Congressional Record, Volume 142 Issue 87 (Thursday, June 13, 1996)

[Congressional Record Volume 142, Number 87 (Thursday, June 13, 1996)]
[Senate]
[Pages S6226-S6243]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. McCAIN (for himself, Mrs. Kassebaum, Mr. Murkowski, Mr.
Stevens and Mr. Simon):
S. 1869. A bill to make certain technical corrections in the Indian
Health Care Improvement Act, and for other purposes; to the Committee
on Indian Affairs.

THE INDIAN HEALTH CARE IMPROVEMENT TECHNICAL CORRECTIONS ACT OF 1996

Mr. McCAIN. Mr. President, I rise today on behalf of myself and
Senators Kassebaum, Murkowski, Stevens, and Simon to introduce
legislation to make various technical amendments to the Indian Health
Care Improvement Act.
The bill we are introducing today will simply make technical changes
to certain provisions of the act and extend the authorization for
several Indian health care demonstration programs.
Mr. President, the Congress passed the Indian Health Care Improvement
Act in 1976 to raise the level of health care provided to American
Indians and Alaska Native communities. While the health status of
Indian people has generally improved since its enactment, it still lags
far behind any other segment of our population. Health crises in every
possible problem area continue to afflict many reservation communities
at alarming rates. The mortality rate for diabetes exceeds the national
average by 139 percent. American Indians are four times more likely to
die from alcoholism than other Americans. The incidence rates for fetal
alcohol syndrome among native Americans is six times the national
average.
The Indian Health Care Improvement Act was enacted to meet the
fundamental trust obligation of the United States to ensure that
comprehensive health care would be provided to American Indians and
Alaska Natives as it is provided to all other Americans. The act was
amended in 1992 to extend most of the authorized programs through the
year 2000, at which time the Indian Health Service is required to
report to Congress on the progress of meeting the health objectives
outlined in the act. Until such time, we are seeking to make minor
changes to certain provisions of the act to allow maximum flexibility
in the delivery of health services to American Indians and Alaska
Natives and to ensure that several important tribal programs can
continue through the year 2000.
First, the bill amends section 4(n), the Indian health scholarship
and loan repayment fund, by modifying the definition of the term
``Health Profession.'' This modification will provide greater
flexibility to the IHS to determine eligibility for financial
assistance to Indians enrolled in health degree programs. Second, the
bill amends section 104(b), the Indian health professions scholarship,
to maximize opportunities for scholarship recipients to meet their
service obligations to the IHS. It also authorizes the Secretary to
waive or suspend a service or payment obligation upon death, extreme
hardship conditions or bankruptcy. Next, the bill amends section 206
regarding reimbursement from certain third parties of costs of health
services to clarify the provisions for individuals in collection
actions for services provided by IHS or tribal health facilities. These
provisions were previously adopted by the Senate on October 31, 1995 as
part of S. 325, the Native American Technical Corrections Act. However,
the House has not yet acted upon S. 325 because the bill contained
provisions resulting in joint referrals to a number of House
committees. The bill I am introducing today has been drafted to permit
referral to just one House Committee.

The bill also amends section 405 to continue the Medicare/Medicaid
Demonstration Program for direct billing of Medicaid, Medicare and
other third party payers. The demonstration program authorizes up to
four tribally-operated IHS hospitals or clinics to participate directly
in the billing and receipt of Medicare/Medicaid payments rather than
through the current system of channeling payments through the IHS. The
four participating tribes including Mississippi Choctaw Health Center,
Bristol Bay Area Health Corporation, Choctaw Tribe of Oklahoma and
South East Alaska Regional Health Consortium, unanimously report
successful results and satisfaction with the program. Collections for
some of these tribes have since doubled due to the implementation of
the program. I have also received a strong interest from other Indian
tribes in expanding this program so that other eligible tribal
operators may participate in this direct billing process.
The Medicare/Medicaid Demonstration Program is set to expire on
September 30, 1996 at which time the Secretary of the Department of
Health and Human Services will evaluate the program and provide a
recommendation on whether the program should be made a permanent
program. However, without this proposed extension, the four tribal
participants will be forced to shut down their direct billing/
collection departments and return to the old system of IHS-managed
collections.
Given the highly favorable reports of the participating tribal
programs, we are proposing to continue the program through the year
2000 and expand the number of eligible tribal facilities from four to
twelve. The Congress will evaluate the future of the program when the
Secretary has submitted the final report on the project.
Finally, the act extends the authorization for several innovative
health care demonstration projects that were established as model
programs to be replicated on other Indian reservations. Several of
these demonstration projects, including the California Contract Health
Services Demonstration Program, the Gallup Alcohol and Substance Abuse
Demonstration Program, the Substance Abuse Counselor Education
Demonstration Program and the Home and Community Based Care
Demonstration Program, are due to sunset in this fiscal year.
While the programs expire in fiscal year 1997, the Secretary is not
required to provide a report on these programs until 1999. I believe
that these programs should be reauthorized through the year 2000 in
order to continue the important health care services provided by these
programs and to achieve consistency with other portions of the act. The
bill will simply extend the authorization for these programs through
the year 2000 until such time that the Secretary prepares his report on
the entire Indian Health Care Improvement Act.
Mr. President, this legislation is necessary to ensure the
continuation of these important health care programs for Indian people.
It is my hope that we can move this bill quickly and favorably. I urge
my colleagues to support the immediate passage of this legislation.
I ask unanimous consent that the full text of this bill and the
section-by-section summary be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 1869

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

SECTION 1. SHORT TITLE; REFERENCES.

(a) Short Title.--This Act may be cited as the ``Indian
Health Care Improvement Technical Corrections Act of 1996''.
(b) References.--Whenever in this Act an amendment or
repeal is expressed in terms of an amendment to or repeal of
a section or other provision, the reference shall be
considered to be made to a section or other provision of the
Indian Health Care Improvement Act.

SEC. 2. TECHNICAL CORRECTIONS IN THE INDIAN HEALTH CARE
IMPROVEMENT ACT.

(a) Definition of Health Profession.--Section 4(n) (25
U.S.C. 1603(n)) is amended--
(1) by inserting ``allopathic medicine,'' before ``family
medicine''; and
(2) by striking ``and allied health professions'' and
inserting ``an allied health profession, or any other health
profession''.
(b) Indian Health Professions Scholarships.--Section 104(b)
of the Indian Health Care Improvement Act (25 U.S.C.
1613a(b)) is amended--
(1) in paragraph (3)--
(A) in subparagraph (A)--
(i) by striking the matter preceding clause (i) and
inserting the following:
``(3)(A) The active duty service obligation under a written
contract with the Secretary under section 338A of the Public
Health Service Act (42 U.S.C. 254l) that an individual has
entered into under that section shall, if that individual is
a recipient of an Indian Health Scholarship, be met in full-
time practice, by service--'';
(ii) by striking ``or'' at the end of clause (iii);
(iii) by striking the period at the end of clause (iv) and
inserting ``; or''; and

[[Page S6227]]

(iv) by adding at the end the following new clause:
``(v) in an academic setting (including a program that
receives funding under section 102, 112, or 114, or any other
academic setting that the Secretary, acting through the
Service, determines to be appropriate for the purposes of
this clause) in which the major duties and responsibilities
of the recipient are the recruitment and training of Indian
health professionals in the discipline of that recipient in a
manner consistent with the purpose of this title, as
specified in section 101.'';
(B) by redesignating subparagraphs (B) and (C) as
subparagraphs (C) and (D), respectively;
(C) by inserting after subparagraph (A) the following new
subparagraph:
``(B) At the request of any individual who has entered into
a contract referred to in subparagraph (A) and who receives a
degree in medicine (including osteopathic or allopathic
medicine), dentistry, optometry, podiatry, or pharmacy, the
Secretary shall defer the active duty service obligation of
that individual under that contract, in order that such
individual may complete any internship, residency, or other
advanced clinical training that is required for the practice
of that health profession, for an appropriate period (in
years, as determined by the Secretary), subject to the
following conditions:
``(i) No period of internship, residency, or other advanced
clinical training shall be counted as satisfying any period
of obligated service that is required under this section.
``(ii) The active duty service obligation of that
individual shall commence not later than 90 days after the
completion of that advanced clinical training (or by a date
specified by the Secretary).
``(iii) The active duty service obligation will be served
in the health profession of that individual, in a manner
consistent with clauses (i) through (v) of subparagraph
(A).'';
(D) in subparagraph (C), as so redesignated, by striking
``prescribed under section 338C of the Public Health Service
Act (42 U.S.C. 254m) by service in a program specified in
subparagraph (A)'' and inserting ``described in subparagraph
(A) by service in a program specified in that subparagraph'';
and
(E) in subparagraph (D), as so redesignated--
(i) by striking ``Subject to subparagraph (B),'' and
inserting ``Subject to subparagraph (C),''; and
(ii) by striking ``prescribed under section 338C of the
Public Health Service Act (42 U.S.C. 254m)'' and inserting
``described in subparagraph (A)'';
(2) in paragraph (4)--
(A) in subparagraph (B), by striking the matter preceding
clause (i) and inserting the following:
``(B) the period of obligated service described in
paragraph (3)(A) shall be equal to the greater of--''; and
(B) in subparagraph (C), by striking ``(42 U.S.C.
254m(g)(1)(B))'' and inserting ``(42 U.S.C. 254l(g)(1)(B))'';
(3) in paragraph (5), by adding at the end the following
new subparagraphs:
``(C) Upon the death of an individual who receives an
Indian Health Scholarship, any obligation of that individual
for service or payment that relates to that scholarship shall
be canceled.
``(D) The Secretary shall provide for the partial or total
waiver or suspension of any obligation of service or payment
of a recipient of an Indian Health Scholarship if the
Secretary determines that--
``(i) it is not possible for the recipient to meet that
obligation or make that payment;
``(ii) requiring that recipient to meet that obligation or
make that payment would result in extreme hardship to the
recipient; or
``(iii) the enforcement of the requirement to meet the
obligation or make the payment would be unconscionable.
``(E) Notwithstanding any other provision of law, in any
case of extreme hardship or for other good cause shown, the
Secretary may waive, in whole or in part, the right of the
United States to recover funds made available under this
section.
``(F) Notwithstanding any other provision of law, with
respect to a recipient of an Indian Health Scholarship, no
obligation for payment may be released by a discharge in
bankruptcy under title 11, United States Code, unless that
discharge is granted after the expiration of the 5-year
period beginning on the initial date on which that payment is
due, and only if the bankruptcy court finds that the
nondischarge of the obligation would be unconscionable.''.
(c) Reimbursement From Certain Third Parties of Costs of
Health Services.--Section 206 (16 U.S.C. 1621e) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1)--
(i) by striking ``Except as provided'' and inserting ``(a)
Right of Recovery.--Except as provided'';
(ii) by striking ``the reasonable expenses incurred'' and
inserting ``the reasonable charges billed'';
(iii) by striking ``in providing'' and inserting ``for
providing''; and
(iv) by striking ``for such expenses'' and inserting ``for
such charges''; and
(B) in paragraph (2), by striking ``such expenses'' each
place it appears and inserting ``such charges'';
(2) in subsection (b), by striking ``(b) Subsection (a)''
and inserting ``(b) Recovery Against State With Workers'
Compensation Laws or No-Fault Automobile Accident Insurance
Program.--Subsection (a)'';
(3) in subsection (c), by striking ``(c) No law'' and
inserting ``(c) Prohibition of State Law or Contract
Provision Impediment to Right of Recovery.--No law'';
(4) in subsection (d), by striking ``(d) No action'' and
inserting ``(d) Right to Damages.--No action'';
(5) in subsection (e)--
(A) in the matter preceding paragraph (1), by striking
``(e) The United States'' and inserting ``(e) Intervention or
Separate Civil Action.--The United States''; and
(B) by striking paragraph (2) and inserting the following
new paragraph:
``(2) while making all reasonable efforts to provide notice
of the action to the individual to whom health services are
provided prior to the filing of the action, instituting a
civil action.'';
(6) in subsection (f), by striking ``(f) The United
States'' and inserting ``(f) Services Covered Under a Self-
Insurance Plan.--The United States''; and
(7) by adding at the end the following new subsections:
``(g) Costs of Action.--In any action brought to enforce
this section, the court shall award any prevailing plaintiff
costs, including attorneys' fees that were reasonably
incurred in that action.
``(h) Right of Recovery for Failure To Provide Reasonable
Assurances.--The United States, an Indian tribe, or a tribal
organization shall have the right to recover damages against
any fiduciary of an insurance company or employee benefit
plan that is a provider referred to in subsection (a) who--
``(1) fails to provide reasonable assurances that such
insurance company or employee benefit plan has funds that are
sufficient to pay all benefits owed by that insurance company
or employee benefit plan in its capacity as such a provider;
or
``(2) otherwise hinders or prevents recovery under
subsection (a), including hindering the pursuit of any claim
for a remedy that may be asserted by a beneficiary or
participant covered under subsection (a) under any other
applicable Federal or State law.''.
(d) California Contract Health Services Demonstration
Program.--Section 211(g) (25 U.S.C. 1621j(g)) is amended by
striking ``1993, 1994, 1995, 1996, and 1997'' and inserting
``1996 through 2000''.
(e) Medicare and Medicaid Demonstration Program.--Section
405(c) (42 U.S.C. 1395qq note) is amended--
(1) in paragraph (1)(D), by striking ``prior to October 1,
1990'' and inserting ``on or before the date which is 1 year
after the date of submission of the plan''; and
(2) in paragraph (2)--
(A) by striking ``, prior to October 1, 1989, select no
more than 4'' and inserting ``select no more than 12''; and
(B) by striking ``September 30, 1996'' and inserting
``September 30, 2000''.
(f) Gallup Alcohol and Substance Abuse Treatment Center.--
Section 706(d) (25 U.S.C. 1665e(d)) is amended to read as
follows:
``(d) Authorization of Appropriations.--There are
authorized to be appropriated, for each of fiscal years 1996
through 2000, such sums as may be necessary to carry out
subsection (b).''.
(g) Substance Abuse Counselor Education Demonstration
Program.--Section 711(h) (25 U.S.C. 1665j(h)) is amended by
striking ``1993, 1994, 1995, 1996, and 1997'' and inserting
``1996 through 2000''.
(h) Home and Community-Based Care Demonstration Program.--
Section 821(i) (25 U.S.C. 1680k(i)) is amended by striking
``1993, 1994, 1995, 1996, and 1997''and inserting ``1996
through 2000''.
____

Section-by-Section Summary--Indian Health Care Improvement Technical
Corrections Act of 1996

Section 1(a) sets forth the short title of the Act.
Section 1(b) provides that wherever a section or other
provision is amended or repealed in this Act, such amendment
shall be considered made to the referenced section or
provision of the Indian Health Care Improvement Act (25
U.S.C. 1601 et. seq.).
Section 2(a) amends Section 4(n) of the Indian Health Care
Improvement Act to modify the definition of ``Health
Profession'' to specify that ``allopathic medicine'' shall be
added as an eligible degree program for individuals to
qualify for scholarships and loan repayment programs. This
section also modifies the definition by striking the current
language of ``and allied health professions'' and inserting
``an allied health profession, or any other health
profession'' to allow the IHS additional flexibility to
determine eligibility for scholarships and loan repayments
for individuals enrolled in health professions not specified
under this section.
Section 2(b) amends Section 104(b) of the Indian Health
Care Improvement Act to add a new provision that clarifies
that an individual serving in an academic setting that is
funded under sections 102, 112, or 114 of the Act who is
responsible for the recruitment and training of Indian Health
Professionals shall be considered to be meeting their service
obligations under section 338A of the Public Health Service
Act. This provision will allow an individual to meet their
service obligation to the IHS by working at a university or
other academic setting which is responsible for recruiting
and training American Indians in the health professions. This

[[Page S6228]]

is also intended to clarify that the Secretary may defer an
individual's service obligation during the term of an
internship, residency or other advanced clinical program.
Section 104(b) is further amended by adding new subsections
to address unique circumstances under which the Secretary to
authorized to waive or suspend service or payment obligations
due to death or the Secretary's determination that it would
cause extreme hardship or to enforce such a requirement would
be unconscionable. An additional subsection is added to
clarify the terms under which an individual's payment
obligation may be discharged in a bankruptcy proceeding.
Section 2(c) amends Section 206 of the Indian Health Care
Improvement Act to clarify the notice provisions for
individuals in collection actions for services provided by
IHS or tribal health facilities and recoverable costs in such
a collection action and the right of the United States and
Indian tribes to recover against an insurance company or
employee benefit plan.
Section 2(d) amends Section 211(g) of the Indian Health
Care Improvement Act to extend the authorization for the
California Contract Health Services Demonstration Program
until the year 2000.
Section 2(e) amends Section 405(c) of the Indian Health
Care Improvement Act to provide that applicants for the
Medicare and Medicaid Demonstration Program must be
accredited by the Joint Commission on Accreditation of
Hospitals within one year of submission of an application.
Section 405(c) is amended to increase the number of eligible
tribal health facilities from four to twelve. The
authorization for the Medicare and Medicaid Demonstration
Program is extended until the year 2000.
Section 2(f) amends Section 706(d) of the Indian Health
Care Improvement Act to strike out 706(d) in its entirety and
add a new subsection that will extend the authorization for
the Gallup Alcohol and Substance Abuse Treatment Center until
the year 2000.
Section 2(g) amends Section 711(h) of the Indian Health
Care Improvement Act to extend the authorization for the
Substance Abuse Counselor Education Demonstration Program
until the year 2000.
Section 2(h) amends Section 821(I) of the Indian Health
Care Improvement Act to extend the authorization for the Home
and Community-Based Care Demonstration Program until the year
2000.
______

By Mr. MOYNIHAN:
S. 1870. A bill to establish a medical education trust fund, and for
other purposes; to the Committee on Finance.

