryan had died, and told us her son's story. I 
remember that she said she was guided in her advocacy by a quote from 
Daniel Burnham, who said:

       Make no little plans. They have no magic to stir men's 
     blood and probably themselves will not be realized. Make big 
     plans, aim high and hope they work, remembering that a noble, 
     logical diagram, once recorded, will never die, but long 
     after we are gone will be a living thing asserting itself 
     with ever-growing insistency.

  This is the kind of courage children with disabilities must bring to 
their everyday lives. This is the kind of courage that parents of 
children with disabilities show every day as they dream their dreams 
and work, step-by-step, toward a better, more independent, more 
productive life for their child. This is the kind of courage that 
America's dedicated and professional teachers bring to their work with 
American students every school day, aiming high and hoping their big 
plans work.
  We can do no less. We will do no less. These amendments will keep us 
on track.
  Mr. President, I ask unanimous consent that a short list of 
improvements to IDEA, and a section-by-section summary of the bill be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

     Individuals With Disabilities Education Act Amendments of 1996

          SUMMARY OF CHANGES MADE TO CURRENT LAW BY FRIST BILL


               Part A--General provisions (Secs. 601-610)

     Sec. 601--Short Title/Findings/Purpose
       Updates ``Findings''--to reflect changes made in the 
     education of children with disabilities over the past 20 
     years (since enactment of P.L. 94-142), and to restate that 
     the ``right to equal educational opportunities'' is inherent 
     in the equal protection clause of the 14th Amendment.
       Updates ``Purposes'' of IDEA--to incorporate all relevant 
     IDEA programs in the purpose statements (i.e., the basic 
     State grant program under Part B, the early intervention 
     program for infants and toddlers with disabilities under Part 
     H, and the various support programs under Parts C through E, 
     including systems change activities, coordinated research and 
     personnel preparation, and coordinated technical assistance, 
     dissemination, and technology development and media 
     services).
     Sec. 602--Definitions
       Adds definitions of ``behavior management plan'', 
     ``educational service agency'' (to replace ``intermediate 
     educational unit''), ``general education curriculum'', 
     ``inappropriately identified'', ``individualized family 
     service plan (IFSP)'', ``infant or toddler with a 
     disability'', ``outlying areas'', ``parent'' (to include 
     guardians), ``public or private nonprofit agency or 
     organization'', ``supplementary aids and services'', 
     ``systems change activities''; ``systems change outcomes'', 
     and ``unserved and underserved''.
       Deletes definitions of ``research and related purposes'', 
     ``public and private agency'', and ``youth with a 
     disability''; and moves the definition of ``transition 
     services'' to sec. 614(i).
       Revises definitions of--
       (1) ``IEP''--by removing all substantive provisions, and 
     referring to sections 614(d)-614(j), where all provisions 
     (both process and content) are contained.
       (2) ``Institution of Higher Education (IHE)''--by making a 
     simple cross reference to the Higher Education Act of 1965, 
     etc.
       (3) ``Related Services''--by adding ``orientation and 
     mobility services'' (to be consistent with current policy of 
     the Education Department).
       Makes technical and conforming changes to several other 
     definitions e.g., by adding a definition for the term ``child 
     with a disability (current law defines the plural ``children 
     with disabilities''), and alphabetizes and adds heading to 
     terms.
     
[[Page S1358]]

     Sec. 603--Office of Special Education Programs (OSEP). 
         (Provisions regarding the administrative staffing of 
         OSEP)
       Amends sec. 603--to allow OSEP to ``accept voluntary and 
     uncompensated services in furtherance of the purposes of this 
     Act.''
     Sec. 604--Abrogation of State Sovereign Immunity. (Current 
         law provides that the Federal Government has the right to 
         bring a suit against a State for violation of IDEA)
       No changes.
     Sec. 605--Acquisition of Equipment and Construction of 
         Necessary Facilities
       Repealed.
     Sec. 606--Employment of Individuals with Disabilities
       No changes.
     Sec. 607--Grants for the Removal of Architectural Barriers
       Repealed.
     Sec. 608--Requirements for Prescribing Regulations. (Current 
         law requires a 90-day public comment period for 
         regulations proposed under Part B of the IDEA)
       Makes technical and conforming changes.
     Sec. 609--Eligibility for Financial Assistance. (Current law 
         provides that no grants may be made for projects that 
         focus exclusively on children aged 3-5, unless the State 
         is eligible for a preschool grant under sec. 619)
       Makes technical and conforming changes.
     Sec. 610--Administrative Provisions Applicable to Parts D and 
         E
       (Parts D&E include support programs under IDEA concerning 
     research, personnel training, etc. The Senate bill (1) 
     reduces the number of support programs from 14 to 7, and (2) 
     reorganizes the remaining provisions contained in Parts C 
     through G of current law into three Parts: Part C--State 
     Systems Change Grants, Part D--Coordinated Research and 
     Personnel Preparation, and Part E--Technical Assistance, 
     Support, and Dissemination.) The Senate bill reorganizes and 
     substantially revises sec. 610, as described below:
       1. Requires Secretary to develop and implement a 
     comprehensive plan for activities under D and E, to enhance 
     services to children with disabilities under parts B and H.
       2. Identifies eligible applicants for awards (SEAs, LEAs, 
     IHEs, private nonprofit organizations, Indian tribes, and, in 
     some cases, ``for profit'' organizations); and specifies that 
     the Secretary may limit individual competitions to one or 
     more categories of applicants, etc.
       3. Extends current provisions regarding outreach to 
     minorities (i.e., requires at least one percent of the total 
     funds appropriated under parts D and E to be used for 
     outreach purposes for ``HBCUs'' and IHEs with minority 
     enrollments of at least 25 percent. This is a continuation of 
     current law.
       4. Provides that the Secretary may, without rulemaking, 
     limit competitions to projects that give priority to one or 
     more targeted areas set out in the bill--so long as each 
     project addresses the needs of children with disabilities and 
     their families.
       5. Sets out specific applicant responsibilities.
       6. Includes provisions for application management--
     including (1) requiring a peer review process, with detailed 
     criteria for selection of panel members, and (2) providing 
     that the Secretary may use a portion of funds under Parts D 
     and E (a) to pay nonfederal entities for administrative 
     support, (b) for Federal employees to monitor projects, and 
     for evaluation of activities carried out under these 
     programs.


  part b--assistance for education of all children with disabilities 
                            (secs. 611-620)

     Sec. 611--Entitlements and Allocations
       1. Retains the ``child count'' formula.
       2. Expands the list of activities that a State may carry 
     out if it retains Part B funds at the State level (e.g., to 
     meet performance goals, and to develop and implement the 
     mediation process required by sec. 615, systems change 
     activities authorized under part C, and a statewide 
     coordinated services system, etc.).
       3. Revises the $7,500 minimum subgrant provision (which 
     prohibits subgrants to very small LEAs that would receive 
     less than $7,500 under sec. 611). The bill (1) eases this 
     restriction by giving States the option to decide whether to 
     make subgrants of less than that amount, and (2) adds 
     preschool funds under sec. 619 to the amount that could be 
     counted in determining if an LEA meets the $7,500 minimum. 
     (Bill retains the provision requiring that, if a State 
     doesn't make a subgrant to an LEA, it must use those funds to 
     provide FAPE to children residing in the LEA).
       4. Defines ``outlying areas'' as including the Federated 
     States of Micronesia, Republic of the Marshall Islands, and 
     the Republic of Palau and requires the outlying areas to use 
     their Part B funds in accordance with the purposes of IDEA, 
     and not for other purposes, as permitted under P.L. 95-134.
       5. Makes technical changes regarding grants to the 
     Secretary of the Interior, and makes other technical and 
     conforming changes.
     Sec. 612--State Eligibility
       1. Simplifies provisions related to State participation 
     under Part B--by combining most of the elements of current 
     sections 612 (State eligibility) and 613 (State plans), so 
     that all conditions of State eligibility (including policies 
     on FAPE, procedural safeguards, LRE, etc.) appear in one 
     comprehensive section.
       2. Amends ``child find'' requirements (Sec. 612(a)(3))--to 
     codify current Department policy, which provides that, so 
     long as a child meets the ``two-pronged'' test as a ``child 
     with a disability'' under sec. 602(4) (i.e., has a disability 
     and needs special education), the child does not have to be 
     classified by a specific impairment or condition in order to 
     be eligible for service under Part B.
       3. Amends LRE provisions (Sec. 612(a)(5))--to ensure that 
     the State's funding formula does not result in placements 
     that violate the policy that children are placed in the least 
     restrictive environment, and (2) that the state educational 
     agency examines data to determine if significant racial 
     disproportionality is occurring in the evaluation and 
     placement of children under this Act; and if either situation 
     is identified, to take appropriate corrective action.
       4. Amends provisions on Transition from Part H to Preschool 
     Programs (Sec. 612(a)(9))--to conform Part B with the 
     transition planning requirements under Part H (Sec. 
     678(a)(8)) (i.e., to ensure the LEA staff participate in 
     transition planning conferences convened by the Part H lead 
     agency, in order to ensure an effective transition for 
     infants and toddlers with disabilities who move into 
     preschool programs under Part B.
       5. Addresses unilateral placements by parents (Sec. 
     612(a)(10))--to clarify that if the parents of a child with a 
     disability unilaterally place the child in a private school 
     and a hearing officer agrees with the parent's placement, the 
     LEA may be required to reimburse the parents. However, the 
     amount of reimbursement may be reduced or denied--(1) if 
     prior to removal of the child from the public school, the 
     parents do not provide a statement to the LEA rejecting its 
     proposed placement, or (2) upon a judicial finding of 
     unreasonableness the respect to actions taken by the parents.
       6. Strengthens requirements on ensuring provision of 
     services by non-educational agencies (Sec. 612(a)(12)) (i.e., 
     while retaining the single line of responsibility of the SEA 
     (Sec. 612(a)(11)), the bill provides (1) that if a non-
     educational agency is responsible for providing or paying for 
     services that are also necessary for ensuring FAPE to 
     children with disabilities, that agency must pay for, or 
     provide such services directly or by contract or other 
     arrangements, (2) that the State must ensure that interagency 
     agreements or other mechanisms are in effect between 
     educational agencies and non-educational agencies for 
     defining respective financial responsibilities, resolving 
     interagency disputes, and for interagency coordination, and 
     (3) that the State must establish a mechanism by which local 
     educational agencies may seek reimbursement from agencies for 
     the costs of providing related services and disseminate those 
     procedures to local educational agencies.
       7. Amends ``comprehensive system of personnel development'' 
     (CSPD) requirements (Sec. 612(a)(14))--to simplify and reduce 
     the burden of such requirements, especially the data 
     provisions, and make the requirements more meaningful.
       8. Amends ``Personnel Standards'' to include use of 
     paraprofessionals (Sec. 612(a)(15))--to allow districts to 
     utilize appropriately trained and supervised 
     paraprofessionals to provide services.
       9. Conforms the IDEA to general education initiatives (sec. 
     612 (a)(16) and (17))--by requiring States to (1) establish 
     performance goals and indicators for children with 
     disabilities, and (2) ensure that these children participate 
     in general State and district-wide assessments, with 
     appropriate accommodations, where necessary, and that 
     guidelines are developed for participation in alternative 
     assessments for those children who cannot participate in 
     state and district-wide assessments.
       10. Consolidates funding requirements under current law in 
     one place (Sec. 612(a)(18)), and deletes non-germane 
     provisions.
       11. Consolidates the public participation requirements of 
     current law in one place (Sec. 612(a)(19)), and provides 
     language to reduce burden--by clarifying that, if the State's 
     policies and procedures have been subjected to public comment 
     through a State rulemaking process, no further public review 
     or public comment period is required.
       12. Amends provisions on State Advisory Panels--by (1) 
     specifying other categories of participants of such panels, 
     (2) adding new duties of the Panel (e.g., advise the SEA 
     developing corrective action plans to address findings 
     identified through Federal monitoring reports, and to 
     developing and implementing policies related to coordination 
     of services), and (3) providing that a State panel 
     established under the ESEA or Goals 200: Educate America Act 
     may also serve as the State Advisory Panel if it meets the 
     requirements of this part.
       13. Significantly reduces paperwork and staff burden, by no 
     longer requiring States to submit three-year State plans. 
     Once a State demonstrates to the satisfaction of the 
     Secretary that it has in effect policies and procedures that 
     meet the eligibility requirements of the new sec. 612, the 
     State does not have to resubmit such materials, unless those 
     policies and procedures are change.
       14. Simplifies provisions related to participation of 
     LEAs--by (1) replacing the LEA application requirements in 
     sec. 614 of current law with new ``LEA eligibility'' 
     provisions in sec. 613, and (2) conforming those provisions, 
     as appropriate, to the new State eligibility requirements 
     under sec. 612.
     Sec. 613--LEA Eligibility
       1. Simplifies provisions related to participation of LEAs--
     by (1) replacing the LEA application requirements in sec. 614 
     of current 

