[Congressional Record Volume 142, Number 74 (Thursday, May 23, 1996)]
[Senate]
[Pages S5571-S5600]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



  Ms. MIKULSKI. Mr. President, I am honored to join my good friends 
Senators Snowe, Boxer, Feinstein, Murray, and Mosely-Braun in 
introducing the Women's Health Equity Act. This years' bill, composed 
of 37 separate bills, will improve the status of women's health in the 
areas of research, services and prevention. The package builds on past 
successes. It brings resources and expertise to bear on the unmet 
health needs of America's women. This bill sets an agenda. It's where 
women's health care needs to go as we enter the 21st century.
  There has been a pattern of neglect and a history of indifference to 
women's health needs. It's astonishing that between 1979 and 1986 the 
death rate from breast cancer was up 24 percent. No one knew why. Yet 
there was no research being done--the research community was ignoring 
this very significant problem. I worked with colleagues to change that 
by making sure that breast cancer research got its fair share of 
research dollars.
  I was frustrated when I found out that America's flagship medical 
research center, the National Institutes of Health [NIH], was 
supporting research that systematically excluded women. Less than a 
decade ago, only 14 percent of every research dollar was going to study 
the health problems of 51 percent of the American population. I wanted 
to change that. And I did. With the help of my colleagues, I was 
successful in setting up the Office of Women's Health Research at NIH. 
This office is turning these statistics around. Women are now routinely 
included in clinical trials.

[[Page S5572]]

  Despite all our progress, we have a long way to go. We have to change 
outdated attitudes. It's not easy to reverse gender biases. We take a 
few steps forward and then a few steps back.
  I want to make sure that women's health care needs are met 
comprehensively and equitably. The NIH must allocate sufficient 
resources to women's diseases. It should continue to include women in 
clinical trials. It must continue to expand access to health services 
for women. We must aggressively pursue prevention in women's diseases. 
I pledge to fight for new attitudes and find new ways to end the 
needless pain and death that too many American women face.
  I am proud to introduce this bill with a great group of Senators that 
care equally about women's health. This bill confirms our intent to 
move forward in women's health equity. It is an outline, a framework, 
an agenda. No doubt, it will take time, but I'm sure we will succeed.
  Mrs. MURRAY. Mr. President, I rise in strong support of the Women's 
Health Equity Act. I am proud to join my colleagues, Senators Snowe, 
Mikulski, Feinstein, and Moseley-Braun, in offering this package of 39 
legislative initiatives of critical importance to the health of women 
and their children. Today we are sending a powerful and united message. 
We are more committed than ever to keeping the spotlight on the 
important issues surrounding women's health research, treatment and 
education.
  There are so many worthy pieces to this bill that I won't go into 
each and every one separately. This bill underscores the lack of 
attention that has been paid to women's health issues and the many 
obstacles we face in getting accurate, vital information about our 
health, the health of our children and the health care system as it 
effects us.
  Women face an array of unique and serious health risks. We must do 
more to ensure that adequate research and education programs are 
maintained, supported and enriched. We have much more to learn about 
diseases like osteoporosis, lupus, and breast cancer that devastate the 
lives of women across this country. And we need to continue to broaden 
the scope of current efforts in research into AIDS, cardiovascular 
disease and alcoholism to better understand how women are impacted. We 
must enable women to protect themselves and their daughters.
  Mr. President, our bill recognizes the need for supporting this kind 
of research and specifically addresses all of these conditions which 
jeopardize the health of women. We must encourage a coordinated and 
committed effort from the top level of our government to make sure that 
women's health issues receive the attention they deserve. For too long, 
our concerns were ignored or given second-class status. If we continue 
to allow this to happen--women will die, our children will get sick, 
and future generations will be shortchanged of valuable information 
about ways to prevent health-related tragedies.
  And our bill acknowledges another critical health issue which 
disproportionately affects women--domestic violence. The Women's Health 
Equity Act includes a number of provisions which seek to protect women 
who are victims of violence from being discriminated against when 
seeking health insurance. Family violence is a public health crisis 
which tears families apart and often prevents women, especially low-
income women, from providing their children with a safe, nurturing 
environment in which to learn and grow.
  As you know Mr. President, one of my biggest concerns as a Senator is 
the well being of our Nation's young people. I am proud that this bill 
includes provisions which encourage: adolescent health demonstration 
projects; eating disorders research and education initiatives; fetal 
alcohol syndrome research and prevention programs; and demonstration 
projects to prevent smoking in WIC clinics. These efforts are critical 
and send our young people an important message that we care about them, 
their health, and their futures.
  I am particularly pleased that the Newborns' and Mothers' Health 
Protection Act was included in this act. By allowing longer hospital 
stays after child-birth, we will see improved health for both mother 
and baby. Women will receive essential information about care for their 
newborn and if there are any health complications, mother and baby will 
receive the attention they need.
  Mr. President, I want to commend Senator Snowe for her leadership in 
coordinating this effort and for all she has done for women's health 
and health care. I am proud to be an original cosponsor of this bill 
and I urge all of my colleagues to join and help move these initiatives 
forward. Together, we can improve the lives and health of women and 
children in our Nation, continue the important work we have started and 
celebrate the great strides we have made. I look forward to this 
challenge.
                                 ______

      By Mr. D'AMATO (for himself, Mr. Kerry, Mrs. Boxer, Mr. Bryan, 
        Ms. Moseley-Braun, and Mrs. Murray):
  S. 1800. A bill to amend the Electronic Fund Transfer Act to limit 
fees charged by financial institutions for the use of automatic teller 
machines, and for other purposes; to the Committee on Banking, Housing, 
and Urban Affairs.


              the fair atm fees for consumers act of 1996

  Mr. D'AMATO. Mr. President, I rise today with Senators Kerry and 
Murray as my primary cosponsor to introduce legislation to protect 
consumers from excessive and redundant fees imposed by automated teller 
machine (ATM) operators. I am also pleased that Senators Boxer, Bryan, 
and Moseley-Braun have joined in cosponsoring this important 
initiative.
  Traditionally, a bank or financial institution, let's call it 
Integrity Bank, agrees to provide a consumer with a package of services 
in exchange for the use of the consumer's money. These services 
typically include access to an ATM network, such as MOST, CIRRUS, or 
PLUS, which consists of any Integrity Bank ATM's as well as ATM's 
operated by other banks or financial institutions. Integrity Bank and 
the consumer have an agreement about whether Integrity Bank will charge 
the consumer for using ATM's not owned by Integrity Bank. Integrity 
Bank, in turn, is responsible for paying the network a fee for 
transactions completed by its consumers on ATM's not owned by Integrity 
Bank.
  Changes which took effect in April of this year may force the 
consumer to pay new fees. Until April 1, the major electronic banking 
networks prohibited the assessment of ATM user fees by the bank which 
owned the ATM. The networks have revoked this policy, opening the door 
to a new and outrageous practice beyond the control of Integrity Bank 
and its customer. Now, despite the fact that Integrity Bank pays fees 
to the ATM network, ATM owners and operators can now charge non-
customers who use their ATM's--a service that consumers thought was 
included in any charges imposed by Integrity Bank--their bank.
  Now many ATM users may be caught in the middle. Their own banks can 
continue to impose fees while the operators of the ATM's they use are 
entitled to ransack consumers' accounts. What is next, explicit and 
redundant fees for deposit envelopes? A nighttime ATM surcharge? I will 
refrain from offering banks any further suggestions on how to pick the 
pockets of American consumers.
  Mr. President, this double-dipping is unfair and unconscionable. 
Consumers should not be charged twice for a single ATM transaction and 
should certainly not be charged a fee which has nothing to do with the 
relationship between the consumer and his or her financial institution.
  Banks and other financial service providers argue that these 
surcharges are necessary to cover the costs of ATM operation. In-branch 
ATM's present minimal expense to financial institutions. How can banks 
argue with straight faces that surcharges are necessary to cover costs 
of operation?
  Mr. President, the rules change which permits this extra fee was 
enacted only recently. While some banks have already imposed the 
surcharge, many others are testing the waters before they take 
advantage of the rule change. Congress should act before this unfair 
practice spreads like a wildfire.
  It is hard to believe that banks are so strapped when industry 
profits have never been higher. For the fourth straight year in 1995, 
commercial banks reported record earnings. Last year, commercial banks 
reported profits of $48.8 billion, exceeding the previous year's record 
of $44.6 billion by

[[Page S5573]]

9.4 percent. These skyrocketing earnings are primarily the result of 
increased interest and fee income. On top of this, commercial banks now 
pay nearly nothing to receive deposit insurance.
  Are banks really losing money on ATM operations or is this new fee 
just an easy way to gouge the consumer? The U.S. Public Interest 
Research Group and the Center for the Responsive Law recently reported 
that ATM's generated $3.1 billion in transaction fees for banks in 
1995. Though ATM transactions cost banks $3.2 billion, the report said, 
profits increased by $2.2 billion as a result of the labor savings. 
This new ATM surcharge is nothing more than a thinly veiled attempt to 
artificially inflate profits at the consumer's expense.
  Banks have spent the past 20 years enticing consumers to use ATMs to 
reduce the need for branch offices. Banks have told regulators and the 
Congress that branch closings save money without decreasing service 
because ATM's fill the role once served by branch offices. Now it 
appears providing that service comes only with an added cost to the 
consumer and more profit for the provider.
  Let me just say a few words about the impact of this fee on community 
banks. These banks have already agreed to pay fees to ATM networks in 
order to ensure that their customers have access to funds at convenient 
locations. Now community banks face the threat of losing customers to 
large banks with large ATM networks. Since community bank customers 
depend on other institutions' ATM's, large banks can use ATM user fees 
to steal community bank customers.
  This moves comes at a time when some banks are charging their 
customers a premium for teller service. These banks justify this teller 
fee with claims that teller service is more expensive to provide than 
ATM service. Now, some banks are squeezing consumers even harder with 
new ATM user fees. Consumers are getting nickel-and-dimed to death and 
it has got to stop.
  Mr. President, the bill I introduce today would prohibit user fees 
imposed by ATM operators. Under this bill, for example, banks would 
remain free to charge their own customers for using the ATM's of other 
banks. Other ATM owners and operators, however, would be prohibited 
from taking a second bite out of the consumer.
  There is congressional precedent for this type of legislation. 
Congress originally passed legislation banning surcharges in the credit 
card industry in 1976 and renewed the ban twice in 1978 and 1981. In 
that instance, Congress prohibited retail institutions from charging 
consumers surcharges on their credit card purchases. To allow 
additional charges and fees for card use after the consumer had paid 
for the use of the credit card would have forced customers to pay twice 
and permitted some unscrupulous merchant to engage in deceptive 
advertising and other harmful practices. This is analogous to our 
current ATM situation.
  I understand that some businesses that rely on retail sales through 
credit and ATM cards may be concerned about this bill. They need not 
worry. The sole purpose of this legislation is to prohibit excessive 
fees to ATM users. I recognize that there may be some off-site ATM's 
that are costly to maintain and have historically charged fees. I am 
willing to consider necessary accommodations to this bill. However, I 
will draw the line in cases where it is clear the consumer is being 
fleeced.
  Mr. KERRY. Mr. President, I am pleased to join my colleague from New 
York, the chairman of the Banking Committee, Senator D'Amato, in 
introducing this important piece of legislation.
  It is not often that Senator D'Amato and I agree on issues on this 
floor or in the Banking Committee, and when we do, there is 
justification for strong bi-partisan support. That is indeed the case 
on this legislation, and I am pleased to join with my colleague, and I 
congratulate him on his leadership in moving to protect consumers 
against the potential of double-bank-fees that amount to a banking-
penalty tax on consumers.
  Why do we need this legislation now? Because, on April 1 of this 
year, American depositors had a cruel April Fool's joke played on them. 
That's the day Visa and MasterCard--owners of two of the largest 
automated teller network--began letting their member banks charge a fee 
to other banks' customers who use their automated tellers. Some banking 
analysts tell me that across the country this surcharge can range from 
50 cents to $2.50. Consumers can be charged an increased fee by both 
their bank and the bank whose machine they are using which could cost 
as much as $5 to make a deposit, a withdrawal, or to check your 
balance.
  Our legislation has a simple purpose: it prohibits a transaction fee 
assessed by the owner or operator of an ATM machine. This bill will 
stop double fees.
  It gives consumers negotiating power with a financial services 
industry which is consolidating and downsizing--laying off tellers, 
shutting branches and reducing bank-lobby hours; it helps the small 
banker from being run out of business by the big banks; and it bolsters 
congressional oversight of antitrust violations.
  Mr. President, Massachusetts is in a unique situation. Because of 
pending bank mergers and consolidations the 2 largest banks will soon 
own 2,200 of the 3,500 ATM machines in the State--about 65 percent.
  In no other State does one bank control more than 15 percent of the 
ATM's. I applaud the banking industry which has grown and is healthy 
and strong, and there is room in financial services for large 
institutions and for small credit unions and neighborhood savings and 
loans. This bill not only protects consumers, but it protects small 
banks that don't own more than a few ATM's from being run out of 
business by the larger banks who can offer free transactions at 
thousands of machines.
  Let me put this in perspective. In a survey of just 228 of the 3,500 
machines in my State--less than 10 percent of all the machines--it was 
reported that 400,742 transactions per month would be subject to the 
new surcharge--almost 5 million transactions per year at just 10 
percent of the ATM's in my State.
  If the larger financial institutions could offer no fee if a consumer 
took their money out of a smaller institution, the fate of the smaller 
institutions in an increasingly automated environment is obviously in 
question, and we have to address this problem now. And to save the 
community banks and avoid the 1990's version of the 1980's S&L crisis.
  Mr. President, in a recent USA Today interview with an executive of 
one of the Nation's largest banks, when asked ``are you instituting 
surcharges on non-customers who use your automated teller machines?'' 
the answer was somewhat disturbing.
  It was:

       We're going to do it . . . The reason is frankly pretty 
     self-evident. You've got a community bank that likes to tell 
     you they're going to give you this wonderful service and you 
     can shake the President's hand and get a doughnut and a cup 
     of coffee in the lobby and so on. When you go in to open an 
     account they say we don't have any ATM's but don't worry 
     about it, here's our card and you can use anybody's ATM in 
     the country. So we're subsidizing the community banks. We're 
     not going to do that anymore.

  Well, Mr. President, I ask, what's wrong with community banks. I like 
the idea of neighborhood credit unions and having a cup of coffee and a 
doughnut in the lobby. What this response tells me is that there is 
more to the surcharge than meets the eye. And we should be aware of the 
what lies around the corner as we head down the road.
  You will hear from representatives of the industry, Mr. President. 
Some of the biggest banks will lobby heavily saying that this fee is an 
issue of convenience. But I suspect that other forces are at play. 
Commercial banks posted record profits last year. This new fee is not 
designed to raise profits.
  Yet, community and cooperative bankers will tell you a different 
story--a constituent of mine in Dorchester, MA, owns a profitable bank 
with one ATM machine. He runs the bank well and serves the community. 
But he is no match against far bigger competitors. He knows that once 
these surcharges become pervasive and the big banks start charging his 
customers to use their ATM's, they will just move their accounts to the 
big banks to avoid the charge.
  So, this is not an issue of establishing prices and fees; this is an 
antitrust issue. I want to set the marker down clearly--the Congress 
needs to do a

[[Page S5574]]

better job in monitoring and preventing the trend of consolidation from 
running the smaller banks out of business.
  I want to be clear about what else this bill does, and what it does 
not do. This legislation does not regulate fees and prices, and does 
not curtail the widespread use of ATM's especially in lower income 
areas.
  Mr. President, I do not believe that it is the business of the U.S. 
Senate to set prices and fees at banks and other financial 
institutions. I am a great believer in the free market--not the Federal 
Government--dictating fee structures. But there is a general sense of 
fairness that is being violated in this new surcharge.
  When a depositor opens an account, he or she knows the fees 
associated with transactions. It is current Federal law--found in 
statutes like the Electronic Funds Transfer Act, the Truth-in-Savings 
Act and the Truth-in-Lending Act--that mandates fees to be disclosed to 
the consumer. So, when we open a bank account, we will know how much 
each transaction will cost.
  But now, with this new surcharge, we are left in the dark. We don't 
find out how much it will cost to use an ATM machine, not associated 
with our particular bank, until our statement appears in the mail, long 
after the ATM transaction is completed.
  That is bad for consumers and it is bad precedent. And the trend is 
not favorable. Historic mergers, consolidations and acquisitions have 
taken place in financial service industry. Consumers have less choice, 
not more. Bank lobby hours have been curtailed so drastically, tellers 
replaced by machines, that we are forced to use ATM's. This is the 
direction of the industry and at some point the Congress must step in 
and let the banks know enough is enough.
  Thank you and I yield the floor.
                                 ______

      By Mr. McCAIN:
  S. 1801. A bill to amend title 49, United States Code, to authorize 
appropriations for the Federal Aviation Administration for fiscal year 
1997, to reform the Federal Aviation Administration, and for other 
purposes; to the Committee on Commerce, Science, and Transportation.


                    THE OMNIBUS AVIATION ACT OF 1996

  Mr. McCAIN. Mr. President, today, I am introducing the Omnibus 
Aviation Act of 1996. This legislation reauthorizes for one year 
several key programs of the Federal Aviation Administration, including 
the vital Airport Improvement Program. It also provides needed, 
comprehensive FAA reform, including the development of a stable, long-
term funding system for the FAA, and addresses other critical safety 
and airport concerns. Specifically, this legislation would:
  Reauthorize AIP at $1.8 billion for one year;
  Expand the prohibition on airport revenue diversion;
  Provide for thorough reform of the FAA;
  Encourage Congress to meet the FAA's short-term funding needs;
  Enhance airline safety by requiring airlines to share employment and 
performance records before hiring new pilots; and
  Abolish the MWAA Board of Review.
  Significantly, this bill expresses the sense of the Senate that 
Congress must act immediately to address the short-term funding needs 
of the FAA. Mr. President, we have all heard by now that certain 
aviation excise taxes that make up most of the Airport and Airway Trust 
Fund, which provides nearly all of the FAA's funding, expired at the 
end of last year. Since then, no money has been going into the aviation 
trust fund. Yet, the FAA has determined that since the beginning of 
this year, approximately half a billion dollars has been spent each 
month from the existing trust fund balance. The FAA advises that at 
this rate, all of the money in the trust fund will be spent by 
December. Without immediate action by Congress to provide interim, 
short-term funding for the FAA, confidence in the FAA and our nation's 
air traffic control system could erode.
  The legislation that I am introducing today not only encourages quick 
resolution of the FAA's immediate funding problem, but also sets out a 
plan for complete FAA reform. In specific, this bill incorporates the 
Air Traffic Management System Performance Improvement Act, which I have 
cosponsored with Senator Ford and Senator Hollings, to create a more 
autonomous and accountable FAA that can continue to ensure the safety 
of the traveling public while, at the same time, meet the needs of the 
growing aviation industry.
  This FAA reform measure is particularly important because while the 
interim, short-term funding is in place and during the one-year 
reauthorization of FAA programs, the FAA will be able to set up a 
performance-based fee system to satisfy the FAA's long-term funding 
needs. This FAA reform proposal would ensure that the new FAA funding 
system must consider the FAA's costs of providing air traffic control 
services and must increase the efficiency with which air traffic 
control services are produced or used, without jeopardizing safety.
  The existing aviation excise tax system does not enable the FAA to 
determine whether the air traffic control system is becoming more or 
less costly per flight, or whether air traffic control system 
productivity is increasing or decreasing. By contrast, establishing a 
user fee funding system under this bill would compel the FAA to 
establish a cost accounting system, which would enable it to determine 
the efficiency and costs of the FAA and the air traffic control system, 
and develop investment and modernization programs that are viable.

  This legislation also addresses other critical aviation issues. 
First, it contains provisions intended to reverse the disturbing trend 
of illegal diversion of airport revenues. To ensure that airport 
revenues are used only for airport purposes, this legislation would 
expand the prohibition on revenue diversion to cover more instances of 
diversion. It also would establish clear penalties and stronger 
mechanisms to enforce Federal laws prohibiting revenue diversion. In 
addition, the bill would impose additional reporting requirements so 
that illegal revenue diversion is easily identified and verified. It 
also would provide important protections for whistleblowers.
  To enhance the safety of the Nation's air transportation system, this 
legislation also contains provisions that would require air carriers to 
request and receive, after obtaining written consent from a pilot 
application, relevant employment and performance records before hiring 
someone as a pilot. These provisions focus on encouraging and 
facilitating the flow of information between employers so that safety 
is not compromised in any way.
  To ensure that the burden of these pilot recordsharing provisions 
does not fall on employers and the legal system, when a transfer is 
requested and complied with, both the employer who turns over the 
requested records and the prospective employer who receives them will 
be immune from lawsuits related to the transferred information, unless 
the employer who provides the information knows it is false. Complete 
immunity is critical--without it, the airlines simply will not share 
records. The legislation therefore could not achieve its objective of 
making it a common practice of prospective employers to research to the 
greatest extent the experience of pilots, and to learn significant 
information that could affect air carrier hiring decisions and, 
ultimately, airline safety.
  Finally, this legislation makes certain changes to the Metropolitan 
Washington Airports Authority required following recent Federal court 
rulings. In specific, the bill would abolish the MWAA Board of Review, 
and increase the number of presidentially appointed members of the MWAA 
Board of Directors. It also conveys the sense of the Senate that the 
MWAA should not provide free, reserved parking areas at either 
Washington National Airport or Washington Dulles International Airport 
for Members of Congress and other government officials or diplomats.
  Mr. President, certain unfortunate, recent events have raised 
questions about the safety of our nation's air transportation system. 
We must do our part to reassure the traveling public that we have the 
world's safest system. This comprehensive legislation will go a long 
way in reassuring the public that the system is safe, and will provide 
the FAA with a stable, predictable, and sufficient funding stream for 
the long term.

[[Page S5575]]

                                 ______
      By Mr. THOMAS (for himself and Mr. SIMPSON):
  S. 1802. A bill to direct the Secretary of the Interior to convey 
certain property containing a fish and wildlife facility to the State 
of Wyoming, and for other purposes; to the Committee on Environment and 
Public Works.


               Ranch a Crook County, Wyoming Legislation

  Mr. THOMAS. Mr. President, I rise today along with my colleague from 
Wyoming, Senator Simpson, to introduce legislation to protect public 
land in our State. This bill would transfer 680 acres of land currently 
administered by the United States Fish and Wildlife Service to the 
State of Wyoming. This property commonly known as Ranch A is located in 
Crook County, WY, and is scheduled to be disposed of by the General 
Services Administration in the coming months. Since the area is unique 
and possesses many historic and distinctive characteristics, the State 
of Wyoming would like to have the property transferred to it so that 
the property and facilities on the land can be preserved for the public 
for many years to come.
  The Ranch A lodge, which sits on 680 acres of property, was 
constructed by a private developer in the 1930's and acquired by the 
U.S. Fish and Wildlife Service in 1963. Since the area has an abundant 
supply of spring-fed water, it is ideal for trout research and the 
study of trout genetics. The Fish and Wildlife Service continued its 
research operations at Ranch A until 1980 when all of the agency's 
trout research work was transferred to Bozeman, MT. Since that time, 
the Service has maintained the facility but has leased the area to a 
variety of groups including the Wyoming Game and Fish Department and 
the South Dakota School of Mines.
  Although the area has significant historical and cultural values, in 
1995 the Department of Interior took action to divest itself of 
ownership of Ranch A. Recently, the Fish and Wildlife Service declared 
the property as ``surplus'' and is planning to dispose of Ranch A 
through the General Services Administration. No formal action has been 
taken on the disposal request and the property is still owned and 
maintained by the Fish and Wildlife Service.
  The State of Wyoming is interested in protecting Ranch A and working 
to ensure the area is protected for future generations. Earlier this 
year, the Wyoming congressional delegation was approached by Gov. Jim 
Geringer and asked if we could introduce legislation to have the 
property transferred to the State of Wyoming. The State is willing to 
assume ownership of the area and maintain the facility and the adjacent 
land for educational, historical and wildlife management purposes.
  The legislation I am introducing today would achieve that goal. The 
bill would transfer all right and title of the 680 acres and all 
buildings on the Ranch A property to the State of Wyoming. The State 
would assume control of the property and would be required to manage 
the area for public purposes including fish and wildlife management, 
education and historical uses. In order to ensure the area remains 
public, the legislation contains a reverter clause that requires the 
State of Wyoming to manage the property for public uses or it would be 
transferred back to Federal ownership.
  The bill is the product of long negotiations between the State of 
Wyoming and the Fish and Wildlife Service. Initially, the State would 
only accept the land if Federal funds were authorized to refurbish the 
area. However, by working with the State, the Federal Government and 
local officials, we have been able to craft a compromise that does not 
require any Federal expenditures and keeps the land public.
  Mr. President, the Ranch A property is a truly unique facility that 
should be kept in public ownership. The area has significant historic 
and cultural value in addition to its wildlife and research 
opportunities. Keeping the area clean and pure is a goal of the 
residents in the region who hope to preserve the beauty of the facility 
and surrounding land for future generations to enjoy. The State of 
Wyoming is willing to take on the responsibility of protecting this 
wonderful property and I strongly support their efforts to ensure that 
Ranch A is protected for many years to come.
  Instead of allowing the Federal Government to dispose of this unique 
property that has such a variety of uses, I urge Congress to take 
action and allow the State of Wyoming to protect Ranch A. The choice is 
clear--either we pass this bill and keep the area open to the public, 
or we allow the Federal Government to move forward and dispose of the 
land into private ownership. I hope we can move quickly to support this 
outstanding area and pass this legislation in the near future.
                                 ______

      By Mr. MURKOWSKI (for himself, Mr. Johnston and Mr. Akaka):
  S. 1804. A bill to make technical and other changes to the laws 
dealing with the territories and freely associated States of the United 
States; to the Committee on Energy and Natural Resources.


          Territories and Freely Associated States Legislation

  Mr. MURKOWSKI. Mr. President, today I am introducing legislation that 
will address several concerns that were brought to my attention by the 
leadership in some of the United States territories and in the nations 
in free association with the United States. I am pleased that this 
legislation is cosponsored by the Ranking Member and former Chairman of 
the Committee on Energy and Natural Resources, Senator Johnston, as 
well as by Senator Akaka, who has also had a long and abiding interest 
in the welfare of the territories and freely associated States.
  During the February recess, I had the opportunity to meet with the 
chief executives of the United States territories of American Samoa, 
Guam, and the Commonwealth of the Northern Mariana Islands as well as 
the Presidents of the Republic of Palau, the Republic of the Marshall 
Islands, and the Federated States of Micronesia. I want to express my 
appreciation to all of them for their courtesies and their willingness 
to meet with Senator Akaka and myself and for their assistance in 
arranging full and frank discussions.
  I was impressed by the diversity within the Pacific and the magnitude 
of the problems facing these island governments. I have some 
appreciation for their problems in dealing with Washington because I 
can recall the days of territorial administration for Alaska. I was 
also able to point out that Statehood is not a complete remedy for 
those who still think Alaska is their private reserve. Alaska, like the 
islands, is noncontiguous and must deal with standards developed for 
the lower 48 States. We have the problem of servicing small remote 
populations, much like the Republic of the Marshalls and the Federated 
States of Micronesia have.
  The legislation that I am introducing today would address the 
following issues:
  Section 1 extends the supplemental food assistance program for 
Enewetak and Bikini for an additional 5 years. Enewetak and Bikini were 
the sites for the United States atmospheric nuclear testing program in 
the Marshall Islands and the food assistance program is necessary to 
supplement local food supplies while the populations resettle their 
atolls. The difficulty that Enewetak has experienced in establishing a 
local food supply should be ample warning to the population of Bikini 
of the environmental consequences of a scrape, and I sincerely hope 
that we can avoid that environmental degradation. While Enewetak is 
making significant strides in reestablishing a local food supply, it is 
clear that a continuation of the agriculture assistance is needed. The 
language would also require the United States to ensure that the 
program is designed to meet the actual needs of the populations. I 
understand that the program is running at the same level as it did 10 
years ago without taking into account the change in population.

