[Congressional Record Volume 142, Number 104 (Tuesday, July 16, 1996)]
[Senate]
[Pages S7887-S7905]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mrs. HUTCHISON:
  S. 1953. A bill to reform the financing of Federal elections, and for 
other purposes; to the Committee on Rules and Administration.


            the campaign finance and disclosure act of 1996

 Mrs. HUTCHISON. Mr. President, today I am introducing 
legislation which I believe addresses shortcomings in the current 
campaign finance law.
  First, though, if I were going to give a title to the campaign 
finance reform legislation under consideration in the Senate until now, 
I would call it the Incumbent Protection Act of 1996, because that is 
what proposed limitations on expenditures would accomplish.
  For us to limit campaign contributions across the board would be 
counterproductive and self-serving. Any such limit, voluntary or 
otherwise, would favor incumbents because it would inhibit the right of 
a challenger to go out and raise more campaign funds than an incumbent 
who already enjoys greater name recognition.
  Challengers would have no way of overcoming that very real 
disadvantage. We should strive to level the playing field, not tilt it 
further toward those who already enjoy the advantage.
  That said, there are a number of commonsense principles I believe can 
be invoked in order strengthen the current campaign finance law and 
make it more equitable.
  I support the idea of requiring that 60 percent of a Senate 
candidate's campaign funds be raised from individuals within his or her 
home State. This rule would ensure that those who would be represented 
by the candidate have the greatest say in the outcome of an election.
  I support limiting the use of personal wealth to finance campaigns. 
Right now there are no limits on the amount of personal wealth a 
candidate can spend on his or her own political campaign and be 
reimbursed. Today, such candidates are entitled to make personal 
campaign contributions to their own campaigns, and repay themselves 
after the fact. The status quo is campaign finance based on 
creditworthiness, and as such is inherently inequitable.
  I think we can fairly, and constitutionally, set a limit on the 
amount for which such candidates can be reimbursed for upfront 
expenditures from their personal pocketbooks.
  The bill I am introducing today would set a personal reimbursement 
limit of $250,000 on the use of Senate candidates' personal funds or 
funds from members of their immediate families.
  I support limiting political action committee [PAC] donations to the 
same amount as individuals are entitled to donate to a candidate.
  This legislation decreases the PAC contribution limit to the same 
limit as an individual. Under the bill individual contributions are 
limited to $1,000 and PAC contributions are lowered from $5,000 to 
$1,000 to make both categories of limitations equal.
  The vast majority of PAC's are cooperative, grassroots efforts within 
a specific group, or company, such as a teachers' association, a union, 
or a tax-limitation group. Most people who contribute to PACs give 
small amounts of money. If someone wants to participate in the process, 
they should be encouraged. Our campaign finance law should be neutral. 
Neither PAC's, nor individuals, should be given preferential treatment.
  I support the idea of doing away with the congressional franking 
privilege for mass mailings during election years. I do not use and 
have never used the franking privilege of mass mailings at any time. It 
is, frankly, an advantage for incumbents provided at taxpayer expense 
which should be canceled.
  My legislation would eliminate mass mailings as franked mail from 
January 1 of an election year through the date of an incumbent 
Senator's general election. This may seem strenuous, but it is 
absolutely necessary.
  Mr. President, campaign finance reform is a work in progress. We are 
in the process of restoring confidence in the political process. For 
the American people, this is a plus--not a weakness. The ability to 
fine tune and strengthen the political process while preserving our 
basic democratic institutions is one of the great strengths of our 
country. It requires our greatest dedication.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Lott, Mr. Heflin, Mr. Abraham, Mr. 
        Ashcroft, Mr. Burns, Mr. Craig, Mr. Faircloth, Mr. Grams, Mr. 
        Kempthorne, Mr. Mack, Mr. McConnell, Mr.

[[Page S7888]]

        Bennett, Mr. Bond, Mr. Brown, Mr. Grassley, Mr. Nickles, Mr. 
        Simpson, Mr. Stevens, Mr. Thurmond, Mr. Pressler, Mr. Shelby, 
        Mr. Cochran, Mr. Warner, and Mr. Thomas):
  S. 1954. A bill to establish a uniform and more efficient Federal 
process for protecting property owners' rights guaranteed by the fifth 
amendment; read the first time.


                    THE OMNIBUS PROPERTY RIGHTS ACT

  Mr. HATCH. Mr. President, I am pleased today to introduce a new 
version of the Omnibus Property Rights Act of 1996. This bill is a 
narrower version of the bill introduced as S. 605, on March 23, 1995.
  Americans everywhere are losing their fundamental right to property. 
They cannot build homes, farm land, clear ditches or cut firebreaks in 
property that clearly belongs to them. Often, this property has been in 
their family for years. The Omnibus Property Rights Act is the proper 
vehicle to vindicate property rights and limit arbitrary actions by 
Federal bureaucrats.
  The criticisms of S. 605, in my view, are vastly overblown. But, in a 
good faith effort to address concerns raised by critics of the original 
bill, I am introducing this revised version. This version will: First, 
narrow the definition of property to include only real property, 
including fixtures on land, such as crops, timber, and mining 
interests, and water rights; Second, increase the threshold amount that 
property or a portion of property need be diminished in value before 
compensation for a taking be sought from 33 to 50 percent; Third, 
expressly exempt civil rights laws from the bill's purview, including 
those protecting persons with disabilities; Fourth, remove the takings 
regulatory reform ``look back'' provision from the bill by striking all 
of section 404, this in an effort to address the fear that any and all 
agency review provisions are too burdensome; and Fifth, amend the 
owner's consent to enter land provision to allow for nonconsensual 
agency access to private land pursuant to criminal law enforcement and 
emergency access exceptions.
  In addressing the bill oponent's claims by making these significant 
changes, I would like to say once again that our critics' real problem 
is not with the overall bill, but with the U.S. Supreme Court. In 1992, 
the Supreme Court held in Lucas versus South Carolina Coastal Council 
that restrictions on property use based on ``background principles of 
the State's law of property and nuisance'' need not be compensated. 
Common law nuisance is either the use of property that harms or 
interferes with another's property or that injures public health, 
safety, or morals. This common law exemption for compensation has been 
codified literally in this bill as a ``nuisance exception.'' All we did 
in our bill was to codify the ``law of the land.'' The bill codifies 
and clarifies recent Supreme Court standards as to what constitutes a 
``taking'' of private property and ameliorates the arbitrary nature of 
court and administrative proceedings.
  What this bill does is to limit big government's ability to regulate 
and control private property without paying innocent or nonpolluting 
property holders compensation. Currently, the Federal Government and 
agency bureaucrats are able to shift the cost of public regulation to 
individual property owners.
  The Omnibus Property Rights Act helps to take away this arbitrary 
free ride. The bill helps secure and protect private property rights 
guaranteed by the takings clause of the fifth amendment of our 
Constitution, which the Supreme Court in Armstrong versus United States 
(1960) determined is ``to bar Government from forcing some people alone 
to bear public burdens, which in all fairness and justice, should be 
borne by public as a whole.''
  In adopting the Supreme Court's recent Lucas holding, the Omnibus 
Property Rights bill provides that only innocent property holders are 
to be compensated for government takings. Those that misuse their 
property to pollute or to harm public health and safety are not 
entitled to compensation under the bill's nuisance provision. Property 
owners remain subject to the same laws and regulations as everyone 
else. Only if government cannot demonstrate that their use of property 
amounts to a harm recognized as common law nuisance will a property 
holder be compensated under this bill. What could be fairer than this?
  What about those Federal statutes, named by opponents of the Omnibus 
bill, that might not fall under the nuisance exception? Will 
enforcement of those statutes, designed to protect the public, diminish 
the value of property and require compensation? The answer is no: 
property holders are subject to the same general laws and regulations 
as everyone else. Only where enforcement of regulatory schemes amounts 
to a taking under current law, and arbitrarily singles out property 
holders to their detriment by requiring them, through reduced property 
values, to fund programs that should be paid out of the public 
treasury, will property holders be compensated. Moreover, even in these 
limited circumstances, the Federal Government can still regulate by 
paying compensation when it takes property. Current law--even without 
this bill--recognizes that justice and fairness require the government 
to pay for the property it takes. Thus, contrary to the bill's critics 
and the administration, if the Omnibus Property Rights Act is enacted 
into law, the sky will not fall. In reality, the Federal bureaucracy 
has a poor record in protecting the right of the American public to use 
and own property. That is why we need a vehicle--such as this bill--to 
force the government by statute to heed the public's rights.
  Indeed, the omnibus bill includes provisions that require Federal 
agencies to account for the costs of taking property when formulating 
policy, and it provides for a more efficient administrative remedy for 
property owners who seek compensation. It also allows for alternative 
dispute resolution mechanisms to encourage quicker settlements of 
takings claims. For cases that go to Federal court under the bill, the 
bill codifies recent Supreme Court decisions and clarifies the law in 
regulatory takings cases. Because the bill provides for clearer, 
bright-line rules of liability, it will lead to lower costs overall, as 
both agencies and property owners become fully aware of the limits of 
the government's power to take property. Importantly, the codification 
of bright-line rules will ameliorate the ad hoc and arbitrary nature of 
takings jurisprudence.
  I ask my colleagues to support this bill and breathe life into the 
fifth amendment of the U.S. Constitution.
       By Mr. HATCH (for himself, Mr. Harkin, Mr. Faircloth, Mr. 
     Bennett, Mr. Inouye, Mr. Thurmond, Mr. Simon, Mr. Pressler 
     and Mr. Dewine):
  S. 1955. A bill to amend the Public Health Service Act to provide for 
the establishment of a National Center for Pain Research, and for other 
purposes; to the Committee on Labor and Human Resources.


    THE NATIONAL CENTER FOR PAIN RESEARCH ESTABLISHMENT ACT OF 1996

  Mr. HATCH. Mr. President, I rise today to introduce S. 1955, a bill 
to establish a National Center for Pain Research within the National 
Institutes of Health. This is legislation that I have developed working 
closely with Senators Harkin and Faircloth. S. 1955 is also cosponsored 
by Senators Bennett, Inouye, Thurmond, Simon, Pressler and DeWine.
  Pain is a condition that each of us experiences throughout our lives. 
Millions of individuals suffer from pain, sometimes chronic and often 
needlessly. Yet, there is insufficient knowledge about the basic 
mechanisms of pain, relatively few resources dedicated to the 
development and evaluation of pain treatment modalities, and inadequate 
transfer of new knowledge and information to health care professionals.
  To show the magnitude of the problem, I will cite several statistics. 
Studies show that four in five Americans will have low back pain at 
some point in their lives. Nearly one in six Americans suffers from 
some form of arthritis, a very painful condition. In fact, according to 
the American Chronic Pain Association, pain is a part of the daily 
lives of one in three Americans.
  These painful conditions are not only common, they are also 
expensive. A recent survey has shown that absences from work due to 
pain totaled 50 million days in 1995, accounting for billions of 
dollars in lost wages for sick days or medical and disability payments.