[[Page S1359]]
     law with new ``LEA eligibility'' provisions in sec. 613, and (2) 
     conforming those provisions, as appropriate, to the new State 
     eligibility requirements under sec. 612.
       2. Includes ``Maintenance of Effort'' provision--to ensure 
     that the level of expenditures for the education of children 
     with disabilities within each LEA from State and local funds 
     will not drop below the level of such expenditures for the 
     preceding fiscal year; but provides four specific exceptions 
     (i.e., (1) decreases in enrollment of children with 
     disabilities, (2) end of LEA's responsibility to provide an 
     exceptionally costly program to a child with a disability 
     [because child leaves the LEA, etc.], (3) retirement or other 
     voluntary departure of special education staff who are at or 
     near the top of the salary schedule, and (4) end of unusually 
     large expenditures for equipment or construction). (Bill 
     retains ``excess costs'' and ``supplement--not supplant'' 
     provisions of current law.)
       3. Provides greater flexibility to LEAs in the use of Part 
     B funds, while still ensuring that children with disabilities 
     receive needed special education and related services. The 
     bill identifies specific activities that an LEA may carry out 
     (notwithstanding the excess cost and noncomingling 
     requirements in secs. 613(3)(B) and 612(a)(18)(A)(ii)), 
     including using Part B funds for--
       Incidental benefits (i.e., LEAs could provide special 
     education services to a child with a disability in the 
     regular classroom without having to track the costs of any 
     incidental benefits to non-disabled students from those 
     services).
       Simultaneous services on a space-available basis (i.e., 
     special education and related services that are provided to 
     ``IDEA-eligible'' children could simultaneously be provided, 
     on a space available basis, to children with disabilities who 
     are protected by ``ADA-504'').
       A coordinated services system (i.e., an LEA could use up to 
     5 percent of its Part B funds to develop and implement a 
     coordinated services system that links education, health, and 
     social welfare services, and various systems and entities in 
     a manner designed to improve educational and transitional 
     results for all children and their families, including 
     children with disabilities and their families).
       A school-based improvement plan (i.e., an LEA could (if 
     authorized by the SEA) permit one or more local schools 
     within the LEA to design, implement, and evaluate a school-
     based improvement plan for improving educational and 
     transitional results for children with disabilities and, as 
     appropriate, for other children, consistent with the 
     provisions on incidental benefits and simultaneous services 
     in sec. 613(a)(4) (A) and (B)).
       4. Provides that an LEA may join with other LEAs to jointly 
     establish eligibility under Part B.
       5. Significantly reduces paperwork and staff burden for 
     SEAs and LEAs--by providing that once an LEA demonstrates to 
     the satisfaction of the SEA that it has in effect policies 
     and procedures that meet the eligibility requirements of the 
     new sec. 613, the SEA may consider that those requirements 
     have been met; and the LEA would not have to resubmit such 
     materials, unless those policies and procedures are changed.
       6. Simplifies local involvement with a State's 
     Comprehensive System of Personnel Development--and requires 
     that a local educational agency only, to the extent 
     appropriate, contribute to and benefit from the State 
     Comprehensive System of Personnel Development.
     Sec. 614--Evaluations, Reevaluations, IEPs, and Educational 
         Placements
       1. Simplifies State and local administration of provisions 
     on evaluation, IEPs, and placements--by placing all such 
     provisions in one newly established sec. 614.
       2. Addresses Evaluations and Reevaluations:
       Reduces cost and administrative burden--by requiring that 
     existing evaluation data on a child be reviewed to determine 
     if any other data are needed to make decisions about a 
     child's eligibility and services. (If it is determined by 
     appropriate individuals that additional data are not needed, 
     the parents must be so informed of that fact and of their 
     right to still request an evaluation; but no further 
     evaluations are required at that time unless requested by the 
     parents.)
       Includes protections in evaluation procedures--by requiring 
     LEAs to ensure that tests and other evaluation materials are 
     relevant, validated for the specific purpose for which they 
     are being used, etc.; and retains the nondiscriminatory 
     testing procedures required in current law.
       3. Addresses IEP provisions:
       Consolidates all substantive provisions on IEPs (both 
     content and process) in one place (secs. 614(d)-614(j)), and 
     re-orders the provisions, so that there is a logical 
     sequence--from (1) procedures for developing IEPs, (2) IEP 
     content, (3) measuring and reporting on each child's 
     progress, and (4) reviewing and revising the IEP.
       Requires IEP team to consider specific factors in 
     developing each child's IEP, including (1) basic information 
     about the child (e.g., most recent evaluation results, 
     child's strengths, and parent concerns for enhancing the 
     child's education), and (2) other special factors and 
     possible remedies, as appropriate (e.g., in the case of a 
     child with a visual or hearing impairment, limited English).
       Revises content of IEPS--by (1) replacing ``annual goals 
     and short term instructional objectives'' with ``measurable 
     annual objectives'', (2) placing greater emphasis on ensuring 
     that each child, as appropriate, has the opportunity to 
     progress in the general curriculum, and to participate with 
     nondisabled children in various environments.
       Amends provisions on transition services (i.e., the bill 
     requires that transition services needs (1) be considered for 
     all students with disabilities beginning at age 14 (or 
     younger . . .), and, as appropriate, addressed under the 
     applicable components of the IEP (e.g., levels of 
     performance, objectives, and services), and (2) be considered 
     in light of the student's participation in the general 
     curriculum (e.g., a vocational education or school to work 
     program).)
       The bill (1) retains current law requiring a statement of 
     transition services beginning at age 16 (or younger), and (2) 
     moves the definition of ``transition services'' from Part A 
     to sec. 614(I).
       4. Adds a provision regarding transfer of rights at the age 
     of majority (i.e., requiring that, at least one year before a 
     student reaches the age of majority under State law, the IEP 
     must include ``a statement about the rights under this Act, 
     if any, that will transfer to the student on reaching the age 
     of majority under sec. 615(j).''
     Sec. 615--Procedural Safeguards.
       1. Revises the written notice provision--(a) to set out the 
     specific content of notices to parents, and (b) to reduce 
     burden under current law and regulations--by permitting 
     notices to include only a brief summary of the procedural 
     safeguards under Part B relating to due process hearings (and 
     appeals, if applicable), civil actions, and attorney fees--
     together with a statement that a full explanation of such 
     safeguards will be provided if the parents request it or 
     request a due process hearing, etc.
       2. Reduces potential conflict between LEAs and parents of 
     children with disabilities--by requiring States to make 
     mediation available to such parents, on a voluntary basis. 
     (The use of mediation can resolve disputes quickly and 
     effectively, and at less cost.)
       3. Provides clearer notice of the existence of a conflict 
     between an LEA and the parents of a child with disabilities. 
     The bill requires the parents to provide the LEA a written 
     notice of their intent to file a complaint (request a due 
     process hearing) under Part B, on any matter regarding the 
     identification, evaluation, or educational placement of the 
     child or the provision of FAPE to the child, 10 calendar days 
     prior to filing the complaint, if the parents (1) have new 
     information about any matter described above, and (2) are 
     initiating a complaint about such a matter, and have signed 
     the most recent IEP of the child.
       The bill further states that (1) if, prior to filing the 
     complaint, the parents have new information on any matter 
     described above, they must provide the information to the LEA 
     along with the notice of intent to file a complaint; and (2) 
     if the parents were duly informed by the LEA of their 
     obligation to file such a notice, and fail to do so, ``the 
     time line for a final decision on the complaint shall be 
     extended by 10 calendar days.''
       4. Amends provisions on attorney fees--by clarifying that 
     ``the determination of whether a party is a prevailing party 
     under this section shall be made in accordance with the law 
     established by the Supreme Court in Hensley v. Eckerhart, 461 
     U.S. 424 (1983);'' and (2) that, ``for the purpose of this 
     section, an IEP meeting, in and of itself, shall not be 
     deemed a proceeding triggering the awarding of attorneys 
     fees''.
       5. Permits the transfer of parental rights to a student 
     with disabilities upon reaching the age of majority under 
     State law; and provides that if (under State law) such a 
     student is determined to not have the ability to provide 
     informed consent under Part B, the State must have procedures 
     for appointing the parent or another person to represent the 
     student's interests throughout the student's eligibility 
     under this part.
       6. Makes other technical and conforming changes.
     Sec. 616--Withholding and Judicial Review
       Makes technical and conforming changes.
     Sec. 617--Administration
       1. Adds a provision prohibiting the Secretary from 
     rulemaking via policy letters or other statements. (The bill 
     provides that, in order to establish a new rule that is 
     required for compliance and eligibility under Part B, the 
     Secretary must follow standard rulemaking requirements.)
       2. Adds a provision requiring the Department of Education 
     to widely disseminate, on a quarterly basis, a list of 
     correspondence from the Department during the previous 
     quarter that describes the Department's interpretations of 
     this part and the implementing regulations. (Each item on the 
     list must identify the topic being addressed, include ``such 
     other summary information as the Secretary finds 
     appropriate.''
     Sec. 618--Evaluation and Program Information
       1. Significantly reduces the data burden to States and 
     LEAs--by eliminating the requirement for individual State 
     data reports by disability category, but requires the 
     Secretary, directly or by grant, contract, or cooperative 
     agreement, to conduct studies and evaluations necessary to 
     assess the effectiveness of efforts to provide FAPE and early 
     intervention services, including assessing ``the placement of 
     children with disabilities by disability category.''
       2. Requires the Secretary to conduct a longitudinal study 
     that measures the educational and transitional services 
     provided 

[[Page S1360]]
     to and results achieved by children with disabilities under this Act, 
     etc.
       3. Provides for earmarking up to one-half of one percent of 
     the amounts appropriated under Parts B and H to carry out the 
     purposes of sec. 618.
     Sec. 619--Preschool Grants
       Includes changes that are virtually identical to the 
     changes made in sec. 611, with respect to State 
     administration and State use of funds, subgrants to LEAs and 
     other State agencies, and the provision on the use of funds 
     by the outlying areas.
     Sec. 620--Payments
       Makes technical and conforming changes.