  A concern was also raised over the medical care and monitoring 
program that the Department of Energy runs in the Northern Marshalls. 
At the same time that I am introducing this legislation, I am also 
introducing an amendment that would extend the program to Bikini and 
Enewetak. While I do not want to jeopardize the effectiveness of the 
program for the affected populations of Rongelap and Utirik, I also 
want to ensure that the objectives of the four atoll program are being 
met. This language will also provide the Committee with an opportunity 
to review the administration of the program

[[Page S5576]]

since it was shifted out of defense programs and into environmental 
health within DOE. I appreciate that the four atoll health program was 
to be administered by the Tribunal established under the Compact of 
Free Association, but I am also mindful of the special responsibility 
that the United States has for the populations of the four affected 
atolls. Under the terms of the Compact, we authorized further ex gratia 
assistance if justified, and I think it is time for the Committee on 
Energy and Natural Resources to examine how the programs--those being 
provided by the Republic of the Marshall Islands and those provided by 
the United States--are being implemented. I was very impressed by my 
visit to Bikini and am grateful for the courtesies and hospitality 
extended by the Mayor, the Council, and Senator Balos. During the 
hearings on this legislation, I also want to examine what role the 
Public Health Service can play in improving health care not only to the 
four atolls, but throughout the Republic of the Marshall Islands and 
also to the Federated States of Micronesia and the Republic of Palau. I 
again want to emphasize that in no way do I want to jeopardize the 
overriding objective of the health care being provided by Brookhaven to 
the 133 exposed Marshallese, but I do not want to pass over the 
opportunity to see if the populations of Bikini and Enewetak could 
bootstrap onto the program using their trust funds.
  Section 2 of the legislation would repeal a provision of law that 
authorizes the government of the Commonwealth of the Northern Mariana 
Islands to take over the American Memorial Park in Saipan. Senator 
Akaka and I participated in a wreath laying at the park, and I was 
impressed with the development of the area, especially in light of 
staff descriptions of the site only a few short years ago. Ambassador 
Haydn Williams deserves a great deal of credit for his persistence and 
commitment to seeing the park established. While I am not opposed to 
proposals for other arrangements, it seems to me that the area is now a 
part of the National Park System and should remain so until the lease 
expires unless some concrete proposal is brought forward that will 
maintain the objectives and purposes for the memorial. I fully expect 
that we will need to modify this provision to permit the commonwealth 
the ability to develop the marina area, but at least for the time 
being, I think the National Park Service should continue to operate and 
maintain the memorial.

  Section 3 is a technical amendment to the legislation dealing with 
the land grant status of the College of Micronesia and was brought to 
my attention by Susan Moses, the president of the college. The 
amendment would provide separate land grant status to the three 
successor institutions to the former College of Micronesia--the College 
of Micronesia--FSM, the College of the Marshall Islands, and the Palau 
Community College. This amendment will hopefully eliminate some 
administrative headaches for the college.
  Section 4 amends the Guam Organic Act to guarantee that any lands 
acquired by the United States for Federal purposes will be made 
available to the Government of Guam when those purposes have expired. 
The Federal Government, principally the Department of Defense, controls 
about one-third of the available land area in Guam. Those lands were 
acquired for defense needs, and when those needs no longer exist, the 
lands should be returned to Guam. I was particularly troubled by the 
situation at Ritidian Point where the Fish and Wildlife Service, 
seemingly in the dead of night, effectively stole land that the 
Department of Defense and the Government of Guam had negotiated for 
transfer. Whatever the justification for Fish and Wildlife's interest, 
there is no excuse for the insensitivity shown by the Department of the 
Interior in that acquisition. Rather than spending their time enlarging 
their empire, the Fish and Wildlife Service could make better use of 
their resources by going after the brown tree snake. At the rate they 
are going, they will have the only wildlife refuge dedicated to extinct 
species. I especially want to thank Congressman Underwood for his 
assistance in developing this approach to guarantee a role for the 
Government of Guam in any further Federal land disposal in Guam. The 
Governor of Guam made an excellent presentation of the problems created 
by the actions of the Fish and Wildlife Service and I think this is a 
situation that needs to be addressed and I am grateful for the 
comprehensive briefing he provided us during our brief visit to Guam.

  Section 5 would repeal a provision of law that limits the use of 
lands transferred to Guam. Again, I want to thank Congressman Underwood 
for suggesting this amendment. I cannot think of any restriction more 
onerous than transferring property for which the Federal Government has 
no further need and then denying the Government of Guam the ability to 
derive the economic benefits of its use and development.
  Section 6 was suggested by the Resident Representative of the 
Commonwealth of the Northern Mariana Islands and would provide State-
like treatment for the commonwealth, the Virgin Islands, and American 
Samoa for certain drug enforcement programs. Guam and Puerto Rico 
presently have State-like treatment, and this amendment simply provides 
uniform treatment for all the territories.
  Section 7 of the legislation would amend the Revised Organic Act of 
the Virgin Islands at the request of the Governor of the Virgin 
Islands. The first amendment would provide that the Governor would 
retain his powers as Governor when he is temporarily absent from the 
territory on official business. This amendment recognizes that with 
modern communications and transportation, the current limitations are 
archaic and impede continuity in the operations of the executive branch 
in the Virgin Islands.
  The second amendment would reform the authority granted to the Virgin 
Islands in 1976 to issue bonds secured by the matching fund. The debt 
is now priority debt, not parity debt. Priority debt places a premium 
value on the earliest debt, while parity debt places all bond holders 
on a level playing field. Although most communities now issue parity 
debt, the current limitation handicaps the Virgin Islands by requiring 
a higher fee and interest rate on subsequent issues as well as over 
collateralization. The amendment would permit the Virgin Islands to 
issue parity debt and allows for a transition to permit the Virgin 
Islands to refinance their current priority debt. This would reduce the 
debt service and free up needed revenues for school improvements and 
emergency repairs made necessary by Hurricane Marilyn. I want to 
emphasize that current bond holders will be fully protected.
  Section 8 was suggested by Senator Johnston to begin to look at what 
the economic future of the Virgin Islands will be in light of the 
changes that are happening both politically and economically in the 
Caribbean and what the Federal Government can do to provide a stable 
and self-sustaining local economic base. I fully agree with Senator 
Johnston that the time to do that analysis is now.

  Mr. President, upon my return from my visit to the Pacific, I wrote 
the President on what I thought was a fairly significant concern raised 
by the Presidents of the Republic of the Marshall Islands and the 
Federated States of Micronesia. While the political relationship under 
the Compacts of Free Association is of indefinite duration, certain 
provisions are subject to renegotiation and expire at the end of 15 
years. The compacts require renegotiation in the 13th year and the 
Presidents quite correctly pointed out that was not sufficient time to 
conclude negotiations and obtain the necessary ratifications by the 
United States and their governments. Like the Governor of the Virgin 
Islands and Senator Johnston, they are looking to the future and trying 
to plan for it. They asked if I would request the administration to 
begin the process of formulating the U.S. position and begin discussion 
while there was a degree of time. Given the number of years it took for 
the original ratification, that seemed like a reasonable request. I 
will not comment on the President's response, other than to ask 
unanimous consent that a copy of my letter and his response be included 
in the Record.
  Mr. President, I appreciate that we are late in this session of the 
Congress, but these are important matters that require the attention of 
the Congress. I

[[Page S5577]]

want to announce that the Committee on Energy and Natural Resources 
will hold a hearing on this legislation on June 25, 1996 and at the 
same time we will review the report on the law enforcement initiative 
in the commonwealth of the Northern Mariana Islands. I will not go into 
great detail on the situation in the Commonwealth other than to say 
that reforms need to be implemented. We had extensive and detailed 
briefings and discussions with the Governor's staff, the Federal 
officials on the island, the Chamber of Commerce, the legislature, the 
U.S. attorney and Federal judiciary. It is my intention to move 
expeditiously on this legislation immediately after the hearing is 
concluded.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.

                                S. 1804

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

     SECTION 1. MARSHALL ISLANDS AGRICULTURAL AND FOOD PROGRAMS.

       Paragraph (2) of subsection (h) of section 103 of Public 
     Law 99-239, as amended, is further amended by striking the 
     word ``ten'' and inserting in lieu thereof the word 
     ``fifteen'' and by adding at the end of subparagraph (B) 
     ``Such technical assistance, programs and services shall 
     ensure, on an ongoing basis, that the commodities provided 
     reflect the changes in the population that have occurred 
     since the effective date of the Compact.''.

     SEC. 2. AMERICAN MEMORIAL PARK.

       Section 5 of Public Law 95-348 is amended by striking 
     subsection (f), and renumbering subsections (g) and (h) as 
     subsections (f) and (g), respectively.

     SEC. 3. TERRITORIAL LAND GRANT COLLEGES--TECHNICAL AMENDMENT.

       Subsection (b) of section 1361 of Public Law 96-374 is 
     amended by striking the words ``August 30, 1980 (7 U.S.C. 
     327), commonly referred to as the Second'' and inserting in 
     lieu thereof the words ``July 2, 1862 (7 U.S.C. 305), 
     commonly referred to as the First''.

     SEC. 4. AMENDMENT TO THE GUAM ORGANIC ACT.

       The Organic Act of Guam (48 U.S.C. 1421 et seq.), as 
     amended, is further amended by adding at the end thereof the 
     following new section:
       ``Sec. 36. (a) At least 180 days before transferring to any 
     Federal agency excess real property located in Guam, the 
     Administrator of General Services shall notify the government 
     of Guam that the property is available under this section.
       ``(b) The Administrator shall transfer to the government of 
     Guam all right, title, and interest of the United States in 
     and to excess real property located in Guam, by quit claim 
     deed and without reimbursement, if the government of Guam, 
     within 180 days after receiving notification under subsection 
     (a) regarding the property, notifies the Administrator that 
     the government of Guam intends to acquire the property under 
     this section.
       ``(c) For purposes of this section, the term 'excess real 
     property' means excess property (as that term is defined in 
     section 3 of the Federal Property and Administrative Services 
     Act of 1949, as in effect on the date of enactment of the 
     Guam Land Return Act) that is real property.''.

     SEC. 5. REPEAL OF LIMITATION ON USE OF LANDS BY THE 
                   GOVERNMENT OF GUAM.

       (a) In General.--Section 818(b)(2) of Public Law 96-418 (94 
     Stat. 1782), is repealed.
       (b) Execution of Instruments.--The Secretary of the Navy 
     and the Administrator General Services shall execute all 
     instruments necessary to implement this section.

     SEC. 6. CLARIFICATION OF ALLOTMENT FOR TERRITORIES.

       Section 901(a), Part 1, title I of the Act of June 19, 1968 
     (42 U.S.C. 3791(a)), as amended, is further amended in 
     paragraph (2) by changing the proviso to read as follows: 
     ``(2) ``State'' means any State of the United States, the 
     District of Columbia, The Commonwealth of Puerto Rico, the 
     Virgin Islands, American Samoa, Guam, and the Commonwealth of 
     the Northern Mariana Islands.''

     SEC. 7. AMENDMENTS TO THE REVISED ORGANIC ACT OF THE VIRGIN 
                   ISLANDS.

       (a) Section 7(a) of P.L. 90-496 (82 Stat. 839), as amended, 
     is futher amended by adding at the end thereof ``As used in 
     this section, the term 'temporary absence' shall not be 
     construed as being physically absent from the territory while 
     on official Government business.''
       (b) Section 3 of P.L. 94-392 (90 Stat. 1195), as amended, 
     is further amended to read as follows:
       (1) by inserting ``hereinafter'' between ``obligations'' 
     and ``issued'';
       (2) by deleting ``priority for payment'' and inserting in 
     lieu thereof ``a parity lien with every other issue of bonds 
     or other obligations hereinafter issued for payment''; and
       (3) by deleting ``in the order of the date of issue''.
       (c) The provisions of section 149(d)(3)(A)(i)(I) and 
     149(d)(2) of the Internal Revenue Code of 1986, as amended, 
     shall not apply to bonds issued:
       (1) by an authority created by statute of the Virgin 
     Islands legislature, the proceeds of which will be used to 
     advance refund certain bonds issued by such authority on July 
     8, 1992; or
       (2) by an authority created by statute of the Virgin 
     Islands Legislature, the proceeds of which will be used to 
     advance refund certain bonds issued by such authority on 
     November 3, 1994.
       (d) The amendments made by subsections (b) and (c) shall 
     apply to obligations issued on or after the date of enactment 
     of this section.

     SEC. 8. COMMISSION ON THE ECONOMIC FUTURE OF THE VIRGIN 
                   ISLANDS.

       (a) Establishment and Membership.--
       (1) There is hereby established a Commission on the 
     Economic Future of the Virgin Islands (the ``Commission''). 
     The Commission shall consist of six members appointed by the 
     President, two of whom shall be selected from nominations 
     made by the Governor of the Virgin Islands. The President 
     shall designate one of the members of the Commission to be 
     Chairman.
       (2) In addition to the six members appointed under 
     paragraph (1), the Secretary of the Interior shall be an ex-
     officio member of the Commission.
       (3) Members of the Commission appointed by the President 
     shall be persons who by virtue of their background and 
     experience are particularly suited to contribute to 
     achievement of the purposes of the Commission.
       (4) Members of the Commission shall serve without 
     compensation, but shall be reimbursed for travel, subsistence 
     and other necessary expenses incurred by them in the 
     performance of their duties.
       (5) Any vacancy in the Commission shall be filled in the 
     same manner as the original appointment was made.
       (b) Purpose and Report.--
       (1) The purpose of the Commission is to make 
     recommendations to the President and Congress on the policies 
     and programs necessary to provide for a secure and self-
     sustaining future for the local economy of the Virgin Islands 
     through 2020 and on the role of the federal government in 
     providing for that future. In developing recommendations, the 
     Commission shall--
       (A) solicit information and advice from persons and 
     entities that the Commission determines have expertise to 
     assist the Commission in its work;
       (B) examine and analyze historical data since 1970 on 
     expenditures for infrastructure and services;
       (C) analyze the sources of funds for such expenditures;
       (D) assemble relevant demographic and economic data, 
     including trends and projections for the future; and
       (E) estimate future needs of the Virgin Islands, including 
     needs for capital improvements, educational needs and social, 
     health and environmental requirements.
       (2) The recommendations of the Commission shall be 
     transmitted to the President, the Committee on Energy and 
     Natural Resources of the United States Senate and the 
     Committee on Resources of the United States House of 
     Representatives no later than December 1, 1997. The 
     recommendations shall be accompanied by a report that sets 
     forth the basis for the recommendations and includes an 
     analysis of the capability of the Virgin Islands to meet 
     projected needs based on reasonable alternative economic, 
     political and social conditions in the Caribbean, including 
     the opening in the near future of Cuba to trade, tourism and 
     development.
       (c) Powers.--
       (1) The Commission may--
       (A) hold such hearings, sit and act at such times and 
     places, take such testimony and receive such evidence as it 
     may deem advisable;
       (B) use the United States mail in the same manner and upon 
     the same conditions as other departments and agencies of the 
     United States;
       (C) enter into contracts or agreements for studies and 
     surveys with public and private organizations and transfer 
     funds to federal agencies to carry out such aspects of the 
     Commission's functions as the Commission determines can best 
     be carried out in such manner; and
       (D) incur such necessary expenses and exercise such other 
     powers as are consistent with and reasonably required to 
     perform its functions.
       (2) The Secretary of the Interior shall provide such office 
     space, furnishings and equipment as may be required to enable 
     the Commission to perform its functions. The Secretary shall 
     also furnish the Commission with such staff, including 
     clerical support, as the Commission may require and shall 
     provide to the Commission financial and administrative 
     services, including those related to budgeting, accounting, 
     financial reporting, personnel and procurement.
       (3) The President, upon request of the Commission, may 
     direct the head of any federal agency of department to assist 
     the Commission and if so directed such head shall--
       (A) furnish the Commission to the extent permitted by law 
     and within available appropriations such information as may 
     be necessary for carrying out the functions of the Commission 
     and as may be available to or procurable by such department 
     or agency; and
       (B) detail to temporary duty with the Commission on a 
     reimbursable bases such personnel within his administrative 
     jurisdiction as the Commission may need or believe to be 
     useful for carrying out its functions, each such detail to be 
     without loss of seniority, pay or other employee status.

[[Page S5578]]

       (d) Chairman.--Subject to general policies that the 
     Commission may adopt, the Chairman of the Commission shall be 
     the chief executive officer of the Commission and shall 
     exercise its executive and administrative powers. The 
     Chairman may make such provisions as he may deem appropriate 
     authorizing the performance of his executive and 
     administrative functions by the staff of the Commission.
       (e) Appropriations.--There is authorized to be appropriated 
     such sums as may be necessary to carry out the purposes of 
     this section.
       (f) Termination.--The Commission shall terminate three 
     months after the transmission of the report and 
     recommendations under subsection (b)(2).
                                                                    ____

         U.S. Senate, Committee on Energy and Natural Resources,
                                    Washington DC, March 11, 1996.
     Hon. William J. Clinton,
     President of the United States,
     The White House,
     Washington, DC.
       Dear Mr. President: Recently Senator Akaka and I had the 
     opportunity to meet with President Amata Kabua of the 
     Republic of the Marshall Islands and his Cabinet and later 
     with President Bailey Olter of the Federated States of 
     Micronesia and the Speaker of their legislature. While we had 
     frank and informative meetings, one issue arose in both 
     meetings that we wanted to bring to your attention and 
     request your support.
       As you know, in 1986, the Republic of the Marshall Islands 
     and the Federated States of Micronesia emerged from the 
     former United Nations Trust Territory of the Pacific Islands 
     as sovereign nations in free association with the United 
     States. That status had been requested by the Micronesian 
     governments in the late 1960's and negotiated with the United 
     States over more than a decade. Congress approved the 
     Compacts of Free Association for these two areas in Public 
     Law 99-239, signed by the President on January 14, 1986. That 
     approval came after several years of Congressional 
     consideration.
       Under the terms of the Compacts, the political relationship 
     is open ended, but the federal assistance provisions 
     terminate after fifteen years, in 2001, with a possible two 
     year extension if negotiations on such assistance have not 
     concluded. Under section 231 of the Compacts, negotiations on 
     those provisions that expire at the end of fifteen years 
     shall commence no later than in year thirteen, in 1999. The 
     leadership in both countries strongly urged that discussions 
     begin prior to that time. I support that request.
       In addition to the critical strategic and policy interests 
     of the United States in each of these areas, we have 
     developed a close and, I hope, an enduring relationship based 
     on mutually shared values. the political development of the 
     freely associated states and their emergence from the United 
     Nations trusteeship system was done peacefully. The option of 
     free association was a decision made by the Micronesians at a 
     time when full independence was the mark of decolonization 
     elsewhere in the world. While there have been significant 
     developments in the ten years of the Compacts, the process of 
     nation-building is not simple nor without setbacks and 
     problems. The relationship is unique, and while I understand 
     that there are some who find it troubling, I think an honest 
     review would demonstrate that it has exceeded the 
     expectations of all parties.
       I do have some concerns with how the present relationship 
     has been implemented, not the least of which is the failure 
     of the Department of the Interior to assign an individual to 
     each of the freely associated states to provide assistance 
     and monitor the various federal programs and grants that have 
     been provided despite the clear intent of the Congress in 
     approving section 108 of P.L. 101-219 and explicit 
     appropriations. That is a situation that should be rectified 
     immediately. Some of the present economic problems might have 
     been avoided with a continuing presence from the Department. 
     While I support the Administration's economic policy reforms 
     being carried out in cooperation with the Asian Development 
     Bank, those reforms do not obviate the need for a full time 
     presence from the Department of the Interior in responding to 
     the problems.
       I think it is clear, however, that the United States has 
     much to offer the micronesian governments consistent with 
     their sovereignty and our fiscal limitations. Technical and 
     other assistance in marine resources and tourism will be 
     important as these countries attempt to develop their 
     economic potential while preserving their culture and 
     traditions. Continued assistance in fiscal management will 
     also be vital.
       I strongly suggest that you begin consideration of the 
     Administration's policy with respect to future assistance to 
     the freely associated states now and that you do so in close 
     consultation with the Congress. The history of the original 
     approval of the Compacts indicates that the two years 
     provided in section 231 is wholly inadequate for negotiations 
     and Congressional consideration. It would be even worse if 
     the Administration waited any longer to begin to formulate 
     its position.
       I do want to emphasize the need for close Congressional 
     consultations. This Committee, as well as the relevant House 
     Committees, were involved in the discussions and negotiations 
     that led to the passage of the Covenant for the Northern 
     Mariana Islands and the Compacts for the three freely 
     associated states, and many of our concerns are reflected in 
     the final documents.
           Sincerely,
                                               Frank H. Murkowski,
     Chairman.
                                                                    ____



                                              THE WHITE HOUSE,

                                       Washington, April 10, 1996.
      Hon. Frank H. Murkowski,
     U.S. Senate,
     Washington, DC
       Dear Mr. Chairman: Thank you for your letter regrading U.S. 
     policy toward the Federated States of Micronesia and the 
     Republic of the Marshall Islands. These former parts of the 
     Trust Territory of the Pacific Islands make an important 
     contribution to our security presence in the Asia-Pacific 
     region.
       We are working closely with Micronesia and the Marshall 
     Islands to ensure the nearly $2 billion in scheduled U.S. 
     assistance from over forty agencies is effectively and 
     efficiently used. The Interior Department has dedicated 
     substantial personnel resources for this purpose.
       I look forward to working with you and other members of 
     your committee to support the exciting process of nation-
     building that is taking place in these former parts of the 
     Trust Territories.
           Sincerely,
                                             Bill Clinton.

 Mr. JOHNSTON, Mr. President, I am pleased to join in the 
introduction of this legislation that will address several important 
areas of concern in the territories and freely associated states. Many 
of the provisions result from a recent trip that the chairman of the 
Committee on Energy and Natural Resources, Senator Murkowski, and 
Senator Akaka recently took to most of the Pacific insular areas.
  It is almost 24 years since I first came to the Senate and assumed 
the chairmanship of the Subcommittee on Territories of the then 
Committee on Interior and Insular Affairs. I thought it was important 
to visit the areas under the committee's jurisdiction and meet with the 
leadership. There is nothing that can replace that first-hand 
knowledge. Given the enormous workload of the committee and the 
critical nature of the legislation before us, it is often easy to 
overlook the needs of the territories and freely associated states. I 
sincerely hope that other members of the committee will also visit 
these areas and come to appreciate the unique needs and problems that 
confront the residents. The responsibility for these areas is one of 
those unique constitutional authorities entrusted to Congress by 
article IV.
  In the time that I have been involved with the insular areas, 
Congress has enacted legislation providing full local self-government 
to the Virgin Islands, Guam, and American Samoa--including the election 
of non-voting delegates to the House of Representatives. We have also 
terminated the Trust Territory of the Pacific Islands, leader to the 
emergence of three sovereign nations in free association with the 
United States and a fully locally self-governing territory--the 
Commonwealth of the Northern Mariana Islands. I also had the privilege 
of serving on the Ad Hoc Advisory Group of Puerto Rico with our former 
colleague Marlow Cook and former Governor Luis Munoz Marin.

  I want to focus on one provision of this legislation, and that is the 
study of the future economic needs of the Virgin Islands. Since 1960, 
the Virgin Islands has experienced enormous growth and development. In 
large part, that growth resulted from increased tourism after the 
closure of Cuba and also from improved transportation links to the 
Islands. Another component was the favorable trade status of the Virgin 
Islands, which is outside the customs territory of the United States. 
Those underpinnings are about to disappear. NAFTA and other trade 
agreements are eroding the trade advantages that the Virgin Islands has 
enjoyed. Within the foreseeable future, we will have a post-Castro Cuba 
that will likely challenge the Virgin Islands tourist industry. Rather 
than waiting for those events to happen, it is essential that we--the 
Virgin Islands and the federal government--begin to plan for the 
future. This legislation calls for the creation of a Commission on the 
Economic Future of the Virgin Islands. The Commission would carry out 
an in-depth study of what will need to be done to provide a transition 
for the Virgin Islands to a fully self-sustaining local economy and 
what the federal government needs to do to facilitate that transition.
  I am pleased to cosponsor this legislation and I look forward to the 
hearings that the Committee will conduct

[[Page S5579]]

in the next several weeks. At that time we will also review the report 
from the Administration on the law enforcement initiative in the 
Commonwealth of the Northern Mariana Islands. I was the floor manager 
for the Covenant, and I take particular pride in the accomplishments 
that have occurred in the past twenty years. The Northern Marianas 
entered territorial status heavily dependent on federal support for 
basic government operations. In twenty years, the territory has 
progressed to the point that it no longer requires direct assistance in 
operations and is capable of matching federal grants for capital 
infrastructure. That progress has had a price, however, and I intend to 
very carefully examine the labor situation and the continued reports of 
abuse, especially in the garment industry. While I fully support the 
authority for local self-government conferred under the Covenant, that 
grant also included the responsibility for exercising that authority 
properly.
  In that context, on July 20, 1995, the Senate passed S. 638, a bill 
containing, among other things, significant provisions addressing labor 
issues in the Commonwealth of the Northern Mariana Islands. The House 
has not yet responded to this important legislative initiative. My hope 
is that we can obtain House action on S. 638 soon--in time for the 
104th Congress to act to address these problems.
                                 ______

      By Mr. GRAMS:
  S. 1805. A bill to provide for the management of Voyageurs National 
Park, and for other purposes; to the Committee on Energy and Natural 
Resources.


       voyageurs national park accessibility and partnership act

  Mr. GRAMS. Mr. President, there is a march toward democracy afoot in 
America today.
  That statement may seem surprising; after all, why would such a 
movement be needed? We Americans take pride in the fact that our 
Government is based on the pursuit of democracy--in the words of 
Abraham Lincoln, ``a government of the people, by the people and for 
the people.'' And that principle should have as much relevance today as 
it did when President Lincoln delivered the Gettysburg Address 130 
years ago--but does it?
  In theory perhaps, but as a practical matter, it seems that the words 
of Lincoln have been steadily eroded by the recent surge in the size 
and power of the Federal Government. And with that growth in Washington 
has come the slow but unmistakable shift in power from the people to 
the government.
  Under a democracy, government is needed to establish and enforce the 
fundamental rules by which our society operates--with the express 
support of the people. It is there to protect the rights of individuals 
and to step in when those rights come into conflict--to resolve 
disputes between people, not to create them.
  But in recent years, the American people have been forced to watch 
Government expand its role in our daily lives through the use of laws, 
rules, and regulations--to the point of interference. Instead of 
receiving its power from the people, it has usurped that authority and 
as a result, abandoned any sense of public accountability.
  As a result, many people believe that they have lost control of their 
Government--indeed a growing number of us feel that the Government now 
controls us.
  There is no better example of this shift in power than in the Federal 
Government's management of our natural resources and public lands, 
particularly as it has affected the people of my home state in the 
controversy surrounding Voyageurs National Park.
  The Park, now comprising 218,000 acres in northern Minnesota, was 
created in 1971 and established as part of the National Park System in 
1975 following years of contentious debate and public hearings. While a 
number of local residents supported the creation of the park, they did 
so after promises by the Federal Government of increased economic 
growth in the region; maintenance of the Park as a multiple 
recreational use facility, for recreational activities like 
snowmobiling; and the continued use of input from the public into the 
management of the park.
  But as the years passed, those promises fell by the wayside, leaving 
local residents out in the cold and understandably distrustful of 
government bureaucrats who have been unaccountable to the people they 
are supposed to serve and unresponsive to their needs. Instead of 
working for the people, the Federal Government has consistently ignored 
their concerns and in some cases, actually worked against them.
  For example, the people of northern Minnesota were promised that in 
exchange for giving up their rights to the land that would comprise the 
Park, they would receive opportunities to boost their local economy. In 
fact, upon creation of the Park, Federal officials estimated that it 
would host over 1.3 million visitors each year, thereby providing much-
needed economic growth for the surrounding communities.
  But the road toward economic prosperity never found its way through 
Voyageurs National Park. Park officials currently estimate the annual 
number of visitors at 200,000--less than one-sixth their initial 
projection. Even worse, the Park Service has tried to cover its tracks 
by suggesting that the park--despite its low visitor rate--is not 
underutilized.
  While the facts and figures certainly counter the Park Service's 
assertion, nothing beats a first-hand assessment of park use. So, on a 
beautiful Saturday last July, I visited Voyageurs National Park. While 
admiring the beauty and historical significance of the lands and waters 
enclosed within the park, I was struck by the fact that hardly anyone--
with the exception of park officials and a few scattered visitors--was 
there. It was only when I drove through the neighboring city of 
International Falls, MN, that I did see a number of tourists and 
visitors--in line--waiting to pass through customs--on their way to 
Canada.
  In 1983, Congress called for the Park Service to create a 
comprehensive visitor use and facilities plan which would lay out a 
strategy to increase park use. In spite of Congress' directive, no 
attempt to carry out the study ever occurred--perhaps due to the Park 
Service's belief that the park was not being underutilized, 
bureaucratic stonewalling, or maybe just out of simple 
negligence. Whatever the reason, Voyageurs National Park today remains 
underutilized--an isolated enclave--with the people of northern 
Minnesota forced to pay the price of the National Park Service's 
mismanagement.