[[Page S7889]]

  Mr. President, with an appropriation of $12 billion a year, you would 
think that the NIH would be devoting a substantial amount of funding 
toward a medical condition which is so prevalent. In fact, I was 
shocked to learn that such is not the case. According to statistics 
provided to me by the agency, NIH is spending only $54 million per year 
on pain-related research, only one-half of one percent. And that number 
is down almost 10 percent from the previous year.
  To take one example, acute back pain, a serious condition which will 
affect about 80 percent of all Americans sometime in their lives, is 
alone responsible for a $40-billion-a-year drain on the U.S. economy. 
Yet, NIH reports that it currently funds only $2.5 million of research 
into this area.
  My study of this issue has led me to conclude there is another 
serious problem associated with our Government campaign against pain. 
Pain research is spread across many of the Institutes, yet there is 
little coordination of these research activities to make sure these 
resources are effectively used.

  Mr. President, this is not to say that NIH has neglected pain 
research. In fact, I want to make clear that NIH deserves high marks 
for its significant contributions in the field of pain research. NIH 
scientists have been integral in the cataloging of neurotransmitters 
and have been the key to improved understanding of the process of 
nociception. This basic science research has allowed for the 
development of several new drugs to treat pain.
  I want to take this opportunity to thank Dr. Harold Varmus, NIH 
Director, and Dr. Harold Slavkin, NIDR Director, for their continued 
support of a most impressive program within the National Institute of 
Dental Research. The NIDR's Intramural Pain Research Program, operated 
through the Neurobiology and Anesthesiology Branch [NAB] of NIDR, 
exemplifies the high quality of pain research that I hope can be 
multiplied with enactment of this bill.
  The NAB has trained almost 100 basic and clinical science pain 
researchers around the world, many of who have become deans of dental 
and medical schools, department chairs and successful grantees of many 
NIH Institutes. In fact, the American Pain Society has recently awarded 
two major research medals to two NAB investigators in recognition of 
their collaborative basic and clinical science research on neuropathic 
pain.
  The National Center for Pain Research Act of 1996 will allow us to 
build on the successful pain research activities currently underway at 
the NIH.
  This bill will improve integration of pain-related research within 
NIH, establish a national agenda for pain research, and expand the 
utilization of interdisciplinary pain research teams.
  Specifically, it will, first, establish a Center for Pain Research 
within NIH. The purpose of this Center is to improve the quality of 
life of individuals suffering from pain by fostering clinical and basic 
science research into the causes of and effective treatments for pain; 
second, authorize the Center to coordinate pain research throughout the 
Institutes at NIH, as well as fund priority pain-related research 
through its own research budget; third, create an advisory board that 
will be made up of experts in pain research and pain management from a 
wide variety of health care disciplines, including physicians who 
practice pain management, psychology, physical medicine and 
rehabilitative services, nursing, dentistry, and chiropractic health 
care professionals; and fourth, establish six regional pain research 
centers to facilitate and enhance pain-related research, training, 
education, and related activities to be carried out by the Center.

  In addition to increasing our knowledge about pain, it is important 
to disseminate information about advances made in the pain research. 
Through pioneering research supported by the NIH, we have already made 
great strides in increasing our knowledge of pain and in treating 
painful conditions.
  However, the treatment of patients suffering from painful conditions 
remains woefully inadequate. Too many of our health professionals lack 
specific training in pain management. With adequate pain control, much 
of the suffering from painful conditions can be prevented or greatly 
attenuated.
  Sadly, pain control is a significant problem for patients with 
cancer. A statement from the National Cancer Institute indicated that, 
``the under treatment of pain and other symptoms of cancer is a serious 
and neglected public health problem.'' With 1 million new cases of 
cancer diagnosed each year, this problem cannot be ignored.
  Additional studies have shown that pain associated with cancer is 
most frequently under treated in the elderly and children--two of our 
most vulnerable populations. The need for a national movement to help 
these individuals is illustrated by the fact that cancer pain can be 
virtually abolished in approximately 90 percent of patients by the 
intelligent use of drugs.
  This bill has widespread support from organizations representing the 
providers of pain management, pain researchers, and the people they 
serve. These organizations include: American Academy of Pain 
Management, American Academy of Pain Medicine, American Chiropractic 
Association, American Chronic Pain Association, American Pain Society, 
Arthritis Foundation, Back Pain Association of America, Endometriosis 
Association, Interstitial Cystitis Association, National Chronic Pain 
Outreach Association, National Committee on the Treatment of 
Intractable Pain, Pain Research Group of the University of Wisconsin, 
Reflex Sympathetic Dystrophy Syndrome Association of America, American 
Cancer Society, Sickle Cell Disease Association of America, and the 
Vulvar Pain Foundation.
  In closing, I would like to thank the chiropractic community for 
bringing this issue to the forefront of public attention. The 
chiropractic profession, through its ability to effectively treat many 
painful conditions--including low back pain, headaches and neck pain--
has been on the leading edge of pain management for years. They have 
joined their colleagues in the health professions in initiating and 
developing this important legislation and our bill recognizes the 
substantial role chiropractors play in the pain treatment community.

  I would also like to thank the contributions of the American Pain 
Society, which represents the interdisciplinary pain management 
research and care community. They also have actively participated in 
the development of this legislation.
  Mr. President, the creation of the Center for Pain Research will 
facilitate the discovery of new treatments for painful conditions 
afflicting almost all of our fellow Americans. This bill also makes 
certain that these discoveries reach the people who now suffer from 
needless pain as soon as possible.
  I urge my colleagues to support creation of a Center for Pain 
Research within the National Institutes of Health.
  Mr. President, I ask unanimous consent that the text of the bill be 
placed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1955

       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 ``National Center for Pain 
     Research Act of 1996''.

     SEC. 2. NATIONAL CENTER FOR PAIN RESEARCH.

       (a) Establishment.--Section 401(b)(2) of the Public Health 
     Service Act (42 U.S.C. 281(b)(2)) is amended by adding at the 
     end thereof the following new subparagraph:
       ``(F) The National Center for Pain Research.''.
       (b) Operation.--Part E of title IV (42 U.S.C. 287 et seq.) 
     is amended by adding at the end thereof the following new 
     subpart:

             ``Subpart 5--National Center for Pain Research

     ``SEC. 485E. ESTABLISHMENT AND PURPOSE OF THE CENTER.

       ``(a) Establishment.--The Secretary shall establish within 
     the National Institutes of Health, a center to be known as 
     the National Center for Pain Research (hereafter referred to 
     in this subpart as the `Center'). The Center shall be headed 
     by a Director (hereafter referred to in this subpart as the 
     `Director') who shall be appointed by the Director of NIH, 
     after consultation with experts in the fields of pain 
     research and treatment representing the disciplines 
     designated in subsection (b)(3), and have the powers 
     described in section 405.
       ``(b) General Purpose.--The general purpose of the National 
     Center for Pain Research is--
       ``(1) to improve the quality of life of individuals 
     suffering from pain by fostering of

[[Page S7890]]

     clinical and basic science research into the causes of and 
     effective treatments for pain;
       ``(2) to establish a national agenda for conducting and 
     supporting pain research in the specific categories described 
     in subparagraphs (A), (B), (C), and (D) of paragraph (3);
       ``(3) to identify, coordinate and support research, 
     training, health information dissemination and related 
     activities with respect to--
       ``(A) acute pain;
       ``(B) cancer and HIV-related pain;
       ``(C) back pain, headache pain, and facial pain; and
       ``(D) other painful conditions;
     including the biology of pain, the development of new and the 
     refinement of existing pain treatments, the delivery of pain 
     treatment through the health care system and the coordination 
     of interdisciplinary pain management, that should be 
     conducted or supported by the National Institutes of Health;
       ``(4) to conduct and support pain research, training, 
     education and related activities that have been identified as 
     requiring additional, special priority as determined 
     appropriate by the Director of the Center and the advisory 
     council established under subsection (c);
       ``(5) to coordinate all pain research, training, and 
     related activities being carried out among and within the 
     National Institutes of Health;
       ``(6) to initiate a comprehensive program of collaborative 
     interdisciplinary research among schools, colleges and 
     universities, including colleges of medicine and osteopathy, 
     colleges of nursing, colleges of chiropractic who are members 
     of the Association of Chiropractic Colleges, schools of 
     dentistry, schools of physical therapy, schools of 
     occupational therapy, and schools of clinical psychology, 
     comprehensive health care centers, and specialized centers of 
     pain research and treatment; and
       ``(7) to promote the sufficient allocation of the resources 
     of the National Institutes of Health for conducting and 
     supporting pain research in the specific categories described 
     in subparagraphs (A), (B), (C), and (D) of paragraph (3).
       ``(c) Advisory Council.--
       ``(1) In general.--The National Pain Research Center 
     Advisory Board shall be the advisory council for the Center. 
     Section 406 applies to the advisory council established under 
     this paragraph, except that--
       ``(A) the members of the advisory council shall include 
     representatives of the broad range of health and scientific 
     disciplines involved in research and treatment related to 
     those categories of pain described in subsection (b)(2), and 
     shall include an equal number of representatives of 
     physicians who practice pain management, clinical 
     psychologists, individuals who provide physical medicine and 
     rehabilitative services (including physical therapy and 
     occupational therapy), nurses, dentists, and chiropractic 
     health care professionals;
       ``(B) the nonvoting ex officio members shall include--
       ``(i) the Director of the National Cancer Institute;
       ``(ii) the Director of the National Institute of Dental 
     Research;
       ``(iii) the Director of the National Institute of Child 
     Health and Human Development;
       ``(iv) the Director of the National Institute of Nursing 
     Research;
       ``(v) the Director of the National Institute of Allergy and 
     Infectious Diseases;
       ``(vi) the Director of the National Institute of Arthritis 
     and Musculoskeletal and Skin Diseases;
       ``(vii) the Director of the National Institute of 
     Neurological Disorders and Stroke;
       ``(viii) the Director of the National Institute on Drug 
     Abuse; and
       ``(ix) the Director of the National Institute on Disability 
     and Rehabilitation Research of the Department of Education; 
     and
       ``(3) the council shall meet at least two times each fiscal 
     year.
       ``(2) Duties.--The advisory council shall advise, assist, 
     consult with and make recommendations to the Director of the 
     Center concerning matters relating to the coordination, 
     research, training, education, and related general purposes 
     set forth in subsection (b), including policy recommendations 
     with regard to grants, contracts, and the operations of the 
     Center.
       ``(d) Establishment of Regional Pain Research Centers.--
       ``(1) Establishment.--To facilitate and enhance the 
     research, training, education, and related activities to be 
     carried out by the Center, the Director of the Center, in 
     consultation with the advisory council established under 
     subsection (c), shall establish not less than six regional 
     pain research centers.
       ``(2) Focus and distribution.--
       ``(A) Focus.--The regional centers established under 
     paragraph (1) shall have as their primary focus one of the 
     categories of pain described in subparagraphs (A), (B), (C), 
     and (D) of subsection (b)(3).
       ``(B) Distribution.--One regional pain research center 
     shall be established in each of the following six regions of 
     the United States as defined by the Secretary:
       ``(A) The northeast region.
       ``(B) The southeast region.
       ``(C) The midwest region.
       ``(D) The southwest region.
       ``(E) The west region, including Hawaii.
       ``(F) The Pacific Northwest region, including Alaska.
       ``(2) Use of technology.--The regional centers established 
     under paragraph (1) shall be a part of the Center and shall 
     be interconnected to the Center headquarters through the 
     utilization of distance learning technologies, satellites, 
     fiber optic links, or other telecommunications and computer 
     systems, to allow for the interactive exchange of 
     information, research data, findings, training programs, 
     educational programs, and other Center research and related 
     initiatives.
       ``(3) Initial regional centers.--The initial regional 
     centers shall be selected through a competitive process from 
     among institutions and centers of the type described in 
     subsection (b)(6).
       ``(e) Authorization of Appropriations.--
       ``(1) In general.--For the purposes of carrying out this 
     section, there are authorized to be appropriated $20,000,000 
     for each of fiscal years 1997, 1998, and 1999, and such sums 
     as may be necessary for fiscal year 2000.
       ``(2) Regional centers.--Of the amount appropriated under 
     paragraph (1) for fiscal year 1998 and each subsequent fiscal 
     year, not less than $1,000,000 shall be made available to 
     each of the regional centers established under subsection 
     (d).
       ``(3) Report to congress.--Not later than January 1, 1998, 
     and each January 1, thereafter, the Director of the Center 
     shall prepare and submit to the committees of Congress a 
     report concerning the total amount of funds expended to 
     support pain-related research in the year for which the 
     report was prepared.''.
                                 ______
                                 