THE MEDICAL EDUCATION TRUST FUND ACT OF 1996

Mr. MOYNIHAN. Mr. President, I rise to introduce legislation that
would establish a Medical Education Trust Fund to support America's 124
medical schools and 1,250 teaching hospitals. These institutions are
national treasures; they are the very best in the world. Yet today they
find themselves in a precarious financial situation as market forces
reshape the health care delivery system in the United States. Explicit
and dedicated funding for these institutions, which this legislation
will provide, will ensure that the United States continues to lead the
world in the quality of its health care system.
This legislation requires that the public sector, through the
Medicare and Medicaid programs, and the private sector, through an
assessment on health insurance premiums, will contribute broad-based
and fair financial support. Over the 5-year period, 1997 to 2001, the
Medical Education Trust Fund established under this legislation would
provide average annual payments of about $17 billion, roughly doubling
the funding that we currently provide for medical education.

Brief History

My particular interest in this subject began in 1994, when the
Finance Committee took up the President's Health Security Act. I was
Chairman of the Committee at the time. In January of that year, I asked
Paul Marks, M.D., President of Memorial Sloan-Kettering Cancer Center
in New York City, if he would arrange a ``seminar'' for me on health
care issues. He agreed, and gathered a number of medical school deans
together one morning in New York.
Early on in the meeting, one of the seminarians remarked that the
University of Minnesota might have to close its medical school. In an
instant I realized I had heard something new. Minnesota is a place
where they open medical schools, not close them. How, then, could this
be? The answer was that Minnesota, being Minnesota, was a leading state
in the growth of Health Maintenance Organizations, and HMO's do not
send patients to teaching hospitals, absent which you cannot have a
medical school.
We are in the midst of a great age of discovery in medical science.
It is certainly not a time to close medical schools. This great era of
medical discovery is occurring right here in the United States, not in
Europe like past ages of scientific discovery. And it is centered in
New York City. This heroic age of medical science started in the late
1930's. Before then, the average patient was probably as well off,
perhaps better, out of a hospital as in one. Progress from that point
60 years ago has been remarkable. The last few decades have brought us
images of the inside of the human body based on the magnetic resonance
of bodily tissues; laser surgery; micro surgery for reattaching limbs;
and organ transplantation, among other wonders. I can hardly imagine
what might be next. Physicians are now working on a gene therapy that
might eventually replace bypass surgery.
After months of hearings and debate on the President's Health
Security Act, I became convinced that special provisions would have to
be made for medical schools, teaching hospitals, and medical research
if we were not to see this great moment in medical science suddenly
constrained. To that end, when the Committee on Finance voted 12 to 8
on July 2, 1994, to report the Health Security Act, it included a
graduate medical education and academic health centers trust fund. The
trust fund provided an 80-percent increase in Federal funding for
academic medicine; as importantly, it represented stable, long-term
funding. While nothing came of the effort to enact universal health
care coverage, the medical education trust fund enjoyed widespread
support. An amendment by then-Senator Malcolm Wallop of Wyoming to kill
the trust fund by striking the source of its revenue--a 1.75-percent
assessment on health insurance premiums--failed on a 7 to 13 vote in
the Finance Committee.
I continued to press the issue in the first session of the 104th
Congress. On September 29, 1995, during Finance Committee consideration
of the budget reconciliation legislation, I offered an amendment to
establish a similar trust fund. With a new majority in control and the
committee in the midst of considering a highly partisan budget
reconciliation bill, my amendment failed on a tie vote, 10 to 10.
Notably, however, the House version of the reconciliation bill did
include a graduate medical education trust fund. That provision
ultimately passed both Houses as part of the conference agreement,
which was subsequently vetoed by President Clinton.

The conference agreement on the budget resolution, being considered
by the Senate and House this week, also apparently assumes that this
year's Medicare reconciliation bill will include a similar trust fund.
That is the history of this effort, briefly stated.

Need for Legislation

Medical education is one of America's most precious public resources.
It should be explicitly financed with contributions from all sectors of
the health care system, not just the Medicare Program as is the case
today. The fiscal pressures of a competitive health care market are
increasingly closing off traditional implicit revenue sources--such as
additional payments from private payers--that have in the past
supported medical schools, graduate medical education, and research.
This legislation provides alternative funding to prevent the
deterioration of these institutions and the invaluable services they
provide.
Events in Rochester, NY, a community with a long and proud tradition
of quality, cost-effective health care, provide a good example of how
market forces are reshaping the health care delivery system. Last year,
the only option available to retirees of Kodak at no additional cost
was a managed care plan. Unfortunately, that managed care plan excluded
Strong Memorial, Rochester's prestigious teaching hospital. Strong
Memorial was established in 1920 with the help of George Eastman and
was named for Henry Strong, a financier of Eastman. Yet ironically, 75
years later, Eastman Kodak's retirees could not get care at Strong
Memorial Hospital.
After much protest, the managed care plan brought Strong Memorial
into its provider network, but only after Kodak agreed to make separate
payments for 1 year to support the costs of graduate medical education
at

[[Page S6229]]

Strong. The Rochester community worked out a solution, however
temporary, to the problems faced by its primary teaching hospital, but
we cannot, and should not, rely on the Kodaks of the world to finance
medical education. We must adopt a comprehensive Federal strategy.
Other teaching hospitals are facing similar difficulties. In its June
1995 ``Report to Congress,'' the Prospective Payment Assessment
Commission [ProPAC], the Commission which advises Congress on Medicare
hospital insurance part A payment, summarized the situation of teaching
hospitals as follows:

As competition in the health care system intensifies, the
additional costs borne by teaching hospitals will place them
at a disadvantage relative to other facilities. The role,
scale, function, and number of these institutions
increasingly will be challenged. . .. Accelerating price
competition in the private sector . . . is reducing the
ability of teaching hospitals to obtain the higher patient
care rates from other payers that traditionally have
contributed to financing the costs associated with graduate
medical education.

ProPAC's June 1996 ``Report to Congress,'' issued just last week,
confirmed that ``major teaching hospitals have the dual problems of
higher overall losses from uncompensated care and less above cost
revenue from private insurers.''
It is obvious that teaching hospitals can no longer rely on higher
payments from private payers to cover the costs of their teaching
programs. Nor should they. The establishment of this trust fund, which
reimburses teaching hospitals for the costs of graduate medical
education, will ensure that teaching hospitals can pursue their vitally
important patient care, training, and research missions in the face of
an increasingly competitive health system.
Medical schools also face an uncertain future. There are many policy
issues that need to be examined regarding the role of medical schools
in our health system, but two threats faced by medical schools now
require immediate attention. This legislation addresses both. First,
many medical schools are immediately threatened by the dire financial
condition of their affiliated teaching hospitals. Medical schools rely
on teaching hospitals to provide a place for their faculty to practice
and perform research, a place to send third- and fourth-year medical
school students for training, and for some direct revenues. By
improving the financial condition of teaching hospitals, this
legislation significantly improves the outlook for medical schools.

The second immediate threat faced by medical schools stems from their
reliance on a portion of the clinical practice revenue generated by
their faculties to support their operations. As competition within the
health system intensifies and managed care proliferates, these revenues
are shrinking. This legislation provides payments to medical schools
from the trust fund that are designed to partially offset this loss of
revenue.
None of the foregoing is meant to suggest that the new competitive
forces reshaping health care have brought only negative results. To the
contrary, the onset of competition has had many beneficial effects, the
dramatic curtailing of growth in health insurance premiums being the
most obvious. But as Msgr. Charles J. Fahey of Fordham University
warned in testimony before the Finance Committee in 1994, we must be
wary of the ``commodification of health care,'' by which he meant that
health care is not just another commodity. We can rely on competition
to hold down costs in much of the health system, but we must not allow
it to bring a premature end to this great age of medical discovery, an
age made possible by this country's exceptionally well-trained health
professionals and superior medical schools and teaching hospitals. This
legislation complements a competitive health market by providing tax-
supported funding for the public services provided by teaching
hospitals and medical schools.

Description of Legislation

The medical education trust fund established in the legislation I
have just introduced would receive funding from three sources broadly
representing the entire health care system: A 1.5-percent tax on health
insurance premiums, the private sector's contribution; Medicare, and
Medicaid, the latter two sources comprising the public sector's
contribution. The relative contribution from each of these sources will
be in rough proportion to the medical education costs attributable to
their respective covered populations.
Over the 5-year period 1997 to 2001, the medical education trust fund
will provide average annual payments of about $17 billion. The tax on
health insurance premiums, including self-insured health plans, raises
approximately $4 billion per year for the trust fund. Federal health
programs contribute about $13 billion per year to the trust fund: $9
billion in transfers of Medicare graduate medical education payments
and $4 billion in Federal Medicaid spending.
This legislation is only a first step. It establishes the principle
that, as a public good, medical education should be supported by
dedicated, long-term Federal funding. To ensure that the United States
continues to lead the world in the quality of its medical education and
its health system as a whole, the legislation would also create a
medical education advisory commission to conduct a thorough study and
make recommendations, including the potential use of demonstration
projects, regarding the following: alternative and additional sources
of medical education financing; alternative methodologies for financing
medical education; policies designed to maintain superior research and
educational capacities in an increasingly competitive health system;
the appropriate role of medical schools in graduate medical education;
and policies designed to expand eligibility for graduate medical
education payments to institutions other than teaching hospitals.
Mr. President, the services provided by this Nation's teaching
hospitals and medical schools--groundbreaking research, highly skilled
medical care, and the training of tomorrow's physicians--are vitally
important and must be protected in this time of intense economic
competition in the health system. I therefore urge Senators to support
the Medical Education Trust Fund Act of 1996.
I ask unanimous consent that a summary and a copy of the bill be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 1870

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Medical
Education Trust Fund Act of 1996''.
(b) Table of Contents.--The table of contents of this title
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Medical Education Trust Fund.
Sec. 3. Amendments to medicare program.
Sec. 4. Amendments to medicaid program.
Sec. 5. Assessments on insured and self-insured health plans.
Sec. 6. Medical Education Advisory Commission.
Sec. 7. Demonstration projects.

SEC. 2. MEDICAL EDUCATION TRUST FUND.

The Social Security Act (42 U.S.C. 300 et seq.) is amended
by adding after title XX the following new title:

``TITLE XXI--MEDICAL EDUCATION TRUST FUND

``table of contents of title

``Sec. 2101. Establishment of Trust Fund.
``Sec. 2102. Payments to medical schools.
``Sec. 2103. Payments to teaching hospitals.

``SEC. 2101. ESTABLISHMENT OF TRUST FUND.

``(a) In General.--There is established in the Treasury of
the United States a fund to be known as the Medical Education
Trust Fund (in this title referred to as the `Trust Fund'),
consisting of the following accounts:
``(1) The Medical School Account.
``(2) The Medicare Teaching Hospital Indirect Account.
``(3) The Medicare Teaching Hospital Direct Account.
``(4) The Non-Medicare Teaching Hospital Indirect Account.
``(5) The Non-Medicare Teaching Hospital Direct Account.

Each such account shall consist of such amounts as are
allocated and transferred to such account under this section,
sections 1876(a)(7), 1886(j) and 1931, and section 4503 of
the Internal Revenue Code of 1986. Amounts in the accounts of
the Trust Fund shall remain available until expended.
``(b) Expenditures From Trust Fund.--Amounts in the
accounts of the Trust Fund are available to the Secretary for
making payments under sections 2102 and 2103.
``(c) Investment.--
``(1) In general.--The Secretary of the Treasury shall
invest amounts in the accounts of the Trust Fund which the
Secretary determines are not required to meet

[[Page S6230]]

current withdrawals from the Trust Fund. Such investments may
be made only in interest-bearing obligations of the United
States. For such purpose, such obligations may be acquired on
original issue at the issue price, or by purchase of
outstanding obligations at the market price.
``(2) Sale of obligations.--The Secretary of the Treasury
may sell at market price any obligation acquired under
paragraph (1).
``(3) Availability of income.--Any interest derived from
obligations held in each such account, and proceeds from any
sale or redemption of such obligations, are hereby
appropriated to such account.
``(d) Monetary Gifts to Trust Fund.--There are appropriated
to the Trust Fund such amounts as may be unconditionally
donated to the Federal Government as gifts to the Trust Fund.
Such amounts shall be allocated and transferred to the
accounts described in subsection (a) in the same proportion
as the amounts in each of the accounts bears to the total
amount in all the accounts of the Trust Fund.

``SEC. 2102. PAYMENTS TO MEDICAL SCHOOLS.

``(a) Federal Payments to Medical Schools for Certain
Costs.--
``(1) In general.--In the case of a medical school that in
accordance with paragraph (2) submits to the Secretary an
application for fiscal year 1997 or any subsequent fiscal
year, the Secretary shall make payments for such year to the
medical school for the purpose specified in paragraph (3).
The Secretary shall make such payments from the Medical
School Account in an amount determined in accordance with
subsection (b), and may administer the payments as a
contract, grant, or cooperative agreement.
``(2) Application for payments.--For purposes of paragraph
(1), an application for payments under such paragraph for a
fiscal year is in accordance with this paragraph if--
``(A) the medical school involved submits the application
not later than the date specified by the Secretary; and
``(B) the application is in such form, is made in such
manner, and contains such agreements, assurances, and
information as the Secretary determines to be necessary to
carry out this section.
``(3) Purpose of payments.--The purpose of payments under
paragraph (1) is to assist medical schools in maintaining and
developing quality educational programs in an increasingly
competitive health care system.
``(b) Availability of Trust Fund for Payments; Annual
Amount of Payments.--
``(1) Availability of trust fund for payments.--The
following amounts shall be available for a fiscal year for
making payments under subsection (a) from the amount
allocated and transferred to the Medical School Account under
sections 1876(a)(7), 1886(j), 1931, 2101(c)(3) and (d), and
section 4503 of the Internal Revenue Code of 1986:
``(A) In the case of fiscal year 1997, $200,000,000.
``(B) In the case of fiscal year 1998, $300,000,000.
``(C) In the case of fiscal year 1999, $400,000,000.
``(D) In the case of fiscal year 2000, $500,000,000.
``(E) In the case of fiscal year 2001, $600,000,000.
``(F) In the case of each subsequent fiscal year, the
amount specified in this paragraph in the previous fiscal
year updated through the midpoint of the year by the
estimated percentage change in the general health care
inflation factor (as defined in subsection (d)) during the
12-month period ending at that midpoint, with appropriate
adjustments to reflect previous underestimations or
overestimations under this subparagraph in the projected
health care inflation factor.
``(2) Amount of payments for medical schools.--
``(A) In general.--Subject to the annual amount available
under paragraph (1) for a fiscal year, the amount of payments
required under subsection (a) to be made to a medical school
that submits to the Secretary an application for such year in
accordance with subsection (a)(2) is an amount equal to an
amount determined by the Secretary in accordance with
subparagraph (B).
``(B) Development of formula.--The Secretary shall develop
a formula for allocation of funds to medical schools under
this section consistent with the purpose described in
subsection (a)(3).
``(c) Medical School Defined.--For purposes of this
section, the term `medical school' means a school of medicine
(as defined in section 799 of the Public Health Service Act)
or a school of osteopathic medicine (as defined in such
section).
``(d) General Health Care Inflation Factor.--The term
`general health care inflation factor' means the consumer
price index for medical services as determined by the Bureau
of Labor Statistics.