  The Park Service and the U.S. Fish and Wildlife Service have also 
worked together to curtail legitimate visitor access to and use in the 
Park. Under the guise of the Endangered Species Act, certain bays were 
shut off to snowmobiling in order to protect the nesting habitat of 
bald eagles. While everyone agreed that the eagles should be protected, 
many believed that both agencies failed to give valid, scientific 
reasons for closing off the bays. Recently, a Federal district judge 
ruled that Federal bureaucrats had abused the Endangered Species Act to 
unfairly restrict snowmobile access in the bays. It is sadly ironic 
that it took a Federal judge to recognize a legitimate use in the 
Park--something the Park Service and Fish and Wildlife Service have 
failed to comprehend.
  But perhaps the greatest example of arrogance on the part of the 
Federal Government concerns the question of wilderness designation 
within the Park. Despite the clearly expressed intent of Congress that 
Voyageurs National Park was to be a multiple recreational use facility, 
the Park Service has continued to manage certain portions of the Park 
for wilderness study characteristics. One need go no further than to 
ask my colleague from Minnesota, Representative Jim Oberstar, who 
helped create the Park when he served as a Congressional staffer, about 
the intent of Congress that it was to be open for multiple use. Yet, 
major segments of the Park continue to be shut off to legitimate and 
recognized multiple uses--such as snowmobiling, boating and dog 
sledding--further breaking the long-standing commitments made to 
northern Minnesotans.
  Mr. President, as much as we would like to, we cannot rewrite the 
history of Voyageurs National Park or simply wave a magic wand to right 
the wrongs to which the people of northern Minnesota have been 
subjected over the last 25 years. But we can and must take action to 
ensure that history does not repeat itself--that future management

[[Page S5580]]

of the Park be conducted in accordance with the views of the people.
  For that reason, today, I am introducing legislation which would help 
resolve this controversy by bringing democracy and government 
accountability back to Voyageurs National Park.
  Under my legislation, a new Planning and Management Council will be 
charged with developing and monitoring a comprehensive management plan. 
It will consist of 11 members appointed by the Secretary of the 
Interior and will include representatives from Federal, State, local 
and tribal governments.
  The management council will be authorized to create Advisory Councils 
made up of individuals representing diverse interests. All council 
meetings will be open to the public, who will be given opportunities to 
provide comment on agenda items.
  Mr. President, under my bill, public input will no longer be 
ignored--in fact, it will be encouraged as part of the management 
process.
  Finally, my legislation will prohibit the Park Service from issuing 
any additional regulations regarding the Park between enactment of this 
bill and the Secretary's final approval of the management plan, except 
in cases of routine administration, law enforcement need and 
emergencies.
  To better understand how this new management council will improve the 
situation in northern Minnesota, one need look no further than the 
recent ban that was proposed by the National Park Service on the use of 
live bait within the interior lakes of Voyageurs National Park--one 
imposed without the solicitation of public input or notification to 
area fisherman and the Minnesota Department of Natural Resources.
  This unilateral action taken by the Park Service naturally created 
enormous controversy and outrage in northern Minnesota. As one State 
official said at the time, ``It was a big surprise to us * * *. There 
was no prior discussion with us on the ban. There's a longstanding 
tradition in the park of being able to use live bait.''
  After many of us raised our objections and outrage over the ban, the 
Park Service backpedaled, then lifted the ban, stating that it had 
misread the law. In doing so, the Superintendent of the Park was quoted 
in the papers saying, ``I had no idea this was going to be a problem. 
If I had known, trust me, I would have dealt with it differently.''
  Mr. President, think about those words for a second. According to the 
Park Service, if they had just known, they never would have tried to 
impose their will on the people. If they had just known, just listened, 
just sought input, none of this would have happened. That is exactly 
what we are seeking today.
  My legislation would avoid such embarrassments in the future by 
bringing everyone together to ensure that management of the Park is 
conducted by agreement, not edict. It will ensure that everyone has a 
seat at the table when the decisions are made. Above all, this new 
management council will return democracy to the preservation of 
Voyageurs National Park. It will return to the people of northern 
Minnesota a voice in how the park is operated and its impact on their 
communities, economy and livelihood.

  Mr. President, I spoke earlier today of a growing movement toward 
democracy in America--born in the heartland of our Nation, led by the 
American people, and headed toward Washington. Since holding two public 
field hearings in Minnesota on this issue last year, I have heard from 
numerous citizen organizations, community leaders, and average 
Minnesotans about the management of the park and how their daily lives 
are affected by it.
  Their message is simple: Let us have a say in how our natural 
resources are maintained--return some of the power to the people--give 
us back our government and our country. The silent majority, which has 
been suppressed for so many years, is now finding its voice again--and 
it is our responsibility to listen to it and act upon it. By conducting 
our field hearings, which attracted well over 2,000 Minnesotans, we 
took the first step by listening. Now, we must move ahead and take 
action.
  During those hearings, I heard a number of people give profound and 
often moving testimony. Many presented facts and figures--invaluable 
data about the history and management about the park. But what struck 
me the most during the hearings were the personal stories--the real-
life accounts about how the Federal Government and its mismanagement of 
Voyageurs National Park has truly changed the lives of the people it 
was created to serve.
  One of these stories belonged to Carol Selsaas of Cohasset, MN. In 
her testimony, Carol described the work of her late father, George 
Esslinger, who was one of the strongest supporters in northern 
Minnesota for the creation of Voyageurs National Park.
  Carol said:

       For over 9 years, my father worked with other men and women 
     to fight for the creation of the park. He assisted the 
     Department of the Interior in physically identifying the 
     boundaries of the park. He traveled and spoke in favor of the 
     park. He gave his heart and soul to the park. He believed the 
     area he supported for a national park should be maintained 
     for the enjoyment of all people: snowmobilers, cross country 
     skiers, boaters, hikers, fishermen, hunters, yes and even dog 
     sledders. He felt that this would be a park for everyone who 
     had respect for this land, not one locked up except for a 
     chosen few.

  Carol went on to describe how her father supported the park with the 
understanding that the trails and roads already established--over 200 
miles on the Kabetogama Peninsula alone-- would be maintained. To date, 
all but 12 miles are now closed off to public access. On one of those 
closed off trails, Carol said, rests a memorial to her father placed by 
the Park Service. With tears in her eyes, she said that because of the 
inaccessibility of the trail, she has never been able to visit her 
father's memorial.
  ``My father died knowing that he had been lied to,'' said Carol. ``He 
died apologizing to me, his grandson, his community. On his death bed, 
I promised that I would fulfill his wish and tell the story of how he 
was misled in his support for Voyageurs National Park.''
  Indeed, she did--as did many other of my fellow Minnesotans. We 
cannot forget their words or discard their testimonies. In the sterile 
halls of the Federal buildings here in Washington, the words of Carol 
Selsaas and others may not mean much, but to me, they describe the 
heartfelt emotions and passions about the culture of northern 
Minnesota--a culture that Washington may not understand, but cannot 
take for granted.
  Nor can we hide in the halls of Congress from the march of democracy 
that is spreading throughout the heartland of our country. If we are 
truly committed to operating as the open democracy described by 
President Lincoln, we must turn the tide and return power back to its 
legitimate source in America: the people.
  The legislation I introduce today is a necessary step in bringing the 
principles of democracy back to one small, but important region of our 
Nation. Let us no longer obstruct the march of democracy but help pave 
the way for it across America.
  Mr. President, I ask unanimous consent that the test 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. 1805

       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 ``Voyageurs National Park 
     Accessibility and Partnership Act of 1996''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) Voyageurs National Park serves as a unique federal park 
     unit in 1 of the Nation's distinguished natural ecosystems;
       (2) Voyageurs National Park shall serve as a year-round 
     multiple-use recreational unit as mandated under Public Law 
     91-661;
       (3) current management of Voyageurs National Park has 
     unilaterally restricted use and accessibility within certain 
     portions of the park;
       (4) intergovernmental cooperation that respects and 
     emphasizes the role of State, local, and tribal governments 
     in land management decision-making processes is essential to 
     optimize the protection and development of social, 
     historical, cultural, and recreational resources; and
       (5) the national interest is served by--
       (A) improving the management and protection of Voyageurs 
     National Park;
       (B) ensuring appropriate public access, enjoyment, and use 
     throughout Voyageurs National Park; and

[[Page S5581]]

       (C) allowing Federal, State, local, and tribal governments 
     to engage in an innovative management partnership in Federal 
     land management decisionmaking processes.

     SEC. 3. PLANNING AND MANAGEMENT COUNCIL.

       Public Law 91-661 (16 U.S.C. 160 et seq.) is amended--
       (1) by redesignating sections 304 and 305 (16 U.S.C. 160i 
     and 160j) as sections 306 and 307, respectively; and
       (2) by inserting after section 303 (16 U.S.C. 160h) the 
     following:

     ``SEC. 304. PLANNING AND MANAGEMENT COUNCIL.

       ``(a) Establishment.--There is established the Voyageurs 
     National Park Intergovernmental Council (referred to in this 
     Act as the `Council').
       ``(b) Duties of the Council.--The Council shall develop and 
     monitor a comprehensive management plan for the park in 
     accordance with section 305.
       ``(c) Membership.--The Council shall be composed of 11 
     members, appointed by the Secretary, of whom--
       ``(1) 1 member shall be the Assistant Secretary for Fish 
     and Wildlife and Parks, or a designee;
       ``(2) 3 members shall be appointed, from recommendations by 
     the Governor of Minnesota, to represent the Department of 
     Natural Resources, the Office of Tourism, and the 
     Environmental Quality Board, of the State of Minnesota;
       ``(3) 1 member shall be a commissioner from each of the 
     counties of Koochiching and Saint Louis, appointed from 
     recommendations by each of the county boards of 
     commissioners;
       ``(4) 1 member shall be a representative from the cities of 
     International Falls and Orr, appointed from recommendations 
     by each of the city councils;
       ``(5) 1 member shall be a State senator who represents a 
     legislative district that contains a portion of the park, 
     appointed from a recommendation by the Governor of Minnesota;
       ``(6) 1 member shall be a State representative who 
     represents a legislative district that contains a portion of 
     the park, appointed from a recommendation by the Governor of 
     Minnesota;
       ``(7) 1 member shall be an elected official from the 
     Northern Counties Land-Use Coordinating Board, appointed from 
     recommendations by the Board; and
       ``(8) 1 member shall be an elected official of the Native 
     American community to represent the 1854 Treaty Authority, 
     appointed from recommendations by the Authority.
       ``(d) Advisory Committees.--
       ``(1) In general.--The Council may establish 1 or more 
     advisory committees for consultation, including committees 
     consisting of members of conservation, sportsperson, 
     business, professional, civic, and citizen organizations.
       ``(2) Funding.--An advisory committee established under 
     paragraph (1) may not receive any amounts made available to 
     carry out this Act.
       ``(e) Quorum.--A majority of the members of the Council 
     shall constitute a quorum.
       ``(f) Chairperson.--
       ``(1) Election.--The members of the Council shall elect a 
     chairperson of the Council from among the members of the 
     Council.
       ``(2) Terms.--The chairperson shall serve not more than 2 
     terms of 2 years each.
       ``(g) Meetings.--The Council shall meet at the call of the 
     chairperson or a majority of the members of the Council.
       ``(h) Staff and Services.--
       ``(1) Staff of the council.--The Council may appoint and 
     fix the compensation of such staff as the Council considers 
     necessary to carry out this Act.
       ``(2) Procurement of temporary services.--The Council may 
     procure temporary and intermittent services under section 
     3109(b) of title 5, United States Code.
       ``(3) Administrative support services.--The Administrator 
     of General Services shall provide to the Council, on a 
     reimbursable basis, such administrative support services as 
     the Council requests.
       ``(4) Provision by the secretary.--On a request by the 
     Council, the Secretary shall provide personnel, information, 
     and services to the Council to carry out this Act.
       ``(5) Provision by other federal departments and 
     agencies.--A Federal agency shall provide to the Council, on 
     a reimbursable basis, such information and services as the 
     Council requests.
       ``(6) Provision by the governor.--The Governor of Minnesota 
     may provide to the Council, on a reimbursable basis, such 
     personnel and information as the Council may request.
       ``(7) Subpoenas.--The Council may not issue a subpoena nor 
     exercise any subpoena authority.
       ``(i) Procedural matters.--
       ``(1) Guidelines for conduct of business.--The following 
     guidelines apply with respect to the conduct of business at 
     meetings of the Council:
       ``(A) Open meetings.--Each meeting shall be open to the 
     public.
       ``(B) Public notice.--Timely public notice of each meeting, 
     including the time, place, and agenda of the meeting, shall 
     be published in local newspapers and such notice may be given 
     by such other means as will result in wide publicity.
       ``(C) Public participation.--Interested persons shall be 
     permitted to give oral or written statements regarding the 
     matters on the agenda at meetings.
       ``(D) Minutes.--Minutes of each meeting shall be kept and 
     shall contain a record of the persons present, an accurate 
     description of all proceedings and matters discussed and 
     conclusions reached, and copies of all statements filed.
       ``(E) Public inspection of record.--The administrative 
     record, including minutes required under subparagraph (D), of 
     each meeting, and records or other documents that were made 
     available to or prepared for or by the Council incident to 
     the meeting, shall be available for public inspection and 
     copying at a single location.
       ``(2) New information.--At any time when the Council 
     determines it appropriate to consider new information from a 
     Federal, State, or local agency or from a Council advisory 
     body, the Council shall give full consideration to new 
     information offered at that time by interested members of the 
     public. Interested parties shall have a reasonable 
     opportunity to respond to new data or information before the 
     Council takes final action on management measures.
       ``(j) Compensation.--
       ``(1) In general.--A member of the Council who is not an 
     officer or employee of the Federal government shall serve 
     without pay when carrying out duties pursuant to this Act.
       ``(2) Travel expenses.--While away from the home or regular 
     place of business of the member in the performance of 
     services for the Council, a member of the Council shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, in the same manner as persons employed 
     intermittently in Federal Government service are allowed 
     expenses under section 5703 of title 5, United States Code.
       ``(k) Funding.--Of amounts appropriated to the National 
     Park Service for a fiscal year, the Secretary shall make 
     available such amounts as the Council shall request, not to 
     exceed $150,000 for the fiscal year.
       ``(l) Termination of Council.--The Council shall terminate 
     on the date that is 10 years after the date of enactment of 
     this subsection.

     ``SEC. 305. MANAGEMENT PLAN.

       ``(a) Schedule.--
       ``(1) In general.--Not later than 3 years after the date of 
     enactment of this subsection, the Council shall submit to the 
     Secretary and the Governor of Minnesota a comprehensive 
     management plan (referred to in this section as the `plan') 
     for the park, to be developed and implemented by the 
     responsible Federal agencies, the State of Minnesota, and 
     local political subdivisions.
       ``(2) Preliminary report.--Not later than 1 year after the 
     date of the first meeting of the Council, the Council shall 
     submit a preliminary report to the Secretary describing the 
     process to be used to develop the plan.
       ``(b) Development of Plan.--
       ``(1) In general.--In developing the plan, the Council 
     shall examine all relevant issues, including--
       ``(A) appropriate public access and recreational use, 
     including--
       ``(i) snowmobiling opportunities;
       ``(ii) campsites and trails;
       ``(iii) the management policies of harvesting fish and 
     wildlife;
       ``(iv) aircraft access throughout the park;
       ``(v) policies affecting hiking, bicycling, snoeshoeing, 
     skiing, current watercraft opportunities, and other 
     recreational activities the Council considers appropriate for 
     the park; and
       ``(vi) visitation and services at the Kettle Falls 
     facilities;
       ``(B) the proper distribution of visitors in the park;
       ``(C) a comprehensive visitor education program; and
       ``(D) the need for wilderness management for certain areas 
     of the park.
       ``(2) Conditions.--In carrying out subparagraphs (A) 
     through (D) of paragraph (1), the Council shall--
       ``(A) be subject to relevant environmental law;
       ``(B) consult on a regular basis with appropriate officials 
     of each international, Federal, or State agency or local 
     government that has jurisdiction over land or water in the 
     park;
       ``(C) consult with interested conservation, sportsperson, 
     business, professional, civic, and citizen organizations; and
       ``(D) conduct public meetings at appropriate places to 
     provide interested persons the opportunity to comment on 
     matters to be addressed by the plan.
       ``(3) Prohibited considerations.--The Council may not 
     consider--
       ``(A) removing park designation; or
       ``(B) allowing mining, logging, or commercial or 
     residential development.
       ``(4) Report.--The Council shall report to the 
     International Joint Commission on water levels in the Rainy 
     Lake Watershed, pursuant to the Convention Providing for 
     Emergency Regulation of the Level of Rainy Lake and of 
     Certain Other Boundary Waters, signed at Ottawa September 15, 
     1938 (54 Stat. 1800).
       ``(c) Approval of Plan.--
       ``(1) Submission to secretary and governor.--The Council 
     shall submit the plan to the Secretary and the Governor of 
     Minnesota for review.
       ``(2) Approval or disapproval by secretary.--
       ``(A) Review by the governor.--The Governor may comment on 
     the plan not later than 60 days after receipt of the plan 
     from the Council.

[[Page S5582]]

       ``(B) Secretary.--
       ``(i) In general.--The Secretary shall approve or 
     disapprove the plan not later than 90 days after receipt of 
     the plan from the Council.
       ``(ii) Criteria for review.--In reviewing the plan, the 
     Secretary shall consider--

       ``(I) the adequacy of public participation;
       ``(II) assurances of plan implementation from State and 
     local officials in Minnesota;
       ``(III) the adequacy of regulatory and financial tools that 
     are in place to implement the plan;
       ``(IV) provisions of the plan for continuing oversight by 
     the Council of implementation of the plan; and
       ``(V) the consistency of the plan with Federal law.

       ``(iii) Notification of disapproval.--If the Secretary 
     disapproves the plan, the Secretary shall, not later than 30 
     days after the date of disapproval, notify the Council in 
     writing of the reasons for the disapproval and provide 
     recommendations for revision of the plan.
       ``(C) Revision and resubmission.--Not later than 60 days 
     after receipt of a notice of disapproval under subparagraph 
     (B) or (D), the Council shall revise and resubmit the plan to 
     the Secretary for review.
       ``(D) Approval or disapproval of revision.--The Secretary 
     shall approve or disapprove a plan submitted under 
     subparagraph (C) not later than 30 days after receipt of the 
     plan from the Council.
       ``(d) Review and Modification of Implementation of Plan.--
     The Council--
       ``(1) shall review and monitor the implementation of the 
     plan; and
       ``(2) may, after providing for public comment and after 
     approval by the Secretary, modify the plan, if the Council 
     and the Secretary determine that the modification is 
     necessary to carry out this Act.
       ``(e) Interim Program.--Before the approval of the plan, 
     the Council shall advise and cooperate with appropriate 
     Federal, State, local, and tribal governmental entities to 
     minimize adverse impacts on the park.
       ``(f) National Park Service Regulations.--During the period 
     beginning on the date of enactment of this subsection and 
     ending on the date a management plan is approved by the 
     Secretary under subsection (c)(2), the Secretary may not 
     issue any regulation that relates to the park, except for--
       ``(1) regulations required for routine business, such as 
     maintenance, visitor education, and law enforcement; and
       ``(2) emergency regulations.
       ``(g) State and Local Jurisdiction.--Nothing in this Act 
     diminishes, enlarges, or modifies any right of the State of 
     Minnesota or any political subdivision of the State to--
       ``(1) exercise civil and criminal jurisdiction;
       ``(2) carry out State fish and wildlife laws in the park; 
     or
       ``(3) tax persons, corporations, franchises, or private 
     property on land and water included in the park.''.
                                 ______

      By Mr. D'AMATO (for himself, Mr. Dodd and Mr. Frist):

  S. 1806. A bill to amend the Federal Food, Drug, and Cosmetic Act to 
clarify that any dietary supplement that claims to produce euphoria, 
heightened awareness or similar mental or psychological effects shall 
be treated as a drug under the Act, and for other purposes; to the 
Committee on Labor and Human Resources.


               Legislation to Control Herbal Street Drugs

 Mr. D'AMATO. Mr. President, today I am introducing 
legislation--along with my colleagues Senators Dodd and Frist--to 
control the growing problem of dangerous herbal stimulants that are 
marketed and sold as alternatives to powerful and illegal street drugs. 
This carefully-drafted bill will make these herbal street drugs subject 
to pre-market safety reviews and allow the Food and Drug 
Administration, the FDA, to take prompt and decisive action against 
this narrow class of products.
  I strongly support the right of the American people to have access to 
legitimate dietary supplements, and I want to clearly state that this 
bill will not limit that access. However, herbal street drugs are not 
legitimate dietary supplements. They are quite simply dangerous 
products masquerading as dietary supplements to evade Government review 
and sanctions.
  Mr. President, on March 7, 1996, one of these products, called 
Ultimate Xphoria, killed 20-year-old Peter Schlendorf of Northport, NY. 
Peter, a junior at the State University of New York at Albany, died 
from a lethal combination of herbal stimulants found in this product. A 
statement issued by the medical examiner's office in Panama City, FL, 
where Peter died, specifically states that Peter's death ``was a result 
of the use of Ultimate Xphoria, an herbal product containing Ma 
Huang.'' Ma Huang--also known as Ephedra--is a botanical source of the 
powerful stimulant ephedrine. The medical examiner's statement lists 
Peter's cause of death as the ``synergistic effect of ephedrine'' and 
several other herbal stimulants contained in this product. The 
statement further explains that these stimulants ``can have an adverse 
effect on the heart and central nervous system.''
  Mr. President, I am committed to doing everything that I can to 
ensure that no more young people die from these dangerous herbal street 
drugs. And let me be perfectly clear: if Congress fails to act, it will 
just be a matter of time before these products kill more young people.
  This is a battle to protect our children. The slick peddlers of these 
herbal street drugs have specifically targeted young people. They sell 
their products in novelty shops, using flashy signs and posters that 
appeal to and attract adolescents. They give their products names like 
Cloud 9, Herbal Ecstacy, Ultimate Xphoria, Magic Mushrooms and E-Ludes.
  Using the Internet and showy brochures, they hawk their dangerous 
wares with promises of ``euphoric stimulation, highly increased energy 
levels, tingly skin sensations, increased sexual sensations, enhanced 
sensory processing and mood elevations.'' One product, called Herbal 
Ecstacy, even claims that it is ``a carefully formulated and thoroughly 
tested organic alternative to actual MDMA or Ecstacy''--a dangerous, 
illegal street drug. The marketing brochure for this product further 
states that it ``acts on the same basis as MDMA, triggering similar, 
but not identical, physical reactions in the body.'' This is just 
outrageous.
  In addition, many of these products falsely claim to be safe and 
tested. Some are even advertised as ``100 percent and FDA approved'' 
and as ``100 percent natural . . . with no side effects''. As Peter's 
death clearly demonstrates, however, these products can be deadly, and 
none are FDA-approved. How can the producers of these herbal street 
drugs claim that they are safe and tested when they can produce such 
tragic results? This is wrong and must be stopped.
  The manner in which these products are marketed invites misuse by 
unsuspecting young people. These products are advertised as 
alternatives to street drugs. They are intended to get young people 
high. And what happens when the recommended dosage doesn't achieve the 
desired high? Then, the claims that these products are safe, natural 
and thoroughly tested lure young people into taking larger dosages. 
Indeed, some sellers are telling people to take two, three and four 
times the recommended dosage to achieve the desired high.
  Mr. President, the legislation that I am introducing today will help 
to ensure that no more young people die from these dangerous products. 
The bill amends the Federal Food, Drug, and Cosmetic Act to clarify 
that a dietary supplement shall be considered a drug if its label or 
labeling claims or implies that the dietary supplement produces 
euphoria, heightened awareness or similar mental or psychological 
effects. As a result, this narrow class of dangerous products will be 
subject to the same premarket safety reviews as other drugs, and the 
FDA will have enhanced authority to take prompt and decisive action 
against them. Now, the FDA will be able to quickly pull these herbal 
street drugs, like the one that killed Peter Schlendorf, from stores 
before they kill again. This legislation is necessary to protect the 
health of the American public, particularly its youth, who are 
obviously the target of these dangerous herbal street drugs.