              Support Programs (Parts C through E, and H)


      part c--promoting systems change to improve educational and 
transitional services and results for children with disabilities (Secs. 
                                621-625)

       A new Part C has been developed. [It replaces current Part 
     C which authorized a wide range of special interest 
     demonstration and technical assistance initiatives, most with 
     their own authorization earmarks.] The new Part C authorizes 
     a new ``Systems Change'' State grant program. State Education 
     Agencies, in partnership with local education agencies, and 
     other interested individuals, agencies, and organizations, 
     would be able to compete for planning or implementation 
     grants to improve educational and transitional services and 
     results for children with disabilities on a system wide 
     basis.
     Sec. 621--Findings and Purposes

     Sec. 622--Grants

       Authorizes grants to State Education Agencies in 
     partnership with local education agencies, and other 
     individuals, agencies, and organizations to address 
     comprehensive systems change.
       Authorizes grants to multiple States, in collaboration with 
     universities and interested persons to address system change 
     barriers of a regional or national scope.
       Grants for planning for one year duration and 
     implementation grants may be 5 years duration.
     Sec. 623--Application
       Grants to be based upon the performance of children with 
     disabilities on State assessments and other performance 
     indicators.
       Grants to describe the organizational structures, policies, 
     procedures and practices that will be changed to improve 
     educational and transitional services and results for 
     children with disabilities.
     Sec. 624--Incentives
       Provides incentives for significant and substantial levels 
     of collaboration among participating partners.
       Provides incentives for addressing the needs of unserved, 
     underserved, and inappropriately identified populations of 
     children with disabilities.
     Sec. 625--Authorization of Appropriations


        part d research and personnel preparation (sec. 631-634)

       A new Part D authorizes research/innovation and personnel 
     preparation activities which are to be coordinated with 
     system changes initiatives funded under Part C and improve 
     results for children with disabilities. [Consolidates current 
     Part D, which funds personnel preparation, and Part E, which 
     funds research.]
     Sec. 631--Findings and Purpose
     Sec. 632--Definitions
     Sec. 633--Research and Innovation
       New knowledge production--supports research and innovation 
     projects in areas of new knowledge, such as, learning styles, 
     instructional approaches, behavior management, assessment 
     tools, assistive technology, program accountability and 
     personnel preparation models.
       Integration of research and practice--supports projects 
     which validate new knowledge findings through demonstration 
     and dissemination of successful practice.
       Improvement in the use of professional knowledge--supports 
     projects to organize and disseminate professional knowledge 
     in ways that empower teachers, parents, and others to use 
     such knowledge in their classrooms and other learning 
     settings.
     Sec. 634--Personnel Preparation
       High incidence disabilities--supports the preparation of a 
     variety of personnel providing educational and transitional 
     services and supports to students in high incidence 
     disability areas, such as, learning disabilities, mental 
     retardation, behavior disordered, and other groups.
       Leadership preparation--supports the preparation of 
     leadership personnel at the advanced graduate, doctoral, and 
     post-doctoral levels of training.
       Low-incidence disabilities--supports the preparation of a 
     variety of personnel providing educational and transitional 
     services and supports to children in low incidence disability 
     areas, such as, sensory impairment, multiple disabilities, 
     and severe disabling conditions.
       Projects of national significance--supports the development 
     and demonstration of new and innovative program models and 
     approaches in the preparation of personnel to work with 
     children with disabilities.


part e--technical assistance, support, and dissemination of information 
                            (secs. 641-644)

       A new Part E provides authorizations for parent training 
     and information centers, technical assistance, support, 
     dissemination, and technology and media activities which are 
     to be coordinated with system change initiatives funded under 
     Part C and other activities that are designed to improve 
     educational and transitional services and results for 
     children with disabilities. [Consolidates activities 
     authorized in various Parts of current law, especially Parts 
     G and F; removes numerous authorization earmarks.]
     Sec. 641--Findings and Purposes
     Sec. 642--Definitions
     Sec. 643--Parent Training and Information
       Provides support for Statewide Parent Training and 
     Information Center activities, as authorized in current law, 
     with the following additions:
       Supports collaboration between Centers and other parent 
     groups in a State and between parent groups and systems 
     change activities in States.
       Requires Centers to work together through national and 
     regional networks, and to address the needs of unserved and 
     underserved parents in their State.
       Provides support for Community-based Parent and Information 
     Programs:
       Supports the building of capacity, demonstration, and 
     replication of models to ensure that parents of children with 
     disabilities from unserved and underserved populations 
     participate in parent training and information activities.
       Supports the provision of services to parents of children 
     with disabilities from unserved and underserved populations.
       Supports the provision of training and information 
     concerning children inappropriately identified as disabled.
       Supports technical assistance activities to develop, 
     coordinate, and disseminate information.
     Sec. 644--Coordinated Technical Assistance and Dissemination
       Supports systemic technical assistance to States, local 
     education agencies, and other entities to plan and conduct 
     comprehensive systems change activities.
       Supports inter-organizational technical assistance 
     activities to address interagency barriers to systems change 
     and to improved transitional and educational results for 
     children with disabilities.
       Supports national dissemination activities in areas related 
     to: Infants, toddlers, children, and youth with disabilities 
     and their families; provision of services and supports for 
     deaf-blind children; services to blind and print disabled 
     children; postsecondary services to individuals with 
     disabilities; personnel to provide services to children with 
     disabilities.
       Supports national technical assistance and dissemination 
     coordination activities.
     Sec. 645--Technology Development, Demonstration, and 
         Utilization and Media Services
       Supports research, development, and demonstration of 
     innovative and emerging technology benefiting children with 
     disabilities.
       Supports dissemination and transfer of technology for use 
     by children with disabilities.
       Supports video descriptions, and open and closed captioning 
     of television programs.
       Supports recorded free educational materials and textbooks 
     for visually impaired and print-disabled students in 
     elementary, secondary, postsecondary, and graduate school.
       Supports activities of the National Theater of the Deaf.
       Requires the collection and reporting of appropriate 
     evaluation data concerning technology and media activities.


     part h--infants and toddlers with disabilities (secs. 671-687)

       The early intervention program for infants and toddlers 
     with disabilities under Part H of this Act is an evolving 
     program that has proven successful and enjoyed strong support 
     since its enactment in 1986. Therefore, no major amendments 
     are proposed. However, the bill:
       1. Provides greater flexibility in addressing the needs of 
     ``at risk infants and toddlers'' in those States not 
     currently serving such children--by permitting Part H funds 
     to be used for referring those children to other (non-Part H) 
     services, and conducting periodic follow-ups on each referral 
     to determine if the child's eligibility under Part H has 
     changed.
       2. Provides for a review of the definition of 
     ``developmental delay''--by requiring the Federal Interagency 
     Coordinating Council (FICC) to convene a panel to develop 
     recommendations regarding a model definition of 
     ``developmental delay''--to assist States, as appropriate, 
     with their own respective definitions.
       3. Facilitates the provision requiring a smooth transition 
     for toddlers with disabilities from the Part H program to 
     preschool services under Part B--by permitting the planning 
     to begin up to 6 months before the child's 3rd birthday, if 
     the parents and agencies agree.
       4. Provides technical changes related to (1) membership on 
     the FICC (2) responsibilities of the State and Federal 
     Interagency Coordinating Councils, and (3) definitions of 
     terms; and makes other technical and conforming changes.
                                                                    ____


            The First Bill--Commonsense Improvements to IDEA

       1. Eliminates the major bureaucratic burden of three-year 
     plan submissions.--State and local educational agencies will 
     make only one plan or application, instead of the currently 
     mandated submission of once every three years. Under the 
     First bill, state and local agencies will update their plans 
     only if they report substantial changes.
     
[[Page S1361]]

       2. Reduces burden on school funding sources to pay for 
     supports and related services.--The First bill helps local 
     districts pay for supports and related services by requiring 
     that other agencies pay their fair share of the cost of 
     services to children who are eligible for those agencies' 
     services.
       3. Cuts mandatory data collection by 50%.--The First bill 
     cuts data collection and reporting burdens on state and local 
     educational agencies. Currently, agencies are required to 
     report numbers of children receiving special education by 
     age, by four placement categories and by the disability of 
     the student. Under the Frist bill, agencies will report only 
     the total number of children receiving special education and 
     the number of children in each of only two placement 
     categories.
       4. Reduces litigation by adding mediation.--If there is a 
     dispute over an IEP, school districts and families will be 
     able to use mediation to try to resolve issues instead of 
     automatically having to go to a due process hearing.
       5. Eliminates regulation through Department of Education 
     policy letters.--The Frist bill will reduce the burden of new 
     regulations on state and local educational agencies. Policy 
     letters issued by the Department of Education will no longer 
     be used for purposes of eligibility and compliance 
     monitoring. Letters may be issued only for non-regulatory 
     guidance and purposes of explanation and clarification of 
     existing policy.
       6. Relieves burden by allowing flexible local control of 
     funds:
       A. Allows flexibility in the use of funds for school 
     improvement and coordination with general education reform.--
     States will be allowed to use up to 1% of the funds received 
     under Part B, and local districts may use up to 5% of Part B 
     funds to develop better services for all children, including 
     children with disabilities. In addition, school districts 
     will be allowed all of their Part B funds to establish 
     school-based improvement plans designed to improve 
     educational results for children with disabilities.
       B. Relieves financial burden of the current maintenance of 
     effort requirement.--The Frist bill allows local education 
     agencies to reduce the overall level of spending for 
     educating children with disabilities by the following; when 
     the reduction results from lower per-teacher staff costs or 
     per-pupil student costs, when a reduction is due to a one-
     time expenditure in the preceeding fiscal year, or when there 
     are decreases in district enrollment of students with 
     disabilities.
       C. Eliminates wasteful fiscal tracking mandates.--Building 
     and district administrators will no longer be required to 
     keep track of the educational benefits to non-disabled 
     children when a child with a disability is provided special 
     education and related services in the regular education 
     classroom.
       7. Reduces the administrative burden of student 
     evaluations.--The Frist bill will simplify and streamline the 
     process of student evaluation. Initial evaluations and 
     reevaluations will focus on collecting only the information 
     that is necessary for educational planning. Reevaluations 
     will take place when additional information is needed, or at 
     natural transitions such as when a student moves from 
     elementary school to junior high.
       8. Cuts data collection requirements of personnel 
     development programs.--The Frist bill simplifies and reduces 
     data collection requirements for a state to maintain its 
     Comprehensive System of Personnel Development (CSPD). In 
     addition, local control will increase because school 
     districts will decide their level of participation in the 
     state's CSPD.
       9. Cuts paperwork and providers administrative relief in 
     IEP process.--The Frist bill eliminates mandated short-term 
     objectives in an IEP. Paperwork will be reduced by the 
     elimination of short-term objective tracking and repetitive 
     reporting of test results and other information in the IEP. A 
     flexible, sensible, workable schedule of educational reports 
     to parents of children with disabilities will be determined 
     by the IEP team.
       10. Empowers school officials in disciplining children.--
     For the first time since its enactment, IDEA will contain 
     comprehensive language that will untie school officials' 
     hands when disciplining students with disabilities. 
     [Currently under discussion, will be worked out by date of 
     mark-up and then inserted]