      By Mr. DOMENICI:
  S. 1956. An original bill to provide for reconciliation pursuant to 
section 202(a) of the concurrent resolution on the budget for fiscal 
year 1997; from the Committee on the Budget.


the personal responsibility work opportunity and medicaid restructuring 
                              act of 1996

  Mr. DOMENICI. Mr. President, for purposes of the Senate's 
consideration of the Personal Responsibility, Work Opportunity, and 
Medicaid Restructuring Act of 1996, pursuant to section 423(f)(2) of 
the Unfunded Mandates Reform Act of 1995 I hereby submit the mandate 
cost estimates for the Agriculture and Finance Committees 
reconciliation submissions and ask unanimous consent that they by 
printed in the Record
  The entire cost estimate will be available in a Committee print 
proposed by the Senate Committee on the Budget.
  There being no objection, the material was ordered to be printed in 
the Record as follows:

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                     Washington, DC, July 3, 1996.
     Hon. Richart G. Lugar,
     Chairman, Committee on Agriculture, Nutrition, and Forestry, 
         U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared enclosed cost estimate for the Agricultural 
     Reconciliation Act of 1996, as recommended by the Senate 
     Committee on Agriculture, Nutrition, and Forestry. Enactment 
     of this bill would affect direct spending. Therefore, pay-as-
     you-go procedures would apply.
       If you wish further details on this estimate, we will be 
     pleased to provide them.
           Sincerely,
                                                 Paul Van de Water
                                  (For June E. O'Neill, Director).
       Enclosure.

                           *   *   *   *   *

       8. Estimated impact on State, local, and tribal 
     governments: The bill contains at least two mandates as 
     defined by the Unfunded Mandates Reform Act of 1995 (Public 
     Law 104-4), but the total costs of the mandates would not 
     exceed the $50 million annual threshold established in the 
     law. The bill would require state agencies that administer 
     the Food Stamp program to provide information to law 
     enforcement agencies under certain circumstances. CBO 
     estimates that the additional costs of this mandate would be 
     negligible because such information is readily available from 
     other sources.
       The bill would also require states to implement an 
     electronic benefit transfer (EBT) system before October 1, 
     2002, unless the Secretary of Agriculture provides a waiver. 
     Based on information provided by the Department of 
     Agriculture, CBO expects that under current law all states 
     will have such systems in place by October 1, 2002, or would 
     receive a waiver from the Secretary of Agriculture under the 
     bill. Therefore, no additional direct costs would be 
     associated with this new mandate.
       Other provisions of the bill would also affect state 
     budgets, but CBO is uncertain whether these provisions would 
     be considered mandates as defined by Public Law 104-4. One 
     provision would reduce the amount that states are allowed to 
     retain when they collect overissuances of food stamp 
     benefits. The bill would also reduce amounts that states 
     receive from the Federal Government for administering Child 
     Nutrition programs. The receipt of these funds is based on a 
     percentage of funds spent on certain Child Nutrition programs 
     during the second preceding fiscal year. Thus, reductions in 
     programmatic funding beginning in fiscal year

[[Page S7891]]

     1997 would result in less administrative funding two years 
     later.
       Public Law 104-4 defines a mandate for large entitlement 
     programs, including the Food Stamp program, as a provision 
     that would increase the stringency of conditions under the 
     program or would place caps upon, or otherwise decrease, the 
     federal government's responsibility to provide funding to 
     state, local, or tribal governments under the program if the 
     state, local, or tribal governments lack the authority under 
     the program to amend their financial or programmatic 
     responsibilities to continue providing required services.
       In the case of overissuances of food stamp benefits, it is 
     unclear whether the amounts states retain from collection of 
     overissuances should be considered part of the federal 
     government's responsibility to provide funding to states for 
     administering the Food Stamp program. It is also unclear 
     whether states have sufficient flexibility in the 
     administration of the overall program to offset the losses 
     they would experience with savings elsewhere in the program, 
     then any losses would not be the result of a mandate as 
     defined by the law. CBO estimates that states could lose 
     federal funds totaling $15 million annually in fiscal years 
     1997-2001 and $200 million in fiscal year 2002 as the result 
     of this provision.
       In the case of administrative funding for Child Nutrition 
     programs, it is also unclear whether states have sufficient 
     flexibility in the administration of the program to offset 
     the losses in federal funding. If such flexibility exists, 
     then any losses would not be the result of a mandate as 
     defined by the law. CBO estimates that states would lose $1.5 
     million in fiscal year 1999 and approximately $7 million 
     annually by fiscal year 2002.
       The bill would have other impacts on the budgets of state 
     and local governments that would not be the result of 
     mandates as defined by the law. The bill would eliminate 
     funding for startup and expansion costs associated with the 
     school breakfast program totaling $10 million to $25 million 
     annually. The bill would also allow states to opt to receive 
     funding for the Food Stamp program through a block grant. 
     States opting to receive the block grant would be given 
     flexibility to administer the program within broad parameters 
     in exchange for receiving funding levels established in the 
     bill.
       9. Estimated impact on the private sector: The bill 
     contains no private-sector mandates as defined in Public Law 
     104-4.

                           *   *   *   *   *

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                    Washington, DC, July 10, 1996.
     Hon. William V. Roth, Jr.,
     Chairman, Committee on Finance,
     U.S. Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for federal, state and 
     local, and private sector cost estimates for the 
     reconciliation recommendations of the Senate Committee on 
     Finance, as ordered reported on June 26, 1996. Enactment of 
     the bill would affect direct spending and receipts; 
     therefore, pay-as-you-go procedures would apply.
       If you wish further details on this estimate, we will be 
     pleased to provide them.
           Sincerely,
                                                     James F. Blum
                                  (For June E. O'Neill, Director).
       Enclosure.


    congressional budget office estimated cost of intergovernmental 
                                mandates

       1. Bill number: Not yet assigned.
       2. Bill title: Not yet assigned.
       3. Bill status: As ordered reported by the Senate Committee 
     on Finance on June 26, 1996.
       4. Bill purpose: The bill would restructure or modify the 
     federal welfare programs and Medicaid by reducing federal 
     spending and granting states greater authority in operating 
     many of these programs.
       5. Intergovernmental mandates contained in bill: The bill 
     contains a number of new mandates as defined under the 
     Unfunded Mandates Reform Act of 1995, Public Law 104-4, and 
     repeals a number of existing mandates.
       Block Grants for Temporary Assistance for Needy Families. 
     The bill would eliminate a mandate by allowing states to 
     lower their payment levels for cash assistance. Current law 
     requires states to maintain their AFDC payment levels at or 
     above their levels on May 1, 1988, as a condition for having 
     their Medicaid plans approved, and at or above their levels 
     on July 1, 1987, as a condition for receiving some Medicaid 
     funds for pregnant women and children. This bill would repeal 
     those requirements but would replace it with the new 
     requirement that states maintain their overall level of 
     expenditures for needy families at 80 percent of their 
     historical level.
       Supplemental Security Income (SSI). SSI is a federal 
     program, but most states supplement the federal program. 
     Current federal law requires states to either maintain their 
     supplemental payment levels at or above 1983 levels or 
     maintain their annual expenditures at a level at least equal 
     to the level from the previous year. Once a state elects to 
     supplement SSI, federal law requires it to continue in order 
     to remain eligible for Medicaid payments. This bill would 
     eliminate that mandate.
       Child Support. The bill would mandate changes in the 
     operation and financing of the state child enforcement 
     system. The primary changes include using new enforcement 
     techniques, eliminating a current $50 payment to welfare 
     recipients for whom child support is collected, and allowing 
     former public assistance recipients to keep a greater share 
     of their child support collections.
       Restricting Welfare and Public Benefits for Aliens. Future 
     legal entrants to the United States would be banned, with 
     some exceptions, from receiving federal benefits until they 
     have resided in the country for five years. Thereafter, the 
     bill would require states to use deeming (including a sponsor 
     or spouse's income as part of the alien's) when determining 
     financial eligibility for federal means-tested benefits. The 
     bill would also require states to implement an alien 
     verification system for determining eligibility for federal 
     benefit programs that they administer. The requirements 
     associated with applying deeming in these programs and 
     implementing verification systems could result in costs to 
     some states. However, the flexibility afforded states in 
     determining eligibility and benefit levels reduces the 
     likelihood that these requirements would represent mandates 
     as defined by Public Law 104-4.
       6. Estimated direct costs of mandates to State, local, and 
     tribal governments:
       (a) Is the $50 Million Threshold Exceeded? No.
       (b) Total Direct Costs of Mandates: On balance, spending by 
     state and local governments on federally mandated activities 
     could be reduced by billions of dollars over the next five 
     years as a result of enactment of this bill, although states 
     are not likely to take full advantage of this new flexibility 
     to reduce spending. While the new mandates imposed by the 
     bill would result in additional costs to some states, the 
     repeal of existing mandates and the additional flexibility 
     provided are likely to reduce spending by more than the 
     additional costs. (Other aspects of the bill that do not 
     relate to mandates could be very costly to state and local 
     governments. These impacts are discussed in the ``other 
     impacts'' section of this estimate.)
       Block Grants for Temporary Assistance for Needy Families. 
     The bill would grant states additional flexibility in 
     maintaining their spending for needy families. This 
     flexibility could save states a significant amount of 
     money; however, CBO is unable to estimate the magnitude of 
     such savings at this time.
       Supplemental Security Income. Eliminating the current 
     maintenance of effort requirement on state supplements to SSI 
     could reduce spending for federally mandated activities by 
     nearly $4 billion annually.
       Child Support. The mandates in the child support portion of 
     the bill would produce a net saving to states. CBO estimates 
     that the direct savings from increasing child support 
     collections retained by the states and eliminating the $50 
     pass through would outweigh the additional costs of improving 
     the child support enforcement system and allowing former 
     public assistance recipients to keep a greater share of their 
     child support collections.
       The table below summarizes the costs and savings associated 
     with the child support portion of the bill. In total, CBO 
     estimates that states would save over $163 million in 1997 
     and $1.9 billion over the 1997-2002 period.

                           CHANGES IN SPENDING BY STATES ON CHILD SUPPORT ENFORCEMENT                           
                                [By fiscal years, outlays in millions of dollars]                               
----------------------------------------------------------------------------------------------------------------
                                                              1997     1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
Enforcement and Data Processing \1\.......................       62       -5       50       60       40       48
Direct Savings from Enforcement...........................      -20      -45     -127     -216     -302     -380
Elimination of $50 Pass Through...........................     -206     -221     -244     -267     -292     -315
Modifying Distribution of Payments........................        0       47       52       58      112      138
                                                           -----------------------------------------------------
      Total...............................................     -163     -223     -269     -364     -442     -510
----------------------------------------------------------------------------------------------------------------
\1\ Net of technical assistance provided by the Secretary of Health and Human Services.                         