  Again, let me clearly state that this bill has been carefully drafted 
to maintain the public's continued access to legitimate dietary 
supplements. For example, it will not limit access to either over-the-
counter drugs, such as Sudafed, or legitimate dietary supplements, such 
as herbal teas, that contain ephedra or its related products.
  I am certain that no Member of Congress envisioned that the Dietary 
Supplement Health and Education Act of 1994--the Dietary Supplement 
Act--would protect dangerous products like these herbal street drugs, 
but these products are currently covered by the literal language of 
that act. Since these products are considered dietary

[[Page S5583]]

supplements under current law, the FDA's authority to regulate them is 
significantly limited. For example, these products are not currently 
subject to premarket safety reviews. In addition, the FDA cannot 
regulate herbal street drugs as a class, but instead must take action 
against each product individually. Indeed, the FDA must prove that a 
particular formulation of an herbal street drug ``presents a 
significant or unreasonable risk of illness or injury'' before it can 
take any action against the product. This is a lengthy process that can 
take years.
  Moreover, under current law, an herbal street drug manufacturer can 
easily evade an FDA enforcement action simply by changing the 
composition of its product, while continuing to make the same labeling 
claims for drug-like mental and psychological effects. Each time the 
product formula changes, the FDA must evaluate the new formula and 
build its case from the beginning. The product formula thus becomes a 
moving target that the FDA must chase. The FDA should not have to chase 
herbal street drugs.
  Some will argue that this legislation is unnecessary and that the FDA 
already has the authority to take action against herbal street drugs, 
but the clever producers and marketers of these herbal street drugs 
have been careful to take advantage of the protections afforded 
legitimate dietary supplements under the Dietary Supplement Act. For 
example, under that act, a dietary supplement is not subject to 
regulation as a drug simply because its label or labeling bears a 
truthful, nonmisleading claim regarding its effect on the body. This 
provision significantly limits the FDA's ability to take action against 
the peddlers of herbal street drugs who use carefully worded labels to 
evade FDA review and control.
  Other options available to the FDA would also be ineffective against 
herbal street drugs. For example, the Dietary Supplement Act gives the 
Secretary of Health and Human Services the authority to declare that a 
dietary supplement poses an imminent hazard to public health or safety. 
Once such a declaration is made, the dietary supplement can be banned. 
A formal imminent hazard declaration requires lengthy formal rulemaking 
procedures, however, including a trial-type hearing before an 
administrative law judge. In addition, because what sells an herbal 
street drug is its claims rather than its ingredients, the imminent 
hazard declaration can easily be defeated by a formulation change 
without any label change. One can easily imagine the slick peddlers of 
these products switching a single ingredient--for example, from ephedra 
to kava-kava, another powerful herbal stimulant--just as the FDA is 
knocking on their door.
  Mr. President, the marketing of herbal street drugs as dietary 
supplements, rather than as drugs, does not promote any of the goals 
identified by Congress in the Dietary Supplement Act. That act was 
intended to promote the public health. Congressional findings in 
section 2 of the act cite the role of a healthy diet, including safe 
dietary supplements in disease prevention, long-term good health, and 
reducing health care costs. Far from promoting the public health, 
herbal street drugs endanger the health and safety of consumers and 
give rise to unnecessary medical costs.
  These dangerous products are not taken for nutritional purposes or to 
otherwise improve health and thus are not within the intended coverage 
of the Dietary Supplement Act. The manufacturers of herbal street drugs 
should not be permitted to abuse the Dietary Supplement Act by using it 
to legitimize the marketing of dangerous products. A narrowly drafted 
statutory amendment to correct the inclusion of herbal street drugs in 
the language of the act would achieve the intent of Congress by closing 
a loophole that Congress never intended to create.
  Herbal street drugs killed young Peter Schlendorf. We have to make 
sure that this does not happen again. We have carefully drafted this 
legislation to target the narrow class of products that killed Peter--
products that are being marketed and sold to young people as safe and 
legal alternatives to dangerous, illegal street drugs. We must take 
action quickly. I urge my fellow Senators to support this effort and 
quickly pass this legislation. If we wait, herbal street drugs will end 
more promising, young lives.
 Mr. DODD. Mr. President, I am proud to sponsor this very 
important legislation with my colleagues, Senators D'amato and Frist. 
In my view, the legislation is necessary to protect the American 
public, and particularly our Nation's youth, from what amount to common 
street drugs.
  The makers of these products make no attempt to sell them as products 
to improve health or nutrition. The products carry names like ``Herbal 
Ecstacy,'' ``Ultimate X-Phoria,'' and ``Cloud 9.'' One product claims 
``It is a carefully formulated and thoroughly tested organic 
alternative to actual MDMA or Ecstacy.'' I hardly think any of us 
believe that our Nation's children should be able to go into any 
novelty store and buy the equivalent of a powerful, dangerous, and I 
might add, illegal street drug.
  Let me share with you the claims and promotional language of these 
products, lest there be any doubt what there purpose is for:

       The effects of Herbal Ecstacy beyond smart drug capacity 
     include: Euphoric stimulation; highly increased energy 
     levels; tingly skin sensations; enhanced sensory processing; 
     mood elevations.
       Herbal Ecstacy acts on the same basis as MDMA, triggering 
     similar but not identical physical reactions in the body.
       Our herbs are 100% natural and are uniquely formulated to 
     give you a floaty, energetic, mind expanding, euphoric 
     experience.

  And listen to what is presented on a brochure as endorsements by 
users:

       They don't call it ``ultimate'' for nothing!
       This puts everything else I've tried to shame!!

  Now, Mr. President, I guess we might feel differently if we knew 
these products were without risk. But the fact is, they have proven 
deadly. Peter Schlendorf, a 20-year-old from York, FL, died because he 
took one of these products. The cause of death was identified by the 
medical examiner's office in the Florida town where Peter died.
  The makers of these products claim they are nutritional supplements, 
legitimately sold and promoted. They point to a law passed a couple of 
years ago that was meant to govern legitimate dietary supplements, that 
improve health and nutrition. But make no mistake. These products do 
nothing to improve health and nutrition.
  So, the legislation we are proposing today is very simple. It says 
that products claiming to produce euphoria, heightened awareness or 
similar mental or psychological effects shall be treated as a drug. It 
would make the products subject to the same review, by the U.S. Food 
and Drug Administration, as other drugs. The products are not banned. 
And the bill will have no effect on legitimate dietary supplements. It 
only will affect products that are marketed and sold as alternatives to 
powerful street drugs.
  Mr. President, it is my hope that we can act quickly on this 
legislation and prevent the kind of tragedy experienced by the 
Schlendorfs.
 Mr. FRIST. Mr. President, I rise today to join my 
distinguished colleague from New York in introducing legislation to 
address an alarming problem facing our children today.
  A new class of street drugs is endangering our Nation's young people. 
These products are being portrayed as safe, natural alternatives to 
illegal street drugs, but they are far from safe.
  As a medical doctor who specialized in heart ailments, I am familiar 
with the powerful and even life-threatening effect some of these 
products can have on the human heart and central nervous system. And as 
the father of three young boys of the ages 8, 10 and 12, I am outraged 
at the way these products are being blatantly marketed toward children 
and young adults.
  Therefore, I have joined Senators D'Amato and Dodd in introducing a 
bill that will control the growing problem of herbal street drugs. This 
bill will classify as drugs products marketed and sold, particularly to 
young people, as alternatives to illegal street drugs. As a result 
these products will be subject to the same Federal review and sanctions 
as other pharmaceuticals.
  This bill will not limit public access to legitimate dietary 
supplements and over-the-counter medications. It is not drafted to 
limit public access to products that contain particular ingredients. 
The producers of legitimate products that make truthful claims about 
their product have nothing to fear from

[[Page S5584]]

this bill. To the contrary, they should support the intent of this bill 
because it addresses the problem of unscrupulous manufacturers who are 
giving the dietary supplement industry a bad name and abusing the very 
laws which permit dietary supplement manufacturers to place truthful 
and nonmisleading claims on their products.
  These herbal street drugs pose significant health risks to consumers. 
These products are marketed under a variety of brand names, including 
Cloud 9, Herbal Ecstasy and Ultimate Xphoria, with labels that claim or 
imply that they produce such effects as euphoria, heightened awareness 
and other effects. These labels often portray the products as legal 
alternatives to illegal street drugs such as ``ecstasy.'' ``Ecstasy'' 
is the street name for MDMA (4-methyl-2, dimethoxyamphetamine), which 
produces euphoria.
  These products often contain botanical sources of ephedrine. 
Ephedrine is an amphetamine-like stimulant that can have potentially 
dangerous effects on the heart and central nervous system. Possible 
adverse effects range from clinically significant effects such as heart 
attack, stroke, seizures, psychosis and death, to clinically less 
significant effects that may indicate the potential for more serious 
effects. These effects can include dizziness, headache, 
gastrointestinal distress, irregular heartbeat, and heart palpitations. 
The labels on these herbal street drugs may list one or more ephedrine-
containing ingredients, including ma huang, Chinese ephedra, ma huang 
extract, ephedra, Ephedra sinica, ephedra extract, ephedra herb powder, 
epitonin or ephedrine.
  Ephedrine and its related products are also available in many 
legitimate forms that will not be affected by this bill. For example, 
ephedrine can be useful for treating mild forms of seasonal or chronic 
asthma and is also FDA-approved for treating enursesis hypotension, 
nasal congestion and sisustitis.
  According to a statement by the Panama City, Florida medical 
examiner, 20-year-old Peter Schlendorf died ``as a result of the use of 
Ultimate Xphoria, an herbal product containing Ma Huang''. Peter's 
cause of death was listed as the ``synergistic effect of ephedrine, 
pseudo-ephedrine, phenylpropanolamine and caffeine''. There is no 
question that this combination of stimulants can have an adverse effect 
on the heart and central nervous system.
  As lawmakers, we have a responsibility to make sure that no more 
young people die from these herbal street drugs. This bill provokes 
debate on this important issue. I have already been contacted by a 
major trade association, the Council for Responsible Nutrition [CRN], 
and the Nutritional Health Alliance, an industry and consumer 
coalition, expressing a desire to work with us to reach an effective 
solution to this issue. I urge all interested parties to come to the 
table and address the serious consequences of allowing these herbal 
street drugs to fall into the hands of our children.
                                 ______

      By Mr. MURKOWSKI (for himself and Mr. Stevens):
  S. 1807. A bill to amend the Alaska Native Claims Settlement Act, 
regarding the Kake Tribal Corporation public interest land exchange; to 
the Committee on Energy and Natural Resources.


                     kake land exchange legislation

 Mr. MURKOWSKI. Mr. President, today I introduce the Kake 
Tribal Land Exchange Act on behalf of myself and Senator Stevens. This 
legislation would amend the Alaska Native Claims Settlement Act which 
authorized the transfer of 23,040 acres of land from the U.S. 
Government to Kake Tribal Corporation.
  The land was transferred to Kake to recognize ``an immediate need for 
a fair and just settlement''
  Unfortunately, Kake has not received the full beneficial use of its 
23,040 acres because the city's watershed--over 2,400 acres--rest 
within Kake Tribal's lands. In order to protect the city's watershed 
and still receive beneficial use of their 23,040 acres we are proposing 
an acre-for-acre land exchange. This will assist the people of Kake, 
AK, as they move toward a safer, cleaner, and healthier future.
  Under this proposal, Kake Tribal would exchange the watershed for 
2,427 acres in southeast Alaska, thereby allowing Kake to receive its 
full entitlement under ANCSA. This legislation is of great importance 
to the residents of the community of Kake, AK.
  This legislation will ensure protection of the Gunnuk Creek watershed 
which is the main water supply for the city of Kake as well as protect 
critical habitat for the Gunnuk Creek hatchery.
  The legislation has received wide support in Alaska from diverse 
groups such as: The Southeast Alaska Conservation Council, the city of 
Kake, AK, the Organized Village of Kake, the Kake non-profit fishery, 
the Alaska Federation of Natives, and Sealaska Corporation.
  Additionally, the Governor of Alaska has written to me in support of 
this exchange. Attached are copies of some of the letters of support I 
have received for the record at this time.
  Because this is an acre-for-acre exchange there will be no cost to 
the Federal Government. I introduced this legislation with the 
confidence that it is in the best interest of not only the citizens of 
Kake but with the knowledge that it is in the best interest of all 
Americans to protect drinking water for our communities. Lastly, this 
legislation will help fulfill our commitment to the Natives of Alaska 
that they will be treated fairly and justly under the Alaska Native 
Claims Settlement Act.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1807

       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 ``Kake Tribal Corporation Land 
     Exchange Act.''

     SEC. 2. AMENDMENT OF SETTLEMENT ACT.

       The Alaska Native Claims Settlement Act (Public Law 92-203, 
     December 18, 1971, 85 Stat. 688, 43 U.S.C. 1601 et seq.), as 
     amended, is further amended by adding a new section to read:

     SEC. 40. KAKE TRIBAL CORPORATION LAND EXCHANGE.

       (a) To provide Kake Tribal Corporation with land suitable 
     for development, to acknowledge the corporation's return to 
     public ownership land needed as a municipal watershed area, 
     and to promote the public interest, the Secretary shall 
     convey to the corporation approximately 2, 427 acres of 
     Federal land as described in subsection (c). The land to be 
     conveyed includes:
       (1) up to 388 acres in the Slate Lakes area, as described 
     in (c)(2) of this section, if, within five years after the 
     effective date of this section, the corporation has entered 
     into an agreement to lease or otherwise convey some or all of 
     the land to the operator of the Jualin Mine; or,
       (2) at the corporation's option, the 388 acres mentioned in 
     (1) of this subsection and the remaining 2,039 acres may be 
     conveyed from the acres described in (c)(3) of this section.
       (b) Title to Surface and Subsurface.--Subject to valid 
     existing rights and easements, the Secretary shall, no later 
     than the deadlines specified in (c)(2) and (3) of this 
     section, convey to Kake Tribal Corporation title to the 
     surface estate in this land and convey to Sealaska 
     Corporation title to the subsurface estate in that land.
       (c) Description and Deadlines.--The land covered by this 
     section is in the Copper River Meridian and is further 
     described as follows:
       (1) the land to be conveyed by Kake Tribal Corporation to 
     the United States, no later than 90 days after the effective 
     date of this section, as shown on the map dated __________ 
     and labeled Attachment A, is the municipal watershed area and 
     is described as follows:

                           Municipal watershed                          
                                                                        
                                                             Approximate
                          Section                               acres   
                                                                        
                                                                        
                               T56S, R72E                               
13.........................................................           82
23.........................................................          118
24.........................................................          635
25.........................................................          640
26.........................................................          346
34.........................................................            9
35.........................................................          349
36.........................................................          248
                                                            ------------
  Approximate total........................................        2,427
                                                                        

       (2) Kake Tribal Corporation shall have the option to select 
     up to 388 acres in the Slate Lakes area, as shown on the map 
     dated __________ and labeled Attachment B. This option shall 
     remain in effect for five years after the date of enactment 
     of this section. The land to be conveyed is identified on the 
     following maps as:

[[Page S5585]]



                            Slake lakes area                            
                                                                        
                                                             Approximate
              Section                      Description          acres   
                                                                        
                                                                        
                               T35S, R62E                               
22.................................  E\1/2\................           27
23.................................  W\1/2\................          152
26.................................  W\1/2\................          119
27.................................  E\1/2\................           23
                                                                        
                               T36S, R62E                               
1..................................  W\1/2\, NW\1/4\.......           38
   Two utility corridors: One beginning in the northwest                
quarter of section 1, T36S, R62E, heading northwest through             
 the northeast quarter of section 2, then heading northwest             
    through section 26, T35S, R62E; another beginning in                
  section 23, T35S, R62E, heading northeast, then heading               
  northwest through section 23, then northwest through the              
  southwest quarter of section 15, then northwest through               
section 16, then turning northeast in the northeast quarter             
        of section 16 to the Jualin patented group.                     
      Approximate total............    ....................          388
                                                                        

       (3) the remaining 2,039 acres of land to be conveyed to 
     Kake Tribal Corporation, or the entire 2,427 acres if the 
     option on the 388 acres mentioned in (2) of this subsection 
     is not exercised, shall be land in the Hamilton Bay and 
     Saginaw Bay areas and shall be conveyed within 90 days after 
     the effective date of this section; this land is shown on the 
     maps dated __________ and labeled Attachments C and D.
       (d) Timber Manufacturing.--Notwithstanding any other 
     provision of law, timber harvested from lands conveyed to 
     Kake Tribal Council pursuant to this Act shall not be 
     available for export as unprocessed logs from Alaska, nor may 
     Kake Tribal Corporation sell, trade, exchange, substitute, or 
     otherwise convey such logs to any other person for the 
     purpose of exporting such logs from their.
       (e) Relation to Other Requirements.--The land conveyed to 
     Kake Tribal Corporation and Sealaska Corporation under this 
     section is, for all purposes, considered land conveyed under 
     the Alaska Native Claims Settlement Act.
       (f) Maps.--The maps referred to in this section shall be 
     maintained on file in the Office of the Chief, United States 
     Forest Service, and in the Office of the Secretary of the 
     Interior, Washington, D.C. The acreage cited in this section 
     is approximate, and if a discrepancy arises between cited 
     acreage and the land depicted on the specified maps the maps 
     shall control. The maps do not constitute an attempt by the 
     United States to convey State or private land.
                                 ______

      By Mr. MURKOWSKI (for himself and Mr. Johnston):
  S. 1808. A bill to amend the Act of October 15, 1966 (80 stat. 915), 
as amended, establishing a program for the preservation of additional 
historic property throughout the Nation, and for other purpose; to the 
Committee on Energy and Natural Resources.


  the national historic preservation act of 1966 amendment act of 1996

 Mr. MURKOWSKI. Mr. President, on behalf of Senator Johnston 
and myself, I introduce a bill to amend the National Historic 
Preservation Act of 1966, that, when enacted, will continue the 
appropriations authorization for the Advisory Council on Historic 
Preservation.
  Established in 1966, the Council is an independent Federal agency 
responsible for advising the President and the Congress on historic 
preservation matters and commenting to Federal agencies on the effects 
of their activities upon historic properties.
  Mr. President, over the past three decades, the Congress has made a 
substantial commitment to the preservation and encouragement of our 
national heritage. Established by the National Historic Preservation 
Act, the Advisory Council on Historic Preservation has served to 
improve the effectiveness and coordination of public and private 
efforts in historic preservation.
  Historic preservation safeguards physical links to the past. It is 
through these links that our important cultural resources are preserved 
and passed on to succeeding generations. Destruction of our significant 
cultural and historic resources serves no purpose. Our memory of 
important history only becomes more difficult without the various 
fabrics to view, touch and or experience.
  Congress recognized this principle in the National Historic 
Preservation Act of 1966: ``The historical and cultural foundations of 
the nation should be preserved as a living part of our community life 
and development in order to give a sense of orientation to the American 
people.''
  Mr. President, in addition to many educational programs, one of the 
most important functions of the Advisory Council is mediating between 
any Federal agency issuing a permit and the individual who is planning 
to develop his property. Under the terms of Section 106 of the National 
Historic Preservation Act, the Council seeks to negotiate a memorandum 
of agreement in such cases, setting forth what will be done to reduce 
or avoid and adverse effects the undertaking will have.
  While the section 106 process has often been described as contentious 
by private property rights advocates and others, I believe the Advisory 
Council can and should serve as a solution to resolving conflicts 
between a sometimes over-reaching bureaucracy and the individual 
property owner.
  It is my hope that the committee hearing process will shed light on 
the problems, address the issues, as well as the successes of the 
Council; and that we can move forward on this important program in a 
positive and constructive manner.
  The Council's appropriations authorization expires with the current 
fiscal year. This legislation will authorize the continuing work of the 
Council by providing appropriations authority from fiscal year 1997 
through fiscal year 2002.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1808

       Be it enacted by the Senate and the House of 
     Representatives of the United States of America in Congress 
     assembled, That the Act of October 15, 1966 (80 Stat. 915), 
     as amended (16 U.S.C. Section 470 et seq.) is further amended 
     as follows:
       (a) Section 212(a) is amended by deleting the last sentence 
     and inserting in lieu thereof the sentence ``There are 
     authorized to be appropriated not to exceed $5,000,000 in 
     each fiscal year 1997 through 2002.''
                                 ______

      By Mr. MURKOWSKI:
  S. 1809. A bill entitled the ``Aleutian World War II National 
Historic Areas Act of 1996''; to the Committee on Energy and Natural 
Resources.


     THE ALEUTIAN WORLD WAR II NATIONAL HISTORIC AREAS ACT OF 1996

 Mr. MURKOWSKI. Mr. President, I introduce a bill entitled the 
``Aleutian World War II National Historic Areas Act of 1996.''
  Mr. President, the Ounalashka Corporation is the Alaska Native 
village corporation for the Unalaska region of the Western Aleutian 
Islands. The Corporation is the major land owner of Amaknak Island, 
where the City of Unalaska is located. The Corporation has been working 
closely with municipal officials of the City of Unalaska to identify 
Corporation land which would be Federally recognized and designated as 
a unique ``historic area''.
  Many have forgotten that during World War II, Unalaska came under 
attack. Unalaska was raided and bombed by Japanese aircraft in one of 
the few sieges on U.S. territory. This area of Amaknak Island was 
heavily fortified, and much of the original bunkers, tunnels, and 
buildings remain. The Corporation owns the majority of land and 
facilities occupied by U.S. military forces on Amaknak Island during 
the war.
  The area is rich in history and memories. In recent years World War 
II veterans who were stationed in Unalaska, and in some cases family 
members, have made pilgrimages back to honor fallen friends and relive 
the past.
  In addition to the historic significance of Unalaska during the War, 
there is also a compelling story of the Aleutian Islands indigenous 
people which is not well known. Alaska Native people from 23 villages 
were evacuated from the region during the War, and many were interned 
in relocation camps. As a result of the devastating bombing by the 
Japanese, the city of Unalaska was the only village that was re-
inhabited following the World War II effort.
  The Aleut people made substantial contributions to the war effort and 
yet suffered hardships similar to those of the Japanese-Americans 
throughout the war.
  The Corporation, the City of Unalaska, and many historians believe 
that the history of the Aleut people and the war effort in the region 
are

[[Page S5586]]

intertwined. In response to the increased interest of the World War II 
veterans and their survivors who have visited Unalaska, the Corporation 
is considering constructing a World War II Historic Center on the 
Island of Amaknak to tell this unique, but little known history of the 
war in the Aleutians and the Aleut people to the rest of the world.
  Mr. President, this legislation, when enacted, will establish the 
``Aleutian World War II National Historic Area''. I am very cognizant 
of the adverse effects that new units of the National Park System can 
create on existing units of the System. This legislation provides us 
with a unique opportunity to work with and for the private sector in 
the development and operation of this important historic resources.
  There will be no land acquisition or day-to-day operational expenses 
normally associated with other units of the National Park System. The 
Ounakashka Corporation has exclusive ownership and control of the 
lands, buildings and historic structures which would comprise the 
historic area.
  The Corporation is not seeking land exchanges with the Department of 
the Interior and does not desire to convey or encumber title to, or 
control of, its lands to the Federal Government. The Corporation only 
wants to work with the Federal Government to save this significant 
piece of the history of the United States. The expense to the National 
Park Service would be minimal, and would consist of technical 
assistance and training. The contribution to the public will be a 
historic site that is preserved for the enjoyment and education of all 
Americans.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1809

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Aleutian World War II 
     National Historic Areas Act of 1996''.

     SEC. 2. PURPOSE.

       The purpose of this Act is to designate and preserve the 
     Aleutian World War II National Historic Area within lands 
     owned by the Ounalaska Corporation on the island of Amaknak, 
     Alaska and to provide for the interpretation, for the 
     educational and inspirational benefit of present and future 
     generations, of the unique and significant circumstances 
     involving the history of the Aleut people, and the role of 
     the Aleut people and the Aleutian Islands in the defense of 
     the United States in World War II.

     SEC. 3. BOUNDARIES.

       The Aleutian World War II National Historic Area shall be 
     comprised of areas on Amaknak island depicted on the map 
     entitled ``Aleutian World War II National Historic Area''.

     SEC. 4. TERMS AND CONDITIONS.

       Nothing in this Act shall--
       (a) authorize the conveyance of lands between the Ounalaska 
     Corporation and the U.S. Department of the Interior, nor 
     remove land or structures appurtenant to the land from the 
     exclusive control of the Ounalaska Corporation; or
       (b) provide authority for the Department of the Interior to 
     assume the duties associated with the daily operation of the 
     Historic Area or any of its facilities or structures.

     SEC. 5. TECHNICAL ASSISTANCE.

       The Secretary of the Interior may award grants and provide 
     technical assistance to the Ounalaska Corporation and the 
     City of Unalaska to assist with the planning, development, 
     and historic preservation from any program funds authorized 
     by law for technical assistance, land use planning or 
     historic preservation.
                                 ______

      By Mr. GORTON (for himself and Mrs. Murray):
  S. 1810. A bill to expand the boundary of the Snoqualmie National 
Forest and for other purposes; to the Committee on Energy and Natural 
Resources.


     the snoqualmie national forest boundary adjustment act of 1996

 Mr. GORTON. Mr. President, today I am joined by junior Senator 
from Washington State, Mrs. Murray, in introducing the ``Snoqualmie 
National Forest Boundary Adjustment Act of 1996.'' Earlier this week 
Representative Jennifer Dunn, of Washington State, introduced identical 
legislation in the House.
  This legislation will facilitate the exchange of land between the 
Weyerhaeuser Company and the Forest Service by adjusting a National 
Forest Boundary. As Chairman of the Interior Appropriations 
Subcommittee, which funds our National Forest and Parks, land exchanges 
result in less expense to the Federal taxpayer than do land 
acquisitions.
  I will be working over the course of the next few months to get this 
legislation passed by both the House and Senate, and I encourage my 
colleagues to support this legislation.
 Mrs. MURRAY. Mr. President, I fully support this landmark 
agreement negotiated by the Sierra Club's Cascade Checkerboard Project, 
the Weyerhaeuser Company, and the Forest Service. I particularly 
applaud the Weyerhaeuser Company's donation of approximately 1,900 
acres of land, 900 acres of which will become part of the Alpine Lakes 
Wilderness Area.
  This exchange will give Weyerhaeuser 7,200 acres of 80- to 100-year-
old trees within the Mount Baker-Snoqualmie National Forest in Pierce 
County, WA, in exchange for 33,000 acres of company's land. 
Essentially, the company gets timber to cut now, and the public gets 
much more land upon which future forests will be grown. Both 
Weyerhaeuser and the Forest Service will also be better able to manage 
their lands as ecosystems and reduce costs and administrative burdens 
of checkerboard management.
  I strongly support such negotiated trades. I believe it is in all of 
our interests to reduce the checkerboard pattern of ownership--which 
Congress created through a massive land grant to the Northern Pacific 
Railroad in 1864. I will continue to encourage cooperation between 
public and private landowner, and environmental and timber interests. 
Such agreements provide models for resolution of natural resources 
disputes and other environmental issues.
  Mr. President, I urge the Senate to take expeditious action on this 
bill, which simply alters the boundary of Mount Baker-Snoqualmie 
National Forest. The boundary change is needed before the exchange can 
occur. I thank my colleagues for any support they can give to their 
bipartisan, non-controversial bill.
                                 ______

      By Mr. MACK (for himself, Mr. Bradley, Mr. Roth, Mr. Lautenberg 
        and Mr. Biden):

  S. 1811. A bill to amend the Act entitled ``An Act authorizing 
Federal participation in the cost of protecting the shores of publicly 
owned property'' to confirm and clarify the authority and 
responsibility of the Secretary of the Army, acting through the Chief 
of Engineers, to promote and carry out shore protection projects, 
including beach nourishment projects, and for other purposes; to the 
Committee on Environment and Public Works.