``SEC. 2103. PAYMENTS TO TEACHING HOSPITALS.

``(a) Formula Payments to Eligible Entities.--
``(1) In general.--In the case of any fiscal year beginning
after September 30, 1996, the Secretary shall make payments
to each eligible entity that, in accordance with paragraph
(2), submits to the Secretary an application for such fiscal
year. Such payments shall be made from the Trust Fund, and
the total of the payments to the eligible entity for the
fiscal year shall equal the sum of the amounts determined
under subsections (b), (c), (d), and (e).
``(2) Application.--For purposes of paragraph (1), an
application shall contain such information as may be
necessary for the Secretary to make payments under such
paragraph to an eligible entity during a fiscal year. An
application shall be treated as submitted in accordance with
this paragraph if it is submitted not later than the date
specified by the Secretary, and is made in such form and
manner as the Secretary may require.
``(3) Periodic payments.--Payments under paragraph (1) to
an eligible entity for a fiscal year shall be made
periodically, at such intervals and in such amounts as the
Secretary determines to be appropriate (subject to applicable
Federal law regarding Federal payments).
``(4) Administrator of programs.--The Secretary shall carry
out responsibility under this title by acting through the
Administrator of the Health Care Financing Administration.
``(5) Eligible entity.--For purposes of this title, the
term `eligible entity', with respect to any fiscal year,
means--
``(A) for payment under subsections (b) and (c), an entity
which would be eligible to receive payments for such fiscal
year under--
``(i) section 1886(d)(5)(B), if such payments had not been
terminated for discharges occurring after September 30, 1996;
``(ii) section 1886(h), if such payments had not been
terminated for cost reporting periods beginning after
September 30, 1996; or
``(iii) both sections; or
``(B) for payment under subsections (d) and (e)--
``(i) an entity which meets the requirement of subparagraph
(A); or
``(ii) an entity which the Secretary determines should be
considered an eligible entity.
``(b) Determination of Amount From Medicare Teaching
Hospital Indirect Account.--
``(1) In general.--The amount determined for an eligible
entity for a fiscal year under this subsection is the amount
equal to the applicable percentage of the total amount
allocated and transferred to the Medicare Teaching Hospital
Indirect Account under sections 1876(a)(7) and 1886(j)(1),
and subsections (c)(3) and (d) of section 2101 for such
fiscal year.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage for any fiscal year is equal
to the percentage of the total payments which would have been
made to the eligible entity in such fiscal year under section
1886(d)(5)(B) if--
``(A) such payments had not been terminated for discharges
occurring after September 30, 1996; and
``(B) such payments included payments for individuals
enrolled in a plan under section 1876, except that for fiscal
years 1997, 1998, and 1999, only the applicable percentage
(as defined in section 1876(a)(7)(B)) of such payments shall
be taken into account.
``(c) Determination of Amount From Medicare Teaching
Hospital Direct Account.--
``(1) In general.--The amount determined for an eligible
entity for a fiscal year under this subsection is the amount
equal to the applicable percentage of the total amount
allocated and transferred to the Medicare Teaching Hospital
Direct Account under sections 1876(a)(7) and 1886(j)(2), and
subsections (c)(3) and (d) of section 2101 for such fiscal
year.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage for any fiscal year is equal
to the percentage of the total payments which would have been
made to the eligible entity in such fiscal year under section
1886(h) if--
``(A) such payments had not been terminated for cost
reporting periods beginning after September 30, 1996; and
``(B) such payments included payments for individuals
enrolled in a plan under section 1876, except that for fiscal
years 1997, 1998, and 1999, only the applicable percentage
(as defined in section 1876(a)(7)(B)) of such payments shall
be taken into account.
``(d) Determination of Amount From Non-Medicare Teaching
Hospital Indirect Account.--
``(1) In general.--The amount determined for an eligible
entity for a fiscal year under this subsection is the amount
equal to the applicable percentage of the total amount
allocated and transferred to the Non-Medicare Teaching
Hospital Indirect Account for such fiscal year under section
1931, subsections (c)(3) and (d) of section 2101, and section
4503 of the Internal Revenue Code of 1986.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage for any fiscal year for an
eligible entity is equal to the percentage of the total
payments which, as determined by the Secretary, would have
been made in such fiscal year under section 1886(d)(5)(B)
if--
``(A) such payments had not been terminated for discharges
occurring after September 30, 1996; and
``(B) non-medicare patients were taken into account in lieu
of medicare patients.
``(e) Determination of Amount From Non-Medicare Teaching
Hospital Direct Account.--
``(1) In general.--The amount determined for an eligible
entity for a fiscal year under this subsection is the amount
equal to the applicable percentage of the total amount
allocated and transferred to the Non-Medicare Teaching
Hospital Direct Account for such fiscal year under section
1931, subsections

[[Page S6231]]

(c)(3) and (d) of section 2101, and section 4503 of the
Internal Revenue Code of 1986.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage for any fiscal year for an
eligible entity is equal to the percentage of the total
payments which, as determined by the Secretary, would have
been made in such fiscal year under section 1886(h) if--
``(A) such payments had not been terminated for cost
reporting periods beginning after September 30, 1996; and
``(B) non-medicare patients were taken into account in lieu
of medicare patients.''.

SEC. 3. AMENDMENTS TO MEDICARE PROGRAM.

(a) In General.--Section 1886 of the Social Security Act
(42 U.S.C. 1395ww) is amended--
(1) in subsection (d)(5)(B), in the matter preceding clause
(i), by striking ``The Secretary shall provide'' and
inserting the following: ``For discharges occurring before
October 1, 1996, the Secretary shall provide'';
(2) in subsection (h)--
(A) in paragraph (1), in the first sentence, by striking
``the Secretary shall provide'' and inserting ``the Secretary
shall, subject to paragraph (6), provide''; and
(B) by adding at the end the following new paragraph:
``(6) Limitation.--
``(A) In general.--The authority to make payments under
this subsection shall not apply with respect to--
``(i) cost reporting periods beginning after September 30,
1996; and
``(ii) any portion of a cost reporting period beginning on
or before such date which occurs after such date.
``(B) Rule of construction.--This paragraph may not be
construed as authorizing any payment under section 1861(v)
with respect to graduate medical education.''; and
(3) by adding at the end the following new subsection:
``(j) Transfers to Medical Education Trust Fund.--
``(1) Indirect costs of medical education.--
``(A) Transfer.--
``(i) In general.--From the Federal Hospital Insurance
Trust Fund, the Secretary shall, for fiscal year 1997 and
each subsequent fiscal year, transfer to the Medical
Education Trust Fund an amount equal to the amount estimated
by the Secretary under subparagraph (B).
``(ii) Allocation.--Of the amount transferred under clause
(i)--

``(I) there shall be allocated and transferred to the
Medical School Account an amount which bears the same ratio
to the total amount available under section 2102(b)(1) for
the fiscal year (reduced by the balance in such account at
the end of the preceding fiscal year) as the amount
transferred under clause (i) bears to the total amounts
transferred to the Medical Education Trust Fund under title
XXI (excluding amounts transferred under subsections (c)(3)
and (d) of section 2101) for such fiscal year; and
``(II) the remainder shall be allocated and transferred to
the Medicare Teaching Hospital Indirect Account.

``(B) Determination of amounts.--The Secretary shall make
an estimate for each fiscal year involved of the nationwide
total of the amounts that would have been paid under
subsection (d)(5)(B) to hospitals during the fiscal year if
such payments had not been terminated for discharges
occurring after September 30, 1996.
``(2) Direct costs of medical education.--
``(A) Transfer.--
``(i) In general.--From the Federal Hospital Insurance
Trust Fund and the Federal Supplementary Medical Insurance
Trust Fund, the Secretary shall, for fiscal year 1997 and
each subsequent fiscal year, transfer to the Medical
Education Trust Fund an amount equal to the amount estimated
by the Secretary under subparagraph (B).
``(ii) Allocation.--Of the amount transferred under clause
(i)--

``(B) Determination of amounts.--For each hospital, the
Secretary shall make an estimate for the fiscal year involved
of the amount that would have been paid under subsection (h)
to the hospital during the fiscal year if such payments had
not been terminated for cost reporting periods beginning
after September 30, 1996.
``(C) Allocation between funds.--In providing for a
transfer under subparagraph (A) for a fiscal year, the
Secretary shall provide for an allocation of the amounts
involved between part A and part B (and the trust funds
established under the respective parts) as reasonably
reflects the proportion of direct graduate medical education
costs of hospitals associated with the provision of services
under each respective part.''.
(b) Medicare HMO's.--Section 1876(a) of the Social Security
Act (42 U.S.C. 1395mm(a)) is amended by inserting after
paragraph (6) the following new paragraph:
``(7)(A) In determining the adjusted average per capita
cost under paragraph (4) for fiscal years after 1996, the
Secretary shall not take into account the applicable
percentage of costs under sections 1886(d)(5)(B) (indirect
costs of medical education) and 1886(h) (direct graduate
medical education costs).
``(B) For purposes of subparagraph (A), the applicable
percentage is--
``(i) for fiscal year 1997, 25 percent;
``(ii) for fiscal year 1998, 50 percent;
``(iii) for fiscal year 1999, 75 percent; and
``(iv) for fiscal year 2000 and each subsequent fiscal
year, 100 percent.
``(C)(i) There is appropriated and transferred to the
Medical Education Trust Fund each fiscal year an amount equal
to the aggregate amounts not taken into account under
paragraph (4) by reason of subparagraph (A).
``(ii) Of the amounts transferred under clause (i)--
``(I) there shall be allocated and transferred to the
Medical School Account an amount which bears the same ratio
to the total amount available under section 2102(b)(1) for
the fiscal year (reduced by the balance in such account at
the end of the preceding fiscal year) as the amount
transferred under clause (i) bears to the total amounts
transferred to the Medical Education Trust Fund under section
2101 (excluding amounts transferred under subsections (c)(3)
and (d) of such section) for such fiscal year; and
``(II) the remainder shall be allocated and transferred to
the Medicare Teaching Hospital Indirect Account under such
section and the Medicare Teaching Hospital Direct Account
under such section in the same proportion as the amounts
attributable to the costs under sections 1886(d)(5)(B) and
1886(h) were of the amounts transferred under clause (i).
``(iii) The Secretary shall make payments under clause (i)
from the Federal Hospital Insurance Trust Fund and the
Federal Supplementary Medical Insurance Trust Fund, in the
same manner as the Secretary determines under section
1886(j).''.

SEC. 4. AMENDMENTS TO MEDICAID PROGRAM.

(a) In General.--Title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) is amended--
(1) by redesignating section 1931 as section 1932; and
(2) by inserting after section 1930, the following new
section:

``transfer of funds to accounts

``Sec. 1931. (a) Transfer of Funds.--
``(1) In general.--For fiscal year 1997 and each subsequent
fiscal year, the Secretary shall transfer to the Medical
Education Trust Fund an amount equal to the amount determined
under subsection (b).
``(2) Allocation.--Of the amount transferred under
paragraph (1)--
``(A) there shall be allocated and transferred to the
Medical School Account an amount which bears the same ratio
to the total amount available under section 2102(b)(1) for
the fiscal year (reduced by the balance in such account at
the end of the preceding fiscal year) as the amount
transferred under paragraph (1) bears to the total amounts
transferred to the Medical Education Trust Fund under title
XXI (excluding amounts transferred under subsections (c)(3)
and (d) of section 2101) for such fiscal year; and
``(B) the remainder shall be allocated and transferred to
the Non-Medicare Teaching Hospital Indirect Account and the
Non-Medicare Teaching Hospital Direct Account, in the same
proportion as the amounts transferred to each account under
section 1886(j) relate to the total amounts transferred under
such section for such fiscal year.
``(b) Amount Determined.--
``(1) Outlays for acute medical services during preceding
fiscal year.--Beginning with fiscal year 1997, the Secretary
shall determine 5 percent of the total amount of Federal
outlays made under this title for acute medical services, as
defined in paragraph (2), for the preceding fiscal year.
``(2) Acute medical services defined.--The term `acute
medical services' means items and services described in
section 1905(a) other than the following:
``(A) Nursing facility services (as defined in section
1905(f)).
``(B) Intermediate care facility for the mentally retarded
services (as defined in section 1905(d)).
``(C) Personal care services (as described in section
1905(a)(24)).
``(D) Private duty nursing services (as referred to in
section 1905(a)(8)).
``(E) Home or community-based services furnished under a
waiver granted under subsection (c), (d), or (e) of section
1915.
``(F) Home and community care furnished to functionally
disabled elderly individuals under section 1929.
``(G) Community supported living arrangements services
under section 1930.
``(H) Case-management services (as described in section
1915(g)(2)).
``(I) Home health care services (as referred to in section
1905(a)(7)), clinic services, and rehabilitation services
that are furnished to an individual who has a condition or
disability that qualifies the individual to receive any of
the services described in a previous subparagraph.
``(J) Services furnished in an institution for mental
diseases (as defined in section 1905(i)).

[[Page S6232]]

``(c) Entitlement.--This section constitutes budget
authority in advance of appropriations Acts and represents
the obligation of the Federal Government to provide for the
payment to the Non-Medicare Teaching Hospital Indirect
Account, the Non-Medicare Teaching Hospital Direct Account,
and the Medical School Account of amounts determined in
accordance with subsections (a) and (b).''.
(b) Effective Date.--The amendment made by subsection (a)
shall be effective on and after October 1, 1996.

SEC. 5. ASSESSMENTS ON INSURED AND SELF-INSURED HEALTH PLANS.

(a) General Rule.--Subtitle D of the Internal Revenue Code
of 1986 (relating to miscellaneous excise taxes) is amended
by adding after chapter 36 the following new chapter:

``CHAPTER 37--HEALTH RELATED ASSESSMENTS

``Subchapter A. Insured and self-insured health plans.

``Subchapter A--Insured and Self-Insured Health Plans

``Sec. 4501. Health insurance and health-related administrative
services.
``Sec. 4502. Self-insured health plans.
``Sec. 4503. Transfer to accounts.
``Sec. 4504. Definitions and special rules.

``SEC. 4501. HEALTH INSURANCE AND HEALTH-RELATED
ADMINISTRATIVE SERVICES.