       (c) Estimate of Necessary Budget Authority: None
     Basis of estimate
       Supplemental Security Income
       States annually supplement federal SSI payments with nearly 
     $4 billion of their own funds. Even though some states 
     supplement SSI beyond what is required by the federally 
     mandated levels, most of the $4 billion can be attributed to 
     the mandate to maintain spending levels. While CBO would not 
     expect states to cut their supplement programs drastically, 
     they would no longer be required by federal law to spend 
     these amounts.
       Child support
       Enforcement and Data Processing Costs. The new system for 
     child support enforcement would focus on matching Social 
     Security numbers in the states' registries of child support 
     orders and directories of new hires. The states would track 
     down non-cooperative parents and insure that support payments 
     would be withheld from their pay checks.
       Much of the costs of improving the system would involve 
     automated data processing. The bill would require states to 
     develop computer systems so that information can be processed 
     electronically. The federal government would pay for 80 
     percent to 90 percent of these costs. Other mandates include 
     suspending a variety of licenses of parents who are not 
     paying child support and providing enforcement services to 
     recipients of Temporary Assistance for Needy Families, Foster 
     Care, and Medicaid and anyone else who requests assistance. 
     The federal government would pay 66 percent of these costs. 
     The

[[Page S7892]]

     numbers in the table in the previous section reflect only the 
     states' share of these costs.
       Direct Savings from Enforcement. Under current law, states 
     can recoup some of the costs of supporting welfare recipients 
     by requiring child support payments to be assigned to the 
     state. As child support enforcement improves, state and 
     federal collections would increase. In addition, by 
     strengthening and increasing collections, states would 
     achieve other savings, such as a reduction in the number of 
     people eligible for Medicaid.
       Elimination of the $50 Passthrough. Under current law, the 
     first $50 in monthly child support collections is paid to 
     welfare families receiving cash assistance. The rest is 
     retained by the state and federal government. Because states 
     and the federal government would be allowed to keep the first 
     $50 if this bill is enacted, states would annually save 
     between $200 million and $300 million.
       Modifying Distribution of Payments. Under current law, when 
     someone ceases to receive public assistance, states continue 
     to collect and enforce the family's child support order. All 
     amounts that are collected on time are sent directly to the 
     family. If states collect past-due child support, however, 
     they may either send the amount to the family or use the 
     amount to reimburse themselves and the federal government for 
     past AFDC payments. Under this bill, after a transition 
     period, payments of past-due child support would first be 
     used to pay off arrearages to the family accrued when the 
     family was not on welfare. The bill would thus result in a 
     loss of collections that otherwise would be recouped by the 
     states.
       Restricting welfare and public benefits for aliens
       The bill would afford states broad flexibility to offset 
     any additional costs associated with the deeming and 
     verification requirements. Because in general states would 
     have sufficient flexibility to make reductions in most of the 
     affected programs, the new requirements would not be mandates 
     as defined in Public Law 104-4. (Additional requirements 
     imposed on states as part of large entitlement programs are 
     not considered mandates under Public Law 104-4 if the states 
     have the flexibility under the program to reduce their own 
     programmatic and financial responsibilities.) Deeming 
     requirements and verification procedures would thus 
     constitute mandates only in those states where such 
     flexibility does not exist. Furthermore, any additional costs 
     would be at least partially offset by reduced caseloads in 
     some programs. On balance, CBO estimates that the net cost of 
     these requirements would not exceed the $50 million annual 
     threshold established in Public Law 104-4.
       7. Appropriation or other Federal financial assistance 
     provided in bill to cover mandate costs: The federal 
     government would provide 66 percent to 90 percent of the 
     costs of improving the child support enforcement system. The 
     costs reflected in this estimate are just the share of the 
     costs imposed on the states.
       8. Other impacts on State, local, and tribal governments: 
     The bill would have many other impacts on the budgets of 
     state, local, and tribal governments, especially the loss of 
     federal funding to the states or their residents.
       This loss of funding would not be considered a mandate 
     under Public Law 104-4, however, because states would retain 
     a significant amount of flexibility to offset the loss with 
     reductions in the affected programs. Under Public Law 104-4, 
     an increase in the stringency of conditions of assistance or 
     a reduction in federal funding for an entitlement program 
     under which the federal government spends more than $500 
     million annually is a mandate only if state, local, or tribal 
     governments lack authority under that program to amend their 
     own financial or programmatic responsibilities.
       Block grants for temporary assistance for needy families
       The bill would convert Aid to Families with Dependent 
     Children (AFDC), Emergency Assistance, and Job Opportunities 
     and Basic Skills Training (JOBS) into a block grant under 
     which states would have a lot of freedom to develop their own 
     programs for needy families. The bill, however, would impose 
     several requirements and restrictions on states, most 
     importantly work requirements. By fiscal year 2002, the bill 
     would require states to have 50 percent of certain families 
     that are receiving cash assistance in work activities. CBO 
     estimates that the cost of achieving these targets would be 
     $10 billion in fiscal year 2002. CBO assumes that, rather 
     than achieving the targets, most states would opt to pay the 
     penalty for not meeting these requirements.
       The federal government's contribution to assistance to 
     needy families would be capped. By fiscal year 2002, annual 
     contributions for assistance (excluding child care) would be 
     about $1 billion less than what is expected under current 
     law. In order to deal with the shrinking federal support and 
     the requirements discussed above, the states would have the 
     option of cutting benefit levels or restricting eligibility. 
     Some state and local governments could decide to offset 
     partially or completely the loss of federal fund with their 
     own funds.
       Supplemental Security Income
       The bill would reduce SSI benefits (net of increases in 
     food stamp benefits) by about $2 billion annually by fiscal 
     year 2002. Some state and local governments may choose to 
     replace some or all of these lost benefits.
       Child protection and foster care
       The bill would maintain the current open-ended entitlement 
     to states for foster care and adoption assistance and the 
     block grant to states for Independent Living. The bill would 
     also extend funding to states for certain computer 
     purchases at an enhanced rate for one year.
       Child care
       The bill would authorize the appropriation of $1 billion in 
     each of fiscal years 1996 through 2002 for the Child Care and 
     Development Block Grant. The appropriation for the block 
     grant for fiscal year 1996 is $935 million.
       In addition, the bill would provide between $2.0 billion 
     and $2.7 billion between 1997 and 2002 in mandatory funding 
     for child care on top of the $1 billion authorization. This 
     mandatory spending would replace AFDC work-related child 
     care--an open ended entitlement program--Transitional Child 
     Care, and At-Risk Child Care. By fiscal year 2002, annual 
     mandatory spending for child care under the bill would be 
     about $800 million higher than federal spending for current 
     child care programs is currently projected to be.
       Miscellaneous
       This bill would reduce funding of the Social Services Block 
     Grant to States by $560 million annually between fiscal year 
     1997 and 2002.
       Medicaid
       The new Medicaid program would be primarily funded by a 
     capped grant rather than an open entitlement to the states as 
     under current law. But the availability of an ``umbrella'' 
     fund would allow states to receive additional federal funds 
     in the event of certain unanticipated increases in 
     enrollment. In addition, some states would be eligible for 
     supplemental payments for treatment of illegal aliens and 
     Native Americans. Compared to current levels, the annual 
     federal contribution to Medicaid would drop by $29 billion by 
     fiscal year 2002. Some states may decide to offset the loss 
     of federal funds with additional state funds rather than 
     reduce benefits, restrict eligibility, or reduce payments to 
     providers. In addition, to the extent that public hospitals 
     and clinics decide to serve individuals who lose Medicaid 
     benefits, state and local government spending would increase.
       Increased Flexibility for States. The bill would 
     restructure the Medicaid program by granting states greater 
     control over the program. For example, the bill would allow 
     states to operate their programs under a managed care 
     structure without receiving a federal waiver. In addition, 
     states would no longer be constrained to provide the same 
     level of medical assistance statewide, nor would 
     comparability of coverage among beneficiaries be required. 
     States would also have greater flexibility in determining 
     provider reimbursement levels, because the proposal would 
     repeal the Boren amendment.
       Limits on Flexibility for States. The bill would prohibit 
     states from supplanting state funds expended for health 
     services with federal funds provided under this bill. As 
     currently written, this provision is not clear. Based on 
     verbal communications with Senate staff, CBO assumes that the 
     intent of this provision is to prevent states from reducing 
     spending for health services that do not qualify for federal 
     matching under Medicaid. If the term ``state funds'' includes 
     the states' share of Medicaid, however, this provision may 
     conflict with the proposed increase in the federal matching 
     rate for some states.
       In addition, the bill would limit the new flexibility to 
     use managed care without a waiver. If states mandate 
     enrollment in managed care, they would have to provide 
     beneficiaries with a choice of at least two health plans. 
     States would also have to set aside funds for Federally 
     Qualified Health Clinics and Rural Health Clinics. The set 
     aside for each state would equal 95 percent of that state's 
     expenditures for these clinics in fiscal year 1995.
       Finally, the bill would prohibit Medicaid plans from 
     imposing treatment limits or financial requirements on 
     services for mental illnesses that are not imposed on 
     services for other illnesses. Similar language for health 
     insurance plans is included in H.R. 1303, the Health Reform 
     Act of 1996, as passed by the Senate on April 23, 1996. Based 
     on our interpretation of the provision in H.R. 3103, we 
     assume that the intent of the Medicaid provision is not to 
     mandate mental health services but to require parity if 
     states provide any mental health services. If states choose 
     to provide mental health services, parity for inpatient 
     hospital services would be costly. Current law prohibits 
     states from using Medicaid funds to provide inpatient care at 
     psychiatric institutions for individuals who are between the 
     ages of 21 and 65. Although not a guaranteed benefit, the 
     bill would expand the definition of inpatient mental health 
     services to include coverage of these individuals for acute 
     care. Therefore, if a state provides any mental health 
     services, the parity provision would require the state to 
     provide these individuals with acute inpatient care without 
     restrictions that differ from other inpatient services.
       If the parity provision is interpreted to mandate mental 
     health services, states with the least flexibility in their 
     Medicaid program may not be able to offset the costs of this 
     requirement by decreasing their responsibilities in other 
     parts of the program. In those states, this provision could 
     thus result

[[Page S7893]]

     in a mandate with costs that could exceed the $50 million 
     annual threshold established in Public Law 104-4.
       Drug Rebate Program. The bill would also restructure the 
     drug debate program so that states would keep the entire 
     rebate, rather than share it with the federal government.