                    The Shore Protection Act of 1996

  Mr. MACK. Mr. President, I rise today to announce legislation I am 
introducing--along with Senator Bradley and others--to reaffirm the 
Federal role in beach preservation and renourishment. I want to thank 
the Senator from New Jersey for his steadfast efforts on this issue and 
for all he did to make this bill possible.
  Mr. President, in my State of Florida, healthy beaches mean a healthy 
economy. Each year, millions of people travel from around the world to 
enjoy the recreational benefits of my State's coastlines. This tourist 
activity sustains our economy and provides hundreds of thousands of 
jobs for Floridians. As a consequence, people in Florida care deeply 
about the future of our beaches and look to us to ensure that they are 
properly maintained.
  For 60 years, Mr. President, the U.S. Army Corps of Engineers worked 
in partnership with the Congress, the States, and coastal communities 
to devise a workable policy on sandy beach renourishment. The Corps 
brought to this partnership a wealth of accumulated technical expertise 
and institutional knowledge about beach preservation. Further, they 
brought funding which was leveraged with State and local participation 
into projects which directly benefited the Nation's coastlines.
  This all ended last year when the Clinton administration turned its 
back on coastal communities by ending the traditional Federal role in 
beach renourishment. In its 1996 budget request, the administration 
indicated that beach preservation and maintenance was no longer of 
national significance.
  I strongly disagree. Almost half our population lives in or near 
coastal communities. The coastal economy is responsible for one-third 
of our gross domestic product and more than 28 million jobs. Much of 
this economic activity derives from the vacationtime

[[Page S5587]]

lure of healthy beaches. These projects truly are of national 
significance, Mr. President, and the Corps of Engineers ought to remain 
a full partner in this effort.
  Last year, I joined Senator Bradley and several of my colleagues in 
twice writing the administration in protest. Further, we restored the 
Corps' authority through the appropriations process. This victory was 
only short term, however, and coastal communities throughout the Nation 
asked Congress for assurance of a permanent Federal presence in this 
sector.
  When the administration released this year's budget and again 
proposed to end the Corps' involvement in restoring beaches, we began 
to explore a permanent legislative solution to this problem. The 
culmination of our efforts is the bill we are introducing today.
  Our legislation is very simple, Mr. President. We amend the mission 
of the Corps to include shore protection projects, and we mandate that 
the Corps make recommendations to Congress on specific projects that 
are worthy of Federal participation. Further, we require the Corps to 
consider benefits to the local and regional economy and ecology when 
considering preparing cost/benefit analyses on beach projects. And we 
encourage the Corps to work with the States and local communities on 
regional plans for the long-term preservation of our coastal resources.
  Mr. President, this bill will ensure that the Federal Government 
remains a full partner with the States and communities on the 
preservation of our beach resources. This is critical to Florida and to 
our Nation's economy. I encourage my colleagues to join the Senator 
from New Jersey and me as we continue to move ahead on this issue.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1811

       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 ``Shore Protection Act of 
     1996''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) the beach, shore, and coastal resources of the United 
     States--
       (A) are critical assets that must be protected, conserved, 
     and restored; and
       (B) provide economic and environmental benefits that are of 
     national significance;
       (2) a network of healthy and nourished beaches is essential 
     to the economy, competitiveness in world tourism, and safety 
     of coastal communities of the United States;
       (3)(A) the coasts of the United States are an economic 
     asset, supporting 34 percent of national employment, or 
     28,000,000 jobs; and
       (B) the 413 coastal communities of the United States 
     generate $1,300,000,000,000, or \1/3\, of the gross domestic 
     product;
       (4)(A) travel and tourism--
       (i) is the second largest sector of the economy of the 
     United States; and
       (ii) contributed over $746,000,000,000 to the gross 
     domestic product in 1995;
       (B) the health of the beaches and shoreline of the United 
     States contributes to this economic benefit, since the 
     leading tourist destinations in the United States are 
     beaches; and
       (C) 85 percent of all tourism-generated revenue in the 
     United States derives from coastal communities;
       (5)(A) the value of the coastline of the United States lies 
     not only in the jobs and revenue that the coastline 
     generates, but also in the families, homes, and businesses 
     that the coastline protects from hurricanes, typhoons, and 
     tropical and extratropical storms;
       (B) almost 50 percent of the total United States population 
     lives in coastal communities; and
       (C) beaches provide protection to prevent the destruction 
     of life and hundreds of billions of dollars worth of 
     property;
       (6) shoreline protection projects can provide ecological 
     and environmental benefits by providing for, or by restoring, 
     marine and littoral habitat;
       (7)(A) the coastline of the United States is a national 
     treasure, visited by millions of Americans and foreign 
     tourists every year;
       (B) over 90,000,000 Americans spend time boating or fishing 
     along the coast each year; and
       (C) the average American spends 10 recreational days per 
     year on the coast; and
       (8) since shoreline protection projects generate positive 
     economic, recreational, and environmental outcomes that 
     benefit the United States as a whole, Federal responsibility 
     for preserving this valuable resource should be maintained.
       (b) Purpose.--The purpose of this Act is to provide for a 
     Federal role in shore protection projects, including projects 
     involving the replacement of sand, for which the economic and 
     ecological benefits to the locality, region, or Nation exceed 
     the costs.

     SEC. 3. SHORE PROTECTION.

       (a) In General.--The first section of the Act entitled ``An 
     Act authorizing Federal participation in the cost of 
     protecting the shores of publicly owned property'', approved 
     August 13, 1946 (33 U.S.C. 426e), is amended--
       (1) in subsection (a)--
       (A) by striking ``damage to the shores'' and inserting 
     ``damage to the shores and beaches''; and
       (B) by striking ``the following provisions'' and all that 
     follows through the period at the end and inserting the 
     following: ``this Act, to promote shore protection projects 
     and related research that encourage the protection, 
     restoration, and enhancement of sandy beaches, including 
     beach restoration and periodic beach nourishment, on a 
     comprehensive and coordinated basis by the Federal 
     Government, States, localities, and private enterprises. In 
     carrying out this policy, preference shall be given to areas 
     in which there has been a Federal investment of funds and 
     areas with respect to which the need for prevention or 
     mitigation of damage to shores and beaches is attributable to 
     Federal navigation projects or other Federal activities.'';
       (2) in subsection (d), by striking ``or from the protection 
     of nearby public property'' and inserting ``, if there are 
     sufficient benefits to local and regional economic 
     development and to the local and regional ecology (as 
     determined under subsection (e)(2)(B)),''; and
       (3) in subsection (e)--
       (A) by striking ``(e) No'' and inserting the following:
       ``(e) Authorization of Projects.--
       ``(1) In general.--No''; and
       (B) by adding at the end the following:
       ``(2) Studies.--
       ``(A) In general.--The Secretary shall--
       ``(i) recommend to Congress studies concerning shore 
     protection projects that meet the criteria established under 
     this Act (including subparagraph (B)(iii)) and other 
     applicable law;
       ``(ii) conduct such studies as Congress requires under 
     applicable laws; and
       ``(iii) report the results of the studies to the 
     appropriate committees of Congress.
       ``(B) Recommendations for shore protection projects.--
       ``(i) In general.--The Secretary shall recommend to 
     Congress the authorization or reauthorization of shore 
     protection projects based on the studies conducted under 
     subparagraph (A).
       ``(ii) Considerations.--In making recommendations, the 
     Secretary shall consider the economic and ecological benefits 
     of a shore protection project and the ability of the non-
     Federal interest to participate in the project.
       ``(iii) Consideration of local and regional benefits.--In 
     analyzing the economic and ecological benefits of a shore 
     protection project, or a flood control or other water 
     resource project the purpose of which includes shore 
     protection, the Secretary shall consider benefits to local 
     and regional economic development, and to the local and 
     regional ecology, in calculating the full economic and 
     ecological justifications for the project.
       ``(iv) NEPA requirements.--Nothing in this subparagraph 
     imposes any requirement on the Army Corps of Engineers under 
     the National Environmental Policy Act of 1969 (42 U.S.C. 4321 
     et seq.).
       ``(C) Coordination of projects.--In conducting studies and 
     making recommendations for a shore protection project under 
     this paragraph, the Secretary shall--
       ``(i) determine whether there is any other project being 
     carried out by the Secretary or the head of another Federal 
     agency that may be complementary to the shore protection 
     project; and
       ``(ii) if there is such a complementary project, describe 
     the efforts that will be made to coordinate the projects.
       ``(3) Shore protection projects.--
       ``(A) In general.--The Secretary shall construct, or cause 
     to be constructed, any shore protection project authorized by 
     Congress, or separable element of such a project, for which 
     funds have been appropriated by Congress.
       ``(B) Agreements.--
       ``(i) Requirement.--After authorization by Congress, and 
     before commencement of construction, of a shore protection 
     project or separable element, the Secretary shall enter into 
     a written agreement with a non-Federal interest with respect 
     to the project or separable element.
       ``(ii) Terms.--The agreement shall--

       ``(I) specify the life of the project; and
       ``(II) ensure that the Federal Government and the non-
     Federal interest will cooperate in carrying out the project 
     or separable element.

       ``(C) Coordination of projects.--In constructing a shore 
     protection project or separable element under this paragraph, 
     the Secretary shall, to the extent practicable, coordinate 
     the project or element with any complementary project 
     identified under paragraph (2)(C).
       ``(4) Report to congress.--The Secretary shall report 
     annually to the appropriate committees of Congress on the 
     status of all ongoing shore protection studies and shore 
     protection projects carried out under the jurisdiction of the 
     Secretary.''.

[[Page S5588]]

       (b) Requirement of Agreements Prior to Reimbursements.--
       (1) Small shore protection projects.--Section 2 of the Act 
     entitled ``An Act authorizing Federal participation in the 
     cost of protecting the shores of publicly owned property'', 
     approved August 13, 1946 (33 U.S.C. 426f), is amended--
       (A) by striking ``Sec. 2. The Secretary of the Army'' and 
     inserting the following:

     ``SEC. 2. REIMBURSEMENTS.

       ``(a) In General.--The Secretary'';
       (B) in subsection (a) (as so designated)--
       (i) by striking ``local interests'' and inserting ``non-
     Federal interests'';
       (ii) by inserting ``or separable element of the project'' 
     after ``project''; and
       (iii) by inserting ``or separable elements'' after 
     ``projects'' each place it appears; and
       (C) by adding at the end the following:
       ``(b) Agreements.--
       ``(1) Requirement.--After authorization of reimbursement by 
     the Secretary under this section, and before commencement of 
     construction, of a shore protection project, the Secretary 
     shall enter into a written agreement with the non-Federal 
     interest with respect to the project or separable element.
       ``(2) Terms.--The agreement shall--
       ``(A) specify the life of the project; and
       ``(B) ensure that the Federal Government and the non-
     Federal interest will cooperate in carrying out the project 
     or separable element.''.
       (2) Other shoreline protection projects.--Section 
     206(e)(1)(A) of the Water Resources Development Act of 1992 
     (33 U.S.C. 426i-1(e)(1)(A)) is amended by inserting before 
     the semicolon the following: ``and enters into a written 
     agreement with the non-Federal interest with respect to the 
     project or separable element (including the terms of 
     cooperation)''.
       (c) State and Regional Plans.--The Act entitled ``An Act 
     authorizing Federal participation in the cost of protecting 
     the shores of publicly owned property'', approved August 13, 
     1946, is amended--
       (1) by redesignating section 4 (33 U.S.C. 426h) as section 
     5; and
       (2) by inserting after section 3 (33 U.S.C. 426g) the 
     following:

     ``SEC. 4. STATE AND REGIONAL PLANS.

       ``The Secretary may--
       ``(1) cooperate with any State in the preparation of a 
     comprehensive State or regional plan for the conservation of 
     coastal resources located within the boundaries of the State;
       ``(2) encourage State participation in the implementation 
     of the plan; and
       ``(3) submit to Congress reports and recommendations with 
     respect to appropriate Federal participation in carrying out 
     the plan.''.
       (d) Definitions.--
       (1) In general.--Section 5 of the Act entitled ``An Act 
     authorizing Federal participation in the cost of protecting 
     the shores of publicly owned property'', approved August 13, 
     1946 (as redesignated by subsection (c)(1)), is amended--
       (A) by striking ``Sec. 5. As used in this Act, the word 
     `shores' includes all the shorelines'' and inserting the 
     following:

     ``SEC. 5. DEFINITIONS.

       ``In this Act:
       ``(1) Secretary.--The term `Secretary' means the Secretary 
     of the Army, acting through the Chief of Engineers.
       ``(2) Separable element.--The term `separable element' has 
     the meaning provided by section 103(f) of the Water Resources 
     Development Act of 1986 (33 U.S.C. 2213(f)).
       ``(3) Shore.--The term `shore' includes each shoreline of 
     each''; and
       (B) by adding at the end the following:
       ``(4) Shore protection project.--The term `shore protection 
     project' includes a project for beach nourishment, including 
     the replacement of sand.''.
       (2) Conforming amendments.--The Act entitled ``An Act 
     authorizing Federal participation in the cost of protecting 
     the shores of publicly owned property'', approved August 13, 
     1946, is amended--
       (A) in subsection (b)(3) of the first section (33 U.S.C. 
     426e(b)(3)), by striking ``Secretary of the Army, acting 
     through the Chief of Engineers,'' and inserting 
     ``Secretary,''; and
       (B) in section 3 (33 U.S.C. 426g), by striking ``Secretary 
     of the Army'' and inserting ``Secretary''.
       (e) Objectives of Projects.--Section 209 of the Flood 
     Control Act of 1970 (42 U.S.C. 1962-2) is amended by 
     inserting ``(including shore protection projects such as 
     projects for beach nourishment, including the replacement of 
     sand)'' after ``water resource projects''.

  Mr. BRADLEY. Mr. President, I rise today to join Senator Mack in 
introducing a measure designed to provide for a continuing Federal role 
in protecting a valuable national resource--our Nation's coastline. The 
Shore Protection Act of 1996 states clearly that the Federal Government 
has an obligation to provide necessary support--both financial and 
technical--for projects that promote the protection, restoration and 
enhancement of sandy beaches and shorelines in cooperation with States 
and localities.
  Beach, shore and coastal resources are critical to our economy and 
quality of life, but they are fragile and must be protected, conserved 
and restored. As a coastal State Senator, who walks the beaches of the 
Jersey shore every year, I know first-hand the economic and 
recreational benefits that are derived from healthy beaches. Every 
summer, thousands of New Jerseyans and visitors from all over the U.S. 
and the world, visit the beaches of the Jersey shore, generating 
roughly $11 billion in travel and tourism revenues.
  However, beaches are important not only to New Jersey's economy or to 
those of other coastal communities, they are important to the Nation's 
economy. Beaches support 28 million jobs, and coastal communities 
generate $1.3 trillion, or one-third, of the Gross National Product. 
Travel and tourism is the second largest sector of our economy, 
contributing over $746 billion in 1995 and amounting to a $26 billion 
trade surplus. Beaches are responsible for this economic boom. As the 
leading tourist destination in the U.S., coastlines generate 85 percent 
of tourism-related revenue. If we allow this valuable resource to 
simply wash away, billions of dollars in beach related revenues will 
disappear as well.
  The value of our coastline lies not only in the jobs and revenue that 
they generate, but also in the families, homes and business they 
protect from hurricanes, nor'easters and tropical storms. With almost 
50% of all Americans living in our coastal communities, we simply must 
have healthy beaches as our first line of defense. Nourished beaches 
can also provide ecological and environmental benefits for certain 
species of wildlife by providing, or restoring, marine and littoral 
habitat.
  In 1995, the Administration proposed an end to the Federal role in 
shore protection projects. Citing budgetary concerns, the 
Administration proposal called for Federal involvement in projects that 
were of ``national significance'' only. This bill makes the case that 
the preservation of an invaluable economic and environmental resource--
our shoreline--is of national significance. Our bill would permit all 
the local, regional and national economic and ecological benefits of a 
shoreline protection project to be considered when judging a project's 
merit. I am confident this comprehensive evaluation will demonstrate 
that shore protection projects are indeed of national significance.
  Mr. President, let me take a moment to outline the major provisions 
of the bill. Specifically, the bill would mandate a continuing Federal 
role in shore protection projects. The bill changes the mission of the 
Corps from one of general authority to do beach projects to a specific 
mandate to undertake the protection, restoration and enhancement of 
beaches in cooperation with states and local communities.
  Additionally, the bill would require that new criteria be used in 
conducting the cost/benefit analysis of a proposed project. Currently, 
when undertaking cost/benefit analysis to determine the suitability of 
proposed projects, the Corps is only required to consider the property 
values of property directly adjacent to the beach. The Corps can take 
into account revenues generated through recreation, but is not required 
to do so, nor can the recreational values be weighed as anything other 
than an ``incidental'' benefit. This bill requires that the benefits to 
the local, regional and national economy and the local, regional and 
national ecology be considered. This comprehensive evaluation will 
demonstrate that shore protection projects are of national 
significance.
  The bill also requires that the Corps report annually to Congress on 
beach project priorities. The Corps will be required to submit 
information (reports) to Congress on projects that, when evaluated with 
the bill's new cost/benefit criteria, are found to merit Federal 
involvement. In current law, this authority is discretionary and has 
been suspended by the Administration.
  The bill also encourages the Corps to work with state and local 
authorities to develop regional plans for preservation, restoration and 
enhancement of shorelines and coastal resources. Further the Corps is 
encouraged to work with other agencies to coordinate with other 
projects that may have a complimentary effect on shoreline protection 
projects.
  A network of healthy and nourished beaches is essential to our 
economy, competitiveness in world tourism and the safety of our coastal 
communities.

[[Page S5589]]

 Protection of the Nation's shoreline must be a continued Federal 
priority.
                                 ______

      By Mr. GRAHAM:
  S. 1812. A bill to provide for the liquidation or replication of 
certain frozen concentrated orange juice entries to correct an error 
that was made in connection with the original liquidation; to the 
Committee on Finance.


     legislation to correct inequity suffered by juice farms, inc.

 Mr. GRAHAM. Mr. President, I am introducing legislation today 
that will order Customs to take the necessary steps to correct an 
inequity suffered by a Florida company, Juice Farms, Inc., resulting 
from a Customs administrative error arising from a dumping case.
  From 1987 to 1990, several anti-dumping orders were issued covering 
Brazilian frozen concentrated orange juice. Juice Farms imported juice 
from Brazil and deposited duties with Customs. As required by law, 
liquidation of the import entries by Customs was suspended by Commerce 
pending the outcome of administrative dumping reviews to be conducted 
by Commerce.
  In 1991, after three successive reviews, the Department of Commerce 
found no sales at less than fair value. Commerce instructed Customs to 
return Juice Farms' anti-dumping duty deposits plus interest. Juice 
Farms learned, however, that Customs had mistakenly liquidated a number 
of entries. Such liquidations were in clear violation of the suspension 
order.
  Juice Farms pursued court challenges but received an unfavorable 
decision because the court found that the company filed its protest of 
the premature liquidations too late. Accordingly, even though the 
duties were required by law to be returned to Juice Farms, to date the 
deposits have not been received. The legislation I propose today simply 
will correct that error and require Customs to refund the funds 
properly owed Juice Farms.
                                 ______

      By Mr. HELMS (for himself and Mr. Grassley):
  S. 1813 A bill to reform the coastwise, intercoastal, and 
noncontiguous trade shipping laws, and for other purposes; to the 
Committee on Commerce, Science, and Transportation.


              The Coastal shipping competition act of 1996

  Mr. HELMS. Mr. President, since 1920 there has been a Federal statute 
in force in America that, however well intentioned, has nonetheless 
prevented a vast segment of the farming community in North Carolina and 
other States from obtaining reasonably much-needed and priced grain 
from the Midwest.
  In doing so, of course, it has long prevented Midwestern grain 
producers from delivering grain to grain deficit States which 
repeatedly experience difficulty in sustaining their livestock. North 
Carolina is one of the those States.
  That is why I am today introducing S. 1813, the Coastal Shipping 
Competition Act, which will eliminate a harmful anachronism that 
enables a few waterborne carriers to cling to a monopoly on shipping. 
The victims of this system, in North Carolina and elsewhere, assert 
accurately that those shippers have no certified Jones Act ships to 
meet the demands of producers who need the gain.
  In fact, Mr. President, poultry and pork farmers in North Carolina 
say they can't get enough grain for their farms to feed their animals. 
North Carolina cannot now, nor ever be able, to produce enough grain to 
satisfy the urgent needs of the poultry and pork producers in North 
Carolina. As a result, they must rely upon grain shipped in from the 
Midwest. The railroads can't guarantee enough railcars to move this 
grain from the Midwest, and the costs of such shipments as can be 
arranged are enormous.
  The increase in transportation costs, coupled with the price of 
grain, inevitably leads to excessively high overhead costs for North 
Carolina farmers. To put it succinctly, the shortage of grains and 
shortage of trains means sharply elevated costs and prices that 
threaten the livelihoods of many farmers.
   Mr. President, I ask unanimous consent that letters from two highly 
respected North Carolina farmers, both of whom urge introduction and 
passage of this legislation, be printed in the Record at the conclusion 
of my remarks.
   Mr. President, according to the most recent North Carolina 
Department of Agriculture statistics, North Carolina was, in 1995, No. 
1 in the Nation in turkey production with 61.2 million birds; in hog 
production, North Carolina was No. 2, with 8.3 million heads--Iowa was 
No. 1--and in commercial broilers North Carolina was No. 4 with 644 
million birds--Arkansas, Georgia, and Alabama ranked first, second, and 
third.
   Mr. President, this past Saturday an article in the May 18 edition 
of the Raleigh News and Observer, reported that 800 poultry jobs in 
Chatham County, N.C., were threatened by, among other things, high-feed 
grain prices. I ask unanimous consent that this article ``800 Perdue 
Jobs in Danger'' be printed in the Record at the conclusion of my 
remarks.
   Mr. President, additionally, in times of severe weather--such as 
this past winter--railroads often are unable to get through mountain 
passes because of snow or flooding.
   Mr. President, the Jones Act unfairly and unreasonably restricts 
shipping between ports in the United States because it requires that 
merchandise and produce shipped by water between U.S. points be shipped 
only on U.S.-built, U.S.-flagged, U.S.-manned, and U.S.-citizen owned 
vessels specifically documented and authorized by the Coast Guard for 
such shipments.
  But, Mr. President, the problem with that is that not nearly enough 
certified vessels exist to transport grain to farmers in North Carolina 
and other States. As a matter of fact, my farmers are now being forced 
to go to foreign sources for feed grain.
  Last year, according to a report in the September 12, 1995, Journal 
of Commerce, Murphy family farms brought in a cargo shipment of 1 
million bushels of Canadian wheat to the port of Wilmington, NC, aboard 
Canada steamship lines.
   Mr. President, the Jones Act is simply not fair. It's not fair to 
farmers in the Midwest and it is unfair to countless producers in my 
own State and in other States.

  Those who may protest this legislation are likely to claim that it 
will somehow destroy American shipping. That simply is not so. 
Moreover, if the status quo is maintained, my farmers will have no 
choice but to purchase their foreign grain from Canada, Argentina, and 
other countries--and all of it will be shipped on foreign flagged 
vessels.
  According to a December 1995 report by the U.S. International Trade 
Commission,

       The economy wide effect of removing the Jones Act is a U.S. 
     economic welfare gain of approximately $2.8 billion. This 
     figure can also be interpreted as the annual reduction in 
     real national income imposed by the Jones Act. A primary 
     reason for the large gain in welfare is a decline of 
     approximately 26 percent in the price of shipping services 
     formerly restricted by the Jones Act.

  Mr. President, isn't it ironic that the United States--the 
breadbasket of the world--has such an unwise and unfair lid on that 
bread basket? That lid, Mr. President, is the Jones Act.
  That is my reason for offering this legislative remedy, Mr. 
President. If Senators truly believe in the free enterprise system, 
they will support this proposal to allow American grain to be shipped 
unhindered to grain deficit States that are in need of it.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1813

       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 ``Coastal Shipping Competition 
     Act of 1996''.

     SEC. 2. MISCELLANEOUS AMENDMENTS TO DEFINITIONS IN TITLE 46, 
                   UNITED STATES CODE.