 Mr. HARKIN. Mr. President, as ranking member of the 
Subcommittee on Disability Policy, I am pleased to join Senator Frist, 
the chair of that subcommittee, in introducing the Individuals With 
Disabilities Education Act [IDEA] Amendments of 1996. It has been a 
privilege and a pleasure for me to work with Senator Frist and our 
respective staffs in developing this reauthorization proposal. I also 
would like to compliment Pat Morrissey, Senator Frist's staff director 
for the Subcommittee on Disability Policy for her efforts to enhance 
the partnership between parents of children with disabilities and the 
educational community.
  The amendments we are proposing today provide fine-tuning to powerful 
education legislation with a long and successful history. Just 3 months 
ago, on November 29, we celebrated the 20th anniversary of the signing 
of Public Law 94-142, the Education for All Handicapped Children Act of 
1975, now known as part B of IDEA. The purpose of this law is simple--
to assist States and local communities to meet their obligations to 
provide equal educational opportunity to children with disabilities in 
accordance with the equal protection clause of the 14th amendment of 
the U.S. Constitution.
  As we look back on that day two decades ago, we know that this law 
has literally changed the world for millions of children with 
disabilities. Prior to the enactment of Public Law 94-142, 1 million 
children with disabilities in the United States were excluded entirely 
from the public school system, and more than half of all children with 
disabilities did not receive appropriate educational services.
  On that day in 1975, we lit a beacon of hope for millions of children 
with disabilities and their families. We sent a simple, yet powerful 
message heard around the world that the days of exclusion, segregation, 
and denial of education for children with disabilities are over in this 
country. And we sent a powerful message that families count and they 
must be treated as equal partners
  Because of IDEA, tremendous progress has been made in addressing the 
problems that existed in 1975. Today, every State in the Nation has 
laws in effect assuring the provision of a free appropriate public 
education for all children with disabilities. And over 5,000,000 
children with disabilities are now receiving special education and 
related services.
  For many parents who have disabled children, IDEA is a lifeline of 
hope. As one parent recently told me:

       Thank God for IDEA. IDEA gives us the strength to face the 
     challenges of bringing up a child with a disability. It has 
     kept our family together. Because of IDEA our child is 
     achieving academic success. He is also treated by his 
     nondisabled peers as ``one of the guys.'' I am now confident 
     that he will graduate high school prepared to hold down a job 
     and lead an independent life.

  In May, Danette Crawford, a senior at Urbandale High School in Des 
Moines, testified before the Disability Policy Subcommittee. Danette, 
who has cerebral palsy, testified that:

       My grade point average stands at 3.8 and I am enrolled in 
     advanced placement courses. The education I am receiving is 
     preparing me for a real future. Without IDEA, I am convinced 
     I would not be receiving the quality education that Urbandale 
     High School provides me.

  We are now graduating the first generation of students who have had 
the benefits of the provisions of IDEA. Already, for example, since 
1978 the percentage of incoming college freshman with disabilities has 
more than tripled from 2.4 percent to over 9 percent. We once heard 
despondency and anger from parents. We now hear enthusiasm and hope, as 
I have, from a parent from Iowa writing about her 7-year-old daughter 
with autism. She said, ``I have no doubt that my daughter will live 
nearly independently as an adult, will work, and will be a very 
positive contributor to society. That is very much her dream, and it is 
my dream for her. The IDEA has made this dream capable of becoming a 
reality.''
  Mr. President, these are not isolated statements from a few parents 
in Iowa. They are reflective of the general feeling about the law 
across the country. The National Council on Disability [NCD] recently 
conducted 10 regional meetings throughout the Nation regarding progress 
made in implementing the IDEA over the past 20 years. In its report, 
NCD stated that ``in all of the 10 regional hearings * * * there were 
ringing affirmations in support of IDEA and the positive difference it 
has made in the lives of children and youth with disabilities and their 
families.'' The report adds that ``all across the country witnesses 
told of the tremendous power of IDEA to help children with disabilities 
fulfill their dreams to learn, to grow, and to mature.''
  These comments, as well as testimony presented at the four hearings 
held by the Subcommittee on Disability Policy, make it clear to me that 
major changes in IDEA are not needed nor wanted. IDEA is as critical 
today as it was 20 years ago, particularly the due process protections. 
These provisions level the playing field so that parents can sit down 
as equal partners in designing an education for their children.
  The witnesses at these hearings did make it clear, however, that we 
need to fine-tune the law--in order to make sure that children with 
disabilities are 

[[Page S1362]]
not left out of educational reform efforts that are now underway, and 
to take what we have learned over the past 20 years and use it to 
update and improve this critical law.
  Based on 20 years of experience and research in the education of 
children with disabilities, we have reinforced our thinking and 
knowledge about what is needed to make this law work, and we have 
learned many new things that are important if we are to ensure an equal 
educational opportunity for all children with disabilities.
  For example, our experience and knowledge over the past 20 years have 
reaffirmed that the provision of quality education and services to 
children with disabilities must be based on an individualized 
assessment of each child's unique needs and abilities; and that, to the 
maximum extent appropriate, children with disabilities must be educated 
with children who are not disabled and children should be removed from 
the regular educational environment only when the nature and severity 
of the disability is such that education in regular classes with the 
use of supplementary aids and services cannot be achieved 
satisfactorily.
  We have also learned that students with disabilities achieve at 
significantly higher levels when schools have high expectations--and 
establish high goals--for these students, ensure their access to the 
general curriculum, whenever appropriate, and provide them with the 
necessary services and supports. And there is general agreement that 
including children with disabilities in general State and district-wide 
assessments is an effective accountability mechanism and a critical 
strategy for improving educational results for these children.
  Our experience over the past 20 years has underscored the fact that 
parent participation is a crucial component in the education of 
children with disabilities, and parents should have meaningful 
opportunities, through appropriate training and other supports, to 
participate as partners with teachers and other school staff in 
assisting their children to achieve to high standards.
  There is general agreement today at all levels of government that 
State and local educational agencies must be responsive to the 
increasing racial, ethnic, and linguistic diversity that prevails in 
the nation's public schools today. Steps must be taken to ensure that 
the procedures used for referring and evaluating children with 
disabilities include appropriate safeguards to prevent the over or 
under-identification of minority students requiring special education. 
Services, supports, and other assistance must be provided in a 
culturally competent manner. And greater efforts must be made to 
improve post-school results among minority students with disabilities.
  The progress that has been made over the past 20 years in the 
education of children with disabilities has been impressive. However, 
it is clear that significant challenges remain. We must ensure that 
this crucial law not only remains intact as the centerpiece for 
ensuring equal educational opportunity for all children with 
disabilities, but also that it is strengthened and updated to keep 
current with the changing times.
  The basic purposes of Public Law 94-142 must be retained under the 
proposed reauthorization of IDEA: To assist States and local 
communities in meeting their obligation to ensure that all children 
with disabilities have available to them a free appropriate public 
education that emphasizes special education and related services that 
are designed to meet the unique needs of these children and enable them 
to lead productive independent adult lives; to ensure that the rights 
of children with disabilities and their parents are protected; and to 
assess and ensure the effectiveness of efforts to educate children with 
disabilities.
  We also need to expand those purposes to promote the improvement of 
educational services and results for children with disabilities and 
early intervention services for infants and toddlers with 
disabilities--by assisting the systems change initiatives of State 
educational agencies in partnerships with other interested parties, and 
by assisting and supporting coordinated research and personnel 
preparation, and coordinated technical assistance, dissemination, and 
evaluation, as well as technology development and media services.
  Mr. President, this bipartisan bill we are presenting here today 
provides the fine-tuning that is needed to up-date current law along 
the lines I have described. These amendments will help ensure that 
children with disabilities have equal educational opportunities along 
with their nondisabled peers to leave school with the skills necessary 
for them to be included and integrated in the economic and social 
fabric of society and to live full, independent productive lives as 
adults.
  In closing, Mr. President, I would like to quote Ms. Melanie Seivert 
of Sibley, IA, who is the parent of Susan, a child with Downs syndrome. 
She states:

       Our ultimate goal for Susan is to be educated academically, 
     vocationally, [and] in life-skills and community living so as 
     an adult she can get a job and live her life with a minimum 
     of management from outside help. Through the things IDEA 
     provides . . . we will be able to reach our goals.
       Does it not make sense to give all children the best 
     education possible? Our children need IDEA for a future.

  Mr. President, IDEA is the shining light of educational opportunity. 
And we, in the Congress, must make sure that the light continues to 
burn bright. We still have promises to keep. I urge my colleagues to 
support the Individuals With Disabilities Education Act Amendments of 
1996.
                                 ______

      By Mr. GLENN (for himself, Mr. Stevens, Mr. Levin, Mr. Cochran, 
        Mr. Pryor, Mr. Cohen, Mr. Lieberman, and Mr. Brown):
  S. 1579. A bill to streamline and improve the effectiveness of 
chapter 75 of title 31, United States Code (commonly referred to as the 
``Single Audit Act``); to the Committee on Governmental Affairs.


                the single audit act amendments of 1996

  Mr. GLENN. Mr. President, today, I am introducing legislation to 
amend the Single Audit Act of 1984. This legislation will both improve 
financial management of Federal funds and reduce paperwork burdens on 
State and local governments, universities and other nonprofit 
organizations that receive Federal assistance. I am happy that the 
chairman of the Governmental Affairs Committee, Senator Stevens, joins 
with me in cosponsoring the bill, as do Senators Levin, Cochran, Pryor, 
Cohen, Lieberman, and Brown, all fellow members of the Governmental 
Affairs Committee.
  Over the last several years we have made great strides in reforming 
the sloppy and wasteful state of Federal financial management. The 
Chief Financial Officers Act of 1990, which I strongly support, was a 
major accomplishment in this regard. Much more remains to be done, 
however, to achieve greater accountability for the hundreds of billions 
of dollars of Federal assistance that go to or through State and local 
governments and nonprofit organizations. Much more also remains to be 
done to reduce the auditing and reporting burdens of the Federal 
assistance management process. The Single Audit Act Amendments of 1996, 
which I introduce today, goes a long way toward achieving these goals.
  The Single Audit Act was enacted in 1984 to overcome serious gaps and 
duplications that existed in audit coverage over Federal funds provided 
to State and local governments, which now amount to about $200 billion 
a year. Some governments rarely saw an auditor interested in examining 
Federal funds, others were swamped by auditors, each looking at a 
separate grant award. The Single Audit Act remedied that problem by 
changing the audit focus from compliance with individual Federal grant 
requirements to a periodic single overall audit of the entity receiving 
Federal assistance. The act also set specific dollar thresholds to 
exempt small grant recipients from regular audit requirements. This 
structured approach of entity-wide audits simplified overlapping audit 
requirements and improved grantee-organization administrative controls.
  The Single Audit Act also served an important purpose of prompting 
State and local governments to improve their general financial 
management practices. The act encouraged the governments to review and 
revise their financial management practices, including instituting 
annual financial statement audits, installing new accounting systems, 
and implementing monitoring systems. The improvements represented long-
needed and long-lasting 