                           *   *   *   *   *



congressional budget office estimate of cost of private sector mandates

       1. Bill number: Not yet assigned.
       2. Bill title: Not yet assigned.
       3. Bill status: As ordered reported by the Senate Committee 
     on Finance on June 26, 1996.
       4. Bill purpose: The bill would reform and restructure the 
     welfare and Medicaid programs and provide for reconciliation 
     pursuant to section 202(a) of the concurrent resolution on 
     the budget for fiscal year 1997.
       5. Private sector mandates contained in the bill: Subtitle 
     A contains several private-sector mandates as defined in 
     Public Law 104-4. Chapter 3 would require employers to 
     provide information on all new employees to new-hire 
     directories maintained by the states, generally within 20 
     days of hiring the workers. This requirement could be 
     satisfied by submitting a copy of the employee's W-4 form.
       Chapter 4 would impose new requirements on individuals who 
     sign affidavits of support for legal immigrants. Under 
     current law, any new immigrant who is expected to become a 
     public charge must obtain a financial sponsor who signs an 
     affidavit promising, as necessary, to support the immigrant 
     for up to three years. The affidavit is not legally binding, 
     however. During this three-year period, a portion of the 
     sponsor's income is counted as being available to the 
     immigrant, and is used to reduce the amount of certain 
     welfare benefits for which the immigrant may be eligible. 
     After the three-year period, immigrants are eligible for 
     welfare benefits on the same basis as U.S. citizens.
       The bill would make the affidavit of support legally 
     binding on sponsors of new immigrants, either until those 
     immigrants became citizens or until they had worked in the 
     U.S. for at least 10 years. This requirement would impose an 
     enforceable duty on the sponsors to provide, as necessary, 
     at least a minimum amount of assistance to the new 
     immigrants. The bill would also make most new immigrants 
     completely ineligible for welfare benefits for a period of 
     five years. In addition, the bill would require sponsors 
     to report any change in their own address to a state 
     agency.
       Chapters 4 and 9 include changes in the Earned Income 
     Credit that would raise private-sector costs. Specific 
     changes include modifying the definition of adjusted gross 
     income used for calculation of the credit, altering 
     provisions related to disqualifying income, denying 
     eligibility to workers not authorized to be employed in the 
     U.S., and suspending the inflation adjustment for individuals 
     with no qualifying children.
       6. Estimated direct cost to the private sector: CBO 
     estimates that the direct cost of the private sector mandates 
     in the bill would be $92 million in fiscal year 1997 and 
     would total about $1.3 billion over the five-year period from 
     1997 through 2001, as shown in the following table.

------------------------------------------------------------------------
                                        1997   1998   1999   2000   2001
------------------------------------------------------------------------
Requirement on Employers.............  .....     10     10     10     10
Requirements on Sponsors of New                                         
 Immigrants..........................      5     20     55    195    400
Changes in the Earned Income Credit..     87    107    126    138    155
------------------------------------------------------------------------

       The mandate requiring employers to provide information on 
     new employees to new-hire directories maintained by the 
     states would impose a direct cost on private sector employers 
     of approximately $10 million per year once it becomes 
     effective in 1998. Based on data from the Bureau of the 
     Census, CBO estimates that private employers hire over 30 
     million new workers each year. Even so, the cost to private 
     employers of complying with this mandate would be expected to 
     be relatively small. Many states already require some or 
     all employers to provide this information, so that a 
     federal mandate would only impose additional costs on a 
     subset of employers. In addition, employers could comply 
     with the mandate by simply mailing or faxing a copy of the 
     worker's W-4 form to the state agency, or by transmitting 
     the information electronically.
       The mandate to make future affidavits of support legally 
     binding on sponsors of new immigrants would impose an 
     estimated direct cost on the sponsors of $5 million in 1997, 
     rising to $400 million in 2001. These estimates represent the 
     additional costs to sponsors of providing the support to 
     immigrants that would be required under the bill. The added 
     costs are larger after the first three years because of the 
     new responsibility sponsors would have to provide support 
     after the three-year deeming period.
       The Joint Committee on Taxation estimates that the direct 
     mandate cost of the changes in the Earned Income Credit in 
     the bill would be $87 million in 1997, rising to $155 million 
     in 2001. These estimates include only the revenue effect of 
     the changes in the credit, and not the effect on federal 
     outlays.
       CBO estimates that the other mandates in the bill would 
     impose minimal costs on private sector entities.
       7. Appropriations or other Federal financial assistance: 
     None.
                                 ______
                                 
      By Mr. PRESSLER (for himself, Mr. Lott and Mr. Inouye):

  S. 1957. A bill to amend chapter 59 of title 49, United States Code, 
relating to intermodal safe container transportation; to the Committee 
on Commerce, Science, and Transportation.


  THE INTERMODAL SAFE CONTAINER TRANSPORTATION AMENDMENTS ACT OF 1996

  Mr. PRESSLER. Mr. President, today I am introducing the Intermodal 
Safe Container Transportation Amendments Act of 1996. I am pleased to 
be joined by Senators Lott and Inouye, chairman and ranking member of 
the Surface Transportation and Merchant Marine Subcommittee. This is a 
bipartisan technical corrections bill and I urge its swift passage.
  Before I explain the purpose of this legislation, I want to provide 
some history on intermodal container shipments in order for my 
colleagues to better understand the time-sensitive nature of the bill 
we are introducing today. Let me explain.
  Intermodal containers are used throughout the world to transport 
cargo by ship, rail, and highway. These containers facilitate the 
timely movement of imports and exports. More often than not, they pose 
no overweight concerns while transported by ship or rail. However, if a 
container is too heavy, it can cause problems when transferred to a 
truck. In some cases, trucks carrying heavy containers end up on our 
Nation's highways operating in violation of vehicle weight regulations. 
This can damage our highway infrastructure and reduce highway safety 
for the traveling public.
  In an effort to mitigate these problems, Congress enacted the 
Intermodal Safe Container Transportation Act of 1992. The purpose of 
that law was to require shippers to provide a carrier involved in 
intermodal transportation with a certification of the gross cargo 
weight of the intermodal container prior to accepting the shipment. 
This information, including weight and a general cargo description, 
should assist the operator in determining whether transporting a 
particular container could result in violations of highway gross weight 
or axle weight regulations. Without the communication of this 
information, the trucker has no way of knowing whether he or she may be 
operating an overweight vehicle. In short, the act let the trucker 
beware.
  Mr. President, the 1992 act has yet to be implemented. Final 
Regulations were issued by the Department of Transportation [DOT] in 
December 1994. However, significant concerns about implementation were 
raised by shippers and carriers, causing DOT to reassess its final rule 
and implementation was delayed until September 1, 1996.
  Unfortunately, the implementation as currently proposed could have 
devastating consequences on intermodal transportation. At best, 
shipments of intermodal cargo will be late in reaching their 
destination. At worst, a complete backlog of shipments and severe 
gridlock at our Nation's ports will result.
  Many of these operational concerns could be alleviated by 
administrative action. Yet, DOT informs us that some of the issues can 
only be resolved by legislation. That is why we are introducing this 
bill today.

  As chairman of the Senate Committee on Commerce, Science, and 
Transportation, I want to assure my colleagues that the sponsors of 
today's technical corrections proposal are very concerned about the 
lengthy delay in implementing the 1992 law. As I said earlier, 
overweight vehicles negate safety and cause severe damage to our 
Nation's highway infrastructure. We need to help our motor carrier 
operators receive information to prevent overweight carriage. That is 
the intent of the 1992 act. That congressional intent must be carried 
forward during implementation.
  Indeed, we are all frustrated over the delays. We also are frustrated 
that the various industry concerns have not been brought to our 
attention far earlier to facilitate a timely legislative resolution. 
However, in the past few weeks, we worked with representatives from all 
of the affected groups, including shippers, motor carriers, rail 
carriers, and ocean carriers. We also requested and received input from 
the administration and safety advocates.
  After many meetings and lengthy discussions, we have developed what I 
consider to be a very sound and reasonable technical amendments bill. 
Of

[[Page S7894]]

course, we also are willing to consider further refinements and other 
suggestions. Nonetheless, our goal is to ensure the long overdue 
implementation of the 1992 1ct can be responsibly carried out as soon 
as possible.
  This technical corrections bill also is designed to reduce 
unnecessary paperwork by allowing greater use of electronic interchange 
technology to expedite the transfer of information. Moreover, it 
provides incentives to encourage the private sector to comply with 
overweight container regulations.
  Our bill raises the intermodal container weight threshold requiring 
certification from 10,000 to 29,000 pounds. Studies have concluded the 
new threshold weight will still prevent gross vehicle weight violations 
while eliminating unnecessary compliance burdens that would otherwise 
be imposed on smaller shipments. Because the 1992 enacted trigger was 
not based on any conclusive data concerning gross vehicle weight or 
axle weight limitations, we feel it is appropriate to institute a more 
appropriate level for certification. In fact, Federal Highway 
Administration officials have confirmed the new trigger provision would 
be quite sufficient to effectively meet the intent of the 1992 act.
  Finally, the bill would clarify liability for failing to provide the 
certification or transferring the information during the intermodal 
movement. It ensures the party responsible for the failure is the party 
liable for the costs incurred for overweight violations.
  Clearly, it is important for my colleagues to understand the 
technical changes proposed by this bill. It is equally important, 
however, for my colleagues to understand what this bill does not do. 
Given the limited time left in this legislative session, we simply 
cannot afford to fall victim to misconceptions or misrepresentations of 
this measure.
  This bill does not make any changes to regulations or enforcement of 
laws concerning the carriage, documentation, placarding, or handling of 
hazardous materials transportation. It does not allow for an increase 
in Federal truck gross vehicle weights nor affect State enforcement of 
such regulations in any way. And, the bill does not affect truck axle 
weight regulations either. The bill meets the objectives of the 1992 
act, but reduces unnecessary compliance burdens and service 
disruptions.
  Mr. President, I urge all of my colleagues to recognize the urgency 
for moving this measure forward expeditiously. I also urge the 
administration to work diligently to address those problematic areas 
which do not need legislative action. Working together, we can advance 
the safety of our Nation's roads and highways.
  I urge my colleagues to support this bipartisan legislation.
  Mr. President, I ask unanimous consent the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1957

       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 ``Intermodal Safe Container 
     Transportation Amendments Act of 1996''.

     SEC. 2. AMENDMENT OF TITLE 49, UNITED STATES CODE.

       Except as otherwise expressly provided, 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 title 49 of the United States Code.

     SEC. 3. DEFINITIONS.

       Section 5901 (relating to definitions) is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) except as otherwise provided in this chapter, the 
     definitions in section 13102 of this title apply.'';
       (2) by redesignating paragraphs (6) and (7) as paragraphs 
     (7) and (8), respectively; and
       (3) by inserting after paragraph (5) the following:
       ``(6) `gross cargo weight' means the weight of the cargo, 
     packaging materials (including ice), pallets, and dunnage.''.

     SEC. 4. NOTIFICATION AND CERTIFICATION.