       Section 2101 of title 46, United States Code, is amended--
       (1) in each of paragraphs (1) through (45), by striking the 
     period at the end and inserting a semicolon;
       (2) in paragraph (46), by striking the period at the end 
     and inserting ``; and'';
       (3) by striking paragraph (3a) and inserting the following:
       ``(3a) `citizen of the United States' means--
       ``(A)(i) a national of the United States, as defined in 
     section 101(a)(22) of the Immigration and Nationality Act (8 
     U.S.C. 1101(a)(22));
       ``(ii) a corporation established under the laws of the 
     United States or under the laws

[[Page S5590]]

     of a State, territory, district, or possession of the United 
     States, that has--
       ``(I) a president or other chief executive officer and 
     chairman of the board of directors of that corporation who 
     are citizens of the United States; and
       ``(II) a board of directors, on which a majority of the 
     number of directors necessary to constitute a quorum are 
     citizens of the United States;
       ``(iii) a partnership existing under the laws of a State, 
     territory, district, or possession of the United States that 
     has at least 1 general partner who is a citizen of the United 
     States;
       ``(iv) a trust that has at least 1 trustee who is a citizen 
     of the United States; or
       ``(v) an association, joint venture, limited liability 
     company or partnership, or other entity that has at least 1 
     member who is a citizen of the United States; but
       ``(B) such term does not include--
       ``(i) with respect to a person or entity under clause (ii), 
     (iii), or (v) of subparagraph (A), any parent corporation, 
     partnership, or other person (other than an individual) or 
     entity that is a second-tier owner (as that term is defined 
     by the Secretary) of the person or entity involved; or
       ``(ii) with respect to a trust under clause (iv), any 
     beneficiary of the trust.'';
       (4) by inserting after paragraph (4) the following new 
     paragraph:
       ``(4a) `coastwise trade'--
       ``(A) subject to subparagraph (B), means the transportation 
     by water of merchandise or passengers, the towing of a vessel 
     by a towing vessel, or dredging operations embraced within 
     the coastwise laws of the United States--
       ``(i) between points in the United States (including any 
     district, territory, or possession of the United States);
       ``(ii) on the Great Lakes (including any tributary or 
     connecting waters of the Great Lakes and the Saint Lawrence 
     Seaway);
       ``(iii) on the subjacent waters of the Outer Continental 
     Shelf subject to the Outer Continental Shelf Lands Act (43 
     U.S.C. 1331 et seq.); and
       ``(iv) in the noncontiguous trade; and
       ``(B) does not include the activities specified in 
     subparagraph (A) on the navigable waters included in the 
     inland waterways trade except for activities specified in 
     subparagraph (A) that occur on mixed waters.'';
       (5) by inserting after paragraph (11c) the following new 
     paragraph:
       ``(11d) `foreign qualified vessel' means a vessel--
       ``(A) registered in a foreign country; and
       ``(B) the owner, operator, or charterer of which is a 
     citizen of the United States or--
       ``(i) has qualified to engage in business in a State and 
     has an agent in that State upon whom service of process may 
     be made;
       ``(ii) is subject to the laws of the United States in the 
     same manner as any foreign person doing business in the 
     United States; and
       ``(iii) either--

       ``(I) employs vessels in the coastwise trade regularly or 
     from time to time as part of a regularly scheduled freight 
     service in the foreign ocean (including the Great Lakes) 
     trades of the United States; or
       ``(II) offers passage or cruises on passenger vessels the 
     owner, operator, or charterer employs in the coastwise trade 
     or in the coastwise trade as part of those cruises offered in 
     the foreign ocean (including the Great Lakes) trades of the 
     United States.'';

       (6) by redesignating paragraph (14a) as paragraph (14b);
       (7) by inserting after paragraph (14) the following new 
     paragraph:
       ``(14a) `inland waterways trade'--
       ``(A) means--
       ``(i) the transportation of merchandise or passengers on 
     the navigable rivers, canals, lakes other than the Great 
     Lakes, or other waterways inside the Boundary Line;
       ``(ii) the towing of barges by towing vessels in the waters 
     specified in clause (i); or
       ``(iii) engaging in dredging operations in the waters 
     specified in clause (i); and
       ``(B) includes any activity specified in subparagraph (A) 
     that is conducted in mixed waters.'';
       (8) by redesignating paragraph (15a) as paragraph (15b);
       (9) by inserting after paragraph (15) the following:
       ``(15a) `mixed waters' means--
       ``(A) the harbors and ports on the coasts and Great Lakes 
     of the United States; and
       ``(B) the rivers, canals, and other waterways tributary to 
     the Great Lakes or to the coastal harbors and coasts of the 
     United States inside the Boundary Line,

     that the Secretary of Transportation determines to be 
     navigable by oceangoing vessels.'';
       (10) by redesignating paragraph (17a) as paragraph (17b);
       (11) by inserting after paragraph (17) the following:
       ``(17a) `noncontiguous trade' means transportation by water 
     of merchandise or passengers, or towing by towing vessels--
       ``(A) between--
       ``(i) a point in the 48 continental States and the District 
     of Columbia; and
       ``(ii) a point in Hawaii, Alaska, Puerto Rico, Guam, the 
     Virgin Islands, American Samoa, the Northern Mariana Islands, 
     or any other noncontiguous territory or possession of the 
     United States, as embraced within the coastwise laws of the 
     United States; or
       ``(B) between 2 points described in subparagraph 
     (A)(ii).'';
       (12) in paragraph (21)(A)--
       (A) in clause (ii), by striking ``or'' after the semicolon;
       (B) in clause (iii), by inserting ``or'' after the 
     semicolon; and
       (C) by adding at the end the following new clause:
       ``(iv) an individual who--

       ``(I) is a member of the family or a guest of the owner or 
     charterer; and
       ``(II) is not a passenger for hire;'';

       (13) by striking paragraph (40) and inserting the 
     following:
       ``(40) `towing vessel' means any commercial vessel engaged 
     in, or that a person intends to use to engage in, the service 
     of--
       ``(A) towing, pulling, pushing, or hauling alongside (or 
     any combination thereof); or
       ``(B) assisting in towing, pulling, pushing, or hauling 
     alongside;''; and
       (14) by inserting after paragraph (40) the following new 
     paragraphs:
       ``(40a) `towing of a vessel by a towing vessel between 
     points' means attaching a towing vessel to a towed vessel 
     (including any barge) at 1 point and releasing the towed 
     vessel from the towing vessel at another point, regardless of 
     the origin or ultimate destination of either the towed vessel 
     or the towing vessel; and
       ``(40b) `transportation of merchandise or passengers by 
     water between points' means, without regard to the origin or 
     ultimate destination of the merchandise or passengers 
     involved--
       ``(A) in the case of merchandise, loading merchandise at 1 
     point and permanently unloading the merchandise at another 
     point; or
       ``(B) in the case of passengers, embarking passengers at 1 
     point and permanently disembarking the passengers at another 
     point.''.

     SEC. 3. DOCUMENTATION.

       (a) Definitions.--Section 12101(b)(2) of title 46, United 
     States Code, is amended--
       (1) by striking paragraph (2) and inserting the following:
       ``(2) `license', `enrollment and license', `license for the 
     coastwise (or coasting) trade', `enrollment and license for 
     the coastwise (or coasting) trade', and `enrollment and 
     license to engage in the foreign and coastwise (or coasting) 
     trade on the northern, northeastern, and northwestern 
     frontiers, otherwise than by sea' mean a coastwise 
     endorsement provided in section 12106.'';
       (2) by striking paragraph (3); and
       (3) by redesignating paragraph (4) as paragraph (3).
       (b) Vessels Eligible for Documentation.--Section 12102(a) 
     of title 46, United States Code, is amended--
       (1) by striking all that precedes paragraph (5) and 
     inserting the following:
       ``(a) A vessel of at least 5 net tons that is not 
     registered under the laws of a foreign country or that is not 
     titled in a State is eligible for documentation if--
       ``(1)(A) the vessel is owned by an individual who is a 
     citizen of the United States, or a corporation, association, 
     trust, joint venture, partnership, limited liability company, 
     or other entity that is a citizen of the United States; and
       ``(B) the owner of the vessel is capable of holding title 
     to a vessel under the laws of the United States or under the 
     laws of a State;''; and
       (2) by redesignating paragraphs (5) and (6) as paragraphs 
     (2) and (3), respectively.
       (c) Coastwise Endorsements.--Section 12106 of title 46, 
     United States Code, is amended to read as follows:

     ``Sec. 12106. Coastwise endorsements and certificates

       ``(a) In General.--A certificate of documentation may be 
     endorsed with a coastwise endorsement for a vessel that is 
     eligible for documentation.
       ``(b) Eligibility.--
       ``(1) In general.--Any of the following vessels may be 
     issued a certificate to engage in the coastwise trade if the 
     Secretary of Transportation makes a finding, pursuant to 
     information obtained and furnished by the Secretary of State, 
     that the government of the nation of registry of such vessel 
     extends reciprocal privileges to vessels of the United States 
     to engage in the transportation of merchandise or passengers 
     (or both) in its coastwise trade:
       ``(A) A foreign qualified vessel (as defined in section 
     2101(11d)).
       ``(B) A vessel of foreign registry--
       ``(i) if the vessel is subject to a demise or bareboat 
     charter, for the duration of that charter, to a person or 
     entity that would be eligible to document that vessel if that 
     person or entity were the owner of the vessel; or
       ``(ii) that engages irregularly in the coastwise trade of 
     the United States.
       ``(2) Vessel engaging irregularly in the coastwise trade.--
     For purposes of this subsection, a vessel engages irregularly 
     in the coastwise trade of the United States if that vessel--
       ``(A) during any 60-day period does not make, in the 
     aggregate, more than 4 calls to United States ports; and
       ``(B) during any calendar year does not make, in the 
     aggregate, more than 6 calls to United States ports.
       ``(c) Employment in the Coastwise Trade.--Subject to the 
     applicable laws of the United States regulating the coastwise 
     trade and trade with Canada, only a vessel with a certificate 
     of documentation endorsed with a coastwise endorsement or 
     with a certificate issued under subsection (b) may be 
     employed in the coastwise trade.''.

[[Page S5591]]

       (d) Inland Waterways Endorsements.--Section 12107 of title 
     46, United States Code, is amended to read as follows:

     ``Sec. 12107. Inland waterways endorsements

       ``A certificate of documentation may be endorsed with an 
     inland waterways endorsement for a vessel that--
       ``(1) is eligible for documentation; and
       ``(2)(A) was built in the United States; or
       ``(B) was not built in the United States; but was--
       ``(i) captured in war by citizens of the United States and 
     lawfully condemned as prize;
       ``(ii) adjudged to be forfeited for a breach of the laws of 
     the United States; or
       ``(iii) is qualified for documentation under section 4136 
     of the Revised Statutes (46 App. U.S.C. 14).''.
       (e) Limitations on Operations Authorized by Certificates.--
     Section 12110(b) of title 46, United States Code, is 
     amended--
       (1) by striking ``coastwise trade'' and inserting 
     ``coastwise trade or inland waterways trade''; and
       (2) by striking ``that trade'' and inserting ``those 
     trades''.

     SEC. 4. TRANSPORTATION OF MERCHANDISE IN THE COASTWISE AND 
                   INLAND WATERWAYS TRADES.

       (a) In General.--Section 27 of the Merchant Marine Act, 
     1920 (46 U.S.C. App. 883) is amended to read as follows:

     ``SEC. 27. PROHIBITION.

       ``No merchandise, including merchandise owned by the United 
     States Government, a State (as defined in section 2101 of 
     title 46, United States Code), or a political subdivision of 
     a State, and including material without value, shall be 
     transported by water, on penalty of forfeiture of the 
     merchandise (or a monetary amount not to exceed the value of 
     the merchandise, as determined by the Secretary of the 
     Treasury, or the actual cost of the transportation, whichever 
     is greater, to be recovered from any cosigner, seller, owner, 
     importer, consignee, agent, or other person that transports 
     or causes the merchandise to be transported by water)--
       ``(1) in the coastwise trade, in any vessel other than--
       ``(A) a vessel documented with a coastwise endorsement 
     under section 12106(a) of title 46, United States Code; or
       ``(B) a vessel that has been issued coastwise certification 
     under section 12106(b) of title 46, United States Code, that 
     is in effect for engaging in the transportation of 
     merchandise; or
       ``(2) in the inland waterways trade in any vessel other 
     than a vessel documented with an inland waterways endorsement 
     under section 12107 of title 46, United States Code.''.
       (b) Repeal.--Section 27A of the Merchant Marine Act, 1920 
     (46 App. U.S.C. 883-1) is repealed.

     SEC. 5. TRANSPORTATION OF PASSENGERS.

       (a) In General.--Section 8 of the Act of June 19, 1886 (24 
     Stat. 81, chapter 421; 46 U.S.C. App. 289) is amended to read 
     as follows:

     ``SEC. 8. PROHIBITION.

       ``No passengers shall be transported by water, on penalty 
     of $200 for each passenger so transported or the actual cost 
     of the transportation, whichever is greater, to be recovered 
     from the vessel so transporting the passenger--
       ``(1) in the coastwise trade, in any vessel other than--
       ``(A) a vessel documented with a coastwise endorsement 
     under section 12106 of title 46, United States Code; or
       ``(B) a vessel that has been issued a coastwise 
     certification under section 12106(b) of title 46, United 
     States Code, that is in effect for engaging in the 
     transportation of merchandise; and
       ``(2) in the inland waterways trade, in any vessel other 
     than a vessel documented with an inland waterways endorsement 
     under section 12107 of title 46, United States Code.''.
       (b) Repeals.--The following provisions are repealed:
       (1) The Act of April 26, 1938 (52 Stat. 223, chapter 174; 
     46 U.S.C. App. 289a).
       (2) Section 12(22) of the Maritime Act of 1981 (46 U.S.C. 
     App. 289b).
       (3) Public Law 98-563 (46 U.S.C. App. 289c).

     SEC. 6. TOWING AND SALVAGING OPERATIONS.

       Section 4370(a) of the Revised Statutes (46 U.S.C. App. 
     316(a)) is amended to read as follows:
       ``(a)(1) No vessel (including any barge), other than a 
     vessel in distress, may be towed--
       ``(A) in the coastwise trade by any vessel other than--
       ``(i) a vessel documented with a coastwise endorsement 
     under section 12106(a) of title 46, United States Code; or
       ``(ii) a vessel registered in a foreign country, if the 
     Secretary of the Treasury finds, pursuant to information 
     furnished by the Secretary of State, that the government of 
     that foreign country and the government of the country of 
     which each ultimate owner of the towing vessel is a citizen 
     extend reciprocal privileges to vessels of the United States 
     to tow vessels (including barges) in the coastal waters of 
     that country; or
       ``(B) in the inland waterways trade by any vessel other 
     than a vessel documented with an inland waterways endorsement 
     under section 12107 of title 46, United States Code.
       ``(2)(A) The owner and master of any vessel that tows 
     another vessel (including a barge) in violation of this 
     section shall each be liable to the United States Government 
     for a civil penalty in an amount not less than $250 and not 
     greater than $1,000. The penalty shall be enforceable through 
     the district court of the United States for any district in 
     which the offending vessel is found.
       ``(B) A penalty specified in subparagraph (A) shall 
     constitute a lien upon the offending vessel, and that vessel 
     shall not be granted clearance until that penalty is paid.
       ``(C) In addition to the penalty specified in subparagraph 
     (A), the offending vessel shall be liable to the United 
     States Government for a civil penalty in an amount equal to 
     $50 per ton of the measurement of the vessel towed in 
     violation of this section, which shall be recoverable in a 
     libel or other enforcement action conducted through the 
     district court for the United States for the district in 
     which the offending vessel is found.''.

     SEC. 7. DREDGING OPERATIONS.

       The first section of the Act of May 28, 1906 (34 Stat. 204, 
     chapter 2566; 46 U.S.C. App. 292), is amended to read as 
     follows:

     ``SECTION 1. VESSELS THAT MAY ENGAGE IN DREDGING.

       ``(a) In General.--A vessel may engage in dredging 
     operations--
       ``(1) on the navigable waters included in the coastwise 
     trade, if--
       ``(A) the vessel is documented with a coastwise endorsement 
     under section 12106(a) of title 46, United States Code; or
       ``(B) the vessel is registered in a foreign country and the 
     Secretary of the Treasury finds, pursuant to information 
     furnished by the Secretary of State, that the government of 
     that foreign country and each government of the country of 
     which an ultimate owner of the vessel is a citizen extend 
     reciprocal privileges to vessels of the United States to 
     engage in dredging operations in the coastal waters of that 
     country; or
       ``(2) on the navigable waters included in the inland 
     waterways trade, if--
       ``(A) the vessel is documented with an inland waterways 
     endorsement under section 12107 of title 46, United States 
     Code; or
       ``(B) the vessel would be qualified to be documented under 
     the laws of the United States with a coastwise endorsement 
     under section 12106(a) of title 46, United States Code, 
     except that the vessel was not built in the United States.
       ``(b) Penalties.--When a vessel is operated in knowing 
     violation of this section, that vessel and its equipment are 
     liable to seizure by and forfeiture to the United States 
     Government.''.

     SEC. 8. CITIZENSHIP AND TRANSFER PROVISIONS.

       (a) Citizenship of Corporations, Partnerships, and 
     Associations.--Section 2 of the Shipping Act, 1916 (46 U.S.C. 
     App. 802) is amended--
       (1) in subsection (a)--
       (A) by inserting a period after ``possession thereof''; and
       (B) by striking all that follows the period inserted in 
     subparagraph (A) through the end of the subsection; and
       (2) by striking subsection (c).
       (b) Approval of Transfer of Registry or Operation Under 
     Authority of a Foreign Country or for Scrapping in a Foreign 
     Country; Penalties.--Section 9 of the Shipping Act, 1916 (46 
     U.S.C. App. 808) is amended--
       (1) by striking subsection (c) and inserting the following:
       ``(c) Except as provided in section 611 of the Merchant 
     Marine Act, 1936 (46 U.S.C. App. 1181) and section 
     31322(a)(1)(D) of title 46, United States Code, a person may 
     not, without the approval of the Secretary of 
     Transportation--
       ``(1) place under foreign registry--
       ``(A) a documented vessel; or
       ``(B) a vessel with respect to which the last documentation 
     was made under the laws of the United States;
       ``(2) operate a vessel referred to in paragraph (1) under 
     the authority of a foreign government; or
       ``(3) scrap or transfer for scrapping a vessel referred to 
     in paragraph (1) in a foreign country.''; and
       (2) by striking subsection (d) and inserting the following:
       ``(d)(1) A person that places a documented vessel under 
     foreign registry, operates that vessel under the authority of 
     a foreign country, or scraps or transfers for scrapping that 
     vessel in a foreign country--
       ``(A) in violation of this section and knowing that that 
     placement, operation, scrapping, or transfer for scrapping is 
     a violation of this section shall, upon conviction, be fined 
     under title 18, United States Code, imprisoned for not more 
     than 5 years, or both; or
       ``(B) otherwise in violation of this section shall be 
     liable to the United States Government for a civil penalty of 
     not more than $10,000 for each violation.
       ``(2) A documented vessel may be seized by, and forfeited 
     to, the United States Government if that vessel is placed 
     under foreign registry, operated under the authority of a 
     foreign country, or scrapped or transferred for scrapping in 
     a foreign country in violation of this section.''.

     SEC. 9. LABOR PROVISIONS.

       (a) Liability for Injury or Death of Master or Crew 
     Member.--Section 20(a) of the Act of March 4, 1915 (38 Stat. 
     1185, chapter 153; 46 U.S.C. App. 688(a)) is amended--
       (1) by inserting ``(1)'' after ``(a)'';
       (2) by adding at the end of paragraph (1) (as designated 
     under paragraph (1) of this subsection) the following new 
     sentence: ``In an action brought under this subsection 
     against

[[Page S5592]]

     a defendant employer that does not reside or maintain an 
     office in the United States (including any territory or 
     possession of the United States) and that engages in any 
     enterprise that makes use of 1 or more ports in the United 
     States (as defined in section 2101 of title 46, United States 
     Code), jurisdiction shall be under the district court most 
     proximate to the place of the occurrence of the personal 
     injury or death that is the subject of the action.''; and
       (3) by adding at the end the following new paragraph:
       ``(2)(A) The employer of a master or member of the crew of 
     a vessel--
       ``(i) may, at the election of the employer, participate in 
     an authorized compensation plan under the Longshore and 
     Harbor Workers' Compensation Act (33 U.S.C. 901 et seq.); and
       ``(ii) if the employer makes an election under clause (i), 
     notwithstanding section 2(3)(G) of the Longshore and Harbor 
     Workers' Compensation Act (33 U.S.C. 902(3)(G)), shall be 
     subject to that Act.
       ``(B) If an employer makes an election, in accordance with 
     subparagraph (A), to participate in an authorized 
     compensation plan under the Longshore and Harbor Workers' 
     Compensation Act--
       ``(i) a master or crew member employed by that employer 
     shall be considered to be an employee for the purposes of 
     that Act; and
       ``(ii) the liability of that employer under that Act to the 
     master or crew member, or to any person otherwise entitled to 
     recover damages from the employer based on the injury, 
     disability, or death of the master or crew member, shall be 
     exclusive and in lieu of all other liability.''.
       (b) Minimum Requirements.--All vessels, whether documented 
     in the United States or not, operating in the coastwise trade 
     of the United States shall be subject to minimum 
     international labor standards for seafarers under 
     international agreements in force for the United States, as 
     determined by the Secretary of Transportation on the advice 
     of the Secretaries of Labor and Defense.

     SEC. 10. REGULATIONS REGARDING VESSELS.

       (a) Applicable Minimum Requirements.--Except as provided in 
     paragraph (2), the minimum requirements for vessels engaging 
     in the transportation of cargo or merchandise in the United 
     States coastwise trade shall be the recognized international 
     standards in force for the United States (as determined by 
     the Secretary of the department in which the Coast Guard is 
     operating, in consultation with any other official of the 
     Federal Government that the Secretary determines to be 
     appropriate).
       (b) Consistency in Application of Standards.--In any case 
     in which any minimum requirement for vessels referred to in 
     paragraph (1) is inconsistent with a minimum that is 
     applicable to vessels that are documented in a foreign 
     country and that are admitted to engage in the transportation 
     of cargo and merchandise in the United States coastwise 
     trade, the standard applicable to United States documented 
     vessels shall be deemed to be the standard applicable to 
     vessels that are documented in a foreign country.
       (c) Minimum Requirements for Vessels.--As used in this 
     subsection, the term ``minimum requirements for vessels'' 
     means, with respect to vessels (including United States 
     documented vessels and foreign documented vessels), all 
     safety, manning, inspection, construction, and equipment 
     requirements applicable to those vessels in United States 
     coastwise passenger trade, to the extent that those 
     requirements are consistent with applicable international law 
     and treaties to which the United States is a signatory.

     SEC. 11. ENVIRONMENT.

       All vessels, whether documented under the laws of the 
     United States or not, regularly engaging in the United States 
     coastwise trade shall comply with all applicable United 
     States and international environmental standards in force for 
     the United States.

     SEC. 12. GENERAL REQUIREMENTS.

       Each person or entity that is not a citizen of the United 
     States, as defined in section 2101(3a) of title 46, United 
     States Code, that owns or operates vessels that regularly 
     engage in the United States domestic coastwise trade shall--
       (1) establish an office or place, and qualify under the 
     laws of that place, to do business in the United States;
       (2) name an agent upon whom process may be served;
       (3) abide by all applicable laws of the United States; and
       (4) post evidence of--
       (A) financial responsibility in amounts as considered 
     necessary by the Secretary of Transportation for the business 
     activities of that person or entity; and
       (B) compliance with applicable United States laws.
                                                                    ____



                                          Murphy Family Farms,

                                      Rose Hill, NC, May 21, 1996.
     Hon. Jesse Helms,
     U.S. Senate, Washington, DC.
       Dear Senator Helms: I am writing to urge you to introduce 
     and sponsor the Coastal Shipping Competition Act--Legislation 
     that I believe would bring much needed, yet fair reform to 
     our nation's antiquated maritime transportation laws.
       North Carolina consumes in its animal and poultry 
     production businesses far more grain and oilseed meals than 
     our North Carolina farmers are able to produce. Thus far, we 
     have relied upon rail transportation originating in the 
     ``Eastern Grain Belt'' states to augment local supplies. As 
     our demand increases, we will likely continue to use rail 
     transportation as our primary source of grains and oilseed 
     meals from production areas outside North Carolina. However, 
     we are beginning to experience the symptoms of over taxing 
     the capacity of the rail corridors that serve us. 
     Additionally, realization of the risks inherent in relying 
     too heavily on a single source of dry bulk transport to feed 
     live animals and poultry is becoming far too real when we 
     have had major service interruptions on at least three 
     occasions since early December 1995.
       We believe that the only other viable transportation source 
     to supply our needs is via water. Yet, after some five years 
     of diligent effort, the only reasonably competitive cargo 
     that we have been able to procure via water has been foreign 
     cargoes delivered to the port of Wilmington on foreign 
     vessels. This seems illogical to us because we know that the 
     United States is the most efficient and largest producer of 
     grains and oilseed meals in the world and that our country 
     serves as the world's repository of supply of these 
     invaluable resources.
       Why can't we access these domestic supplies via water? We 
     believe that a major impediment lies within the constraints 
     imposed upon us and others by the Merchant Marine Act of 
     1920, more commonly known as the Jones Act. Legislation to 
     reform the Jones Act is desperately needed to help rebuild a 
     viable, competitive United States domestic shipping industry 
     and to enhance the competitive position of ours and other 
     American agricultural producers and businesses. I believe 
     that without this legislation we will experience the not so 
     gradual erosion of the economic viability of our existing 
     capital asset base and likewise the economic demise of many 
     of our good citizens and business persons who depend upon the 
     animal and poultry production industry of North Carolina for 
     their livelihoods.
       As a member of the business community and a farmer from 
     your district, I assure you that this is an issue of utmost 
     importance and one that merits your attention and support.
       Thank you for your time and effort and please let me know 
     if I may be of assistance.
           Sincerely,
                                                Wendell H. Murphy,
     Chairman and CEO.
                                                                    ____



                                    Goldsboro Milling Company,

                                      Goldsboro, NC, May 21, 1996.
       Dear Senator Helms: Let me start by thanking you for all 
     you have done in the past in support of agri-business in this 
     country. Your support has meant a great deal to all of us.
       I'm also writing you today to ask you to introduce and 
     support the Coastal Shipping Competition Act--legislation 
     that would bring much needed reform to our nation's 
     antiquated maritime transportation laws.
       These laws negatively affect thousands of businesses across 
     America every day because the laws have eliminated 
     competitive deepwater domestic waterbourne transportation for 
     essential manufacturing inputs and finished products.
       The Merchant Marine Act of 1920 (known as the Jones Act) 
     has had an ironically anti-American impact. While it may have 
     been originally written to protect the U.S. shipping 
     industry, the resulting noncompetitive domestic industry is 
     sparsely available, if at all in many U.S. locations. Not a 
     single coastal freighter over 1,000 tons is operating on the 
     entire 2,000 mile East Coast of the United States.
       Those of us in the poultry and hog business on the East 
     Coast really need an alternative transportation option for 
     our inputs (such as grain) because the infrastructure of the 
     railroads is getting critically overloaded. However, being 
     restricted to using a U.S. owned, operated and manned ship 
     effectively eliminates the possibility of getting inputs 
     delivered by water to east coast ports.
       Legislation to reform the Jones Act is desperately needed 
     to help build the competitive position of American businesses 
     and agricultural producers.
       As a member of the business community in North Carolina, I 
     can assure you this is an issue that merits your attention 
     and support. Thanks for all that you have already done and 
     for your consideration on this matter.
           Sincerely,
                                                  J.L Maxwell, Jr.
     Chairman.
                                                                    ____


                [From the News & Observer, May 18, 1996]

                       800 Perdue Jobs in Danger

                             (By Jay Price)

       Siler City.--Perdue Farms announced Friday that it will 
     padlock its Chatham County chicken processing plant unless 
     the plant can be sold within 60 days, placing the future of 
     800 workers in doubt and sending shock waves through the 
     local economy.
       The company, which has headquarters in Salisbury, Md., 
     blamed the move on high feed costs and a glutted chicken 
     market. ``Hopefully, we'll find a buyer, and if we don't 
     we'll make the workers aware of job opportunities at other 
     Perdue facilities,'' said company spokesman Richard Auletta 
     in New York.
       The news from one of Chatham County's largest employers 
     cast a pall over the annual Siler City Chicken Festival, 
     which begins today.