[[Page S1363]]
financial management reforms. Studies by the General Accounting Office 
[GAO] confirmed these accomplishments. The success of the act also 
prompted the Office of Management and Budget [OMB] to apply single 
audit principles to educational institutions and other nonprofits that 
receive or passthrough Federal funds (OMB Circular No. A-133, ``Audits 
of Institutions of Higher Education and Other Nonprofit 
Organizations,'' March 1990).
  During my tenure as chairman of the Governmental Affairs Committee, I 
requested that GAO study the implementation of the Single Audit Act and 
suggest any needed changes. The resulting report, Single Audit: 
Refinements Can Improve Usefulness (GAO/AIMD-94-133, June 1994), 
reviewed the successes of the act, but also pointed out specific 
modifications that could improve the act's usefulness. The legislation 
I introduce today is based on GAO's findings, and in fact, was 
developed in cooperation with GAO and OMB. Moreover, OMB is presently 
revising its Circular A-133 consistent with the purposes of this 
legislation. Finally, the bill also reflects comments received from 
State, local and private sector accounting, and audit professionals, as 
well as program managers. Altogether, the legislation will strengthen 
the act, while simultaneously reducing its burdens.
  First, the legislation extends the act to cover nonprofit entities 
that receive Federal assistance. Again, these organizations are 
currently subject to the single audit process under OMB Circular A-133. 
Broadening the act's coverage in this way ensures that all nonFederal 
grantee organizations will be covered uniformly by a single audit 
process.
  Second, the bill reduces audit and related paperwork burdens by 
raising the single audit threshold from $100,000 to $300,000. This 
would exempt thousands of smaller State and local governments and 
nonprofits from Federal single audit requirements. It would still 
ensure, however, that the vast majority of Federal funds would be 
subject to audit testing. Needless to say, it would also not interfere 
with the ability of Federal agencies to audit or investigate grantees 
when needed to safeguard Federal funds.
  Third, the bill would improve audit effectiveness by establishing a 
risk-based approach for selecting programs to be tested during single 
audits for adequacy of internal controls and compliance with Federal 
program requirements, such as eligibility rules. The Single Audit Act 
has required audit testing solely on the basis of dollar criteria. 
Using the risk-based approach will ensure coverage of large programs, 
as well as others that are actually more at risk.
  Fourth, the legislation improves the contents and timeliness of 
single audit reporting to make the reports more useful. Currently, 
auditors often include a number of different documents in a single 
audit report. These documents are designed to comply with auditing 
standards but leave many confused. A summary document, written in plain 
language, would greatly increase the usefulness of single audit 
reports.
  Shortening the reporting timeframes will also make the single audit 
reports more useful. The current practice of filing reports 13 months 
after the end of the year that was audited significantly reduces their 
utility. An ideal period would be the Government Finance Officers 
Association's standard of 6 months for timely reporting by State and 
local governments. However, given the multiple audits that some State 
auditors have to perform, the legislation establishes a 9-month 
standard. Moreover, the legislation gives flexibility for extensions as 
needed. The overall goal, still, is to shorten the reporting timeframe 
to make the single audit reports more useful to assess the stewardship 
of organizations entrusted with Federal funds and to prompt any needed 
corrective actions.
  Fifth, the legislation increases administrative flexibility. OMB is 
authorized to issue rules to implement the act and may revise certain 
audit requirements as needed, without seeking amendments to the act. 
For example, OMB would be authorized to raise even higher the $300,000 
threshold. Auditors also will have greater flexibility to target 
programs at risk.
  In these and other ways, the Single Audit Act Amendments of 1996 will 
streamline the underlying Single Audit Act, update its requirements, 
reduce burdens, and provide for more flexibility. This legislation 
builds on the significant accomplishments of the 1984 act and I am 
confident that the Senate will move the legislation expeditiously.
  In December 1995, the Senate Committee on Governmental Affairs held a 
hearing on the status of Federal financial management, including the 
Single Audit Act. Charles Bowsher, the Comptroller General of the 
United States and, Kurt Sjoberg, the California State auditor, 
representing the National State Auditors Association, strongly 
supported the legislation and recommended that it be enacted. Edward 
DeSeve, Office of Management and Budget Controller, also applauded the 
legislative effort.
  The support of the Comptroller General and the State auditors is 
especially important. The Comptroller General was instrumental in 
advising the Congress when the original Single Audit Act was enacted. 
He followed the subsequent implementation of the act and has made the 
recommendations for improving the act that was the basis for the 
current legislation. I give great weight to his recommendations for 
amending the Single Audit Act. State auditors, for their part, are key 
players in the single audit process. They conduct or arrange for 
thousands of single audits each year. So, their views are also 
critically important. Following the December hearing, the National 
State Auditors Association met to discuss the legislation and decided 
unanimously to support its enactment. I submit their letter of support 
for the Record.
  Finally, I commend to my colleagues the fact that this legislation is 
bipartisan. Again, Senator Stevens, chairman of the Governmental 
Affairs Committee, joins with me in cosponsoring the bill, as do 
Senators Levin, Cochran, Pryor, Cohen, Lieberman, and Brown. This 
bipartisanship also extends to the House of Representatives. With this 
bipartisan support, I am sure that this good Government legislation can 
soon become law.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.

                                S. 1579

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

     SECTION 1. SHORT TITLE; PURPOSES.

       (a) Short Title.--This Act may be cited as the ``Single 
     Audit Act Amendments of 1996''.
       (b) Purposes.--The purposes of this Act are to--
       (1) promote sound financial management, including effective 
     internal controls, with respect to Federal awards 
     administered by non-Federal entities;
       (2) establish uniform requirements for audits of Federal 
     awards administered by non-Federal entities;
       (3) promote the efficient and effective use of audit 
     resources;
       (4) reduce burdens on State and local governments, Indian 
     tribes, and nonprofit organizations; and
       (5) ensure that Federal departments and agencies, to the 
     maximum extent practicable, rely upon and use audit work done 
     pursuant to chapter 75 of title 31, United States Code (as 
     amended by this Act).

     SEC. 2. AMENDMENT TO TITLE 31, UNITED STATES CODE.

       Chapter 75 of title 31, United States Code, is amended to 
     read as follows:

              ``CHAPTER 75--REQUIREMENTS FOR SINGLE AUDITS

``Sec.
``7501. Definitions.
``7502. Audit requirements; exemptions.
``7503. Relation to other audit requirements.
``7504. Federal agency responsibilities and relations with non-Federal 
              entities.
``7505. Regulations.
``7506. Monitoring responsibilities of the Comptroller General.
``7507. Effective date.

     ``Sec. 7501. Definitions

       ``(a) As used in this chapter, the term--
       ``(1) `Comptroller General' means the Comptroller General 
     of the United States;
       ``(2) `Director' means the Director of the Office of 
     Management and Budget;
       ``(3) `Federal agency' has the same meaning as the term 
     `agency' in section 551(1) of title 5;
       ``(4) `Federal awards' means Federal financial assistance 
     and Federal cost-reimbursement contracts that non-Federal 
     entities receive directly from Federal awarding agencies or 
     indirectly from pass-through entities;
       ``(5) `Federal financial assistance' means assistance that 
     non-Federal entities receive or administer in the form of 
     grants, loans, loan guarantees, property, cooperative 
     agreements, interest subsidies, insurance, 

[[Page S1364]]
     donated surplus property, food commodities, direct appropriations, or 
     other assistance, but does not include amounts received as 
     reimbursement for services rendered to individuals in 
     accordance with guidance issued by the Director;
       ``(6) `Federal program' means all Federal awards to a non-
     Federal entity assigned a single number in the Catalog of 
     Federal Domestic Assistance or encompassed in a group of 
     numbers or other category as defined by the Director;
       ``(7) `generally accepted government auditing standards' 
     means the government auditing standards issued by the 
     Comptroller General;
       ``(8) `independent auditor' means--
       ``(A) an external State or local government auditor who 
     meets the independence standards included in generally 
     accepted government auditing standards; or
       ``(B) a public accountant who meets such independence 
     standards;
       ``(9) `Indian tribe' means any Indian tribe, band, nation, 
     or other organized group or community, including any Alaskan 
     Native village or regional or village corporation (as defined 
     in, or established under, the Alaskan Native Claims 
     Settlement Act) that is recognized by the United States as 
     eligible for the special programs and services provided by 
     the United States to Indians because of their status as 
     Indians;
       ``(10) `internal controls' means a process, effected by an 
     entity's management and other personnel, designed to provide 
     reasonable assurance regarding the achievement of objectives 
     in the following categories:
       ``(A) Effectiveness and efficiency of operations.
       ``(B) Reliability of financial reporting.
       ``(C) Compliance with applicable laws and regulations;
       ``(11) `local government' means any unit of local 
     government within a State, including a county, borough, 
     municipality, city, town, township, parish, local public 
     authority, special district, school district, intrastate 
     district, council of governments, any other instrumentality 
     of local government and, in accordance with guidelines issued 
     by the Director, a group of local governments;
       ``(12) `major program' means a Federal program identified 
     in accordance with risk-based criteria prescribed by the 
     Director under this chapter, subject to the limitations 
     described under subsection (b);
       ``(13) `non-Federal entity' means a State, local 
     government, or nonprofit organization;
       ``(14) `nonprofit organization' means any corporation, 
     trust, association, cooperative, or other organization that--
       ``(A) is operated primarily for scientific, educational, 
     service, charitable, or similar purposes in the public 
     interest;
       ``(B) is not organized primarily for profit; and
       ``(C) uses net proceeds to maintain, improve, or expand the 
     operations of the organization;
       ``(15) `pass-through entity' means a non-Federal entity 
     that provides Federal awards to a subrecipient to carry out a 
     Federal program;
       ``(16) `program-specific audit' means an audit of one 
     Federal program;
       ``(17) `recipient' means a non-Federal entity that receives 
     awards directly from a Federal agency to carry out a Federal 
     program;
       ``(18) `single audit' means an audit, as described under 
     section 7502(d), of a non-Federal entity that includes the 
     entity's financial statements and Federal awards;
       ``(19) `State' means any State of the United States, the 
     District of Columbia, the Commonwealth of Puerto Rico, the 
     Virgin Islands, Guam, American Samoa, the Commonwealth of the 
     Northern Mariana Islands, and the Trust Territory of the 
     Pacific Islands, any instrumentality thereof, any multi-
     State, regional, or interstate entity which has governmental 
     functions, and any Indian tribe; and
       ``(20) `subrecipient' means a non-Federal entity that 
     receives Federal awards through another non-Federal entity to 
     carry out a Federal program, but does not include an 
     individual who receives financial assistance through such 
     awards.
       ``(b) In prescribing risk-based program selection criteria 
     for major programs, the Director shall not require more 
     programs to be identified as major for a particular non-
     Federal entity, except as prescribed under subsection (c) or 
     as provided under subsection (d), than would be identified if 
     the major programs were defined as any program for which 
     total expenditures of Federal awards by the non-Federal 
     entity during the applicable year exceed--
       ``(1) the larger of $30,000,000 or 0.15 percent of the non-
     Federal entity's total Federal expenditures, in the case of a 
     non-Federal entity for which such total expenditures for all 
     programs exceed $10,000,000,000;
       ``(2) the larger of $3,000,000, or 0.30 percent of the non-
     Federal entity's total Federal expenditures, in the case of a 
     non-Federal entity for which such total expenditures for all 
     programs exceed $100,000,000 but are less than or equal to 
     $10,000,000,000; or
       ``(3) the larger of $300,000, or 3 percent of such total 
     Federal expenditures for all programs, in the case of a non-
     Federal entity for which such total expenditures for all 
     programs equal or exceed $300,000 but are less than or equal 
     to $100,000,000.
       ``(c) When the total expenditures of a non-Federal entity's 
     major programs are less than 50 percent of the non-Federal 
     entity's total expenditures of all Federal awards (or such 
     lower percentage as specified by the Director), the auditor 
     shall select and test additional programs as major programs 
     as necessary to achieve audit coverage of at least 50 percent 
     of Federal expenditures by the non-Federal entity (or such 
     lower percentage as specified by the Director), in accordance 
     with guidance issued by the Director.
       ``(d) Loan or loan guarantee programs, as specified by the 
     Director, shall not be subject to the application of 
     subsection (b).