       (a) Prior Notification.--Subsection (a) of section 5902 
     (relating to prior notification) is amended--
       (1) by striking ``Before a person tenders to a first 
     carrier for intermodal transportation a'' and inserting ``If 
     the first carrier to which any'';
       (2) by striking ``10,000 pounds (including packing material 
     and pallets), the person shall give the carrier a written'' 
     and inserting ``29,000 pounds is tendered for intermodal 
     transportation is a motor carrier, the person tendering the 
     container or trailer shall give the motor carrier a'';
       (3) by striking ``trailer.'' and inserting ``trailer before 
     the tendering of the container or trailer.'';
       (4) by striking ``electronically.'' and inserting 
     ``electronically or by telephone.''; and
       (5) adding at the end thereof the following: ``This 
     subsection applies to any person within the United States who 
     tenders a container or trailer subject to this chapter for 
     intermodal transportation if the first carrier is a motor 
     carrier.''
       (b) Certification.--Subsection (b) of section 5902 
     (relating to certification) is amended to read as follows:
       ``(b) Certification.--
       ``(1) In general.--A person who tenders a loaded container 
     or trailer with an actual gross cargo weight of more than 
     29,000 pounds to a first carrier for intermodal 
     transportation shall provide a certification of the contents 
     of the container or trailer in writing, or electronically, 
     before or when the container or trailer is so tendered.
       ``(2) Contents of certification.--The certification 
     required by paragraph (1) shall include--
       ``(A) the actual gross cargo weight;
       ``(B) a reasonable description of the contents of the 
     container or trailer;
       ``(C) the identity of the certifying party;
       ``(D) the container or trailer number; and
       ``(E) the date of certification or transfer of data to 
     another document, as provided for in paragraph (3).
       ``(3) Transfer of certification data.--A carrier who 
     receives a certification may transfer the information 
     contained in the certification to another document or to 
     electronic format for forwarding to a subsequent carrier. The 
     person transferring the information shall state on the 
     forwarded document the date on which the data was transferred 
     and the identity of the party who performed the transfer.
       ``(4) Shipping documents.--For purposes of this chapter, a 
     shipping document, prepared by the person who tenders a 
     container or trailer to a first carrier, that contains the 
     information required by paragraph (2) meets the requirements 
     of paragraph (1).
       ``(5) Use of `freight all kinds' term.--The term `Freight 
     All Kinds' or `FAK' may not be used for the purpose of 
     certification under section 5902(b) after December 31, 2000, 
     as a commodity description for a trailer or container if the 
     weight of any commodity in the trailer or container equals or 
     exceeds 20 percent of the total weight of the contents of the 
     trailer or container. This subsection does not prohibit the 
     use of the term after that date for rating purposes.
       ``(6) Separate document marking.--If a separate document is 
     used to meet the requirements of paragraph (1), it shall be 
     conspicuously marked `INTERMODAL CERTIFICATION'.
       ``(7) Applicability.--This subsection applies to any 
     person, domestic or foreign, who first tenders a container or 
     trailer subject to this chapter for intermodal transportation 
     within the United States.''.
       ``(c) Forwarding Certifications.--Subsection (c) of section 
     5902 (relating to forwarding certifications to subsequent 
     carriers) is amended--
       (1) by striking ``transportation.'' and inserting 
     ``transportation before or when the loaded intermodal 
     container or trailer is tendered to the subsequent carrier. 
     If no certification is received by the subsequent carrier 
     before or when the container or trailer is tendered to it, 
     the subsequent carrier may presume that no certification is 
     required.''; and
       (2) by adding at the end thereof the following ``If a 
     person inaccurately transfers the information on the 
     certification, or fails to forward the certification to a 
     subsequent carrier, then that person is liable to any person 
     who incurs any bond, fine, penalty, cost (including storage), 
     or interest for any such fine, penalty, cost (including 
     storage), or interest incurred as a result of the inaccurate 
     transfer of information or failure to forward the 
     certification. A subsequent carrier who incurs a bond, fine, 
     penalty, or cost (including storage), or interest as a result 
     of the inaccurate transfer of the information, or the failure 
     to forward the certification, shall have a lien against the 
     contents of the container or trailer under section 5905 in 
     the amount of the bond, fine, penalty, or cost (including 
     storage), or interest and all court costs and legal fees 
     incurred by the carrier as a result of such inaccurate 
     transfer or failure.''.
       (d) Liability.--Section 5902 is amended by redesignating 
     subsection (d) as subsection (e), and by inserting after 
     subsection (c) the following:
       ``(d) Liability to Owner or Beneficial Owner.--If--
       ``(1) a person inaccurately transfers information on a 
     certifcation required by subsection (b)(1), or fails to 
     forward a certification to the subsequent carrier;
       ``(2) as a result of the inaccurate transfer of such 
     information or a failure to forward a certification, the 
     subsequent carrier incurs a bond, fine, penalty, or cost 
     (including storage), or interest; and
       ``(3) that subsequent carrier exercises its rights to a 
     lien under section 5905,

     then that person is liable to the owner or beneficial owner, 
     or to any other person paying the amount of the lien to the 
     subsequent

[[Page S7895]]

     carrier, for the amount of the lien and all costs related to 
     the imposition of the lien, including court costs and legal 
     fees incurred in connection with it.
       (e) Nonapplication.--Subsection (e) of section 5902, as 
     redesignated, is amended--
       (1) by redesignating paragraphs (1) and (2) as paragraphs 
     (2) and (3), respectively; and
       (2) by inserting before paragraph (2), as redesignated, the 
     following:
       ``(1) The notification and certification requirements of 
     subsections (a and b) of this section do not apply to any 
     intermodal container or trailer containing consolidation 
     shipments loaded by a motor carrier if that motor carrier--
       ``(A) performs the highway portion of the intermodal 
     movement; or
       ``(B) assumes the responsibility for any weight-related 
     fine or penalty incurred by any other motor carrier that 
     performs a part of the highway transportation.''.

     SEC. 5. PROHIBITIONS.

       Section 5903 (relating to prohibitions) is amended--
       (1) by inserting after ``person'' a comma and the 
     following: ``to whom section 5902(b) applies,'';
       (2) by striking subsection (b) and inserting the following:
       ``(b) Transporting Prior to Receiving Certification.--
       ``(1) Presumption.--If no certification is received by a 
     motor carrier before or when a loaded intermodal container or 
     trailer is tendered to it, the motor carrier may presume that 
     the gross cargo weight of the container or trailer is less 
     than 29,001 pounds.
       ``(2) Copy of certification not required to accompany 
     container or trailer.--Nothwithstanding any other provision 
     of this chapter to the contrary, a copy of the certification 
     required by section 5902(b) is not required to accompany the 
     intermodal container or trailer.''; and
       (3) by striking ``10,000 pounds (including packing 
     materials and pallets)'' in subsection (c)(1) and inserting 
     ``29,000 pounds''.

     SEC. 6. LIENS.

       Section 5905 (relating to liens) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) General.--If a person involved in the intermodal 
     transportation of a loaded container or trailer for which a 
     certification is required by section 5902(b) of this title is 
     required, because of a violation of a State's gross vehicle 
     weight laws or regulations, to post a bond or pay a fine, 
     penalty, cost (including storage), or interest resulting 
     from--
       ``(1) erroneous information provided by the certifying 
     party in the certification to the first carrier in violation 
     of section 5903(a) of this title;
       ``(2) the failure of the party required to provide the 
     certification to the first carrier to provide it;
       ``(3) the failure of a person required under section 
     5902(c) to forward the certification to forward it; or
       ``(4) an error occurring in the transfer of information on 
     the certification to another document under section 
     5902(b)(3) or (c),

     then the person posting the bond, or paying the fine, 
     penalty, costs (including storage), or interest has a lien 
     against the contents equal to the amount of the bond, fine, 
     penalty, cost (including storage), or interest incurred, 
     until the person receives a payment of that amount from the 
     owner or beneficial owner of the contents, or from the person 
     responsible for making or forwarding the certification, or 
     transferring the information from the certification to 
     another document.'';
       (2) by inserting a comma and ``or the owner or beneficial 
     owner of the contents,'' and ``first carrier'' in subsection 
     (b)(1); and
       (3) by striking ``cost, or interest.'' in subsection (b)(1) 
     and inserting ``cost (including storage), or interest. The 
     lien shall remain in effect until the lien holder has 
     received payment for all costs and expenses described in 
     subsection (a) of this section.''.

     SEC. 7. PERISHABLE AGRICULTURAL COMMODITIES.

       Section 5906 (relating to perishable agricultural 
     commodities) is amended by striking ``Sections 5904(a)(2) and 
     5905 of this title do'' and inserting ``Section 5905 of this 
     title does''.

     SEC. 8. REGULATIONS; EFFECTIVE DATE.

       (a) Regulations.--Section 5907(a) (relating to regulations) 
     is amended by striking the first sentence and inserting the 
     following: ``Not later than 30 days after the date of 
     enactment of the International Safe Container Transportation 
     Amendments Act of 1996, the Secretary of Transportation shall 
     initiate a proceeding to consider adoption or modification of 
     regulations under this chapter to reflect the amendments made 
     by that Act. The Secretary shall prescribe final regulations, 
     if such regulations are needed, within 90 days after such 
     date of enactment.''.
       (b) Effective Date.--Section 5907(b) (relating to effective 
     date) is amended to read as follows:
       ``(b) Effective Date.--This chapter is effective on the 
     date of enactment of the Intermodal Safe Container 
     Transportation Amendments Act of 1996. The Secretary shall 
     implement the provisions of this chapter 180 days after such 
     date of enactment.''.

     SEC. 9. RELATIONSHIP TO OTHER LAWS.

       (a) In General.--Chapter 59 is amended by adding at the end 
     thereof the following:

     ``Sec. 5908. Relationship to other laws

       ``Nothing in this chapter affects--
       ``(1) chapter 51 (relating to transportation of hazardous 
     material) or the regulations promulgated under that chapter; 
     or
       ``(2) any State highway weight or size law or regulation 
     applicable to tractor-trailer combinations.''.
       (b) Clerical Amendment.--The table of sections for such 
     chapter is amended by adding at the end thereof the 
     following:

``5908. Relationship to other laws''

  

  Mr. LOTT. Mr. President, I rise today to speak in support of the 
Intermodal Safe Container Transportation Amendments Act of 1996 which 
is being introduced today by Senator Pressler. It was drafted in a 
completely bipartisan manner with other members of the Senate's 
Committee on Commerce, Science, and Transportation.
  Let me be clear. Without a doubt, there is a problem with overweight 
containers in the transportation world. There is also a problem with 
how the government disciplines offenders under the current law. This 
legislation will go to the root of the problem and provide effective 
remedies.
  The present system places the truck operators, who in most cases are 
least responsible for the problem, in the greatest jeopardy. It is like 
getting mad at your local letter carrier for delivering a month old 
letter to you. It makes no sense because the letter carrier just 
received the letter today. The intermodal carrier receives the 
container already overweight. They did not make it overweight. For the 
government policy to be effective, Senator Pressler has proposed 
legislation which goes directly at the cause and not the symptom. This 
will make the world's intermodal transportation system safer.
  Let me also be up-front. This bill will raise the threshold for 
certification from 10,000 pounds to 29,001 pounds. This action is 
definitely needed and acknowledged as a responsible action. Studies 
from all segments of the transportation industry have concluded that 
this new trigger weight would not increase the risks to the public. I 
believe this will permit better regulatory compliance.
  The efficiency of the intermodal system is addressed by reducing or 
virtually eliminating unnecessary paperwork. Senator Pressler allows 
for the use of electronic data interchange technology to speed 
intermodal transfers. No longer will a driver have to carry a hard copy 
paper certification. The shippers also benefit with the elimination of 
the burdensome separate intermodal certifications. This will permit 
shippers to use a standard bill of lading or other existing shipping 
document as the certification.
  Let's talk enforcement. Senator Pressler put teeth into this 
amendment by focusing action on the beneficial owner of the cargo. 
While this requires no additional State action, it permits the truck 
operator to resolve an overweight violation with greater efficiency. It 
preserves State authority to regulate all highway safety laws. Let me 
be clear, this bill ensures that the parties who cause the container to 
be overweight will be identified and held accountable and liable.
  Let me conclude by complimenting all those who worked skillfully and 
diligently in order to forge this bipartisan and very necessary piece 
of legislation. The dedication in resolving the many technical details 
is reflected in this legislation. This legislation is a collaborative 
effort through the leadership of Senator Pressler and with input from 
the Department of Transportation, The Advocates for Highway and Auto 
Safety, National Industrial Transportation League and the Intermodal 
Safe Container Coalition.
  The bottom line is that the world of intermodal transportation needs 
to be improved, and Senator Pressler's Intermodal Safe Container 
Transportation Amendments Act of 1996 offers the right legislative 
solutions. It will produce many enhancements and safety practices which 
will benefit all the parties involved. This legislation will also 
increase speed and efficiency in the intermodal world without 
jeopardizing the concerns of the general public.
  I ask all my colleagues to take a closer look at Senator Pressler's 
proposal and consider joining us as cosponsors to this important 
transportation legislation.
                                 ______
                                 