``(a) Imposition of Tax.--There is hereby imposed--
``(1) on each taxable health insurance policy, a tax equal
to 1.5 percent of the premiums received under such policy,
and
``(2) on each amount received for health-related
administrative services, a tax equal to 1.5 percent of the
amount so received.
``(b) Liability for Tax.--
``(1) Health insurance.--The tax imposed by subsection
(a)(1) shall be paid by the issuer of the policy.
``(2) Health-related administrative services.--The tax
imposed by subsection (a)(2) shall be paid by the person
providing the health-related administrative services.
``(c) Taxable Health Insurance Policy.--For purposes of
this section--
``(1) In general.--Except as otherwise provided in this
section, the term `taxable health insurance policy' means any
insurance policy providing accident or health insurance with
respect to individuals residing in the United States.
``(2) Exemption of certain policies.--The term `taxable
health insurance policy' does not include any insurance
policy if substantially all of the coverage provided under
such policy relates to--
``(A) liabilities incurred under workers' compensation
laws,
``(B) tort liabilities,
``(C) liabilities relating to ownership or use of property,
``(D) credit insurance, or
``(E) such other similar liabilities as the Secretary may
specify by regulations.
``(3) Special rule where policy provides other coverage.--
In the case of any taxable health insurance policy under
which amounts are payable other than for accident or health
coverage, in determining the amount of the tax imposed by
subsection (a)(1) on any premium paid under such policy,
there shall be excluded the amount of the charge for the
nonaccident or nonhealth coverage if--
``(A) the charge for such nonaccident or nonhealth coverage
is either separately stated in the policy, or furnished to
the policyholder in a separate statement, and
``(B) such charge is reasonable in relation to the total
charges under the policy.

In any other case, the entire amount of the premium paid
under such policy shall be subject to tax under subsection
(a)(1).
``(4) Treatment of prepaid health coverage arrangements.--
``(A) In general.--In the case of any arrangement described
in subparagraph (B)--
``(i) such arrangement shall be treated as a taxable health
insurance policy,
``(ii) the payments or premiums referred to in subparagraph
(B)(i) shall be treated as premiums received for a taxable
health insurance policy, and
``(iii) the person referred to in subparagraph (B)(i) shall
be treated as the issuer.
``(B) Description of arrangements.--An arrangement is
described in this subparagraph if under such arrangement--
``(i) fixed payments or premiums are received as
consideration for any person's agreement to provide or
arrange for the provision of accident or health coverage to
residents of the United States, regardless of how such
coverage is provided or arranged to be provided, and
``(ii) substantially all of the risks of the rates of
utilization of services is assumed by such person or the
provider of such services.
``(d) Health-Related Administrative Services.--For purposes
of this section, the term `health-related administrative
services' means--
``(1) the processing of claims or performance of other
administrative services in connection with accident or health
coverage under a taxable health insurance policy if the
charge for such services is not included in the premiums
under such policy, and
``(2) processing claims, arranging for provision of
accident or health coverage, or performing other
administrative services in connection with an applicable
self-insured health plan (as defined in section 4502(c))
established or maintained by a person other than the person
performing the services.

For purposes of paragraph (1), rules similar to the rules of
subsection (c)(3) shall apply.

``SEC. 4502. SELF-INSURED HEALTH PLANS.

``(a) Imposition of Tax.--In the case of any applicable
self-insured health plan, there is hereby imposed a tax for
each month equal to 1.5 percent of the sum of--
``(1) the accident or health coverage expenditures for such
month under such plan, and
``(2) the administrative expenditures for such month under
such plan to the extent such expenditures are not subject to
tax under section 4501.

In determining the amount of expenditures under paragraph
(2), rules similar to the rules of subsection (d)(3) apply.
``(b) Liability for Tax.--
``(1) In general.--The tax imposed by subsection (a) shall
be paid by the plan sponsor.
``(2) Plan sponsor.--For purposes of paragraph (1), the
term `plan sponsor' means--
``(A) the employer in the case of a plan established or
maintained by a single employer,
``(B) the employee organization in the case of a plan
established or maintained by an employee organization, or
``(C) in the case of--
``(i) a plan established or maintained by 2 or more
employers or jointly by 1 or more employers and 1 or more
employee organizations,
``(ii) a voluntary employees' beneficiary association under
section 501(c)(9), or
``(iii) any other association plan,

the association, committee, joint board of trustees, or other
similar group of representatives of the parties who establish
or maintain the plan.
``(c) Applicable Self-Insured Health Plan.--For purposes of
this section, the term `applicable self-insured health plan'
means any plan for providing accident or health coverage if
any portion of such coverage is provided other than through
an insurance policy.
``(d) Accident or Health Coverage Expenditures.--For
purposes of this section--
``(1) In general.--The accident or health coverage
expenditures of any applicable self-insured health plan for
any month are the aggregate expenditures paid in such month
for accident or health coverage provided under such plan to
the extent such expenditures are not subject to tax under
section 4501.
``(2) Treatment of reimbursements.--In determining accident
or health coverage expenditures during any month of any
applicable self-insured health plan, reimbursements (by
insurance or otherwise) received during such month shall be
taken into account as a reduction in accident or health
coverage expenditures.
``(3) Certain expenditures disregarded.--Paragraph (1)
shall not apply to any expenditure for the acquisition or
improvement of land or for the acquisition or improvement of
any property to be used in connection with the provision of
accident or health coverage which is subject to the allowance
under section 167, except that, for purposes of paragraph
(1), allowances under section 167 shall be considered as
expenditures.

``SEC. 4503. TRANSFER TO ACCOUNTS.

``For fiscal year 1997 and each subsequent fiscal year,
there are hereby appropriated and transferred to the Medical
Education Trust Fund amounts equivalent to taxes received in
the Treasury under sections 4501 and 4502, of which--
``(1) there shall be allocated and transferred to the
Medical School Account an amount which bears the same ratio
to the total amount available under section 2102(b)(1) for
the fiscal year (reduced by the balance in such account at
the end of the preceding fiscal year) as the amount
transferred to the Medical Education Trust Fund under title
XXI of the Social Security Act under this section bears to
the total amounts transferred to such Trust Fund (excluding
amounts transferred under subsections (c)(3) and (d) of
section 2101 of such Act) for such fiscal year; and
``(2) the remainder shall be allocated and transferred to
the Non-Medicare Teaching Hospital Indirect Account and the
Non-Medicare Teaching Hospital Direct Account, in the same
proportion as the amounts transferred to such account under
section 1886(j) relate to the total amounts transferred under
such section for such fiscal year.
Such amounts shall be transferred in the same manner as under
section 9601.

``SEC. 4504. DEFINITIONS AND SPECIAL RULES.

``(a) Definitions.--For purposes of this subchapter--
``(1) Accident or health coverage.--The term `accident or
health coverage' means any coverage which, if provided by an
insurance policy, would cause such policy to be a taxable
health insurance policy (as defined in section 4501(c)).
``(2) Insurance policy.--The term `insurance policy' means
any policy or other instrument whereby a contract of
insurance is issued, renewed, or extended.
``(3) Premium.--The term `premium' means the gross amount
of premiums and other consideration (including advance
premiums, deposits, fees, and assessments) arising from
policies issued by a person acting as the primary insurer,
adjusted for any return or additional premiums paid as a
result of endorsements, cancellations, audits, or
retrospective rating. Amounts returned where the amount is
not fixed in the contract but depends on the experience of
the insurer or the

[[Page S6233]]

discretion of management shall not be included in return
premiums.
``(4) United states.--The term `United States' includes any
possession of the United States.
``(b) Treatment of Governmental Entities.--
``(1) In general.--For purposes of this subchapter--
``(A) the term `person' includes any governmental entity,
and
``(B) notwithstanding any other law or rule of law,
governmental entities shall not be exempt from the taxes
imposed by this subchapter except as provided in paragraph
(2).
``(2) Exempt governmental programs.--In the case of an
exempt governmental program--
``(A) no tax shall be imposed under section 4501 on any
premium received pursuant to such program or on any amount
received for health-related administrative services pursuant
to such program, and
``(B) no tax shall be imposed under section 4502 on any
expenditures pursuant to such program.
``(3) Exempt governmental program.--For purposes of this
subchapter, the term `exempt governmental program' means--
``(A) the insurance programs established by parts A and B
of title XVIII of the Social Security Act,
``(B) the medical assistance program established by title
XIX of the Social Security Act,
``(C) any program established by Federal law for providing
medical care (other than through insurance policies) to
individuals (or the spouses and dependents thereof) by reason
of such individuals being--
``(i) members of the Armed Forces of the United States, or
``(ii) veterans, and
``(D) any program established by Federal law for providing
medical care (other than through insurance policies) to
members of Indian tribes (as defined in section 4(d) of the
Indian Health Care Improvement Act).
``(c) No Cover Over to Possessions.--Notwithstanding any
other provision of law, no amount collected under this
subchapter shall be covered over to any possession of the
United States.''.
(b) Clerical Amendment.--The table of chapters for subtitle
D of the Internal Revenue Code of 1986 is amended by
inserting after the item relating to chapter 36 the following
new item:

``Chapter 37. Health related assessments.''

(c) Effective Date.--The amendments made by this section
shall apply with respect to premiums received, and expenses
incurred, with respect to coverage for periods after
September 30, 1996.

SEC. 6. MEDICAL EDUCATION ADVISORY COMMISSION.

(a) Establishment.--There is hereby established an advisory
commission to be known as the Medical Education Advisory
Commission (in this section referred to as the ``Advisory
Commission'').
(b) Duties.--
(1) In general.--The Advisory Commission shall--
(A) conduct a thorough study of all matters relating to--
(i) the operation of the Medical Education Trust Fund
established under section 2;
(ii) alternative and additional sources of graduate medical
education funding;
(iii) alternative methodologies for compensating teaching
hospitals for graduate medical education;
(iv) policies designed to maintain superior research and
educational capacities in an increasing competitive health
system;
(v) the role of medical schools in graduate medical
education; and
(vi) policies designed to expand eligibility for graduate
medical education payments to institutions other than
teaching hospitals;
(B) develop recommendations, including the use of
demonstration projects, on the matters studied under
subparagraph (A) in consultation with the Secretary of Health
and Human Services and the entities described in paragraph
(2);
(C) not later than January 1998, submit an interim report
to the Committee on Finance of the Senate, the Committee on
Ways and Means of the House of Representatives, and the
Secretary of Health and Human Services; and
(D) not later than January 2000, submit a final report to
the Committee on Finance of the Senate, the Committee on Ways
and Means of the House of Representatives, and the Secretary
of Health and Human Services.
(2) Entities described.--The entities described in this
paragraph are--
(A) other advisory groups, including the Council on
Graduate Medical Education, the Prospective Payment
Assessment Commission, and the Physician Payment Review
Commission;
(B) interested parties, including the Association of
American Medical Colleges, the Association of Academic Health
Centers, and the American Medical Association;
(C) health care insurers, including managed care entities;
and
(D) other entities as determined by the Secretary of Health
and Human Services.
(c) Number and Appointment.--The membership of the Advisory
Commission shall include 9 individuals who are appointed to
the Advisory Commission from among individuals who are not
officers or employees of the United States. Such individuals
shall be appointed by the Secretary of Health and Human
Services, and shall include individuals from each of the
following categories:
(1) Physicians who are faculty members of medical schools.
(2) Officers or employees of teaching hospitals.
(3) Officers or employees of health plans.
(4) Such other individuals as the Secretary determines to
be appropriate.
(d) Terms.--
(1) In general.--Except as provided in paragraph (2),
members of the Advisory Commission shall serve for the lesser
of the life of the Advisory Commission, or 4 years.
(2) Service beyond term.--A member of the Advisory
Commission may continue to serve after the expiration of the
term of the member until a successor is appointed.
(e) Vacancies.--If a member of the Advisory Commission does
not serve the full term applicable under subsection (d), the
individual appointed to fill the resulting vacancy shall be
appointed for the remainder of the term of the predecessor of
the individual.
(f) Chair.--The Secretary of Health and Human Services
shall designate an individual to serve as the Chair of the
Advisory Commission.
(g) Meetings.--The Advisory Commission shall meet not less
than once during each 4-month period and shall otherwise meet
at the call of the Secretary of Health and Human Services or
the Chair.
(h) Compensation and Reimbursement of Expenses.--Members of
the Advisory Commission shall receive compensation for each
day (including travel time) engaged in carrying out the
duties of the Advisory Commission. Such compensation may not
be in an amount in excess of the maximum rate of basic pay
payable for level IV of the Executive Schedule under section
5315 of title 5, United States Code.
(i) Staff.--
(1) Staff director.--The Advisory Commission shall, without
regard to the provisions of title 5, United States Code,
relating to competitive service, appoint a Staff Director who
shall be paid at a rate equivalent to a rate established for
the Senior Executive Service under 5382 of title 5, United
States Code.
(2) Additional staff.--The Secretary of Health and Human
Services shall provide to the Advisory Commission such
additional staff, information, and other assistance as may be
necessary to carry out the duties of the Advisory Commission.
(j) Termination of the Advisory Commission.--The Advisory
Commission shall terminate 90 days after the date on which
the Advisory Commission submits its final report under
subsection (b)(1)(D).
(k) Authorization of Appropriations.--There are authorized
to be appropriated such sums as may be necessary to carry out
the purposes of this section.

SEC. 7. DEMONSTRATION PROJECTS.

(a) Establishment.--The Secretary of Health and Human
Services (in this section referred to as the ``Secretary'')
shall establish, by regulation, guidelines for the
establishment and operation of demonstration projects which
the Medical Education Advisory Commission recommends under
subsection (b)(1)(B) of section 6.
(b) Funding.--
(1) In general.--For any fiscal year after 1996, amounts in
the Medical Education Trust Fund under title XXI of the
Social Security Act shall be available for use by the
Secretary in the establishment and operation of demonstration
projects described in subsection (a).
(2) Funds available.--
(A) Limitation.--Not more than \1/10\ of 1 percent of the
funds in such trust fund shall be available for the purposes
of paragraph (1).
(B) Allocation.--Amounts under paragraph (1) shall be paid
from the accounts established under paragraphs (2) through
(5) of section 2101(a) of the Social Security Act, in the
same proportion as the amounts transferred to such accounts
bears to the total of amounts transferred to all 4 such
accounts for such fiscal year.
(c) Limitation.--Nothing in this section shall be construed
to authorize any change in the payment methodology for
teaching hospitals and medical schools established by this
Act.
____

Summary of the Medical Education Trust Fund Act of 1996

OVERVIEW

The legislation establishes a Medical Education Trust Fund
to support America's 124 medical schools and 1,250 teaching
hospitals. These institutions are in a precarious financial
situation as market forces reshape the health care delivery
system. Explicit and dedicated funding for these institutions
will guarantee that the United States continues to lead the
world in the quality of its health care system.
The Medical Education Trust Fund Act of 1996 recognizes the
need to begin moving away from existing medical education
payment policies. Funding would be provided for demonstration
projects and alternative payment methods, but permanent
policy changes would await a report from a new Medical
Education Advisory Commission established by the bill. The
primary, and immediate, purpose of the legislation is to
establish as Federal policy that medical education is a
public good which should be supported by all sectors of the
health care system.
To ensure that the burden of financing medical education is
shared equitably by all sectors, the Medical Education Trust
Fund

[[Page S6234]]

will receive funding from three sources: a 1.5 percent
assessment on health insurance premiums (the private sector's
contribution), Medicare, and Medicaid (the public sector's
contribution). The relative contribution from each of these
sources is in rough proportion to the medical education costs
attributable to their respective covered populations.
Over the five year period 1997-2001, the Medical Education
Trust Fund will provide average annual payments of about $17
billion, roughly doubling federal funding for medical
education. The assessment on health insurance premiums
(including self-insured health plans) contributes
approximately $4 billion per year to the Trust Fund. Federal
health programs contribute about $13 billion per year to the
Trust Fund: $9 billion in transfers of current Medicare
graduate medical education payments and $4 billion in federal
Medicaid spending.

Estimated Average Annual Trust Fund Revenue By Source, 1997-2001

(In billions of dollars)

1.5% Assessment.......................................................4
Medicare..............................................................9
Medicaid..............................................................4
________

Total..............................................................17

INTERIM PAYMENT METHODOLOGIES

Payments to Medical Schools

Medical schools rely on a portion of the clinical practice
revenue generated by their faculties to support their
operations. As competition within the health system
intensifies and managed care proliferates, these revenues are
being constrained. Payments to medical schools from the Trust
Fund are designed to partially offset this loss of revenue.
Initially, these payments will be based upon an interim
methodology developed by the Secretary of Health and Human
Services.