     ``Sec. 7502. Audit requirements; exemptions

       ``(a)(1)(A) Each non-Federal entity that expends a total 
     amount of Federal awards equal to or in excess of $300,000 or 
     such other amount specified by the Director under subsection 
     (a)(3) in any fiscal year of such non-Federal entity shall 
     have either a single audit or a program-specific audit made 
     for such fiscal year in accordance with the requirements of 
     this chapter.
       ``(B) Each such non-Federal entity that expends Federal 
     awards under more than one Federal program shall undergo a 
     single audit in accordance with the requirements of 
     subsections (b) through (i) of this section and guidance 
     issued by the Director under section 7505.
       ``(C) Each such non-Federal entity that expends awards 
     under only one Federal program and is not subject to laws, 
     regulations, or Federal award agreements that require a 
     financial statement audit of the non-Federal entity, may 
     elect to have a program-specific audit conducted in 
     accordance with applicable provisions of this section and 
     guidance issued by the Director under section 7505.
       ``(2)(A) Each non-Federal entity that expends a total 
     amount of Federal awards of less than $300,000 or such other 
     amount specified by the Director under subsection (a)(3) in 
     any fiscal year of such entity, shall be exempt for such 
     fiscal year from compliance with--
       ``(i) the audit requirements of this chapter; and
       ``(ii) any applicable requirements concerning financial 
     audits contained in Federal statutes and regulations 
     governing programs under which such Federal awards are 
     provided to that non-Federal entity.
       ``(B) The provisions of subparagraph (A)(ii) of this 
     paragraph shall not exempt a non-Federal entity from 
     compliance with any provision of a Federal statute or 
     regulation that requires such non-Federal entity to maintain 
     records concerning Federal awards provided to such non-
     Federal entity or that permits a Federal agency, pass-through 
     entity, or the Comptroller General access to such records.
       ``(3) Every 2 years, the Director shall review the amount 
     for requiring audits prescribed under paragraph (1)(A) and 
     may adjust such dollar amount consistent with the purposes of 
     this chapter, provided the Director does not make such 
     adjustments below $300,000.
       ``(b)(1) Except as provided in paragraphs (2) and (3), 
     audits conducted pursuant to this chapter shall be conducted 
     annually.
       ``(2) A State or local government that is required by 
     constitution or statute, in effect on January 1, 1987, to 
     undergo its audits less frequently than annually, is 
     permitted to undergo its audits pursuant to this chapter 
     biennially. Audits conducted biennially under the provisions 
     of this paragraph shall cover both years within the biennial 
     period.
       ``(3) Any nonprofit organization that had biennial audits 
     for all biennial periods ending between July 1, 1992, and 
     January 1, 1995, is permitted to undergo its audits pursuant 
     to this chapter biennially. Audits conducted biennially under 
     the provisions of this paragraph shall cover both years 
     within the biennial period.
       ``(c) Each audit conducted pursuant to subsection (a) shall 
     be conducted by an independent auditor in accordance with 
     generally accepted government auditing standards, except 
     that, for the purposes of this chapter, performance audits 
     shall not be required except as authorized by the Director.
       ``(d) Each single audit conducted pursuant to subsection 
     (a) for any fiscal year shall--
       ``(1) cover the operations of the entire non-Federal 
     entity; or
       ``(2) at the option of such non-Federal entity such audit 
     shall include a series of audits that cover departments, 
     agencies, and other organizational units which expended or 
     otherwise administered Federal awards during such fiscal year 
     provided that each such audit shall encompass the financial 
     statements and schedule of expenditures of Federal awards for 
     each such department, agency, and organizational unit, which 
     shall be considered to be a non-Federal entity.
       ``(e) The auditor shall--
       ``(1) determine whether the financial statements are 
     presented fairly in all material respects in conformity with 
     generally accepted accounting principles;
       ``(2) determine whether the schedule of expenditures of 
     Federal awards is presented fairly in all material respects 
     in relation to the financial statements taken as a whole;
       ``(3) with respect to internal controls pertaining to the 
     compliance requirements for each major program--
       ``(A) obtain an understanding of such internal controls;
       ``(B) assess control risk; and
       ``(C) perform tests of controls unless the controls are 
     deemed to be ineffective; and
       ``(4) determine whether the non-Federal entity has complied 
     with the provisions of laws, regulations, and contracts or 
     grants pertaining to Federal awards that have a direct and 
     material effect on each major program.
     
[[Page S1365]]

       ``(f)(1) Each Federal agency which provides Federal awards 
     to a recipient shall--
       ``(A) provide such recipient the program names (and any 
     identifying numbers) from which such awards are derived, and 
     the Federal requirements which govern the use of such awards 
     and the requirements of this chapter; and
       ``(B) review the audit of a recipient as necessary to 
     determine whether prompt and appropriate corrective action 
     has been taken with respect to audit findings, as defined by 
     the Director, pertaining to Federal awards provided to the 
     recipient by the Federal agency.
       ``(2) Each pass-through entity shall--
       ``(A) provide such subrecipient the program names (and any 
     identifying numbers) from which such assistance is derived, 
     and the Federal requirements which govern the use of such 
     awards and the requirements of this chapter;
       ``(B) monitor the subrecipient's use of Federal awards 
     through site visits, limited scope audits, or other means;
       ``(C) review the audit of a subrecipient as necessary to 
     determine whether prompt and appropriate corrective action 
     has been taken with respect to audit findings, as defined by 
     the Director, pertaining to Federal awards provided to the 
     subrecipient by the pass-through entity; and
       ``(D) require each of its subrecipients of Federal awards 
     to permit, as a condition of receiving Federal awards, the 
     independent auditor of the pass-through entity to have such 
     access to the subrecipient's records and financial statements 
     as may be necessary for the pass-through entity to comply 
     with this chapter.
       ``(g)(1) The auditor shall report on the results of any 
     audit conducted pursuant to this section, in accordance with 
     guidance issued by the Director.
       ``(2) When reporting on any single audit, the auditor shall 
     include a summary of the auditor's results regarding the non-
     Federal entity's financial statements, internal controls, and 
     compliance with laws and regulations.
       ``(h) The non-Federal entity shall transmit the reporting 
     package, which shall include the non-Federal entity's 
     financial statements, schedule of expenditures of Federal 
     awards, corrective action plan defined under subsection (i), 
     and auditor's reports developed pursuant to this section, to 
     a Federal clearinghouse designated by the Director, and make 
     it available for public inspection within the earlier of--
       ``(1) 30 days after receipt of the auditor's report; or
       ``(2)(A) for a transition period of at least 2 years after 
     the effective date of the Single Audit Act Amendments of 
     1996, as established by the Director, 13 months after the end 
     of the period audited; or
       ``(B) for fiscal years beginning after the period specified 
     in subparagraph (A), 9 months after the end of the period 
     audited, or within a longer timeframe authorized by the 
     Federal agency, determined under criteria issued under 
     section 7505, when the 9-month timeframe would place an undue 
     burden on the non-Federal entity.
       ``(i) If an audit conducted pursuant to this section 
     discloses any audit findings, as defined by the Director, 
     including material noncompliance with individual compliance 
     requirements for a major program by, or reportable conditions 
     in the internal controls of, the non-Federal entity with 
     respect to the matters described in subsection (e), the non-
     Federal entity shall submit to Federal officials designated 
     by the Director, a plan for corrective action to eliminate 
     such audit findings or reportable conditions or a statement 
     describing the reasons that corrective action is not 
     necessary. Such plan shall be consistent with the audit 
     resolution standard promulgated by the Comptroller General 
     (as part of the standards for internal controls in the 
     Federal Government) pursuant to section 3512(c).
       ``(j) The Director may authorize pilot projects to test 
     alternative methods of achieving the purposes of this 
     chapter. Such pilot projects may begin only after 
     consultation with the Chair and Ranking Minority Member of 
     the Committee on Governmental Affairs of the Senate and the 
     Chair and Ranking Minority Member of the Committee on 
     Government Reform and Oversight of the House of 
     Representatives.