      By Mr. McCAIN (for himself, Mr. Feingold, Mr. Gregg, and Mr. 
        Kerry):
  S. 1958. A bill to terminate the Advanced Light Water Reactor 
Program,

[[Page S7896]]

and for other purposes; to the Committee on Energy and Natural 
Resources.


      the advanced light water reactor program funding act of 1996

 Mr. McCAIN. Mr. President, this legislation would terminate 
funding for the Advanced Light Water Reactor [ALWR] Program which 
provides taxpayer funded subsidies to corporations for the design, 
engineering, testing, and commercialization of nuclear reactor designs.
  I am very pleased that Senators Feingold, Gregg, and Kerry have 
joined me as original cosponsors on this important legislation and I 
urge our colleagues to support us in ending this wasteful Government 
spending and corporate welfare. Organizations such as Public Citizen, 
Citizens Against Government Waste, Competitive Enterprise Institute, 
Taxpayers for Common Sense, and the Heritage Foundation have lent their 
strong support to eliminating ALWR funding. And last year, a bipartisan 
Senate coalition, with the help of the Progressive Policy Institute and 
Cato Institute, included the ALWR Program as one of a dozen high 
priority corporate pork programs to be eliminated.
  Although, the ALWR Program has already received more than $230 
million in Federal support over the past 5 years and is due to be 
completed at the end of fiscal year 1996, the Department of Energy has 
requested $40 million for the ALWR Program in fiscal year 1997. The 
House appropriations subcommittee recently marked up the fiscal 1997 
energy and water appropriations bill and provided $17 million in 
corporate subsidies for commercialization efforts under the ALWR 
Program. The Senate appropriations subcommittee has appropriated $22 
million for the design certification phase of the ALWR Program.
  The ALWR Program was created under the Energy Policy Act [EPACT] of 
1992. EPACT makes clear that design certification support should only 
be provided for ALWR designs that can be certified by the Nuclear 
Regulatory Commission by no later than the end of fiscal year 1996. DOE 
has acknowledged that no ALWR designs will be certified by the end of 
fiscal year 1996. Therefore, under EPACT, no funds should be 
appropriated to support ALWR designs.
  In addition, although EPACT specifies that no entity shall receive 
assistance for commercialization of an advanced light water reactor for 
more than 4 years, DOE's fiscal year 1997 funding request would allow 
for a fifth year of Federal financial assistance to the program's chief 
beneficiaries--well to do corporations which can afford to bear 
commercialization costs on their own. General Electric, Westinghouse, 
and Asea Brown Boveri/Combustion Engineering have already received 4 
years of Federal assistance under the ALWR program since at least 1993. 
Significantly, these three companies had combined 1994 revenues of over 
$70 billion and last year their combined revenues exceeded $100 
billion. These corporations certainly can afford to bring new products 
to the market without taxpayer subsidies.
  Moreover, one of the primary recipients of ALWR Program funds, 
General Electric, recently announced that it is cancelling its 
Simplified Boiling Water Reactor [SBWR] after receiving $50 million 
from DOE because ``extensive evaluations of the market competitiveness 
of a 600 MWe size advanced Light Water Reactor have not established the 
commercial viability of these designs.'' Westinghouse's AP-600, a 
similarly designed reactor scheduled to receive ALWR support, is a 
similar sized design facing similar market forces that led GE to cancel 
the SBWR.
  Mr. President, the ALWR Program exemplified the problems and 
unfairness corporate welfare engenders. If the ALWR designs are 
commercially feasible, large, wealthy corporations like Westinghouse do 
not need taxpayers to subsidize them because the market will reward 
them for their efforts and investment in this research. If the ALWR 
designs are not commercially viable, then the American taxpayer is 
unfairly being forced to pay for a product, in complete defiance of 
market forces, that a company would not pay to produce itself.
  As a matter of fundamental fairness, we cannot ask Americans to 
tighten their belts across-the-board to put our fiscal house in order 
while we provide taxpayer funded subsidies to large corporations. As a 
practical matter, such unnecessary and wasteful Government spending 
must be eliminated if we are to restore fiscal sanity. Simply put, 
corporate welfare of this kind is unfair to the American taxpayer, it 
increases the deficit and we cannot allow it to continue.
  Enough is enough. After 5 years and $230 million, it is time that we 
bring the ALWR Program to an end.
  I ask unanimous consent that copies of letters from Citizens Against 
Government Waste, Public Citizen and Competitive Enterprise Institute 
supporting this legislation be included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


                                               Public Citizen,

                                     Washington, DC June 25, 1996.
     Senator John McCain,
     U.S. Senate,
     Washington, DC.
       Dear Senator: We are pleased to support your efforts to 
     terminate further government support for the Advanced Light 
     Water Reactor (ALWR) program at the U.S. Department of 
     Energy. The ALWR program, having received five years of 
     support and more than $230 million of taxpayer money, is a 
     prime candidate for elimination in the coming budget cycle. 
     It represents a textbook example of corporate welfare, 
     provides little value to taxpayers and fails to account for 
     the fact that domestic interest in new nuclear technologies 
     is at an all-time low.
       As of today, not one utility or company participating in 
     the ALWR program has committed to building a new reactor in 
     this country nor are there any signs that domestic orders 
     will be forthcoming in the foreseeable future. Instead of 
     providing reactors for American utilities, the ALWR program 
     has become an export promotion subsidy for General Electric, 
     Westinghouse and Asea Brown Boveri in direct violation of the 
     intent of the Energy Policy Act. These companies, with 
     combined annual revenues of over $70 billion, are hardly in 
     need of such generous financial support.
       Continuing to fund the ALWR program would send a strong 
     message that subsidies to large, profitable corporations are 
     exempt from scrutiny while other programs in the federal 
     budget are cut to reach overall spending targets. The 
     industry receiving this support is mature, developed and 
     profitable and should be fully able to invest its own money 
     in bringing new products to market.
       This legislation is consistent with your long-standing 
     campaign to eliminate wasteful and unnecessary spending in 
     the federal budget. We salute your effort and offer our help 
     in pruning this subsidy from the fiscal year 1997 budget.
           Sincerely,
                                                    Bill Magavern,
     Director, Critical Mass Energy Project.
                                                                    ____



                             Competitive Enterprise Institute,

                                    Washington, DC, June 14, 1996.
     Hon. John McCain,
     U.S. Senate,
     Washington, DC.
       Dear Congressman McCain: I wish to commend you for your 
     efforts to eliminate funding for Advanced Light Water Reactor 
     (ALWR) research. As a longtime opponent of federal subsidies 
     for energy research of this kind, I am glad to see members of 
     Congress representing the interests of the taxpayer on this 
     issue.
       Since 1992, the Department of Energy has spent over $200 
     million on ALWR research, with little to show for it. If such 
     reactors are commercially viable, as supporters claim, then 
     there is no need to waste taxpayer dollars on what amounts to 
     corporate welfare. If the ALWR is not commercially viable, 
     then throwing taxpayer dollars at it is even more wasteful. 
     The fact that no utility plans to build such a reactor in 
     this country any time soon suggests that the latter is more 
     likely. Either way, federal funding for this program should 
     end.
       I full support your efforts to eliminate the ALWR research 
     subsidy and hope that this effort is the first step in the 
     eventual elimination of the Department of Energy as a whole.
           Sincerely,
                                               Fred L. Smith, Jr.,
                                                        President.
                                              Council for Citizens


                                     Against Government Waste,

                                    Washington, DC, June 18, 1996.
     Hon. John McCain,
     U.S. Senate
     Washington, DC.
       Dear Senator McCain: On behalf of the 600,000 members of 
     the Council for Citizens Against Government Waste (CCAGW), I 
     am writing to urge you to introduce legislation to eliminate 
     the Advanced Light Water Reactor (ALWR) program. This program 
     has already surpassed its authorized funding level, and 
     extending its funding will exceed the goals of the Energy 
     Policy Act of 1992 (EPACT).
       In 1992, EPACT authorized $100 million for first-of-a-kind 
     engineering of new reactors. In addition, EPACT specified 
     that the Department of Energy should only support advanced 
     light water reactor designs that could be certified by the 
     Nuclear Regulatory Commission no later than the end of FY 
     1996.
       In a surprise announcement on February 28, 1996, General 
     Electric (GE) terminated

[[Page S7897]]

     one of its taxpayer-subsidized R&D light water reactor 
     programs (the simplified boiling water reactor), stating that 
     the company's recent internal marketing analyses showed that 
     the technology lacked ``commercial viability.'' Westinghouse, 
     which is slated to receive ALWR support between FYs 1997-99 
     for its similar AP-600 program, is not expected to receive 
     design certification until FY 1998 or FY 1999. Taxpayers 
     should not be expected to throw money at projects with little 
     or no domestic commercial value.
       EPACT also stipulates that recipients of any ALWR money 
     must certify to the Secretary of Energy that they intend to 
     construct and operate a reactor in the United States. In 
     1995, the Nuclear Energy Institute's newsletter, Nuclear 
     Energy Insight, reported that ``all three [ALWR] designers 
     see their most immediate opportunities for selling their 
     designs in Pacific Rim countries.'' In fact, GE has sold two 
     reactors developed under this program to Japan, and still the 
     government has not recovered any money.
       As you may recall, CCAGW endorsed your corporate welfare 
     amendment, including the elimination of the ALWR program, to 
     the FY 1996 Budget Reconciliation bill. We are again looking 
     to your leadership to introduce legislation to now eliminate 
     this program. I also testified before the House Energy and 
     Environment Subcommittee on Science on May 1, 1996 calling 
     for the elimination of the ALWR. The mission has been 
     fulfilled, now the program should end.
           Sincerely,
                                                 Thomas A. Schatz,
                                                President.
                                 ______
                                 
      By Ms. SNOWE (for herself and Mr. PRESSLER):
  S. 1960. A bill to require the Secretary of Transportation to 
reorganize the Federal Aviation Administration to ensure that the 
Administration carries out only safety-related functions, and for other 
purposes; to the Committee on Commerce, Science, and Transportation.