[[Page S5593]]

       ``I've worked here a long time,'' said Frank Torres, a 
     Perdue employee since 1985. ``I don't know what happened. I 
     can't do nothing new. Now all everybody's got is one piece of 
     paper and a check. I don't know what will happen.''
       Torres said that Friday morning, employees were given a 
     letter in Spanish and English outlining the company's plans.
       Perdue said employment at a 28-worker feed mill in Staley 
     also will be scaled back, and the operation may later be 
     closed.
       Also affected are 118 growers who raise chickens for Perdue 
     under contract, mostly in Chatham and Randolph counties. Only 
     30 of those will continue to raise birds for the company, 
     which will process them at other plants.
       The company said it will try to arrange for the remaining 
     growers to work with other poultry companies in the area.
       Perdue said the plant workers, most of whom earn $7 to 
     $7.10 an hour, can apply for jobs at other plants, but the 
     closest ones are in Robbins and Concord, a considerable 
     distance away by car.
       About noon Friday, workers dressed in jeans, work boots and 
     hard hats trickled solemnly out of the yellow brick plant and 
     into a gravel parking lot. Many, like Torres, are migrant 
     workers from Mexico who made their way to Chatham County in 
     search of stability.
       Domingo Gonzales, 28 years old and the father of two, has 
     been at the plant for only three months.
       ``I don't know what I'll do,'' he said, noting that he has 
     been working at odd jobs in the United States for nearly nine 
     years and was hoping to finally settle down. ``Maybe I'll go 
     back to Mexico.''
       The fate of many workers like Torres and Gonzales may 
     depend on complex business forces over which they have no 
     control.
       Besides record-high feed prices Perdue cited a recent jump 
     in fuel costs and an abundance of poultry, beef and pork as 
     major reasons for the decision.
       Producers are paying an estimated 40 percent more for feed 
     than they did a year ago, and are getting lower prices for 
     their products, said Dr. Tom Carter, a poultry specialist 
     with the N.C. Cooperative Extensive Service.
       ``It's an unusual situation with the grain prices so 
     high,'' Carter said. ``The cost of production is higher than 
     the market, and that's because of high corn prices.''
       Carter, however, was optimistic that another company would 
     buy the 61,000-square-foot plant, which can process 625,000 
     birds a week.
       ``Very seldom does a facility like that go without a 
     buyer,'' Carter said. ``On the surface, it looks like the 
     situation is such that people wouldn't want to buy it, but if 
     you look beneath the surface, you usually get the best buy 
     when the price is down.''
       Growers also may be able to sell birds elsewhere, Carter 
     said. Townsend, Golden Poultry and Mount Aire have poultry 
     processing plants in Siler City, Sanford and Bonlee, 
     respectively, Carter said.
       ``Eventually, growers will adjust and move in with other 
     companies,'' Carter said, ``but it may take longer than some 
     can adjust their finances for.''
       Growers work under contract to processors like Perdue. The 
     processor owns the chickens, so in this case the farmers 
     won't get stuck with the birds. But they could get stuck with 
     big investments in chicken houses, which cost about $120,000. 
     The average farmer in the area has three houses, said Dr. 
     Glenn Carpenter, a Pittsboro extension agent specializing in 
     poultry. Some older houses may have cost just a few thousand 
     dollars, he said.
       Many growers raise chickens part-time. Typically, it's a 
     family affair employing between one and three people, but 
     some operations are larger and full-time.
       The plant was one of a group of processing facilities that 
     Perdue bought from Showell Farms in January 1995. Its 
     products are sold mostly to institutional users such as 
     schools, hospitals and restaurants.


                             mixed signals

       In recent months, signs were that it was prospering. 
     Olivier Devaud, director of Chatham's Economic Development 
     Commission, said the plant had been hiring workers since 
     announcing in December that it needed 150 more. In the past 
     year Perdue spent $4 million for new equipment at the plant 
     and $1 million on an expansion, which was still under way 
     when Friday's announcement came.
       Other signals were more ominous. In March, Perdue--the 
     nation's No. 2 poultry producer--said it would cut production 
     by 7 percent, but that it didn't plan layoffs. Other large 
     poultry firms, including Tyson, Hudson Foods Inc. and 
     Pilgrims Pride Corp., had already announced similar cuts.
       Poultry and eggs make up the most lucrative agricultural 
     industry in the state, said Kim Decker of the state 
     Agriculture Department. In 1994, the most recent year for 
     which statistics were available, poultry and eggs earned 
     farmers $1.9 billion, he said.
       In contrast, revenue from hogs was $980 million and from 
     tobacco, $943 million. Statewide, the industry employs more 
     than 27,000 people.


                            major job source

       The plant is Chatham's third largest employer. Devaud said 
     its closing would be a blow to the local economy. But new 
     companies and expansions are expected to bring 120 new jobs 
     to Siler City in the next month alone, and the county's 
     unemployment rate is just 2.7 percent.
       Devaud said he hopes that Townsend, the county's biggest 
     employer, can eventually hire some of the workers at its 
     chicken processing plant.
       One who might be looking is Steven Garner, who landed a job 
     loading trucks at the Perdue plant three weeks ago. He was 
     angry Friday.
       ``That's 800 people,'' he said between puffs of a 
     cigarette.
       ``I've got a family. I'm the one who buys the groceries and 
     pays the bills. It's going to be really hard.''
                                 ______

      By Mr. GRAMM (for himself, Mr. D'Amato, Mr. Bryan, and Ms. 
        Moseley-Braun):
  S. 1815. A bill to provide for improved regulation of the securities 
markets, eliminate excess securities fees, reduce the costs of 
investing, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs.


            THE SECURITIES INVESTMENT PROMOTION ACT OF 1996

  Mr. GRAMM. Mr. President, today I am joined by Senators D'Amato, 
Dodd, Bryan, and Moseley-Braun in introducing the Securities Investment 
Promotion Act of 1996. This is important legislation incorporating 
reforms supported by business and by State and Federal Securities 
regulators.
  This legislation moves forward in a significant way to define a 
division of labor between the State and Federal governments for the 
supervision of the securities industry. In the process two very 
important goals are achieved. We improve administration of our nation's 
securities laws while at the same time greatly reducing the cost of 
that regulation.
  We must always remember that the cost of securities regulation, 
however desirable or effective that regulation may be, is ultimately 
born by the people who invest. Today, that includes almost everyone. 
Not everyone may have a stock portfolio, although an increasing number 
of American families do. But most Americans have investments in a 
mutual fund or have a stake in a pension fund that invests in our 
nation's securities markets. More and more small businesses are funding 
their growth, expansion, and job creation with financing from the 
securities markets.
  When I became Chairman of the Securities Subcommittee, I was struck 
by the number of State and Federal regulators, and people in the 
securities business, as well as investors, who commented on the need to 
reform out-of-date and unnecessary securities regulation. The most 
immediate need in that regard the Congress addressed last year, with 
our bill to reform securities litigation. That was a measured, 
bipartisan effort.
  The legislation that we are introducing today is a continuation of 
that bipartisan spirit. I am proud to be joined by the Chairman of the 
Banking Committee, Senator D'Amato, as well as by the Ranking Member of 
the Securities Subcommittee, Senator Dodd, together with Senators Bryan 
and Moseley-Braun of the Banking Committee. We have all worked closely 
in drafting the bill that we are introducing, and have in addition 
benefited from comments and suggestions from the SEC, State securities 
regulators, trade associations, the stock exchanges, and self-
regulatory organizations, among others. I invite further comments as we 
consider this bill in the Committee and then on the floor of the 
Senate. I have intentionally sought to cast the net wide in seeking 
comment from the public on this legislation, since, ultimately, what we 
do in this bill affects the people of this country in very important 
ways.
  Mr. President, I would like to comment briefly on some of the key 
provisions of the bill.
  Title I of the bill is called the Investment Advisers Integrity Act. 
It is an updated version of a bill that I introduced on the first day 
of the 104th Congress, S. 148. There are approximately 25,000 
registered investment advisers in the nation today, and the number 
keeps growing. The SEC has testified that they do not have the 
resources to supervise effectively such a large number of advisers. In 
the past, proposals were put forward to increase SEC funding for 
enforcement of the Investment Adviser Act of 1940 by assessing a $16 
million tax on the industry. Even with such a tax, however, an 
investment adviser could have gone several years without an inspection.

[[Page S5594]]

  Title I of the bill tries a different approach, first suggested to me 
by former SEC Commissioner Rick Roberts. This approach addresses the 
problem through a partnership between the Federal and State securities 
regulators, dividing up the responsibility. The States would have 
exclusive jurisdiction to register investment advisers who manage less 
than $25 million in client assets. These are the investment advisers 
whose activities are most likely to be within their home State. In 
fact, about half of all investment advisers do not personally manage 
any client assets at all.
  The SEC would have exclusive responsibility for registration of 
investment advisers who manage $25 million or more of client assets, as 
well as for all investment advisors to mutual funds. These are the 
investment advisers most likely to be engaged in interstate commerce, 
appropriately a Federal concern.
  I would add, Mr. President, that this provision does not impose a 
Federal mandate on the States, for under the provisions of the bill, 
any State that did not want to assume the responsibility for 
registration of investment advisers is not required to do so. The 
advisers in such a State would then be required to register with the 
SEC, regardless of the size of their business.
  The effect of this division of responsibility will be that between 
two-thirds and three-quarters of investment advisers will be supervised 
by the States where they do their business. On the other hand, perhaps 
as much as two-thirds or more of the assets under management will be 
managed by investment advisers supervised by the SEC, demonstrating the 
concentration of managed assets in the hands of the larger investment 
advisers, having multi-state operations.
  I would like to express my appreciation to the representatives of the 
investment adviser industry, the SEC, and the Texas State Securities 
Commissioner, Denise Crawford, for their assistance in revising and 
crafting this title of the bill, and the support that they have 
expressed for this approach. Whereas today investment adviser 
supervision is limited at best, and more often than not effectively 
non-existent, this division of labor will mean that adequate resources 
and attention can not be brought to bear to encourage the integrity of 
the industry and further increase the investment opportunities for 
American families.
  Mr. President, perhaps the most significant impact of this bill will 
come from the provisions assigning responsibility for mutual fund 
prospectuses review to the SEC. Mutual funds spend tens of millions of 
dollars each year complying with a patchwork of varied and 
often conflicting State requirements governing the prospectuses by 
which funds are offered to investors. These requirements are merely 
different, usually duplicative, and to not provide investors with any 
added useful information than what is already required by the SEC. 
Moreover, complying with these requirements is time consuming. In just 
one example, while a particular mutual fund was awaiting delays in 
clearing its prospectus with a certain State regulator, its value 
increased by 16%. That was a 16% growth denied to the investors of that 
State who could not place funds with the mutual fund until its 
prospectus had cleared the State regulators. No investor was helped by 
that delay. The mutual fund industry has dramatically increased the 
investment opportunities for American families of all levels of income, 
and I am please to further the efforts of my colleagues, Congressmen 
Fields and Bliley, to move forward this important relief from 
unnecessary regulatory burden.

  Similarly, stocks that are traded on the national stock exchange and 
trading systems would be exempted from State regulation under the 
provisions of this bill. Again, as with mutual funds, this is a 
national business, the very kind of activity contemplated by the 
Founding Fathers with the interstate commerce clause of the Commission.
  One of the provisions of the bill, which I consider of high 
importance, is a requirement that the Chief Economist of the SEC 
conduct and publish an economic analysis of each new regulation before 
the regulation can enter into effect. Mr. President, the SEC is a 
lawyer-heavy agency. The Officer of General Counsel, for example, has a 
budget of over $10 million and 120 staff members. By comparison, the 
Office of Economic Analysis, even with the increase required by my 
amendment to the appropriation bill, has a budget of $3 million and 
about two dozen employees.
  The actions of the SEC in regulating the nation's capital markets 
have a profound impact on the economy of the nation and of the world. 
It is therefore of paramount importance that a high priority be given 
within the SEC to careful examination and analysis of the economic and 
market consequences of its regulations. Otherwise, we are in danger of 
regulating blindly, which the economic livelihood and health of the 
nation cannot risk.
  While there are many other important provisions of the bill, I will 
conclude, Mr. President, by emphasizing the last section of the bill. 
This provision addresses the need for improving the access to U.S. 
stock exchanges for the listing of world-class foreign companies. 
Today, U.S. accounting standards are in many points different from the 
accounting standards of other countries. They are not necessarily 
better, just different. Under current regulations, a foreign company 
wishing to list on a U.S. stock exchange would first have to meet U.S. 
accounting standards, which in effect may mean that the company would 
have to keep two sets of books.
  The SEC has sought to address this problem through a greater 
harmonization of international accounting standards. The bill 
encourages the SEC to redouble its efforts to achieve a level of 
generally accepted accounting standards and to report to the Congress 
on its progress.
  Our nation's stock exchanges are the preeminent exchanges in the 
world. It is hard to see how we can continue that position long into 
the next century while maintaining formidable obstacle to the listing 
on our exchanges of the major corporations of the world. I do not see 
how any American investor is protected by being forced to resort to the 
London or Frankfurt stock exchanges in order to invest in foreign 
corporations.
  Mr. President, this is important legislation. Congressman Jack Fields 
and the members of the House Commerce Committee have done the country a 
great service by setting in motion a process by which the Congress will 
begin to delineate clearly the roles of the State and Federal 
governments in securities regulation. I hope that this bill can be 
adopted in short order and meet in conference with similar legislation 
recently adopted unanimously by the House Commerce Committee.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

              Securities Investment Promotion Act of 1996

     SECTION 1. SHORT TITLE: TABLE OF CONTENTS.

       Securities Investment Promotion Act of 1996.

     SEC. 2. SEVERABILITY.

       Court striking any provision of the Act does not affect 
     other provisions.

               TITLE I. INVESTMENT ADVISERS INTEGRITY ACT

     SEC. 101. SHORT TITLE.

       Investment Advisers Integrity Act.

     SEC. 102. ENHANCED FUNDING FOR ENFORCEMENT.

       Authorizes appropriation of up to $16 million in each of 
     FY1997 and FY1998 for enforcement of the Investment Advisers 
     Act of 1940.

     Sec. 103. Improved Supervision Through Federal and State 
                   Cooperation

       Investment advisers with less than $25 million in assets 
     under management and that do not advise a mutual fund are 
     exempted from registering with the SEC if they are required 
     to register with the state where the adviser maintains its 
     business.
       The SEC may exempt from requirements to register with the 
     SEC other persons or classes of persons if the SEC determines 
     that registration would be unfair, a burden on interstate 
     commerce, or for other reasons. The SEC is given similar 
     authority to make exemptions from state registration.
       Investment advisers registered with the SEC are exempt from 
     state investment adviser regulation. States may require such 
     investment advisers to file notice with the state and pay 
     appropriate fees.

     SEC. 104. INTERSTATE COOPERATION.

       Investment advisers complying with books and records 
     requirements of the state of their principal place of 
     business cannot be subject to added books and records 
     requirements by other states where they may conduct business.

[[Page S5595]]

       A state may not require an investment adviser to maintain a 
     higher net capital to post a higher bond than required by the 
     sate where the principal offices are located.

     SEC. 105. DISQUALIFICATION OF CONVICTED FELONS.

       The SEC is authorized to deny investment advisery 
     registration to anyone convicted of a felony in the previous 
     10 years.

           TITLE II. FACILITATING INVESTMENT IN MUTUAL FUNDS

     SEC. 201. SHORT TITLE.

       Investment Company Act Amendments of 1996.

     SEC. 202. FUNDS OF FUNDS.

       Allows mutual funds to invest in other mutual funds in the 
     same group or family of funds and allows just one of the 
     funds to impose sales charges on investors.

     SEC. 203. FLEXIBLE REGISTRATION OF SECURITIES.

       Simplifies the calculation and payment of registration fees 
     by mutual funds.

     SEC. 204. INVESTMENT COMPANY ADVERTISING PROSPECTUS.

       Allows mutual funds to include in their advertising 
     information that was not included in their last prospectus.

     SEC. 205. VARIABLE INSURANCE CONTRACTS.

       Gives insurance companies that issue variable annuities the 
     same ability as mutual funds to set product charges.

     SEC. 206. PROHIBITION ON DECEPTIVE INVESTMENT COMPANY NAMES.

       Mutual funds may not have deceptive or misleading names.

     SEC. 207. EXCEPTED INVESTMENT COMPANIES.

       Exempts from mutual fund regulation any fund not publicly 
     offered and whose investors are persons who each own at least 
     $5 million in investments or are institutional investors 
     owning at least $25 million in investments.
       Within one year the SEC shall prescribe rules to allow 
     employees of such a fund to invest in the fund.

     SEC. 208. PERFORMANCE FEES.

       Gives authority to the SEC to allow investment advisers to 
     be paid performance fees for advising sophisticated 
     investors.

         TITLE III. REDUCING THE COSTS OF SAVING AND INVESTMENT

     SEC. 301. EXEMPTION FOR ECONOMIC, BUSINESS, AND INDUSTRIAL 
                   DEVELOPMENT COMPANIES.

       Exempts business industrial development companies from the 
     Investment Company Act if at least 80% of its securities are 
     sold to ``accredited'' investors who are of the state where 
     the company is organized.

     SEC. 302. INTRASTATE CLOSED-END INVESTMENT COMPANY EXEMPTION.

       Raises from $100,000 to $10 million the limit for closed-
     end investment companies to qualify for an exemption from the 
     Investment Company Act.

     Sec. 303. Definition of Eligible Portfolio Company

       Expands the definition of an eligible portfolio company to 
     include companies with up to $4 million in assets.

     Sec. 304. Definition of Business Development Companies

       Removes requirement that a business development company 
     provide significant managerial assistance.

     Sec. 305. Acquisition of Assets by Business Development 
                   Companies

       Permits BDCs to acquire securities of a company it may 
     invest in from sources other than the company itself.

     Sec. 306. Capital Structure Amendments

       Allows BDCs that meet certain requirements to issue a 
     broader range of securities.

     Sec. 307. Filing of Written Statements

       Authorizes the SEC to require BDCs to include a description 
     of risk factors associated with their capital structure in a 
     written annual report to shareholders.

     Sec. 308 Facilitating National Securities Markets.

       Codifies existing state exemptions from state registration 
     for securities that are traded on a national exchange, the 
     Nasdaq National Market System, or other exchange or system 
     identified by the SEC, and securities sold to qualified 
     purchasers. Exempts from state registration mutual funds and 
     other investment companies. No state review of prospectuses 
     for such securities or mutual funds. States may impose notice 
     and appropriate fee requirements and are not limited from 
     enforcing state fraud laws in connection with such 
     securities.

     Sec. 309. Regulatory Flexibility

       Gives the SEC authority to make exemptions from provisions 
     of the Securities Act of 1933 and the Securities Exchange Act 
     of 1934.

     Sec. 310. Analysis of Economic Effects of Regulation

       Requires the Chief Economist of the SEC to prepare and 
     publish an economic analysis of any proposed SEC regulation 
     before it becomes effective. Authorizes $6 million in 
     appropriations for FY 1997 and $6 million for FY 1998 for the 
     SEC's Economic Analysis Program, including the Office of 
     Economic Analysis.

     Sec. 311. Privatization of EDGAR

       Requires the SEC, within 180 days of enactment, to submit 
     to Congress a report on its plan for promoting competition 
     and innovation of EDGAR through the privatization of all or 
     parts of the system.

     Sec. 312. Improving Coordination of Supervision

       Directs the SEC and other securities examination 
     authorities to coordinate their examinations.

     Sec. 313. Increased to Foreign Business Information

       Facilitates participation by U.S. information media in 
     financial press briefings held outside of the United States.

     Sec. 314. Short-Form Registration

       Clarifies that voting and non-voting shares shall be 
     considered in determining whether a company is eligible to 
     use the short-form registration statement.

     Sec. 315. Church Employee Pension Plans

       Exempts church employee pension plans from federal and 
     state securities laws, except the anti-fraud provisions. The 
     plans would continue to be subject to Internal Revenue Code 
     regulations regarding eligibility, governance, and operations 
     of such plans.

     Sec. 316. Promoting Preeminence of American Securities 
                   Markets

       Expresses the sense of the Congress that the SEC should 
     reinforce its efforts in developing generally accepted 
     international accounting standards in order to enhance the 
     ability of foreign corporations to list their stocks on U.S. 
     exchanges, and requires the SEC to report to Congress in one 
     year on its progress.

  Mr. D'AMATO. Mr. President, it is with great enthusiasm that I rise 
today with my colleagues, the chairman and ranking member of the 
Securities Subcommittee, Senator Gramm and Senator Dodd, and Senators 
Bryan and Moseley-Braun to introduce the Securities Investment 
Promotion Act of 1996.
  The U.S. securities market is the preeminent market in the world. It 
is a fair, efficient and orderly market. In 1995, the U.S. equity 
market capitalization of $7.98 trillion represented nearly half of the 
$16.48 worldwide equity market. The market is at an all time high, 
having increased in trading volume 168 percent in the last decade from 
77.3 billion to 207.4 billion. Clearly our securities market is a 
national treasure.
  This bill my colleagues and I introduce today represents a bi-
partisan effort to improve regulation of the securities market. The 
legislation seeks to maintain our preeminent securities market by 
making it even more efficient and more accessible to those individuals 
and entities who seek entry in order to raise capital.
  The legislation streamlines securities regulation by peeling back 
layers of duplicative, unnecessary and burdensome regulation--opening 
up the capital markets and promoting capital formation. It makes more 
efficient use of precious State and Federal resources by dividing 
rather duplicating regulatory responsibility. These changes will also 
strengthen consumer and investor protection.


                          investment advisers

  The Securities Investment Promotion Act fills a significant 
regulatory gap in the area of investment advisers. As low interest 
rates have caused individuals to flock to the securities markets with 
their savings and retirement money--often seeking advice from an 
investment adviser--it becomes increasingly critical for Congress to 
ensure that investment advisers are adequately regulated. The increase 
in mutual fund investments, which are usually managed by investment 
advisers, has also contributed to the growing number of investment 
advisers.
  Right now, 22,000 investment advisers manage approximately $10.6 
trillion in assets. The SEC does not have sufficient resources to 
maintain an adequate inspection program for investment advisers. 
According to some SEC estimates, they are only able to inspect some of 
the smaller investment advisers once every 30 years.
  The bill creates a rational system of regulation for investment 
advisers by dividing between the SEC and the States responsibility for 
regulating investment advisers. States will regulate the smaller 
investment advisers who operate in their State and manage $25 million 
or less in assets. The SEC will regulate the larger advisers. This 
system will enable the States and the SEC to share regulatory 
responsibility--better protecting investors.


                              mutual funds

  The Securities Investment Promotion Act of 1996 facilitates the 
registration, operation and certain disclosures made by mutual funds. 
Over 30 million U.S. households, or about 31 percent now own mutual 
funds. In part because of low interest rates, by the end of last year 
mutual fund assets hit the $2.7 trillion mark--exceeding bank deposits 
for the first time.
  This bill allows the mutual fund market to operate as a national 
market, comprehensively regulated by the SEC. Right now, when a mutual 
fund registers its shares it must register with the SEC and the States. 
As a result, mutual funds must comply with a

[[Page S5596]]

crazy quilt of regulation imposed by the laws of each of the 50 States. 
This bill facilitates mutual fund registration by eliminating the 
requirement that mutual funds register with the States.
  The bill makes it easier for mutual funds to provide current 
information in advertisements; calculate their registration fees and 
invest in other mutual funds in their family of funds. It also provides 
additional consumer and investor protection by giving the SEC authority 
to prohibit mutual funds from naming their funds in a manner that could 
mislead or confuse investors.


                           capital formation

  The bill promotes capital formation by eliminating overlapping State 
and Federal requirements for registering certain types of securities, 
such as securities sold to ``qualified purchasers'' or securities that 
are listed on a national securities exchange or market system. It also 
gives the SEC flexibility to identify other exchanges or systems that 
should qualify for the exemption from registration.
  The bill promotes investment in small projects and business by making 
it easier for economic, business, and industrial development companies 
to raise money without having to register with the SEC. These companies 
will not have to register their securities if 80 percent or more of the 
securities are sold to accredited investors within the State the 
company operates. This bill provides further relied for companies 
operating within one State. The SEC may now exempt from the securities 
laws a company with $100,000 in assets that is operating within a 
State. The Securities Investment Promotion Act of 1996 raises this 
level to $10 million.
  The bill provides liquidity and investment opportunities to business 
development companies--enabling these companies to invest more capital 
in small businesses. It also helps venture capitalists tap the capital 
markets to fund business endeavors by allowing individuals and entities 
to pool a certain amount of investment funds without having to register 
with the SEC.