     ``Sec. 7503. Relation to other audit requirements

       ``(a) An audit conducted in accordance with this chapter 
     shall be in lieu of any financial audit of Federal awards 
     which a non-Federal entity is required to undergo under any 
     other Federal law or regulation. To the extent that such 
     audit provides a Federal agency with the information it 
     requires to carry out its responsibilities under Federal law 
     or regulation, a Federal agency shall rely upon and use that 
     information.
       ``(b) Notwithstanding subsection (a), a Federal agency may 
     conduct or arrange for additional audits which are necessary 
     to carry out its responsibilities under Federal law or 
     regulation. The provisions of this chapter do not authorize 
     any non-Federal entity (or subrecipient thereof) to 
     constrain, in any manner, such agency from carrying out or 
     arranging for such additional audits, except that the Federal 
     agency shall plan such audits to not be duplicative of other 
     audits of Federal awards.
       ``(c) The provisions of this chapter do not limit the 
     authority of Federal agencies to conduct, or arrange for the 
     conduct of, audits and evaluations of Federal awards, nor 
     limit the authority of any Federal agency Inspector General 
     or other Federal official.
       ``(d) Subsection (a) shall apply to a non-Federal entity 
     which undergoes an audit in accordance with this chapter even 
     though it is not required by section 7502(a) to have such an 
     audit.
       ``(e) A Federal agency that provides Federal awards and 
     conducts or arranges for audits of non-Federal entities 
     receiving such awards that are in addition to the audits of 
     non-Federal entities conducted pursuant to this chapter 
     shall, consistent with other applicable law, arrange for 
     funding the full cost of such additional audits. Any such 
     additional audits shall be coordinated with the Federal 
     agency determined under criteria issued under section 7504 to 
     preclude duplication of the audits conducted pursuant to this 
     chapter or other additional audits.
       ``(f) Upon request by a Federal agency or the Comptroller 
     General, any independent auditor conducting an audit pursuant 
     to this chapter shall make the auditor's working papers 
     available to the Federal agency or the Comptroller General as 
     part of a quality review, to resolve audit findings, or to 
     carry out oversight responsibilities consistent with the 
     purposes of this chapter. Such access to auditor's working 
     papers shall include the right to obtain copies.

     ``Sec. 7504. Federal agency responsibilities and relations 
       with non-Federal entities

       ``(a) Each Federal agency shall, in accordance with 
     guidance issued by the Director under section 7505, with 
     regard to Federal awards provided by the agency--
       ``(1) monitor non-Federal entity use of Federal awards, and
       ``(2) assess the quality of audits conducted under this 
     chapter for audits of entities for which the agency is the 
     single Federal agency determined under subsection (b).
       ``(b) Each non-Federal entity shall have a single Federal 
     agency, determined in accordance with criteria established by 
     the Director, to provide the non-Federal entity with 
     technical assistance and assist with implementation of this 
     chapter.
       ``(c) The Director shall designate a Federal clearinghouse 
     to--
       ``(1) receive copies of all reporting packages developed in 
     accordance with this chapter;
       ``(2) identify recipients that expend $300,000 or more in 
     Federal awards or such other amount specified by the Director 
     under section 7502(a)(3) during the recipient's fiscal year 
     but did not undergo an audit in accordance with this chapter; 
     and
       ``(3) perform analyses to assist the Director in carrying 
     out responsibilities under this chapter.

     ``Sec. 7505. Regulations

       ``(a) The Director, after consultation with the Comptroller 
     General, and appropriate officials from Federal, State, and 
     local governments and nonprofit organizations shall prescribe 
     guidance to implement this chapter. Each Federal agency shall 
     promulgate such amendments to its regulations as may be 
     necessary to conform such regulations to the requirements of 
     this chapter and of such guidance.
       ``(b)(1) The guidance prescribed pursuant to subsection (a) 
     shall include criteria for determining the appropriate 
     charges to Federal awards for the cost of audits. Such 
     criteria shall prohibit a non-Federal entity from charging to 
     any Federal awards--
       ``(A) the cost of any audit which is--
       ``(i) not conducted in accordance with this chapter; or
       ``(ii) conducted in accordance with this chapter when 
     expenditures of Federal awards are less than amounts cited in 
     section 7502(a)(1)(A) or specified by the Director under 
     section 7502(a)(3), except that the Director may allow the 
     cost of limited scope audits to monitor subrecipients in 
     accordance with section 7502(f)(2)(B); and
       ``(B) more than a reasonably proportionate share of the 
     cost of any such audit that is conducted in accordance with 
     this chapter.
       ``(2) The criteria prescribed pursuant to paragraph (1) 
     shall not, in the absence of documentation demonstrating a 
     higher actual cost, permit the percentage of the cost of 
     audits performed pursuant to this chapter charged to Federal 
     awards, to exceed the ratio of total Federal awards expended 
     by such non-Federal entity during the applicable fiscal year 
     or years, to such non-Federal entity's total expenditures 
     during such fiscal year or years.
       ``(c) Such guidance shall include such provisions as may be 
     necessary to ensure that small business concerns owned and 
     controlled by socially and economically disadvantaged 
     individuals will have the opportunity to participate in the 
     performance of contracts awarded to fulfill the audit 
     requirements of this chapter.

     ``Sec. 7506. Monitoring responsibilities of the Comptroller 
       General

       ``(a) The Comptroller General shall review provisions 
     requiring financial audits of non-Federal entities that 
     receive Federal awards that are contained in bills and 
     resolutions reported by the committees of the Senate and the 
     House of Representatives.
       ``(b) If the Comptroller General determines that a bill or 
     resolution contains provisions that are inconsistent with the 
     requirements of this chapter, the Comptroller General shall, 
     at the earliest practicable date, notify in writing--
       ``(1) the committee that reported such bill or resolution; 
     and
       ``(2)(A) the Committee on Governmental Affairs of the 
     Senate (in the case of a bill or resolution reported by a 
     committee of the Senate); or
     
[[Page S1366]]

       ``(B) the Committee on Government Reform and Oversight of 
     the House of Representatives (in the case of a bill or 
     resolution reported by a committee of the House of 
     Representatives).

     ``Sec. 7507. Effective date

       ``This chapter shall apply to any non-Federal entity with 
     respect to any of its fiscal years which begin after June 30, 
     1996.''.

     SEC. 3. TRANSITIONAL APPLICATION.

       Subject to section 7507 of title 31, United States Code (as 
     amended by section 2 of this Act) the provisions of chapter 
     75 of such title (before amendment by section 2 of this Act) 
     shall continue to apply to any State or local government with 
     respect to any of its fiscal years beginning before July 1, 
     1996.
                                                                    ____


                  Single Audit Act Amendments of 1996

       This bill amends the Single Audit Act of 1984 (P.L. 98-
     502). The 1984 Act replaced multiple grant-by-grant audits 
     with an annual entity-wide audit process for State and local 
     governments that receive Federal assistance. The new bill 
     would broaden the scope of the Act to cover universities and 
     other nonprofit organizations, as well. It would also 
     streamline the process. Thus, the bill would improve 
     accountability for hundreds of billions of dollars of Federal 
     assistance, while also reducing auditing and paperwork 
     burdens on grant recipients.
       The bill was developed on the basis of GAO review of 
     implementation of the Single Audit Act ``Single Audit: 
     Refinements Can Improve Usefulness,'' GAO/AIMD-94-133, June 
     21, 1994). Major stakeholders in the single audit process 
     were consulted during the drafting process. Support for the 
     bill was confirmed at a December 14, 1995, hearing of the 
     Senate Committee on Governmental Affairs.
       The 10 years' experience under the 1984 Act demonstrated 
     that the single audit concept promotes accountability over 
     Federal Assistance and prompts related financial management 
     improvements by covered entities. Experience also showed, 
     however, that process can be strengthened. This bill would 
     (1) improve audit coverage of federal assistance, (2) reduce 
     Federal burden on non-Federal entities, (3) improve audit 
     effectiveness, (4) improve single audit reporting, and (5) 
     increase administrative flexibility.


                         Improve Audit Coverage

       The bill would improve audit coverage of Federal assistance 
     by including in the single audit process all State and local 
     governments and nonprofit organizations that receive Federal 
     assistance. Currently, the Act only applies to State and 
     local governments. Nonprofit organizations are subject 
     administratively to single audits under OMB Circular A-133, 
     ``Audits of Institutions of Higher Education and Other 
     Nonprofit Organizations.'' -Including nonprofit organizations 
     under the Act would result in a common set of single audit 
     requirements for Federal assistance.


                         Reduce Federal Burden

       The bill would simultaneously reduce Federal burdens on 
     thousands of State and local governments and nonprofits, and 
     ensure audit coverage over the vast majority of Federal 
     assistance provided to those organizations. It would do so by 
     raising the dollar threshold for requiring a single audit 
     from $100,000 to $300,000. While this would relieve many 
     grantees of Federal single audit mandates, GAO estimated that 
     a $300,000 threshold would cover, for example, 95% of direct 
     Federal assistance to local governments. This is commensurate 
     with the coverage provided at the $100,000 threshold when the 
     Act was passed in 1984. Thus, exempting thousands of entities 
     from single audits would reduce audit and paperwork burdens, 
     but not significantly diminish the percentage of Federal 
     assistance covered by single audits.


                      Improve Audit Effectiveness

       The bill would improve audit effectiveness by directing 
     audit resources to the areas of greatest risk. Currently, 
     auditors must perform audit testing on the largest--but not 
     necessarily the riskiest--programs that an entity operates. 
     The bill would require auditors to assess the risk of the 
     programs an entity operates and select the riskiest programs 
     for testing. As the President of the National State Auditors 
     Association said, ``It makes good economic sense to 
     concentrate audits where increased corrective action and 
     recoveries are likely to result.''


                     Improve Single Audit Reporting

       The bill would greatly improve the usefulness of single 
     audit reports by requiring auditors to provide a summary of 
     audit results. The reports would also be due sooner--9 months 
     after the year-end rather than the current 13 months. 
     Interpretations of current rules lead auditors to include 7 
     or more separate reports in each single audit report. Such a 
     large number of reports tends to confuse rather than inform 
     users. A summary of the audit results would highlight 
     important information and thus enable users to quickly 
     discern the overall results of an audit. Federal managers 
     surveyed by GAO overwhelmingly support the summary reporting 
     and faster submission of reports.


                  Increase Administrative Flexibility

       The bill would enable the single audit process to evolve 
     with changing circumstances. For example, rather than lock 
     specific dollar amount audit thresholds into law, OMB would 
     have the authority to periodically revise the audit threshold 
     above the new $300,000 threshold. OMB also could revise 
     criteria for selecting programs for audit testing. By giving 
     OMB such authority, specific requirements within the single 
     audit process could be revised administratively to reflect 
     changing circumstances that affect accountability for Federal 
     financial assistance.