Payments to Teaching Hospitals

To cover the costs of education, teaching hospitals have
traditionally charged higher rates than other hospitals. As
private payers become increasingly unwilling to pay these
higher rates, the future of these important institutions, and
the patient care, training, and research they provide, is
placed at risk. Payments from the Trust Fund reimburse
teaching hospitals for both the direct and indirect costs of
graduate medical education.
Payments for direct costs are based on the actual costs of
employing medical residents. Payments for indirect costs are
based on the number of patients cared for in each hospital
and the severity of their illnesses as well as a measure of
the teaching load in that hospital. For the purposes of
payments to teaching hospitals, the allocation of Medicare
funds is based on the number of Medicare patients in each
hospital; the allocation of the tax revenue and Medicaid
funds is based on the number of non-Medicare patients in each
hospital.
The legislation also includes a ``carve out'' of graduate
medical education payments from Medicare's payment to HMOs.
Under current law, this payment is based on Medicare's
average fee-for-service costs--including graduate medical
education costs. Therefore, every time a Medicare beneficiary
enrolls in an HMO, money that was being paid to teaching
hospitals for medical education in the form of additional
payments for direct and indirect costs, is paid instead to an
HMO as part of a monthly premium. There is no requirement
that HMOs use any of this payment to support medical
education. Over a 4-year period, the legislation removes
graduate medical education payments from HMO payment
calculation. These funds are deposited into the Medical
Education Trust Fund and paid directly to teaching hospitals.

medical education advisory commission

The legislation also establishes a Medical Education
Advisory Commission to conduct a study and make
recommendations, including the potential use of demonstration
projects, regarding the following:
operations of the Medical Education Trust Fund; alternative
and additional sources of medical education financing;
alternative methodologies for distributing medical education
payments; policies designed to maintain superior research and
educational capacities in an increasingly competitive health
system; the role of medical schools in graduate medical
education; and policies designed to expand eligibility for
graduate medical education payments to institutions other
than teaching hospitals.
The Commission, comprised of nine individuals appointed by
the Secretary of Health and Human Services, will be required
to issue an interim report no later than January 1, 1998, and
a final report no later than January 1, 2000.
______

By Mr. CHAFEE:
S. 1871. A bill to expand the Pettaquamscutt Cove National Wildlife
Refuge, and for other purposes; to the Committee on Environment and
Public Works.

the pettaquamscutt cove national wildlife refuge expansion act of 1996

Mr. CHAFEE. Mr. President, today I am pleased to introduce a bill to
enhance legislation I authored in 1988 that established the
Pettaquamscutt Cove National Wildlife Refuge in Rhode Island.
Pettaquamscutt Cove--a cove which divides the towns of Narragansett
and South Kingstown, RI--is one of the State's natural jewels. The
tidal marshes and mudflats in Pettaquamscutt Cove are home to a diverse
species of waterfowl, wading birds and shore birds, and numerous small
mammals, reptiles, and amphibians.
Pettaquamscutt Cove has been identified as the most important
migration and wintering habitat in Rhode Island for the black duck
population under the North American waterfowl management plan. I might
mention that this plan has been a tremendous success, capitalizing on
the cooperative efforts of the Federal Government working with
nonprofit groups and local governments. These efforts to protect
wetlands--through establishment of national wildlife refuges such as
Pettaquamscutt, through conservation efforts to implement the North
American Wetlands Conservation Act, and through other statutes like the
Wetlands Reserve Program that was recently expanded in the farm bill
that protect our Nation's wetlands--have been a great success. Add to
this some decent rainfall, and the waterfowl populations have rebounded
tremendously. Not since 1955 have we witnessed such a spectacular
migration of waterfowl as this past year.
Rhode Island has lost almost 40 percent of its original wetlands. It
is essential that we do all we can to hold the line on continued losses
of wetlands through preservation of ecosystems such as Pettaquamscutt
Cove. By expanding Pettaquamscutt Cove Refuge, this bill will protect
the fertile marsh habitat that supports a multitude of fish and
wildlife and plants along Rhode Island's coast and provide more
recreational opportunities for Rhode Islanders and other visitors.
Currently, the Pettaquamscutt Cove National Wildlife Refuge boundary
encompasses 460 acres of salt marsh and surrounding forest habitat. One
hundred seventy-five acres of habitat have already been acquired by the
Service. This bill expands the Pettaquamscutt Cove National Wildlife
Refuge boundary to include a 100-acre parcel, known as foddering farm
acres and; allows the Fish and Wildlife Service to expand the refuge
boundary to include other important habitat if and when suitable
properties become available in the future.
Mr. President, the expansion of Pettaquamscutt Cove Refuge to include
the foddering farm acres property provides a wonderful example of
cooperation between the Fish and Wildlife Service and private citizens.
The 100-acre foddering farm property--adjacent to long pond--contains
valuable wetland habitat for waterfowl and other species. The Rotelli
family who owns the property has been working with, and waiting
patiently for, the U.S. Fish and Wildlife Service for several years.
The Rotellis have indicated their willingness to donate a portion of
the value of the property to the Service. Through their partial
donation, the National Wildlife Refuge System gains valuable habitat at
a bargain price. Three cheers for the Rotellis. It is just this kind of
private conservation effort and public spiritedness that has enabled us
to preserve important open space throughout Rhode Island.
This bill will enable the Fish and Wildlife Service to continue their
efforts to work with Rhode Islanders like the Rotellis to protect the
beautiful and important natural resources along Rhode Island's coast.
Mr. President, I urge my colleagues to support this legislation and
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. 1871

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

SECTION 1. EXPANSION OF PETTAQUAMSCUTT COVE NATIONAL WILDLIFE
REFUGE.

Section 204 of Public Law 100-610 (16 U.S.C. 668dd note) is
amended by adding at the end the following:
``(e) Expansion of Refuge.--
``(1) Acquisition.--The Secretary may acquire for addition
to the refuge the area in Rhode Island known as `Foddering
Farm Acres', consisting of approximately 100 acres, adjacent
to Long Cove and bordering on Foddering Farm Road to the
south and Point Judith Road to the east, as depicted on a map
entitled `Pettaquamscutt Cove NWR Expansion Area,' dated May
13, 1996, and available for inspection in appropriate offices
of the United States Fish and Wildlife Service.

[[Page S6235]]

``(2) Boundary adjustment.--After making the acquisition
described in paragraph (1), the Secretary shall revise the
boundaries of the refuge to reflect the acquisition.
``(f) Future Expansion.--
``(1) In general.--The Secretary may acquire for addition
to the refuge such lands, waters, and interests in land and
water as the Secretary considers appropriate and shall adjust
the boundaries of the refuge accordingly.
``(2) Applicable laws.--Any acquisition described in
paragraph (1) shall be carried out in accordance with all
applicable laws.''.

SEC. 2. AUTHORIZATION OF APPROPRIATIONS.

Section 206(a) of Public Law 100-610 (16 U.S.C. 668dd note)
is amended by striking ``designated in section 4(a)(1)'' and
inserting ``designated or identified under section 204''.

SEC. 3. TECHNICAL AMENDMENTS.

Public Law 100-610 (16 U.S.C. 668dd note) is amended--
(1) in section 201(1)--
(A) by striking ``and the associated'' and inserting
``including the associated''; and
(B) by striking ``and dividing'' and inserting
``dividing'';
(2) in section 203, by striking ``of this Act'' and
inserting ``of this title'';
(3) in section 204--
(A) in subsection (a)(1), by striking ``of this Act'' and
inserting ``of this title''; and
(B) in subsection (b), by striking ``purpose of this Act''
and inserting ``purposes of this title'';
(4) in the second sentence of section 205, by striking ``of
this Act'' and inserting ``of this title''; and
(5) in section 207, by striking ``Act'' and inserting
``title''.
______

By Mr. SIMON:
S. 1872. A bill to amend section 922(x)(5) of title 18, United States
Code, relating to the prohibition of possession of a handgun by a
minor, to change the definition of minor from under 18 years of age to
under 21 years of age: to the Committee on the Judiciary.

Amendments to the Youth Handgun Safety Act

Mr. SIMON. Madam President, I know that all of my colleagues share my
concern about the increasing violence committed by and against young
people in our Nation. There are many factors contributing to youth
crime and violence and, as legislators, it is essential that we
consider them not only as a whole but also individually. One of the
contributing factors is clearly the easy access to handguns by young
people. According to ``Violence by Young People: Why the Deadly
Nexus?'' by Prof. Alfred Blumstein of Carnegie Mellon University, the
number of murders committed by juveniles involving a gun has doubled
since 1985, while there has been no such shift in the number of non-gun
homicides. Guns are therefore playing a disproportionate role in the
juvenile murder rate.
The legislation I am introducing amends the Youth Handgun Safety Act.
Senator Kohl sponsored this important act, which was passed as part of
the 1994 crime bill, to establish a minimum age requirement of 18 years
old for the possession of a handgun. Specifically, the act makes it
illegal for anyone under age 18 to possess a handgun and for anyone to
knowingly transfer a handgun to a juvenile. There are exceptions for
ranching or farming, and when the juvenile has written consent from a
parent and is in compliance with all State and local laws. The act
makes handgun possession and transferring a handgun to a juvenile a
misdemeanor crime punishable by fines and up to 1 year imprisonment. Of
course, Congress intends this measure to apply to handguns that have
traveled in interstate commerce.
Before the act became law, it was illegal for a licensed dealer to
sell a handgun to anyone under age 21 and a long gun to anyone under
age 18. However, there were no Federal penalties for the under-age
person who bought the gun or for private transfers of a handgun. I
applaud Senator Kohl for his sponsorship of this important initiative.
As it now stands, however, the Youth Handgun Safety Act defines the
term ``juvenile'' as a person who is less than 18 years of age. My
proposal would amend the definition of ``juvenile'' in this measure to
mean a person who is less than 21 years of age.
Unfortunately, more and more frequently we hear stories about
juvenile brawls which turn into deadly battles. Increasing the age
limit for possession of a handgun to 21 is one step we can take to try
to reduce this bloody cycle. Recognizing that alcohol and teenagers can
be a deadly combination, Congress wisely amended the highway fund to
include penalties for States that did not raise the drinking age to 21.
We should follow this example when it comes to guns and teens as well.
By introducing this measure I hope to encourage my colleagues to think
about how we might help our teens to grow into responsible young
adults. As limiting access to alcohol has certainly saved lives, so too
will limiting access to handguns.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 1872

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

SECTION 1. AMENDMENT TO THE YOUTH HANDGUN SAFETY LAW.

Section 922(x)(5) of title 18, United States Code, is
amended by striking ``18 years'' and inserting ``21 years''.
______

By Mr. INHOFE (for himself, Mr. Chafee, Mr. Lieberman, Mr.
Faircloth, Mr. Kempthorne, Mr. Moynihan, Mr. Reid, and Mr.
Lugar):
S. 1873. A bill to amend the National Environmental Education Act to
extend the programs under the act, and for other purposes; to the
Committee on Environment and Public Works.

the national environmental education amendments act of 1996

Mr. INHOFE. Mr. President, I introduce legislation to reauthorize the
National Environmental Education Act. I am joined by my colleagues,
Senators Chafee, Lieberman, Faircloth, Kempthorne, Moynihan, Reid, and
Lugar. And I am joined on the House side by my colleague, Congressman
Scott Klug of Wisconsin, who is introducing an identical bill in the
House today.
This bill will reauthorize the educational efforts at the National
Environmental Education and Training Foundation and the EPA's Office of
Environmental Education. These programs support environmental education
at the local level. They provide grant money and seed money to
encourage local primary and secondary schools and universities to
educate children on environment issues.
With the importance of the environment and the continuing debate on
how best to protect it, it is vital to educate our children so that
they truly understand how the environment functions.
Over the last few years environmental education has been criticized
for being one-sided and heavy-handed. People have accused environmental
advocates of trying to brainwash children and of pushing an
environmental agenda that is not supported by the facts or by science.
They also accuse the Federal Government of setting one curriculum
standard and forcing all schools to subscribe to their views. This is
not how these two environmental education programs have worked, and I
have taken specific steps to ensure that they never work this way.
The programs that this act reauthorizes have targeted the majority of
their grants at the local level, allowing the teachers in our community
schools to design their environmental programs to teach our children,
and this is where the decisions should be made. In addition, the
grants have not been used for advocacy or to lobby the Government, as
other grant programs have been accused of doing.

This legislation accomplishes two important functions. First, it
cleans up the current law to make the programs run more efficiently.
And second, it places two very important safeguards in the program to
ensure its integrity in the future.
I have placed in this bill language to ensure that the EPA programs
are balanced and scientifically sound. It is important that
environmental education is presented in an unbiased and balanced
manner. The personal values and prejudices of the educators should not
be instilled in our children. Instead we must teach them to think for
themselves after they have been presented with all of the facts and
information. Environmental ideas must be grounded in sound science and
not emotional bias. While these programs have not been guilty of this
in the past, this is

[[Page S6236]]

an important safeguard to protect the future of environmental
education.
Second, I have included language which prohibits any of the funds to
be used for lobbying efforts. While these programs have not used the
grant process to lobby the Government, there are other programs which
have been accused of this and this language will ensure that this
program never becomes a vehicle for the executive branch to lobby
Congress.
This bill also makes a number of housekeeping changes to the programs
which are supported by both the EPA and the Education Foundation which
will both streamline and programs and make them more efficient.
The grants that have been awarded under this program have gone to a
number of local groups. In Oklahoma alone such organizations as the
Stillwater 4-H Foundation; Roosevelt Elementary School in Norman, OK;
Oklahoma State University; the Kaw Nation of Oklahoma; and the Osage
County Oklahoma Conservation District have received grants for
environmental education under these programs.
This is an important piece of legislation, and I hope both the Senate
and the House can act quickly to reauthorize these programs.
______

By Mr. JOHNSTON:
S. 1874. A bill to amend sections of the Department of Energy
Organization Act that are obsolete or inconsistent with other statutes
and to repeal a related section of the Federal Energy Administration
Act of 1974; to the Committee on Energy and Natural Resources.

the department of energy standardization act of 1996

Mr. JOHNSTON. Mr. President, the bill that I have just introduced,
which is strongly supported by the administration, amends or repeals a
number of sections in the Department of Energy Organization Act and the
Federal Energy Administration Act of 1974 that are obsolete or that are
duplicative or inconsistent with other, Governmentwide statutes
governing rulemaking and advisory committee management.
Over the past 3 years, I have proposed, on a number of occasions,
amendments to remove administrative requirements of the Department of
Energy Organization Act that are more onerous than similar
Governmentwide requirements contained in more general statutes. For
example, with the support of the Department of Energy [DOE] and the
Office of Government Ethics, I have successfully promoted the repeal of
financial disclosure and divestiture requirements affecting DOE
employees that were more stringent than the comparable requirements of
the Ethics in Government Act and that provided potent recruitment
disincentives for outstanding potential employees for the Department.
This bill continues the process of placing DOE on a similar footing
in administrative law to other Federal agencies. The first subsection
in section 2 of the bill repeals redundant and obsolete requirements
affecting DOE rule making under the Administrative Procedure Act, and
places DOE procurement rulemaking under the same statutory basis, that
is, the Office of Federal Procurement Policy Act, as all other Federal
agencies. The second subsection repeals a restriction on DOE advisory
committees that effectively prevents DOE from using committees under
the Federal Advisory Committee Act for peer review of scientific and
technical proposals and the selection of awardees for such departmental
scientific honors as the Fermi Award and the E.O. Lawrence Award.
The proposals are noncontroversial, the Department of Energy has
rendered technical assistance in their drafting, and the administration
has indicated its strong support for these provisions in a letter dated
June 10, 1996. I ask unanimous consent that this letter be printed in
the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:

The Secretary of Energy,

Washington, DC, June 10, 1996.
Hon. J. Bennett Johnston,
Ranking Democrat Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
Dear Senator Johnston: This responds to your request for
Department of Energy views on proposed amendments to the
Department of Energy Organization Act (DOE Organization Act).
These amendments would repeal subsections 624(b) and 501(b)
and (d) of the Act. The Department strongly supports these
amendments.
The first amendment would repeal section 624(b) of the DOE
Organization Act (DOE Act) and section 17 of the Federal
Energy Administration Act. The amendment would place DOE
advisory committees on the same legal and procedural basis as
all committees covered by the Federal Advisory Committee Act.
Under current law DOE advisory committees are required to
meet in public session, while other agencies may close
meetings to protect information exempt from disclosure under
the Administrative Procedure Act. DOE's more stringent
requirement was justified at the time of its enactment by the
economic regulatory role of the Department's predecessor, the
Federal Energy Administration.
The second amendment would repeal subsections 501(b) and
(d) of the DOE Organization Act. Subsections 501(b) and (d)
elaborate on requirements in the Administrative Procedure Act
interpreted by the Supreme Court to require agencies to
provide the basis or purpose of the rule in their rulemaking
(Motor Vehicle Manufacturers Association v. State Farm, 463
U.S. 29, 43 (1983). With repeal of subsections 501(b) and
(d), the Department would be governed by the same standard
procedural requirements as other agencies in conducting
notice-and-comment rulemakings. The Department supports this
change.
The Office of Management and Budget advises that there is
no objection from the standpoint of the President's program
to submission of this report for the Committee's
consideration.
If you have further questions, please contact me, or have a
member of your staff contact Douglas W. Smith, Deputy General
Counsel for Energy Policy, at (202) 586-3410.
Sincerely,
Hazel R. O'Leary.
______

By Mr. HATFIELD (for himself and Mr. WYDEN):
S. 1875. A bill to designate the U.S. Courthouse in Medford, OR, as
the ``James A. Redden Federal Courthouse''; to the Committee on
Environment and Public Works.