                        regulatory modernization

  The legislation updates the securities laws to reflect the reality of 
today's marketplace. It simplifies certain procedures for paying fees 
and making disclosures. It gives the SEC flexibility to adapt to the 
changing financial market by giving the SEC authority to exempt 
transactions, individuals or entities from the Federal securities laws.
  The bill fosters awareness of the cost of regulation by requiring the 
SEC to publish an economic analysis of a proposed regulation before it 
becomes effective. It also reduces the costs associated with revolving 
door compliance examinations, where one regulator completes its 
examination only to be replaced by the next. The legislation requires 
the regulators to coordinate examinations.
  The Securities Investment Promotion Act of 1996 is a significant 
piece of legislation that will ensure that the U.S. securities market 
remains number one in the world. It is not a controversial bill, it 
enjoys support on both sides of the aisle. This bill thoughtfully and 
carefully tightens the laws governing the securities market. I commend 
my colleagues and their staff for their excellent work in drafting this 
legislation and plan to move it quickly through the Banking Committee.
  Mr. DODD. Mr. President, I rise today to join Senators Gramm, 
D'Amato, Bryan, and Moseley-Braun in introducing the Securities 
Investment Promotion Act of 1996.
  The U.S. capital markets are vitally important for the good economic 
health not only of virtually every American company but for millions 
and millions of individual investors who have placed some of their 
assets either directly in securities or, as has become more and more 
common, into mutual funds.
  We must recognize that sustained economic growth is heavily dependent 
upon the continuing ability of our capital markets and financial 
services industry to function efficiently and with integrity. If 
companies find impediments to obtaining capital, they will not grow. If 
individuals find impediments to their access to securities and other 
investments, they will not save. Taking steps to enhance the access of 
both corporations and individuals to the securities markets is a 
prudent means by which Congress can help sustain or even increase the 
Nation's rate of economic growth.
  Furthermore, the American capital markets are the envy of the world. 
No other nation enjoys the international reputation of our capital 
markets and it is necessary for Congress periodically to review and 
modernize, where necessary, the laws that make our markets and our 
financial services industry the world's leader.
  The legislation that is being introduced today is the culmination of 
a lengthy bipartisan effort to reform those aspects of the securities 
laws that are an outdated impediment to the efficient functioning of 
the securities industry. The bill will also provide clearer statutory 
directives to both state and Federal regulators so that the integrity 
of--and confidence in--our capital markets and financial services 
industry is enhanced.
  Mr. President, let me provide a brief summary of the major elements 
of this legislation. The three main areas that the bill addresses are: 
improving the regulation of investment advisors under the Investment 
Advisors Act of 1940; modernizing and streamlining the regulation of 
mutual funds under the Investment Company Act of 1940; and, making 
modest adjustments in the securities laws to account for changes in the 
financial world over the past 60 years.
  Title I, the Investment Advisors Integrity Act, would provide much 
needed clarity to regulators for the regulation of investment advisors 
under the Investment Advisors Act of 1940. The most important feature 
of this title is to draw a clear, bright line between those registered 
investment advisors who should be regulated at the Federal level by the 
Securities and Exchange Commission, and those advisors who are more 
properly regulated by the state that is the advisor's principal place 
of business.
  The bill would require investment advisors with more than $25 million 
under management to be regulated by the Securities and Exchange 
commission, while those with assets under the $25 million threshold 
would be regulated by the state.
  This bifurcation is necessary because it is not realistic to expect 
the SEC to be able to thoroughly supervise the more than 25,000 
advisors who are registered under the IAA nor is it reasonable to have 
the advisor industry burdened by duplicative state and Federal 
regulation. This change will allow the state and Federal regulators to 
focus on those parts of the industry that is within their regulatory 
expertise, while freeing the industry from the burden of duplicative 
layers of regulation.
  The second title of the bill is entitled Facilitating Investment in 
Mutual Funds. While most of my colleagues are aware of the rapid growth 
in the mutual fund industry, I wonder how many are aware that nearly 
one out of every three American families has money invested, in some 
form or another, in mutual funds. Mutual funds, as of 1995, have 
slightly more than $2 trillion dollars under management, with $800 
billion coming from individual investors and $1.2 trillion coming from 
institutional investors.
  The significantly increasing importance of the mutual fund industry 
led to a lengthy review by the Securities and Exchange Commission in 
1992, entitled ``Protecting Investors: A Half-Century of Investment 
Company Regulation,'' which made recommendations for modernizing of the 
Investment Company Act of 1940. The last time Congress revised the ICA 
was in 1970, and many believe that it is approriate--a quarter century 
later--for Congress to take a fresh look at the issue of modernization.
  Several of the mutual fund provisions of the legislation being 
introduced today were originally proposed by the SEC in their 1992 
report. Other suggestions have been forthcoming since that report and 
represent a careful balance between the need to make the Investment 
Company Act fit the mutual fund industry as it exists today, without 
sacrificing any investor protection.
  This section of the bill contains two major components: the first is 
to eliminate unnecessary state regulation of mutual funds, while 
preserving the state's authority to investigate for fraud and other 
types of wrongdoing. Mutual funds are highly regulated by the 
Securities and Exchange Commission through the Investment Company

[[Page S5597]]

Act of 1940; in fact, this is one of the most successfully regulated 
industries in America, borne out by the explosive growth in mutual 
funds since the Act was passed. In 1940, there were 105 registered 
companies with $2 billion in assets (according to the SEC); today, as I 
mentioned above, there are more than 5,300 funds holding over $2 
trillion in assets.
  The very success of SEC regulation has rendered most individual state 
regulations obsolete, not to mention that complying with these 
duplicative statutes is both expensive and burdensome on the industry. 
The costs of this regulatory burden are passed onto consumers. The 
legislation we are introducing today will preempt most state regulation 
of mutual funds, while preserving the state's necessary ability to 
protect consumers through anti-fraud and other statutes.
  Another area that will be modernized through adoption of this 
legislation will be in the area of smaller funds whose investors are 
either wealthy individuals--defined in the bill as those with more than 
$5 million in investments--and institutional investors. These funds, 
which are exempt from many of the provisions of the Investment Company 
Act of 1940 because of their smaller size and unique nature, often 
provide critically needed capital directly to new corporations and 
generally to America's emerging industries. By modestly expanding the 
pool of people and institutions eligible to participate in such funds, 
the legislation seeks to expand the amount of capital available for 
investment, particularly newer, small and moderate sized companies.
  There are also enhanced mutual fund disclosure requirements 
benefiting investors that we are continuing to develop, and I would 
anticipate that if and when this bill goes to mark-up, they will be 
added to the legislation.
  The last title of the bill contains a number of provisions that 
attempt to remove anomalies that have developed within the securities 
laws as the financial world has changed over the last sixty years. 
These changes, while modest in and of themselves, will nevertheless 
provide significant and needed relief to both investors and industry.
  In all, Mr. President, this is an extremely balanced and thoughtful 
bill that has been drafted in close consultation with the Securities 
and Exchange Commission and the North American Securities 
Administrators Association, the umbrella group for the fifty state 
securities administrators. It has been written in bipartisan manner 
that is increasingly rare in this body, and as a result, the bill 
provides statutory reform that is needed by investors, corporations and 
the financial services industry without sacrificing any consumer 
protections. I hope that the Senate will move expeditiously to pass 
this legislation.
  Mr. BRYAN. Mr. President, I am pleased to sign on as a co-sponsor of 
the Securities Investment Promotion Act of 1996. This comprehensive 
effort to modernize our regulation of the capital markets will help us 
achieve the most efficient possible regulatory scheme, while preserving 
investor confidence in our markets by maintaining needed investor 
protection safeguards.
  I come to this issue believing that our capital formation process is 
fundamentally sound. America's capital markets are the fairest, most 
successful, and the most liquid the world has ever known. By virtually 
every statistical measure, our capital markets are vibrant and healthy. 
The stock market has been setting new records for some time now and is 
in the midst of the longest run in this century. This has been an 
unprecedented boom for companies, investors and Wall Street firms.
  The manner in which we reform our regulation of securities is 
important because tens of millions of Americans increasingly rely on 
our nation's financial markets to save for retirement, fund their 
children's college education, and to receive a rate of return on 
savings that exceeds the rate of inflation. Today, more than ever, the 
people of America are investing in America. For the first time in 
history, mutual fund assets exceed the deposits of the commercial 
banking system.
  The growth in the mutual fund industry has been nothing short of 
phenomenal. Today, there are 2,222 stock funds, 2,576 bond and fixed-
income funds, plus another 1,000 money-market funds, according to the 
Investment Company Institute. In fact, there are now twice as many 
mutual funds--with a value of around $2.8 trillion--as stocks listed on 
the New York Stock Exchange. The reason for this huge expansion of 
funds may be summed up in one word: demand. Funds continue to roll off 
the assembly line because investors want more avenues in which to put 
their money.
  Investors are attracted to mutual funds because the market has 
remained generally trouble-free and because of its relative safety. 
While much of the credit for this environment should go to go to the 
industry itself, so too should credit go to an effective system of 
regulation. In our enthusiasm for updating and modernizing the 
oversight of this marketplace, care must be taken to maintain vital 
investor protections that have helped this industry grow and prosper.
  Our securities laws and regulations are designed first and foremost 
to protect investors and to maintain the integrity of the marketplace, 
thereby promoting trust and confidence in our system of capital 
formation. We should strive for a securities regulatory system that is 
tough--but one that also is fair and reasonable.
  On balance, I believe that this legislation does a good job of 
eliminating or modernizing laws and regulations that either are 
duplicative or outdated--without sacrificing investor protection. 
However, I also recognize that the introduction of this bill is just 
the first step in a longer process and that further fine tuning and 
revisions will be in order as we learn more about the practical effect 
of several of its specific provisions. I have decided to sign on as a 
co-sponsor despite the reservations I have about specific provisions 
contained in the bill. I will seek out the comments and views of 
federal and state regulators, industry representatives, and investor 
advocates on these matters.
  I would like to take just a few minutes to briefly highlight a few 
key provisions of this legislation:
  More rational investment adviser oversight. This bill seeks to 
rationalize the regulatory scheme for investment advisers. Over the 
last decade, both the House of Representatives and the Senate have held 
numerous hearings in which we have been told that our system of 
investment adviser regulation is woefully inadequate, both in terms of 
the resources we devote to the effort and the laws that govern the 
industry. Today, we take a modest first step in the effort to establish 
a credible program of investment adviser oversight. While I applaud the 
sensible approach contained in this bill, it is my hope that Congress 
does not end its consideration of this issue here.

  This bill will direct the Securities and Exchange Commission to focus 
on the biggest investment advisers--those who manage more than $25 
million of client assets. Investment advisers who fall below this 
threshold will be overseen by the State securities regulators, who 
appropriately are given the task of overseeing the smaller, local 
investment advisers. Now, it may be that the $25 million is not an 
appropriate dividing line. I would look for guidance here to the 
regulators and the industry who will be questioned on this issue. If we 
learn that the threshold is too high, too low, or too inflexible, I 
expect we will make the necessary revisions.
  The oversight of investment advisers is an extremely important issue, 
as more and more Americans turn to these financial professionals to 
help guide them through the increasing complexity of our financial 
markets. Both the Senate and the House of Representatives have 
addressed the issue of improving investment adviser oversight for 
several years now, but each time we have failed to reach an agreement 
on how best to accomplish such a goal. Establishing a more rational 
system for determining jurisdiction is a helpful step. But, it is only 
a first step. If we can all agree on this, I hope that we can also 
agree to come back next year and begin the process of evaluating 
whether our investment adviser laws are adequate for the protection of 
investors. For example, as I understand it, there is little more to the 
federal system of regulation than filling out some paperwork and paying 
a one-time fee. There are no minimum standards of competency, training, 
or education to become an investment adviser. We

[[Page S5598]]

must take a closer look at this law to determine where it may be 
deficient and to make the necessary improvements.
  Improved State-Federal Coordination. Today, both the Securities and 
Exchange Commission and the 50 State securities regulators share the 
responsibility for overseeing our capital markets. By and large, this 
system of shared regulatory responsibility has worked well, with the 
SEC taking responsibility for market-wide issues, while the States 
focus their attention on the issues most affecting individual investors 
and small businesses.
  I also believe that there is room for improved coordination and a 
more clearly defined allocation of responsibility between the States 
and the SEC. I support the goal of eliminating duplicative and 
overlapping regulations that do not provide any additional protections 
to investors or to the markets but which do serve to increase the costs 
of raising capital. I believe this bill draws brighter lines of 
responsibility between the States and the SEC, and streamlines the 
securities offering process for American businesses. However, I will 
withdraw my support if any changes are made to the bill that will have 
the effect of weakening the State role in policing sales practices, or 
that will in any way undermine the enforcement authority of State 
securities regulators or the ability of defrauded investors to recover 
their losses in court under State laws.
  Modernization of mutual fund oversight. This bill recognizes the 
fundamentally national character of the mutual fund industry by 
assigning exclusive responsibility for the routine review of mutual 
fund offering documents and related materials to the SEC and NASD. The 
legislation also encourages further innovation in the mutual fund 
industry by means of advertising prospectuses and fund of funds.
  While I understand that this section of the bill generally 
corresponds to a similar section contained in H.R. 3005 recently 
approved by the House Commerce Committee, I am troubled that the Senate 
version fails to incorporate two key provisions of the House bill that 
deal with Commission authority with respect to reporting and record 
keeping requirements.
  In closing, I want to say that it is my intention to carefully 
consider the feedback and comments we receive on this legislation--from 
Federal and State securities regulators--from representatives of the 
securities industry--and from investor advocates. I will work to revise 
any provisions that are identified as having the potential to upset the 
delicate balance between promoting capital formation and protecting 
investors that this bill now seeks to accomplish.
                                 ______

      By Mr. GRASSLEY (for himself, Mr. Hatch, Mrs. Kassebaum, and Mr. 
        Bond):
  S. 1817. A bill to limit the authority of Federal courts to fashion 
remedies that require local jurisdictions to assess, levy, or collect 
taxes, and for other purposes; to the Committee on the Judiciary.


                    the wisconsin works act of 1996

  Mr. GRASSLEY. Mr. President, I rise today to introduce a measure that 
will assist the President of the United States in carrying out a 
promise he made to the people of Wisconsin that he would approve the 
Wisconsin Works program. There have been some problems getting welfare 
actually acted on. I had a very nice letter from the President last 
year for the work that we did on the welfare reform bill. But that 
measure got vetoed and so did a subsequent measure.

  Now, the President has said that he supports the welfare reform 
demonstration project in Wisconsin, known as Wisconsin Works. Well, 
today, on behalf of myself, Senators Coats, Abraham, Gramm of Texas, 
Ashcroft, Craig, Coverdell, Grassley, Gregg, Santorum, Faircloth, and 
Nickles, I am submitting a very brief bill, which, in substance, says 
that when waivers are submitted by the Wisconsin Department of Health 
and Services to conduct a demonstration project known as Wisconsin 
Works, those waivers shall be deemed approved.
  We have heard many stories about the need to reform welfare, Mr. 
President, and one of those stories that has been repeated recently is 
that of an experiment in Sedalia, MO, where applicants for food stamps 
were sent to an employer. Many of them took jobs, which is good. It 
moved them off public assistance. Those who were turned down because 
they were not capable could stay on public assistance. Those who 
refused to show up were taken off of the food stamp rolls. So there was 
an incentive for those who did not want to work. Two people went for 
the job, but they were turned down because they tested positive for 
drugs.
  Under existing Federal law, the State of Missouri could not sanction 
those people, even though they were turned down for a job because they 
tested positive for drugs. The simple point of that is that that 
creates the most perverse of incentives--the incentive for people who 
are on public assistance and who do not want to have to take a job to 
get on drugs and they can stay on the public assistance rolls.
  That is the kind of thing that needs to be changed. That is why we 
need welfare reform. Today, Mr. President, I am simply acting to 
expedite one of the many waivers now pending from the States, which has 
been delayed, I understand from the Governors, an average of 210 days. 
This measure, if and when adopted, will deem the waivers submitted by 
the State of Wisconsin to be approved.
                                 ______

      By Mr. GRASSLEY (for himself, Mr. Hatch, Mrs. Kassebaum, and Mr. 
        Bond):
  S. 1817. A bill to limit the authority of Federal courts to fashion 
remedies that require local jurisdictions to assess, levy, or collect 
taxes, and for other purposes; to the Committee on the Judiciary.


             the fairness in judicial taxation act of 1996

 Mr. GRASSLEY. Mr. President, I introduce the Fairness in 
Judicial Taxation Act of 1996. I would like to thank Senator Hatch, 
Senator Kassebaum, and Congressman Manzullo for their leadership on 
this issue. I hope that both the House and Senate will move quickly to 
pass this bill.
  This important piece of legislation will curb the awesome power that 
the Federal courts gave themselves in the Supreme Court Case of 
Missouri versus Jenkins. As this body well knows, in that case the U.S. 
Supreme Court ruled that Federal courts could force towns and cities 
across America to raise taxes--even if State law forbids a tax 
increase. Amazingly, the Supreme Court failed to place any effective 
limitation on this power.
  This is outrageous and violates one of the basic principles our great 
Nation was founded on--no taxation without representation. I really 
can't think of a more un-American creature than a tax imposed by an 
unelected, unaccountable Federal judge. I urge my fellow Senators to 
remember--the power to tax is the power to destroy.
  This Congress is working hard to reduce the tax burdens on American 
families and small businesses. It would be a dereliction of duty not to 
do what we can to protect the American taxpayer from the destructive 
power of judge-imposed taxes.
  Today, I expect to be appointed to a national commission which is 
charged with looking into ways to change the way the IRS operates so 
that it will be fairer to the American taxpayer. The bill I introduce 
today is intended to deal with the same sort of problem--helping to 
protect the American people from the abusive use of Federal power in 
the collection of taxes.
  In my view, and I believe in the view of the vast majority of 
American taxpayers, it doesn't matter where the abuse comes from--the 
IRS or some Federal judge. The bottom line is that the scale has tipped 
too far in the direction of the Federal Government and away from 
protecting the rights of the American people.
  Now, we cannot by statute overturn Missouri versus Jenkins. And we 
don't have the votes to pass a constitutional amendment. Since the 
Supreme Court has spoken, and we are stuck with judge-imposed taxes, 
the Fairness in Judicial Taxation Act goes as far as we can. The bill 
sets up a six-part test which must be met before a judge can compel the 
raising of taxes. In brief, before a court could impose a tax, the 
judge would have to prove:

  That there is no way--other than a tax--to achieve justice; right 
now, courts can compel the raising of taxes

[[Page S5599]]

without even looking to see what else can be done;
  The tax won't in reality make the problems the tax is supposed to fix 
even worse;
  That the tax will not force property owners to leave the area, 
thereby actually reducing the amount of tax revenue for the town or 
city;
  The proposed tax will not cause property values to plummet; when 
property owners leave to avoid judge-imposed taxes, this can cause the 
value of land and property to go through the floor;
  The tax will not override tax caps set by local law; in Missouri 
versus Jenkins, the Supreme Court actually ruled that Federal Judge can 
strike down local tax caps;
  The proposed tax will effectively redress only the narrow issue 
before the court; in some cases, Federal judges have used judge-imposed 
taxation plans to pay for vast social engineering schemes.
  As you can see, Mr. President, these six factors will make it 
difficult--but not impossible--for courts to raise taxes. I wish we 
could just overturn Missouri versus Jenkins, but we can't. So, this is 
the next best thing.
  Importantly, the Fairness in Judicial Taxation Act gives everyday, 
average Americans the right to go before the court and be heard on the 
issue of tax increases. Congress might not be able to force courts not 
to raise taxes, but we can at least make the courts listen to people 
who will be harmed by the tax increase. And anyone who wants to, and 
who has appeared before the judge to oppose the tax, can file their own 
independent appeal--immediately, and not at the end of the court case, 
which can drag on for many years.
  Mr. President, this bill is good and fair and reasonable. It returns 
power back to the American people in a real and effective way.
 Mrs. KASSEBAUM. Mr. President, I am pleased to join today 
Senator Grassley in introducing the Fairness in Judicial Taxation Act 
of 1996. I want to commend Senator Grassley, Senator Hatch, and 
Congressman Manzullo for their leadership on this important issue.
  In recent years, a number of judges have ordered local governments to 
impose taxes on citizens as a means to remedy a constitutional 
violation. In many of these cases, I have believed that Federal courts 
exceeded their limited jurisdiction under article III of the 
Constitution. While I fully understand the role of the judiciary in 
protecting constitutional rights, I do not believe that judges should 
be in the business of needlessly imposing taxes.
  Our legislation addresses this issue by requiring Federal courts to 
meet certain criteria before imposing a tax. The Federal court must 
find that: There is no other means available to remedy the deprivation 
of rights, the tax will not contribute to the deprivation intended to 
be remedied, the tax will not result in a loss of revenue, the tax will 
not disproportionately affect any racial, ethnic, or national group, 
and plans submitted by a locality will not effectively redress the 
deprivation.
  These five criteria are similar to the analysis any effective 
legislature would undertake before imposing a tax on its people. It is 
a reasonable, moderate approach to a difficult issue.
  Mr. President, in 1990, I joined Senator Danforth in supporting a 
constitutional amendment which would prohibit judicial taxation. 
Senator Thurmond has advocated a legislative solution to this same 
issue. While these various approaches have not yet been successful, I 
believe they represent the emerging consensus that courts should stay 
out of the business of imposing taxes.
  I would hope that the legislation we are introducing today will 
contribute to the important debate about this issue.
  Mr. President, my interest in the issue of judicial taxation grew out 
of the experience of the Kansas City, MO, school system. In that case, 
the Federal judge has essentially taken over the school system by 
imposing a tax on the local population in order to finance 
implementation of a magnet school plan. His intervention, I would 
argue, has created an undercurrent of ill will, exacerbated racial 
tension, and done little to solve, over the long term, the problems 
with the Kansas City of school system.
  School desegregation is not an easy issue. It is fraught with 
emotion, and there are no magic answers. But imposing a comprehensive 
solution from the bench--without the support of the community--has not 
proven effective. We simply must find a better approach to this 
problem--an approach which brings a community together.
  I, for one, have strongly supported neighborhood schools. One of the 
real strengths of our education system has been in its local base. The 
sense of connection among students, parents, school officials, and 
communities is a vitally important source of support for children. When 
education loses its roots in the neighborhood, we lose the commitment 
and emphasis which are critical to academic success.
  Moreover, at a time when the stresses and outright breakdown of many 
families have denied to children the strong and positive messages they 
should be receiving from the parents, the sense of connection and 
belonging that a school can provide becomes even more vital.
  I fear that complex, Rube Goldberg solutions involving busing, magnet 
schools, and the such--financied by judicially imposed taxes--undermine 
community support for effective schooling. The business at hand is to 
guarantee that all our students have an opportunity for a quality 
education in their neighborhoods. That is where we should devote our 
energies and our financial resources.
  Mr. President, I am pleased to join with Senator Grassley in 
proposing legislation which deals with a key aspect of this problem--
the imposition of taxes by Federal courts. It is my hope that the 
Senate will act expeditiously on this important legislation, and 
communities will again work together to improve education for all their 
children.
                                 ______

      By Mr. DASCHLE (for himself, Mr. Bryan, Mr. Dodd, Mr. Kennedy, 
        Mr. Leahy, Ms. Mikulski, Ms. Moseley-Braun Mr. Rockefeller, and 
        Mr. Simon) (by request):
  S. 1818. A bill to amend the Employee Retirement Income Security Act 
of 1974 to provide for retirements savings and Security; to the 
Committee on Labor and Human Resources.
  S. 1819. A bill to amend the Railroad Retirement Act of 1974 to 
provide for retirement savings and security; to the Committee on Labor 
and Human Resources.
  S. 1820. A bill to amend title 5 of the United States Code to provide 
for retirement savings and security; to the Committee on Governmental 
Affairs.
  S. 1821. A bill to amend the Internal Revenue Code of 1986 to provide 
for retirement savings and security; to the Committee on Finance.


                     retirement savings legislation

  Mr. DASCHLE. Mr. President, lack of retirement security is America's 
quiet crisis.
  Americans who work hard all their lives--either in the workplace or 
at home--deserve peace of mind that a secure retirement awaits them. 
But too many Americans live in fear that they cannot afford to retire 
because they do not have adequate pension coverage.
  Right now, 51 million working Americans--more than half of private 
sector workers--have no private pension plan. Women are especially hard 
hit by this quiet crisis. Nearly two-thirds of working women do not 
have pension plans. And if you work in a small business, you only have 
a 1-in-4 chance of getting pension coverage.
  Even those workers fortunate enough to have a pension plan cannot be 
sure their pensions will actually be there when they are ready to 
retire. Add to that the fact that more Americans are spending every 
dollar they earn just to pay the bills, leaving less and less for 
retirement, and it is no wonder people are worried about the future.
  Working Americans should be able to count on a pyramid of income 
sources that, along with Medicare, provides them with a secure 
retirement. Social Security is the base of that pyramid, the foundation 
of retirement security. At the top of the pyramid are employer-provided 
pensions and private savings.
  From day one, Democrats in this Congress have had to fight to protect 
Social Security and Medicare from attacks by the far right. And we will 
continue to defend those programs as the critical bedrock of retirement 
security.
  But Social Security and Medicare--alone--were never intended to 
provide

[[Page S5600]]

full retirement security. If people are going to retire with dignity 
and security, they need personal savings, and they need adequate 
pension coverage. But too many obstacles exist in our current system 
for millions of Americans to get and keep pension coverage.
  That is why pension reform is one of the top 3 priorities for 
Democrats between now and November. We are committed to getting some, 
if not all, of this package back to the President for his signature 
before this Congress ends.
  Democrats plan to ease the fears of working Americans by making it 
easier for businesses to offer pension plans, and easier for workers 
who do not have access to employer-sponsored pensions plans to set up 
their own, tax-free pension plans.
  We will also establish a new kind of 401(k) plan to help people save 
up to $5,000 a year, tax-free, for retirement.
  Workers will be able to take their pensions and retirement savings 
accounts with them when they change jobs. They will not lose what they 
have already saved every time they take a new job. That is essential in 
an economy where the average worker will change jobs up to 8 times in 
his or her career.
  In addition to more pensions, this plan will make all pensions more 
secure by requiring pension funds to be invested in a more timely 
manner, and by increasing civil and criminal penalties for pension 
raiding.
  Finally, Democrats in the Senate will push to dramatically increase 
women's retirement security by enabling them to earn pensions 
themselves, and by making sure women are aware of the spousal pension 
funds to which they may be entitled.
  My colleague from Kansas, Senator Kassebaum, predicted in a recent 
speech that pension reform would be the big issue for the next 
Congress. I respectfully disagree with my colleague. Senate Democrats 
believe that pension reform is a big issue for this Congress. There is 
no reason the American people should have to wait that long.
  People who work hard all their lives deserve to be able to retire 
with dignity and security. We intend to ensure that they can, and we 
intend to do so this year.
 Ms. MOSELEY-BRAUN. Mr. President, I am pleased to have this 
opportunity to join my colleagues in introducing President Clinton's 
pension legislation, the Retirement Savings and Security Act. This 
legislation addresses some of the most serious concerns of the Nation's 
work force, and it will have a positive and lasting impact on the 
working people of this country. The Retirement Savings and Security Act 
will help America's working people prepare for their retirement, and 
help ensure their future economic security.
  This plan tackles the significant problems of pension coverage and 
portability by making it easier for people to enroll in pension plans, 
by making it easier for small businesses to offer benefits to their 
employees, and by making it easier for people to save for their 
retirement.
  A baby boomer will turn 50 every 7 seconds this year. The average 
American will hold between four and eight jobs in his or her lifetime. 
These trends require that we concern ourselves with increasing access 
to our Nation's pension system and ensuring that pensions are portable.
  As the sponsor of S. 1756, the Women's Pension Equity Act, I want to 
take special note of the attention the President's plan gives to some 
of the pension issues which have a disproportionate impact on women.
  Our pension system was not designed for working women, either those 
in the work force or in the home. The statistics vividly make the case. 
Women make up 60 percent of seniors over 65 years old, but 75 percent 
of the elderly poor. An elderly woman is twice as likely as a man to 
live below the poverty line. One reason for the high incidence of 
poverty among older women is clear--less than one-third of female 
retirees receive any pension benefits at all and for those that do, the 
average benefit is only half that of male retirees. Over half of all 
male retirees receive pension benefits.
  There are a number of reasons for the disparity in men's and women's 
pension coverage and benefits. Women are more likely to move in and out 
of the work force to care for family, women are more likely to work at 
home, or to work in industries without generous salary or pension 
benefits, and women earn less compared to men--all of which contributes 
to little or no pension income.
  This legislation encourages increased portability and lower vesting 
requirements. Allowing workers to earn pension benefits quickly and to 
take those benefits with them when they change jobs will directly 
benefit women, who are more likely than men to take time out of the 
work force to care for their children or their parents.
  This legislation encourages small business to offer 401(k) plans. 
Expanding pension coverage into small businesses will directly benefit 
women, who disproportionately work in small businesses.
  This legislation encourages employers to accept a lump sum rollover 
of a new employee's pension funds from the previous employer. Making it 
easier to transfer retirement funds directly into a new account, 
thereby decreasing the likelihood of pension savings being spent before 
retirement, will directly benefit women, who are almost a third more 
likely to receive a lump sum payment as their sole pension income, will 
benefit directly.
  In addition, this plan contains several targeted initiatives that 
were drawn, in part, from S. 1756, and that will help to further ensure 
retirement security for older women. These are initiatives to protect 
working women and homemakers alike who face widowhood or divorce. The 
current pension laws often leave widows and divorced women without any 
of the pension benefits earned by their husbands during many years of 
marriage.

  I am very pleased that the President acted to ensure that these 
provisions were included in the administration's pension bill. The 
President understands that our pension laws have to reflect the reality 
faced by women today in the work force, in the home, and in retirement.
  I want to take particular note of the President's interest in dealing 
with two problems affecting widows and divorced widows whose deceased 
husbands participated in the Federal civil service retirement system.
  The first provision in this legislation allows a widow or divorced 
widow to collect their husband's civil service pension if he dies after 
leaving his civil service job and before collecting his pension 
benefits. The second provision allows a court that awards a woman part 
of her husband's civil service pension upon divorce, to extend that 
award to any lump sum payment made if the husband dies before 
collecting benefits.
  These provisions ensure that women will not be left without pension 
income in their retirement years because of absurd, yet potentially 
devastating, pension loopholes in the civil service retirement system. 
Similar language is included in S. 1756.
  Mr. President, the President's pension initiative will result in 
significant improvements in pension coverage for older women. This bill 
is just another example of the President's commitment to increase the 
economic security of all Americans.
  All Americans need improved pension coverage. We need to know that we 
can retire without falling into poverty or becoming a huge financial 
burden for our families. We need to know that the golden years are not 
going to turn into disposable years.
  I commend the President on his efforts to expand pension coverage, 
portability, and security for all Americans and I commend the President 
for making a special effort when it comes to older women living alone--
those most likely to live in poverty.
  I am proud to be able to cosponsor this important initiative. All 
Americans, women included, deserve to retire with dignity.

                          ____________________