                   Conclusion: Good Government Reform

       Developed by GAO and endorsed by the National State 
     Auditors Association, the Single Audit Act Amendments of 1996 
     represents consensus good government legislation that will 
     improve accountability over Federal funds and reduce burdens 
     on State and local governments and nonprofit organizations.
                                                                    ____

                                                    National State


                                         Auditors Association,

                                  Baltimore, MD, January 29, 1996.
     Hon. John Glenn,
     Ranking Minority Member, Committee on Governmental Affairs, 
         U.S. Senate, Dirksen Senate Office Building, Washington, 
         DC.
       Dear Senator Glenn: The National State Auditors Association 
     has voted unanimously to support the proposed bill to amend 
     the Single Audit Act of 1984. My state audit colleagues and I 
     believe that the proposed legislation is an excellent measure 
     that deserves to be passed into law as soon as possible.
       The Single Audit Act amendments provide a unique 
     opportunity to address the needs of federal, state and local 
     government auditors and program managers. The original act is 
     over 10 years old and the amendments address many of the 
     changes that have occurred over the years in the auditing 
     profession and in government financial management. The bill 
     is the result of open and constructive dialog along the 
     stakeholders. Over the last several months, we have worked 
     closely with congressional staff as well as representatives 
     of the General Accounting Office and the Office of Management 
     and Budget. As currently drafted, the bill provides needed 
     improvements to financial accountability over federal grant 
     funds.
       While there are several excellent provisions in the amended 
     act, two are particularly noteworthy. First, the minimum 
     threshold of receipts requiring any entity to have a single 
     audit performed is raised in the bill to $300,000. Similarly, 
     the thresholds for larger recipients are also adjusted. These 
     modifications will relieve many state and local governments 
     of unnecessary federal mandates and generate savings of audit 
     costs. Second, the amendments allow federal and state 
     governments to focus audit resources on ``high-risk'' grants 
     where the potential for savings is the greatest. It makes 
     good economic sense to concentrate audits where increased 
     corrective action and recoveries are likely to result.
       In summary, the National State Auditors Association is 
     pleased to fully support the amendments to the Single Audit 
     Act of 1984 and assist you in any way possible to facilitate 
     its passage this year.
           Sincerely,
                                               Anthony Verdecchia,
                                                        President.
                                 ______

      By Mr. KYL (for himself, Mr. Coverdell, Mr. Craig, Mr. Faircloth, 
        Mr. Grams, Mr. Inhofe, Mr. Kempthorne, Mr. Lott, Mr. McCain, 
        Mr. Pressler, Mr. Santorum, Mr. Shelby, Mr. Smith, Mr. Thomas, 
        and Mr. Thompson):
  S.J. Res. 49. A joint resolution proposing an amendment to the 
Constitution of the United States to require two-thirds majorities for 
bills increasing taxes; to the Committee on the Judiciary.


                TAX LIMITATION CONSTITUTIONAL AMENDMENT

 Mr. KYL. Mr. President, during the next 8 weeks, millions of 
Americans will file their income tax returns. According to estimates by 
the Internal Revenue Service, individuals will have spent about 1.7 
billion hours on tax-related paperwork by the time their returns are 
completed. Businesses will spend another 3.4 billion hours. The Tax 
Foundation estimates that the cost of compliance will approach $200 
billion.
  Mr. President, if that is not evidence that our Tax Code is one of 
the most inefficient and wasteful ever created, I do not know what is. 
Money and effort that could have been put to productive use solving 
problems in our communities, putting Americans to work, putting food on 
the table, or investing in the Nation's future are instead devoted to 
convoluted paperwork.
  It is no wonder that the American people are frustrated and angry, 
and that they are demanding radical change in the way their Government 
taxes and spends. It is no wonder that tax reform has become one of the 
major issues of this year's Presidential campaign.
  Mr. President, today I am introducing a resolution with more than a 
dozen of my colleagues that represents the first concrete step toward 
comprehensive tax reform. The resolution, which we call the tax 
limitation amendment, would establish a constitutional requirement for 
a two-thirds majority vote in each House of Congress for the approval 
of tax-rate increases. 

[[Page S1367]]

  A companion resolution, House Joint Resolution 159, was introduced in 
the House of Representatives on February 1 by Congressman Joe Barton of 
Texas and 155 other House Members.
  The two-thirds supermajority that we have proposed was among the 
recommendations of the National Commission on Economic Growth and Tax 
Reform, appointed by Majority Leader Bob Dole and Speaker Gingrich. The 
Commission, chaired by former HUD Secretary Jack Kemp, advocated a 
supermajority requirement in its recent report on how to achieve a 
simpler, single-rate tax to replace the existing maze of tax rates, 
deductions, exemptions, and credits that makes up the Federal income 
tax as we know it today.
  Here are the words of the Commission:

       The roller-coaster ride of tax policy in the past few 
     decades has fed citizens' cynicism about the possibility of 
     real, long-term reform, while fueling frustration with 
     Washington. The initial optimism inspired by the low rates of 
     the 1986 Tax Reform Act soured into disillusionment and anger 
     when taxes subsequently were hiked two times in less than 
     seven years. The commission believes that a two-thirds super-
     majority vote of Congress will earn Americans' confidence in 
     the longevity, predictability, and stability of any new tax 
     system.

  Mr. President, in the 10 years since the last attempt at 
comprehensive tax reform, Congress and the President have made some 
4,000 amendments to the Tax Code. Four thousand amendments. That means 
that taxpayers have never been able to plan for the future with any 
certainty about the tax consequences of the decisions they make. They 
are left wondering whether saving money for a child's education today 
will result in an additional tax burden tomorrow. They can never be 
sure that if they make an investment, the capital gains tax will not be 
increased when they are ready to sell. Rules are changed in the middle 
of the game, and in some cases, the rules have been changed even after 
the game is over. President Clinton's tax increase in 1993 
retroactively raised taxes on many Americans, including some who had 
died.
  The volatility of the Tax Code is not new. You will recall that the 
income tax was established in 1913 with a top rate of 7 percent; fewer 
than 2 percent of American families were even required to file a tax 
return. Just 3 years later, on the eve of the First World War, the top 
rate soared to 67 percent. By the Second World War, the top rate had 
risen again--to 94 percent--and it remained in that range through the 
1950's. Of course, by that time, the tax had been expanded to cover 
almost every working American.
  Ten years ago, President Reagan succeeded in reducing the number of 
tax rates to just two--15 percent and 28 percent. But it was not long 
before additional rates were established, and taxes were raised again 
under the Clinton administration.
  The tax limitation amendment would put an end to the roller coaster 
ride of tax policy that has so bedeviled hard-working Americans. And it 
guarantees more than stability and predictability. It will also ensure 
that taxes cannot be raised--whether we ultimately adopt a single-rate 
tax as the Kemp commission has proposed, a national sales tax as 
Senator Lugar has proposed, or some alternative--unless there is 
sufficient consensus and strong bipartisan support in Congress and 
around the country.

  Mr. President, the last tax increase to have cleared the Congress was 
proposed by President Clinton in 1993, and you will remember that it 
was the largest tax increase in history.
  I was serving in the House of Representatives at the time. It seemed 
to me that most Americans strongly opposed the plan. The calls, 
letters, and faxes from my constituents in Arizona ran about 10 to 1 in 
opposition to the President's tax plan. There was a lot of opposition 
in Congress, too. The opposition was bipartisan--Republicans and 
Democrats. Unfortunately, the President was able to hold onto enough 
members of his own party in the House to pass it there, but only with 
partisan Democrat support.
  The story was different in the Senate. Not more than 50 Senators were 
willing to support the largest tax increase in history. A measure would 
normally fail on a tie vote--in this case, 50 to 50. The reason the tax 
increase passed was that the Vice President, as in the case of any tie 
in the Senate, had the right to cast the deciding vote. That is his 
right under the Constitution. The tax bill was not passed improperly, 
but it is notable that the largest tax increase in history managed to 
become law without the support of a majority of the people's elected 
Senators. To me, that is a travesty.
  The tax increase of 1990--the next largest in history after the 1993 
law--passed with a majority of 54 percent in the Senate and 53 percent 
in the House. That was only slightly better. Yet given the size of the 
increase and the burden it placed on the American economy, it seems to 
me that there should have been greater consensus to pass it, too. 
Taxing away people's hard-earned income is an extraordinary event--or 
at least it should be. However, in Washington, it has become routine.
  A two-thirds majority vote is, as George Will put it, ``one way of 
building into democratic decisionmaking a measurement of intensity of 
feeling as well as mere numbers.'' He noted that supermajority 
requirements are a device for assigning special importance to certain 
matters, and maybe taxation should be one of them.
  The last two tax increases were passed without much intensity of 
feeling at all--without any real consensus that a majority of Americans 
supported them.
  Some people might say, fine, there should be consensus, but ours is a 
government of majority rule. I would respond by noting that 
supermajority requirements are not new to the Constitution. Two-thirds 
votes are required for the approval of treaties, for conviction in an 
impeachment proceeding, for expulsion of a member from either body, for 
proposed constitutional amendments, and for certain other actions.
  If it is appropriate to require a two-thirds vote to ratify a compact 
with a foreign country, it seems to me that it is certainly appropriate 
to require a two-thirds vote to approve a compact with our own citizens 
that requires them to turn over a greater share of what is theirs to 
the Government.
  I want to quote briefly from one of our Founding Fathers, James 
Madison. He was, of course, a strong supporter of majority rule. Yet he 
argued eloquently that the greatest threat to liberty in a republic 
would come from unrestrained majority rule. This is what he said in 
``Federalist No. 51'':

       It is of great importance in a republic not only to guard 
     the society against the oppression of its rulers, but to 
     guard one part of the society against the injustice of the 
     other part.

  If Madison were here today, I believe he would conclude, first of 
all, that the Tax Code is oppressive to our people. Americans never 
paid an income tax until early in this century. By 1948, the average 
American family paid only about 3 percent of its income to the Federal 
Government. The average family now sends about 25 percent of its income 
to Washington. Add State and local taxes to the mix, and the burden 
approaches 40 percent. That is oppression.
  Note that Madison also warned, in the quotation I just read, about 
pitting one part of America against the rest of the country. That is 
happening here as well. Certain segments of our society--some call them 
special interests--have learned in recent years how to feed at the 
public trough while spreading the cost among all taxpayers. This cost-
shifting has left the country with a debt that is $4.9 trillion and 
growing. Our Founding Fathers could never have imagined such 
profligacy, or I believe they would have imposed constitutional limits 
on taxing and spending at the very start of the Republic.
  If you are interested in lobbying reform, I will tell you this: a 
two-thirds requirement for tax changes would probably do more to 
curtail lobbying for special breaks than just about anything else we 
could do. Since every tax break must be offset with a tax increase on 
someone else to ensure revenue neutrality--and the second part of the 
equation, remember, would be out of reach without massive political 
support--the two-thirds requirement would make it virtually impossible 
for special interests to gain special advantage in the Tax Code.
  Confidence. Stability. Predictability. These are things that a two-
thirds supermajority would bring to the Tax 

[[Page S1368]]
Code. Combine this with comprehensive tax reform that is aimed at 
simplifying the law and minimizing people's tax burden, and we could 
see an explosion of economic growth and opportunity unmatched in this 
country for many years.
  Mr. President, I invite my colleagues to join me in supporting the 
tax limitation amendment.
  Mr. President, I ask unanimous consent that the text of the joint 
resolution be printed in the Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:

                              S.J. Res. 49

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

                              ``Article--

       ``Section 1. Any bill to levy a new tax or increase the 
     rate or base of any tax may pass only by a two-thirds 
     majority of the whole number of each House of Congress.
       ``Section 2. The Congress may waive section 1 when a 
     declaration of war is in effect. The Congress may also waive 
     section 1 when the United States is engaged in military 
     conflict which causes an imminent and serious threat to 
     national security and is so declared by a joint resolution, 
     adopted by a majority of the whole number of each House, 
     which becomes law. Any provision of law which would, standing 
     alone, be subject to section 1 but for this section and which 
     becomes law pursuant to such a waiver shall be effective for 
     not longer than 2 years.
       ``Section 3. All votes taken by the House of 
     Representatives or the Senate under this article shall be 
     determined by yeas and nays and the names of persons voting 
     for and against shall be entered on the Journal of each House 
     respectively.''.

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