The James A. Redden Federal Courthouse Act

Mr. HATFIELD. Mr. President, it is my pleasure to introduce today
legislation to name a Federal courthouse in my State after a fine
lawyer, judge and Oregon citizen, U.S. District Judge James Anthony
Redden. My legislation would rename the currently unnamed Federal
courthouse in Medford, OR, the James A. Redden Federal Courthouse.
Over the years Judge Redden's many accomplishments have made him
worthy of this tribute. Judge Redden practiced law in Medford, OR, from
1956-72. While practicing law he was elected to the Oregon State House
of Representatives, in which he served from 1963-69. During the 1967
session he served as the minority leader of the Oregon House of
Representatives.
Judge Redden left private practice in 1973 to serve as the Oregon
State treasurer. In 1977, he began serving as Oregon attorney general.
He served as Oregon's attorney general until 1980, when President Jimmy
Carter appointed him to the position of U.S. District Judge. He was
also appointed to serve on the U.S. Judicial Conference Committee in
1990 and reappointed to another 3 year term in 1993.
Judge Redden is a charter member of the American Board of Trial
Advocates. In 1954, he was admitted to the Massachusetts State bar
followed by the Oregon Bar in 1955. In 1955, he was also admitted to
the bars of the U.S. District Court of Oregon and Court of Appeals, and
finally, in 1979, to the bar of the U.S. Supreme Court.
The most important of Judge Redden's accomplishments is that he
practiced law for 20 years in the Federal courthouse my legislation
proposes to name in his honor. This courthouse is located in Judge
Redden's beloved Jackson County. During his political life, he
represented the people of Jackson County for 6 years, and now as a
senior judge, he plans to try cases in Jackson County again. He has
also taken a special interest in the ongoing renovation of the fine old
building.
Once again I believe that it would be a highly appropriate honor to
name this courthouse after an individual who has done so much, and who
has had such a successful career.
I look forward to working with my colleagues on the Senate
Environment and Public Works Committee to advance this important
proposal through the Senate.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.

[[Page S6237]]

There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1875

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

SECTION 1. DESIGNATION.

The United States courthouse at 310 West Sixth Street in
Medford, Oregon, shall be known and designated as the ``James
A. Redden Federal Courthouse''.

SEC. 2. REFERENCES.

Any reference in a law, map, regulation, document, paper,
other record of the United States to the United States
courthouse referred to in section 1 shall be deemed to be a
reference to the ``James A. Redden Federal Courthouse''.

Mr. WYDEN. Mr. President, it is my pleasure to cosponsor legislation
to name a Federal courthouse in my State after a fine soldier, lawyer,
and judge, U.S. District Judge James Anthony Redden. This legislation
would name the Federal courthouse in Medford, OR, the ``James A. Redden
Federal Courthouse.''
Judge Redden has made public service the centerpiece of his life. He
served his country in the U.S. Army from 1946 to 1948. He honed his
legal skills practicing law from 1956 to 1972 in Medford, OR. He then
left his private practice to serve the people of Oregon as the Oregon
State treasurer in 1973 and as the Oregon attorney general in 1977. In
1980, President Jimmy Carter appointed him to the position of U.S.
District Judge.
For 20 years, Judge Redden practiced law in the courthouse that
Senator Hatfield and I propose to rename today. Judge Redden and
Senator Hatfield have worked together over the years to renovate this
courthouse, and now I, as a Member of the Senate, am pleased to join in
the effort to rename this courthouse after Judge Redden, a great
Oregonian and a great American.
______

By Mr. HARKIN (for himself and Mr. Baucus);
S. 1876. A bill to amend chapter 89 of title 5, United States Code,
to end health insurance portability for Members of Congress and
eliminate continued coverage for departing Members of Congress until
health insurance portability for other U.S. citizens is enacted into
law, and for other purposes; to the Committee on Governmental Affairs.

the move it or lose it health coverage act

Mr. HARKIN. Mr. President, I rise today to offer the Move It or Lose
It Health Coverage Act. This is a straightforward bill that says if
Members of Congress fail to move health insurance portability for
Americans in a way that can be signed into law, then they will lose the
health insurance portability that they now enjoy. If we don't pass it
for America, we lose it for ourselves.
My legislation is designed with one goal in mind: to build up the
pressure to provide greater health security for millions of American
families.
Mr. President, when many Members of Congress leave office today, they
can take their health care with them. No need to worry about
preexisting condition exclusions or waiting periods or cancellations of
policy if they become sick. It's all taken care of. Everything's
covered.
Not so for far too many working families. Millions of Americans today
face preexisting condition exclusions because they change jobs, lose
jobs, or work for employers who change insurance policies.
The legislation I offer today says plain and simple--as long as
health insurance portability is denied to working Americans, it ought
to be denied to Members of Congress as well. Holding office shouldn't
insulate anyone from all the health insurance concerns that face
working families in America every day.
And I am hopeful that this bill I offer today will provide the
incentive needed for all of us to come together and pass responsible
health insurance reform legislation for all Americans.
So my bill says that until Congress passes the Kassebaum-Kennedy
health insurance measure or similar legislation, the coverage provided
to Members of Congress through the Federal Employees Health Benefits
Program [FEHBP] will be modified in several ways so that we know what
so many others are facing.
First, health insurers participating in the FEHBP would be allowed to
include preexisting condition exclusions in health plans covering
Members of Congress. Second, insurers would be free to refuse to issue
coverage or renew coverage provided to a Member because of current
health, or preexisting medical condition. Carriers would be free to
include these restrictions and limitations in any health plan covering
a current or retired Member of Congress.
And, third, current Members of Congress would no longer receive
taxpayer-subsidized health coverage after leaving office.
Mr. President, the Kassebaum-Kennedy health insurance reform bill
passed this body 100 to 0. Not one Senator voted against it. But now
that legislation--and those important reforms--are languishing.
It is time to unite together to give the American people some of the
same protections and health security that we have. If health insurance
portability is good enough for Members of Congress, it ought to be good
enough for working Americans, too.
And we must go about passing the Kassebaum-Kennedy reform in the same
spirit that it was introduced and approved by the Senate the first time
around--with strong bipartisan support and without controversial
provisions that will keep it from being signed into law.
Let us pass what the American people want: a clean bill of health. A
clean bill of security for American families.
And make no mistake, Mr. President. If the Kassebaum-Kennedy
legislation is reduced from the commonsense bill that it was when it
left the Senate to merely a partisan, political bill, then there will
be no winners and American families will lose.
There is plenty of room to reach common ground by using common sense.
It was in that spirit that I acted over 1 month ago to call for a
carefully designed pilot project for medical savings accounts. And it
is in that spirit that I offer my legislation today.
The Kassebaum-Kennedy bill which passed the Senate unanimously is
truly a modest proposal. It does not fix many of the flaws in the
current health care system. But it represents an important step toward
reforming health care and injecting some fairness into the system. It
would offer some welcome relief for American families worried about
losing their health insurance.
Specifically, it would allow families to switch health plans without
facing preexisting conditions. And it would assure that they won't be
dropped and their coverage will be renewed even if they become sick.
The General Accounting Office estimates that 25 million Americans
would be helped by portability reforms contained in the Kassebaum-
Kennedy health insurance bill.
We can not afford to deny this basic reform to the American people.
We have passed common sense change before. We must do so again. The
American people demand and deserve no less. It is time to deliver.
I ask unanimous consent that the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1876

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

SECTION 1. LIMITATIONS OF HEALTH CARE COVERAGE FOR MEMBERS OF
CONGRESS.

(a) Findings.--The Congress finds that--
(1) an estimated 81,000,000 United States citizens suffer
from some type of preexisting medical condition that could
make it difficult to obtain health coverage, especially for
that condition;
(2) millions of citizens are at risk of being subjected to
preexisting condition exclusions under current law because
they change jobs, lose jobs, or work for employers who change
insurance policies;
(3) Members of Congress may--
(A) choose to receive a health plan through the Federal
Employees Health Benefits Program; and
(B) enroll in a plan without facing restrictions because of
health status or preexisting medical conditions;
(4) health care coverage for Members of Congress under such
program--
(A) is portable because Members can change plans without
worry of preexisting condition exclusions or waiting periods;
and
(B) cannot be canceled and is required to be renewed;
(5) Members of Congress are often eligible to continue to
receive health care through the Federal Employees Health
Benefits Program after they leave Congress; and

[[Page S6238]]

(6) Congress should pass legislation to ensure health
insurance portability for United States citizens.
(b) Ending Health Insurance Portability and Other
Protections for Members of Congress.--
(1) In general.--Section 8902 of title 5, United States
Code, is amended by adding at the end the following new
subsection:
``(o)(1) Notwithstanding subsection (f) or (h), or any
other provision of this chapter, a contract for a plan under
this chapter shall provide that a carrier may--
``(A) include in a plan offered to an individual described
under paragraph (2) preexisting condition exclusions and
impose a limitation or exclusion of benefits relating to
treatment of a preexisting condition based on the fact that
the condition existed prior to enrollment;
``(B) exclude from enrollment an individual described under
paragraph (2) due to health status or preexisting condition;
or
``(C) refuse to renew the health plan of an individual
described under paragraph (2) due to health status or
preexisting condition.
``(2) Paragraph (1) shall apply with respect to the health
status or preexisting condition of a member of family of an
individual described under paragraph (3).
``(3) An individual referred to under paragraphs (1) and
(2) is--
``(A) a Member of Congress; or
``(B) an annuitant who on the date immediately preceding
the date of retirement described under section 8901(3)(A) was
a Member of Congress.
``(4) This subsection shall cease to be effective on and
after the date on which the Director of the Office of
Personnel Management has received certification from the
Secretary of Labor that a statute has been enacted into law
that--
``(A) makes health coverage for United States citizens
portable by limiting exclusions for preexisting conditions;
``(B) guarantees availability of health insurance to United
States citizens; and
``(C) guarantees renewability of health coverage to
employers and individuals as long as premiums are paid.''.
(2) Effective date.--This subsection shall take effect 30
days after the date of the enactment of this section.
(c) Elimination of Coverage for Departing Members of
Congress.--Section 8905 of title 5, United States Code, is
amended--
(1) in subsection (b) by striking ``An annuitant'' and
inserting ``Subject to subsection (g), an annuitant''; and
(2) by adding at the end the following new subsection:
``(g)(1) This section shall not apply to any annuitant
who--
``(A) on the date immediately preceding the date of
retirement described under section 8901(3)(A) was a Member of
Congress; and
``(B) becomes an annuitant on or after the date which
occurs 30 days after the date of the enactment of this
subsection.
``(2) This subsection shall cease to be effective on and
after the date on which the Director of the Office of
Personnel Management has received certification from the
Secretary of Labor that a statute has been enacted into law
that--
``(A) makes health coverage for United States citizens
portable by limiting exclusions for preexisting conditions;
``(B) guarantees availability of health insurance to United
States citizens; and
``(C) guarantees renewability of health coverage to
employers and individuals as long as premiums are paid.''.
______

By Mr. MURKOWSKI (for himself and Mr. Stevens):
S. 1877. A bill to ensure the proper stewardship of publicly owned
assets in the Tongass National Forest in the State of Alaska, a fair
return to the United States for public timber in the Tongass, and a
proper balance among multiple use interests in the Tongass to enhance
forest health, sustainable harvest, and the general economic health and
growth in southeast Alaska and the United States; to the Committee on
Energy and Natural Resources.

THE ENVIRONMENTAL IMPROVEMENT TIMBER CONTRACT EXTENSION ACT OF 1996

Mr. MURKOWSKI. Mr. President, today along with Senator
Stevens and Congressman Young, I am introducing the Environmental
Improvement Timber Contract Extension Act of 1996. This bill would
extend for 15 additional years the long-term timber sale contract on
the Tongass National Forest between the Forest Service and the
Ketchikan Pulp Corp. [KPC]. The extension would provide KPC with a
stable timber supply over a sufficient length of time to amortize the
cost of new environmental improvements and energy efficiency equipment.
KPC's situation is unique because all of its timber comes from the
Forest Service. There is no State or private timber available to the
company.
I am introducing this bill as a result of: First, the important role
that KPC plays in the social, economic, and environmental vitality of
southeast Alaska; second, the strong, bipartisan support within the
State for this action; third, the record from field hearings I held
last month in southeast Alaska which overwhelmingly supports
introduction; and fourth, the performance of the Forest Service which
strongly indicates that, without congressional intervention, the KPC
mill cannot survive. Let me elaborate on each of these factors.
First, let me describe the nature of the forest in southeast Alaska.
Thirty percent of the trees are dead or dying. The fiber is suitable
only for pulp. Without a pulp mill, lumber mills would be less
profitable and the pulp would have to be exported, creating no domestic
jobs. Let me also share with my colleagues what the Forest Service told
us about the evolution and importance of KPC's long-term contract to
southeast Alaska. Here is what the Agency told us at a May 28 oversight
hearing in Ketchikan, AK:

The long-term contracts in Alaska which required the
construction and operation of manufacturing facilities such
as sawmills and pulp mills facilitated the establishment of a
timber industry in southeast Alaska.
Prior to the 1950's, economic conditions in southeast
Alaska were characterized as boom-bust. Federal Government
employment, mining and salmon processing were the economic
mainstays. After World War II, mining was essentially gone,
leaving a small local timber industry and commercial fishing
in the natural resources sector. Both the timber and
commercial fishing industries were subject to market swings
from year to year and were seasonal in terms of employment.
The United States favored the expansion of the timber
industry through several long-term timber sales on the
Tongass National Forest to stabilize employment in southeast
Alaska.
Making the best use of the timber on the Tongass required
having suitable markets for both high and low quality timber
and species. The markets were largely export markets in the
Pacific Rim and were somewhat limited by the need to use most
of the timber for pulp. The Forest Service advocated the use
of long-term sales to establish a pulp industry that would
bring greater economic diversity to the region and more year-
round employment. If successful, more service and trade
establishments were expected to follow--creating greater tax
bases, which would provide opportunities for improved
services, such as schools, water, fire protection, and the
like. For all of this to come together, however, the Forest
Service had to guarantee a long-term, stable timber supply to
attract outside capital investment.

I found this testimony compelling. The Forest Service witnesses
recounted the decisions of their predecessors--far-sighted people
recognizing the nature and importance of the resource and planning for
an environmentally and economically secure future. The Forest Service
recognized that, as the sole owner of land and timber, it controlled
the economic and environmental vitality of the region.
Well what is the situation today? Today, KPC's operations directly or
indirectly provide 25 percent of the total annual employment wages in
Ketchikan. KPC's municipal real estate and sales taxes generated $13.6
million in revenues in 1992.
More broadly, the southeast Alaska timber industry is the dominant
contributor to real estate development in Ketchikan. More than 25
percent of all households are timber dependent, and the typical timber
employee can purchase more than 90 percent of the existing housing
units. KPC comprises more than 50 percent of the total borough's
industrial assessed valuation.
Tourism and fishing are also important to the economy of Ketchikan
and southeast Alaska. We need all three of our basic industries--
timber, fishing, and tourism--to be healthy if we are to have a healthy
economy in the region. But quite simply, without some stability of
timber supply, the economies of the region generally, and Ketchikan
specifically, are doomed.
Perhaps that is why the proposal to extend the KPC contract has
received broad, bipartisan support from elected officials throughout
the State. Earlier this year, the Alaska Senate voted 18 to 1 to
support a resolution urging the Congress to extend the contract. The
Alaska House voted 34 to 3 to support the same measure. These are
extraordinary margins of support. I will submit the resolution for the
record.
Then, the Governor joined in, offering his support for congressional
action to extend the contract. In a May 23 letter to me, Gov. Tony
Knowles informed me that:

The State of Alaska supports a KPC contract extension,
contingent on KPC's agreement with the following five
principles: To protect the environment, Alaska jobs, and

[[Page S6239]]

other forest users; and to utilize the Tongass Land
Management Planning [TLMP] process and value-added processing
techniques.

I am pleased to say that these conditions have been agreed to by KPC
and are included in the compromise legislation I am introducing today.
I will include the Governor's letter for the Record.
After receiving these views from the legislature and the Governor, I
scheduled two oversight hearings on May 28 and May 29 in Ketchikan and
Juneau, respectively. What I heard at these hearings was overwhelming
support for the legislature's resolution, the Governor's action, and
the extension of the KPC contract. I heard from tourism interests,
bankers, and fishermen who supported the contract extension. While not
unanimous, the preponderance of testimony offered over the 2 days--and
all of the demonstrators who marched in Ketchikan, as well as most or
them in Juneau--called for congressional action to extend the contract.
These people recognize that there is no alternative source of timber
available.
Last, I am introducing this legislation today because I have finally
lost confidence in the ability of the Forest Service to provide a
stable and sustainable supply of timber for southeast Alaska. Over the
past few years, the agency has fallen further behind in keeping a
working timber sale pipeline. This problem has worsened despite the
efforts of Senator Stevens to provide the agency with additional
funding for timber sale preparation. Consequently, more than half of
the operating mills in southeast Alaska have closed their doors during
the last few years during this administration's watch. KPC is the last
remaining pulp mill in the State.
This situation is absolutely tragic. The Tongass is our Nation's
largest national forest. Yet the level of economic activity associated
with the production of forest products is very small, and sinking. We
have only one pulpmill and a few scattered sawmills left. Employment in
the industry has fallen 40 percent since 1990. New Yorkers burn more
wood in their fireplaces and stoves than we harvest in southeast Alaska
each year.
In its May 25 testimony, the Forest Service acknowledged that ``the
contract with Ketchikan Pulp Co. [KPC] has played an important role in
the development of Alaska's resources in southeast.'' Given this
admission, one would think that the Forest Service would want to see
the mill stay. One would expect the Forest Service to weigh-in in favor
of a contract extension. But not so.
In very disappointing testimony, the agency maintained that ``the
terms of the existing contract provide that all obligations and
requirements of the long-term contract must be satisfied on or before
June 30, 2004.'' In response to questions about any future obligations
past that date, the agency insisted that it has none--none. This
testimony was offered even though the preamble to the contract
discusses a commitment to a permanent economic base.
On the question of whether Congress should extend the contract, the
Forest Service testified that ``a long-term commitment of resources
through a timber contract could further affect the flexibility of
management on the Tongass,'' and that ``we are committed to completing
the Revision of the Tongass Land Management Plan before we begin any
discussion of future long-term commitments to timber related industries
in Southeast.'' Yet, in response to questions, the agency witnesses
could not tell me: First, whether such commitments could be made within
the latitude provided by the range of alternatives in the draft TLMP;
second, whether additional National Environmental Policy Act analysis
would be required; or third, whether such commitments would actually be
precluded by the selected alternative of the final plan. The testimony
was extremely unsettling. It convinced me that either the Forest
Service and/or the administration would like to see the KPC mill go
away.
They have apparently no interest in seeing KPC invest $200 million to
pioneer chlorine-free manufacturing technology that could benefit
environmental control efforts nationwide. That is also tragic.
Mr. President, the simple facts are that--without the contract
extension--KPC will be unable to amortize the required capital
investments for environmental improvements, and it will go away. The
company's new CEO also testified on May 28. He was refreshingly, if not
reassuringly, frank. He said:

In the very near future, we have to decide whether to
continue the large investments required to make KPC viable or
whether the losses currently being inflicted by the
appropriate implementation of the contract can be carried any
longer. Now, we are going to make that decision relatively
soon. This is not an issue for the year 2003. This is a 1996
issue and decision.
We will make that decision, first of all, based on just to
keep running today we must have the Forest Service meet the
intent of the long-term bilateral contract, including the
volume and pricing provisions. And, then, secondly, to
continue to invest at the rapid rate that we are right now,
millions of dollars per quarter, this revised version of the
long-term contract must be extended a minimum of 15 years at
an offering level of 192 million board feet per year.
The people of KPC and the thousands of people who have
worked with us have met its--their contractual obligations to
develop the economy and provide permanent, year-round
employment for southeast Alaska. We want the government to
meet its contractual obligation to provide a sufficient
volume of economically viable timber in a timely fashion.

Some in southeast Alaska suggest that the region does not need the
KPC pulpmill to have a successful and sustainable timber industry. What
is needed they opine, is to eliminate the monopoly contract and develop
more small, value-added manufacturing facilities.
This is wishful thinking. The independent mill witnesses at our
hearings indicated that the lack of a stable timber supply will
preclude any additional investments in southeast Alaska. The
manufacture of pulp is a higher value added process than any of the
alternatives suggested by opponents of the pulpmill. The loss of the
pulpmill will destabilize the industry and the infrastructure of the
region, and have a chilling effect on future industry investments.
Available capital will migrate to other regions.
Mr. President, I cannot stand idly by and watch the town of Ketchikan
die. I will not. I am introducing, and ask respectful consideration of,
the Environmental Improvement Timber Contract Extension Act.
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. 1877

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 ``Environmental Improvement
Timber Contract Extension Act.''

SEC. 2. MODIFICATION OF LONG-TERM CONTRACT REGARDING TONGASS
NATIONAL FOREST.

(a) Definitions.--In this section:
(1) The term ``board feet'' means net scribner long-log
scale for all sawlogs and all hemlock and spruce utility
grade logs.
(2) The term ``contract'' means the timber sale contract
numbered A10fs-1042 between the United States and the
Ketchikan Pulp Company.
(3) The term ``contracting officer'' means the Regional
Forester of Region 10 of the United States Forest Service.
(4) The term ``mid-market criteria'' means an appraisal
that ensures an average timber operator will have a weighted
average profit and risk margin of at least 60 percent of
normal in a mid-market situation, representative of the most
recent 10 years of actual market data.
(5) The term ``proportionality'' means the proportion of
high volume stands (stands of 30,000 or more board feet per
acre) to low volume stands (stands of 8,000 to 30,000 board
feet per acre.)
(6) The term ``purchaser'' means the Ketchikan Pulp
Company.
(b) Findings.--Congress finds the following:
(1) On July 26, 1951, the Forest Service, on behalf of the
United States, and the purchaser entered into a contract to
harvest 8,250,000,000 board feet of timber from the Tongass
National Forest in the State of Alaska. While the contract is
scheduled to end June 30, 2004, it acknowledges an intention
on the part of the Forest Service to supply adequate timber
thereafter for permanent operation of the purchaser's
facilities on a commercially sound and permanently economical
basis. This legislation is necessary to effectuate that
intent.
(2) A pulp mill or similar facility is necessary in
southeast Alaska to optimize the level of year-round, high-
paying jobs in the area, to provide high value added use of
low-

[[Page S6240]]

grade wood and by-product material from sawmilling
operations, and to maintain a stable regional economy.
(3) The purchaser plans to make environmental and
operational improvements to its pulp mill, including
conversion to an elementally chlorine free bleaching process,
expansion of wastewater treatment facilities, relocation of
the existing wastewater outfall, and improvements to chemical
recovery and power generation improvements to chemical
recovery and power generation equipment. Total capital
expenditures are estimated to be $200,000,000, $25,000,000 of
which the purchaser has already invested.
(4) Extension of the contract for 15 years is the minimum
reasonable extension period to allow amortization of these
environmental improvement and energy efficiency projects.
(5) Ketchikan is the fourth largest city of Alaska. Its
economic and job base are extremely dependent upon the
continuation of the contract, which provides the principal
source of year-round employment in the area. The purchaser
has stated among its goals and objectives the following:
(A) Continuation of a long-term commitment to Ketchikan and
southeast Alaska, including maintenance of a stable Alaskan
workforce, utilization of Alaskan contractors, vendors, and
suppliers to permit those businesses to hire and maintain
Alaskan employees.
(B) Participation in the Forest Service's land management
planning process with other users so that the process may be
completed expeditiously with maximum information.
(C) Adherence to sound principles of multiple-use and
sustained yield of forest resources providing for the
production of sustainable contract volumes for the purchaser
and the other timber operators in southeast Alaska and the
protection and promotion of other forest uses, including
tourism, fishing, subsistence, hunting, mining, and
recreation.
(D) Protection of air, water, and land, including fish and
wildlife habitat, through compliance with applicable Federal,
State, and local laws.
(E) Commitment to continue to explore new processes and
technology to maximize the use of timber harvested and
increase the value of products manufactured in southeast
Alaska.
(6) The national interest is served by a policy that
accomplishes the proper stewardship of publicly owned assets
in the Tongass National Forest, a fair return to the United
States for public timber in the Tongass National Forest, and
a proper balance among multiple use interests in the Tongass
National Forest to enhance forest health, sustainable
harvest, and the general economic health and growth in
southwest Alaska and the United States in order to improve
national economic benefits. The national interest is best
achieved by fostering domestic forest product markets and by
modifying the terms of the contract pursuant to subsection
(c).
(c) Contract Fairness Changes.--The contract is hereby
modified as follows:
(1) Extension.--The term of the contract is extended by 15
years from June 30, 2004.
(2) Sale offering plan.--The contract shall include a plan
describing the amount of volume, location, and the schedule
by which the purchaser shall receive the timber required by
paragraph (3) for the remainder of the contract term. The
plan shall be coordinated with the Tongass Land Management
Plan.
(3) Volume requirements.--The volume of timber required
under the contract shall be provided in 5-year increments of
962,500,000 board feet, which the purchaser shall be
obligated to harvest in an orderly manner, subject to the
following:
(A) Until March 1, 1999, when the next 5-year increment is
provided to the purchaser, the Forest Service shall provide
the purchaser with at least 192,500,000 board feet per year
of available timber at a date certain each year and shall
maintain a supply of timber adequate to insure the purchaser
can reasonably harvest 192,500,000 board feet each year.
(B) To ensure harvest in an orderly manner, the contracting
officer shall provide for the construction by the purchaser
of roads in portions of the 5-year increment area of timber
in advance of the 5-year operating period by including such
roads in the environmental impact statement prepared for the
5-year operating period.
(C) Timber selected for inclusion in the 5-year increment
shall meet the mid-market criteria.
(4) Appraisals and rates.--The contracting officer shall
perform appraisals using normal independent national forest
timber sale procedures and designate rates for the increments
of timber to be provided. The rates shall not be designated
at a level that places the purchaser at a competitive
disadvantage to a similar enterprise in the Pacific Northwest
and those rates shall be the sole charges the purchaser shall
be required to pay for timber provided.
(5) Measurement of proportionality.--The Forest Service
shall measure proportionality using the following criteria:
(A) Measure for groups of all contiguous management areas.
(B) Measure proportionality by acres.
(C) Measure proportionality over the entire rotation age.
(6) Conversion or replacement of pulp mill.--The purchaser
may convert or replace, in part or in whole, its pulp mill
with a facility that manufactures any other value added
product that utilizes pulp logs as a raw material component.
(7) Unilateral termination.--The unilateral termination
clause of the contract is eliminated.
(8) Subsequent modifications.--Any clause in the contract,
as modified by this subsection, may be further modified only
by mutual agreement of the Forest Service and the purchaser
and may be so modified without further Act of Congress.
(d) Effective Date for Contract Modification.--
(1) Effective date.--The modifications made by subsection
(c) shall take effect 45 days after the date of the enactment
of this Act.
(2) Ministerial duty to modify the contract.--Not later
than such effective date, the contracting officer shall
revise, as a ministerial function, the text of the contract
to conform with the modifications made by subsection (c) and
implement the modified contract. The contracting officer
shall make conforming changes to provisions of the contract
that were not modified by subsection (c) in order to ensure
that the modifications made by such subsection are
implemented.
(e) Transition Timber Supply.--Timber volume available or
scheduled to be offered to the purchaser under the contract
in effect on the day before the date of the enactment of this
Act shall continue to be offered and scheduled under the
contract as modified by subsection (c) along with such
additional timber volume as is necessary to satisfy the
timber volume requirement of 192,500,000 board feet per year.
____

Senate Joint Resolution No. 40 in the Legislature of the State of
Alaska

Whereas, for the last 40 years, the timber industry
operating on national forest land in Southeast Alaska has
been the largest private employer in Southeast Alaska; and
Whereas the United States Forest Service strategy for
creating permanent year-round employment through a timber
industry in Southeast Alaska has been to offer long-term
contracts to attract pulp mills to use, and add value to,
low-grade and by-product materials from timber harvesting;
these pulp mills serve as a market for pulp logs and chips
from the sawmills in Southeast Alaska; and
Whereas pulp mills assure full utilization and protect
forest health by using that significant portion of the
Tongass National Forest that consists of dead, dying, and
over-mature timber; and
Whereas, since passage of the Tongass Timber Reform Act of
1990 (TTRA), a pulp mill and a major sawmill have closed, and
more than 40 percent of the timber industry has been lost
due, in part, to the failure of the United States Forest
Service to make available the approximately 420,000,000 board
feet per year needed to meet the jobs protection promises
made by those who sought passage of the TTRA, all of which
has created severe social and economic harm to the timber
industry, its workers, and timber-dependent communities in
Southeast Alaska; and
Whereas another of the reasons for the closure of the Sitka
pulp mill was the adverse economic impacts of unilateral
changes to its long-term contract made by the TTRA, those
unilateral changes also adversely impact the economics of the
Ketchikan Pulp Company (KPD) contract; and
Whereas KPC, which obtained a long-term contract to help
create year-round jobs in Southeast Alaska, is the sole
remaining pulp mill in Alaska, a mjor employer in Southeast
Alaska, and the market for pulp logs and chips from all the
other sawmills in Southeast Alaska; and
Whereas the loss of the KPC pulp mill would lead to the
loss of the entire industry now operating on the Tongass
National Forest with devastating social and economic effects
on families and communities throughout Southeast Alaska; and
Whereas, KPC pulp mill faces an uncertain future, not of
its own making, as a result of the continuing log shortage
created by the failure of the United States Forest Service to
meet its volume requirements under KPC's contract and the
TTRA, as a result of the adverse economic impacts to its
long-term contract caused by the unilateral TTRA changes, and
as a result of the requirement that more than $155,000,000 in
capital expenditures be made over the next few years to meet
new and ever changing federal environmental standards and
operating needs; and
Whereas, as a matter of economic common sense, KPC cannot
make all the necessary expenditures without the federal
government extending its contract for a sufficient period to
amortize those expenditures, without an adequate supply of
timber, and without modifying those portions of the
unilateral TTRA contract changes that have adversely impacted
the contract's economics; and
Whereas the legislature finds that an additional 15 years
is a minimum reasonable period to extend the KPC's timber
sale contract to allow such amortization and to provide
opportunities for value-added alternatives that maximize the
number of jobs and assures environmentally sound operations;
and
Whereas the legislature finds that sufficient timber must
be made available to maintain the KPC contract, to provide
100,000,000 board feet for the contracts to small business,
and to reopen the Wrangell facility and a by-product facility
in Sitka; be it
Resolved, That the Alaska State Legislature respectfully
urges the Alaska delegation

[[Page S6241]]

in Congress and the Governor to take all steps necessary,
this year, to extend the Ketchikan Pulp Company long-term
contract for an additional 15 years and modify those portions
of the contract which the TTRA unilaterally impacted, because
such an extension and modification are critical to the
environmental, social, and economic well-being of the Tongass
National Forest timber workers, their families, and timber-
dependent communities in Southeast Alaska and because such an
extension is in the public interest of the State of Alaska;
and be it further
Resolved, That the Tongass National Forest should be
managed for a healthy and diversified economy for the benefit
of all users, including value-added forest products,
commercial and sport fishing, seafood processing, tourism,
subsistence, sport hunting, and local businesses that provide
goods and services; and be it further
Resolved, That the Alaska State Legislature also
respectfully urges the Alaska Congressional Delegation, the
Governor, and the United States Forest Service to take action
this year to assure that sufficient timber be made available
as part of any revision of the Tongass Land-Use Management
Plan to maintain the Ketchikan Pulp Company contract, to
provide 100,000,000 board feet for small business contracts,
and to reopen the Wrangell facility and a by-product facility
in Sitka.
Copies of this resolution shall be sent to the Honorable
Bill Clinton, President of the United States; the Honorable
Daniel R. Glickman, Secretary of the U.S. Department of
Agriculture; the Honorable Bruce Babbitt, Secretary of the
U.S. Department of the Interior; the Honorable Newt Gingrich,
Speaker of the U.S. House of Representatives; the Honorable
Strom Thurmond, President Pro Tempore of the U.S. Senate; and
to the Honorable Ted Stevens and the Honorable Frank
Murkowski, U.S. Senators, and the Honorable Don Young, U.S.
Representative, members of the Alaska delegation in Congress.
____

State of Alaska,

Office of the Governor,

Washington, DC, May 23, 1996.
Hon. Frank Murkowski,
U.S. Senate, Washington, DC.
Dear Senator Murkowski: On behalf of Governor Tony Knowles,
I hereby submit, for the hearing record, the attached letter
from the Governor to Mr. Mark Suwyn, Chairman of Louisiana-
Pacific Corporation, concerning a possible contract extension
for the Ketchikan Pulp Company (KPC).
As the attached letter indicates, the State of Alaska
supports a KPC contract extension, contingent on KPC's
agreement with the following five principles: to protect the
environment, Alaska jobs, and other forest users; and to
utilize the Tongass Land Management Planning (TLMP) process
and value-added processing techniques. The State's support
for a contract extension, however, leaves for the federal
public process to resolve the issues of volume, contract
duration, and pricing structure.
With respect to the TLMP process, which we understand you
are also having hearings on, the State continues to provide
information and comments to the United States Forest Service
in an effort to develop a management plan for the Tongass
that is based on sound science, prudent management, and
meaningful public participation.
In addition to this letter for the record, the State plans
to be represented at the hearings by Veronica Slajer, of the
Department of Commerce and Economic Development, who will be
in attendance to listen to the testimony of the witnesses. As
we informed your staff earlier, Ms. Slajer will not be
testifying at the hearings, but the State is interested in
learning about what others think about these issues so that
the State can incorporate these thoughts in the formulation
of State policy.
Thank you for considering the State's views.
Sincerely,
John W. Katz,
Director of State/Federal Relations and Special Counsel to
the Governor.
____

State of Alaska,

Office of the Governor,

Juneau, April 26, 1996.
Mr. Mark Suwyn,
Chairman and CEO, Louisiana Pacific Corporation, Portland,
OR.
Dear Mark: Thank you for our recent discussions about the
future of the Kctchikan Pulp Company (KPC).
As you know, my Administration has consistently supported a
sustainable timber industry in the Tongass, including a
predictable timber supply to meet the terms of the KPC
contract and 100 million board feet for small operators
through Small Business Administration sales. Thousands of
Alaskan families depend on the Tongass for their livelihoods,
subsistence hunting and fishing, recreation, and other uses.
With this letter, I want to inform you my Administration
supports a KPC contract extension, contingent on the five
principles outlined below. As you mentioned during our recent
meeting, a decision to extend KPC's current contract is a
federal one. While the state has no authority to grant an
extension, the long-term partnership between the people of
Southeast Alaska and the timber industry and between the City
of Kctchikan and KPC gives us an important interest in the
extension issue. This partnership has benefited the jobs and
families of Southeast Alaska and has helped maintain healthy,
safe, and stable communities.
Inherent in this long-term partnership are five principles:
1. Environmental Protection. Protection of air, water, and
land, including fish habitat through compliance with
applicable federal, state, and local laws. This means KPC
should develop a plan to achieve full compliance with
environmental laws within three years. This would include a
meaningful public process that resolves public health and
environmental issues.
2. Commitment to Ketchikan. A long-term commitment to
Ketchikan and the maintenance of a stable workforce,
including the hiring and training of resident Alaskans and a
willingness to hire Alaska contractors. KPC should have
longer terms contracts with Alaska timber businesses to
provide them the certainly to hire permanent employees from
Alaska. KPC should support a policy for directing 50 percent
of the timber from SBA sales to in-state secondary processing
through contracts with SBA timber businesses.
3. Multiple Use. Adherence to sound principles of multiple
use and sustained yield of forest resources. This means the
production of sustainable contract volumes for KPC and the
small timber operators in southeast and the protection and
promotion of other forest uses and users, including tourism,
fishing, subsistence, hunting, mining, and recreation.
The planning process is of little value if individual sales
remain mired in controversy and litigation. Therefore, timber
offerings in areas of high community interest and important
fish habitat, such as Cleveland Peninsula, Honker Divide,
East Kuiu, and Poison Cove, should be avoided. In addition,
every effort should be made to bring about a transition from
the harvest of old growth to second growth timber.
4. TLMP Process. The Tongass Land Management Plan,
including full participation by the timber industry and other
forest users, must be completed expeditiously. The timber
volume available for harvest must be determined through the
TLMP planning process.
5 Value-Added. The timber industry should continue to
explore new processes and technology to maximize the use of
timer harvested and increase the value of products.
As we discussed, the matter of volume, contract duration,
and price must be determined by the federal public process.
I look forward to our continued cooperation.
Sincerely,
Tony Knowles,
Governor.
______

By Mr. AKAKA:
S. 1878. A bill to amend the Nuclear Waste Policy Act of 1982 to
prohibit the licensing of a permanent or interimnuclear waste storage
facility outside the 50 States or the District of Columbia, and for
other purposes; to the Committee on Environment and Public Works.

the nuclear waste policy act of 1982 amendment act of 1996

Mr. AKAKA. Mr. President, today I am introducing an amendment to the
Nuclear Waste Policy Act to prohibit an interim or permanent nuclear
waste storage facility outside of the 50 States. My bill would prevent
the Nuclear Regulatory Commission from issuing a license to store
nuclear waste in any of the territories, or on U.S. possessions such as
Midway Island or Palmyra Atoll.
Some of my Senate colleagues may wonder whether this is a bill in
search of a problem that does not exist. Until a few weeks ago, I would
have never imagined that legislation such as this was necessary.
However, based on information I have compiled, it is clear that the
bill I am proposing is urgently needed.
Earlier this year, the Honolulu papers reported that Palmyra Island,
a Pacific atoll located 900 miles southwest of Hawaii, was sold to a
New York investment firm known as KVR, Inc. The reason KVR purchased
Palmyra has always been vague and uncertain. However, 2 weeks ago
details of a scheme for Palmyra were uncovered when the island's new
owners quietly circulated legislation that would direct the Nuclear
Regulatory Commission to issue a license for high-level nuclear fuel
storage on Palmyra. The State of Hawaii and its delegation in Congress
strongly oppose this proposal.
I have recently discovered that Palmyra was not the only island
targeted for nuclear storage. Midway Island and sites in the Republic
of the Marshall Islands were also proposed for nuclear waste storage by
the owners of Palmyra and their associates.
As more and more information surfaces about the activities of
Palmyra's new owners, their business associates, and the web of
corporations they control, the true picture of their scheme emerges.
When you fit all the pieces of

[[Page S6242]]

the puzzle together, you find that a group of nuclear entrepreneurs
have been combing the Pacific for the past 2 years, searching for a
home for their nuclear waste dump. It is an affront to Hawaii and the
Pacific that they would hatch this scheme and operate in the shadows
for so long.
Let me present the facts in greater detail. In October 1994, the
developers of this nuclear waste initiative wrote the President of the
Republic of the Marshall Islands to propose that high-level nuclear
waste be stored in the Marshall Islands. Prior to sending their letter,
representatives from both sides met in Washington to discuss the
proposal. In exchange for providing exclusive use of an island for
storing nuclear fuel, the Republic of the Marshall Islands Government
would receive $160 million in concession payments as well as a share of
any profits from the venture.
Fortunately this initiative did not succeed. The plan to store
nuclear materials in the Republic of the Marshall Islands was opposed
by the Clinton administration and prompted Congress to enact
legislation prohibiting the Department of Energy from negotiating such
an arrangement with the Republic of the Marshall Islands Government.
At this point the scheme to build a nuclear waste dump on a low-lying
Pacific atoll appeared dead. But the proposal resurfaced when a group
of Washington lobbyists and Wall Street financiers purchased Palmyra
Atoll earlier this year.
The bill drafted by the new owners of Palmyra is one of the most
remarkable legislative proposals I have seen in my 20 years in
Congress. It is a legislative blank check, granting carte blanche
authority to the owners of Palmyra to become the world's only,
privately owned nuclear fuel storage and reprocessing enterprise. This
proposal would vastly increase the risk of nuclear proliferation by
placing the critical elements of weapons of mass destruction--plutonium
and uranium--in private hands.
The bill directs the Nuclear Regulatory Commission to issue a license
to store 200,000 tons of nuclear fuel on Palmyra. The license shall be
granted for the maximum period permitted by law. By directing the NRC
to license nuclear waste storage on Palmyra, the draft legislation
would circumvent NRC licensing standards and waive environmental,
engineering, and safety requirements that normally apply to the storage
of spent nuclear fuel.
One of the boldest elements of the bill grants the owners of Palmyra
the exclusive right to determine the scope of activities on the atoll.
Why should anyone, whether a private individual or an arm of
government, be granted unfettered authority over an island where
200,000 tons of nuclear fuel is being stored and reprocessed? This
would be nuclear madness.
Another flaw of this proposal is that atolls like Palmyra are
environmentally sensitive and prone to erosion and extreme weather
conditions. Eastern Island, the highest point on the atoll, is less
than 6 feet above sea level.

Any nuclear material stored at Palmyra would eventually have to be
relocated. The National Academy of Sciences and the Nuclear Regulatory
Commission have determined that above-ground storage of nuclear
materials can only be an interim solution. Spent nuclear fuel stored at
Palmyra would eventually have to be relocated to a permanent storage
site. If this proposal succeeds, ships carrying spent nuclear fuel from
all corners of the globe will transect the Pacific to deposit nuclear
material at Palmyra, only to transport this fuel once again to a
permanent storage site at another location. If the plan for nuclear
reprocessing goes forward, the traffic in nuclear cargo would increase
dramatically.
The bill further declares that the owners of Palmyra shall have title
to any nuclear fuel, commencing at the time waste is transferred to
containers bound for Palmyra. It would summarily select a site for
storing nuclear waste without scientific or technical evaluation of the
geologic, hydrologic, seismic or other conditions of the atoll. It
negates decades of research, planning, and development we have invested
in achieving an acceptable approach to our nuclear waste problem.
Of course, in order to achieve this remarkable plan, the bill waives
the Clean Water Act and the National Environmental Policy Act. These
laws are the hallmark of our Nation's commitment to protecting the
environment and enjoy broad, bipartisan support. The notion that these
fundamental environmental laws should be waived during the licensing of
a high-level nuclear waste storage site is simply irresponsible. The
American people will never accept such a proposal, no matter how well
it is sugarcoated.
The revelation this week that Midway, an island that is part of the
Hawaiian chain, was also sought by the owners of Palmyra is an
especially frightening development for the people of Hawaii. In
December 1995, the chairman of U.S. Fuel and Security requested that
the Navy allow high-level nuclear fuel storage on Midway Island. U.S.
Fuel and Security is a company affiliated with the new purchasers of
Palmyra. The company has a business plan that calls for storing nuclear
materials on a privately owned island in the Pacific Ocean, which we
now know to be Palmyra.
Fortunately, the request was denied and the Navy transferred
operational control of Midway to the U.S. Fish and Wildlife Service in
May of this year. The purchase of Palmyra was consummated only after it
became clear that the Navy would not approve the proposal for Midway
storage.
Weeks ago, when details first surfaced about establishing a nuclear
waste dump on Palmyra, it was difficult to believe that there was any
truth to these proposals. But as I uncovered more and more information,
I began to realize that this story was fact, and not fiction. This tale
of nuclear intrigue is like a bad onion. Each time you peel away
another layer it smells even more. You begin to wonder what else this
group is up to that we do not know about.
That is why I am introducing legislation to prohibit the storage of
nuclear waste in any of the Pacific territories or on U.S. islands such
as Midway or Palmyra. My bill is a preemptive strike against proposals
to store nuclear waste on Palmyra. It would shut the door on any
possibility of turning these Pacific islands into a nuclear waste dump.
I also want to put the Senate on notice that I am examining
legislation to transfer jurisdiction of Palmyra, Midway, and five other
U.S. possessions to the State of Hawaii. This proposal would give
Hawaii legal authority over, but not title to, these islands.
When a similar proposal surfaced last year in the House of
Representatives, legitimate concerns were raised about the potential
liability associated with such a transfer. In light of efforts to store
nuclear fuel on some of these islands, I believe that we should revisit
the idea of placing these Pacific islands, which are geographically
close to Hawaii, under the State's jurisdiction. I will closely examine
the question of liability and take steps to ensure that the Federal
Government is responsible for cleanup of any hazardous or toxic
substances on these islands, and that the State of Hawaii is
indemnified from future liability.
Transferring jurisdiction of islands like Palmyra and Midway to the
State of Hawaii would mean that our Governor, the State legislature,
and ultimately the people of Hawaii would have a greater say in
determining the future of these islands. This legislation could be a
substitute for, or an addition to, the bill I have introduced today.
My colleagues, the nuclear era began in the Pacific when the first
atomic bomb was dropped on Hiroshima. Since that time, more than 150
nuclear devices have been detonated in the region. The United States
conducted 66 tests in the Marshall Islands and Johnston Atoll during
the 1940's and 1950's. The British conducted 21 tests on Christmas
Island and in Australia during the 1950's. The French detonated more
than 180 devices on Mururoa and Fangataufa Atolls under a nuclear
testing program that began in 1974 and ended in February 1996. The
environmental consequences of this nuclear legacy are evident
throughout the Pacific to this day.
Given the international outpouring of criticism during the recent
French testing, it is inconceivable that anyone would consider
establishing the world's largest spent nuclear fuel dump at Palmyra.
The Pacific has been under assault since the dawn of the nuclear era

[[Page S6243]]

and should not become a future dumping ground for the world's nuclear
problems. Half a century of nuclear testing is enough.

____________________