              Federal Aviation Administration Legislation

   Ms. SNOWE. Mr. President, on June 18, the Secretary of 
Transportation, Federico Pena, called on Congress to ``* * * change the 
FAA charter to give it a single primary mission: safety and only 
safety.'' And that is exactly what the bill I am introducing today, 
along with the distinguished Chairman of the Commerce, Science and 
Transportation Committee, Senator Pressler, will do.
  In light of the many safety concerns that have become public as a 
result of the tragic ValuJet crash, it is important to restate 
Congress' commitment to ensuring the safety of air travel in this 
country. By removing the dual and dueling missions of safety and air 
carrier promotion, as one reporter accurately put it, there will be no 
room for doubt in the minds of the traveling public, or the staff of 
the Federal Aviation Administration that safety is their job--first, 
last and always.
  My bill will require the removal of all nonsafety related duties from 
the FAA. It also requires the Secretary of Transportation to provide 
Congress, within 180 days, with legislation outlining where all the 
nonsafety related duties will be transferred to, within his Department.
  We cannot expect the FAA to regain the trust of the traveling public 
while it maintains the mission to both ensure their safety while at the 
same time continuing to promote the growth of the carriers. The current 
mission of the FAA places it in the untenable position of being both 
the enforcer and the best friend of the airlines--no one can perform 
both roles and do them well.
  The ValuJet crash and the startling information about the safety 
problems at the airline that have come out as a result, only serve to 
clarify the need for this legislation. If FAA is to learn its lesson 
from this tragedy, and to meet the Secretary's call for zero accidents, 
it must turn its attention to improving training for its inspectors, to 
providing a better way to track problems at airlines and to design a 
more systematic approach to inspections--in other words, to return 
their attention to safety issues. My bill will require them to do just 
that.
  There have been those who have stated that removing the promotion of 
air carriers from the mandate is simply a word fix, that it will change 
nothing. The FAA needs to be changed if it is to meet the challenges of 
the coming new century. A Boeing study projects that if worldwide 
aviation maintains the same level of safety that it has for the past 5 
years, by 2013 we can expect to lose an aircraft worldwide every 8 
days. A very sobering statistic.
  The bill I am introducing today with Senator Pressler should serve as 
Congress' wake up call to the FAA. And it will be the job of Congress 
to make sure that the agency moves beyond the status quo to embrace the 
safety only mandate, as well as to provide them with the resources 
necessary to step up enforcement and improve their training programs.
  No one should be promoting an unsafe airline. And by limiting its 
role to improving the safety of U.S. air carriers, the FAA will be 
providing the best reason to purchase a ticket--a safe trip.
                                 ______
                                 
      By Mr. HATCH:
  S. 1961. A bill to establish the United States Intellectual Property 
Organization, to amend the provisions of title 35, United States Code, 
relating to procedures for patent applications, commercial use of 
patents, reexamination reform, and for other purposes; to the Committee 
on the Judiciary.


                     The Omnibus Patent Act of 1996

  Mr. HATCH. Mr. President, today I am introducing the Omnibus Patent 
Act of 1996. The purposes of this bill are: First, to rationalize the 
way intellectual property policy is formulated; second, to provide for 
more efficient administration of the patent, trademark, and copyright 
systems; third, to save the U.S. taxpayers' money by making the patent, 
trademark, and copyright systems self-funding; fourth, to discourage 
gaming the patent system while ensuring against loss of patent term and 
theft of American inventiveness; fifth, to protect the rights of prior 
users of inventions which are later patented by another; sixth, to 
increase the liability of patents by allowing third parties more 
meaningful participation in the reexamination process; seventh, to make 
certain that American provisional applications are given the same 
weight as other countries' provisional applications in other countries' 
courts; eighth, to make technical corrections in the plant patent 
provisions of the Patent Act; ninth, to require the Federal Government 
to pay a successful plaintiff's reasonable attorney's fees in a suit 
for the taking of a patent; and tenth, to allow for the filing of 
patent and trademark documents by electronic medium.


                U.S. Intellectual Property Organization

  Intellectual property normally signifies patents, trademarks, and 
copyrights. Intellectual property is of vital importance not only to 
continued progress in science and the arts but also to the economy. A 
vast array of industries depend on intellectual property. From the 
chemical, electrical, biotechnological, and manufacturing industries to 
books, movies, music, and computer software and hardware. Indeed, 
trademark is important to all businesses, period.
  Intellectual property industries also contribute mightily to our 
balance of trade. American-produced software, for example, accounts for 
70 percent of the world market. U.S. recorded music constitutes 
approximately 60 percent of the international market, with annual 
foreign sales totaling in excess of $12 billion. Together, U.S. 
copyright industries accounted for an estimated $45.8 billion in 
foreign sales in 1993, an 11.7 percent increase over 1992 sales 
figures.
  The remarkable overall performance of these industries continues to 
manifest itself in their tremendous rate of growth. For example, 
between 1991 and 1993, core copyright industries grew at twice the 
annual rate of the U.S. economy, while the rate of employment growth in 
these industries outpaced the rate of employment growth in the Nation's 
economy as a whole by nearly 4 to 1 between 1988 and 1993.
  Keep in mind that these figures do not even begin to take into 
account the significant trade benefits attributable to the ever-
expanding world market for patented American inventions and products 
enjoying U.S. trademark or trade secret protection. While these 
benefits are more difficult to quantify, we need only to look at such 
American companies as DuPont, Ford, General Electric, IBM, Kodak, 
Motorola, Monsanto, Palaroid, Xerox, and countless others whose 
development was founded in large part on U.S. patent protection to 
realize the utility of strong intellectual property protection to our 
Nation's economy and our international predominance in creative 
industries.

[[Page S7898]]

  Because intellectual property protection is so essential to our 
economy, intellectual property policy must be given a high priority, 
and because our markets are becoming increasingly global, international 
intellectual property policy will inevitably loom larger. In some 
instances, domestic policy will be affected by international 
developments. For example, as a direct result of the General Agreement 
on Tariffs and Trade [GATT], the basic U.S. patent term of 17 years 
from issuance was changed to 20 years from filing. I certainly don't 
advocate a slavish following of foreign models. Whatever is one's view 
of what international policy should be, however, the fact remains that 
international policy will have a great impact on domestic intellectual 
property policy.
  These developments argue for better coordination between 
international and domestic intellectual property policymaking. 
Currently, there is no official agency in the U.S. Government 
centralizing intellectual property policy formulation. Indeed, not only 
are there two government entities that deal with intellectual 
property--the Patent and Trademark Office [PTO] and the Copyright 
Office--but they are in different branches. The PTO is in the executive 
branch, while the Copyright Office is in the legislative branch of the 
Government.
  The conduct of international affairs has constitutionally been 
delegated to the executive branch. Because the international aspects of 
intellectual property will increasingly affect domestic intellectual 
property policy, it is appropriate that intellectual property policy 
should be initially formulated in the executive branch. Thus, the bill 
I am introducing today creates a U.S. Intellectual Property 
Organization [USIPO] in the executive branch.
  By centering the initial formulation of intellectual property policy 
in the executive branch, my bill not only predicts a trend but reflects 
the current reality. Despite the fact that there is no official 
intellectual property office, international and domestic intellectual 
property policy for the current administration is originating largely 
from the Patent and Trademark Office. Despite its name, the PTO is 
heavily involved in copyright policy as well. For example, the current 
negotiations for a Protocol and a New Instrument for the Berne 
Convention, the world's premiere copyright treaty, are being led by PTO 
personnel. In addition, the Commissioner of Patents and Trademarks 
chaired the working group that drafted the original version of the 
National Information Infrastructure Copyright Protection Act. This de 
facto intellectual property office is unlikely to disappear regardless 
of the outcome of the Presidential elections because it simply makes 
sense. My bill makes it official.

  I want to make clear that this restructuring of intellectual property 
policy is not motivated by dissatisfaction with the performance of the 
Copyright Office. I have the highest respect for the Register of 
Copyrights, Ms. Marybeth Peters, and I have always found her advice and 
that of her staff to be extremely helpful. Indeed, on a number of 
occasions, I have modified my legislation after listening to her wise 
counsel. This, however, does not detract from the fact that I believe 
that there would be an improvement in formulating and coordinating 
intellectual property policy if the Copyright Office were located 
within the USIPO, as I have proposed.
  Under current practice, the role of the Copyright Office in 
international policy formulation has diminished. Under this bill, with 
the elimination of the bifurcation of intellectual property policy 
between the legislative and the executive branches, it is likely that 
its role would be enhanced. In formulating copyright policy, the 
Commissioner of Intellectual Property would naturally turn to the 
Copyright Office subdivision of the USIPO for assistance and advice.
  In addition to policymaking, the PTO administers the system which 
grants patents and registers trademarks. The Copyright Office registers 
copyrights and oversees adjudication incident to the compulsory 
licenses. Under my bill, these administrative functions would continue 
under the umbrella of the USIPO. The bill provides for three 
subdivisions within the USIPO: the Patent Office, the Trademark Office, 
and the Copyright Office. Each Office is responsible for the 
administration of its own system. Each Office controls its own budget 
and its management structure and procedures. Each Office must generate 
its own revenue.
  The efficiency of the Patent, Trademark, and Copyright Offices will 
be enhanced by the status of the USIPO as a Government corporation, as 
proposed in my bill. This status allows the USIPO and its subdivisions 
to function without the bureaucratic restraints that bedevil much of 
the Federal Government.
  The personnel problems of the Copyright Office illustrate this point. 
As a part of the Library of Congress, the Copyright Office is subject 
to the rigid complexity and great delay which characterize the 
Library's hiring policy. For example, the Copyright Office has been 
unable to fill the position of General Counsel for several years.
  A management review of the Library of Congress prepared for the 
General Accounting Office [GAO] by Booz, Allen and Hamilton notes in 
its May 7, 1996 report that the median time for hiring a replacement 
worker is 177 days, much longer than for other Government agencies. 
Currently, the Library utilizes a 30-step hiring process with multiple 
hand-offs.
  The report levels many other criticisms at the Library of Congress' 
management, but time does not permit me to detail them here. For 
purposes of this legislation, however, the most important conclusion 
was that ``[t]here is little operational reason for housing the 
copyright function at the Library of Congress.''
  Although I concur in this conclusion, I am sensitive to the concern 
of the Librarian of Congress, Dr. James Billington, about the 
importance for the collection of the Library of the deposits made 
incident to copyright registrations. This bill makes no change in the 
deposit requirement, and it makes the Librarian of Congress a member ex 
officio of the Management Advisory Board of the Copyright Office to 
insure that this very important matter is given the attention it 
deserves.
  This legislation also simplifies and streamlines the adjudication 
that takes place under the auspices of the Copyright Office regarding 
compulsory licenses. Currently, the Copyright Office oversees the work 
of ad hoc arbitration panels, called Copyright Arbitration Royalty 
Panels [CARPs], which engage in rate setting and distribution 
proceedings as provided by the Copyright Act for certain compulsory 
licenses. I was an original cosponsor of the legislation that created 
them, and I had great hopes that they would be less costly than the 
Copyright Royalty Tribunal [CRT] that they replaced. Recent experience 
with distribution proceedings under the cable compulsory license, 
however, have proved otherwise. Whereas the last annual budget of the 
CRT was nearly $1 million for all rate setting and distribution, the 
cable distribution alone has to date exceeded $700,000 under the CARPs, 
and it is still not concluded.
  This bill returns to the tried and true method of administrative 
adjudication, namely, decisions rendered by administrative law judges 
subject to the Administrative Procedure Act. This solution is a natural 
one for a government body in the executive branch, although in the 
legislative branch this solution was always problematic under Buckley 
versus Valeo. Indeed, because of separation of powers constitutional 
concerns, the ultimate authority in the current CARP system is the 
Librarian of Congress, not the Register of Copyrights, because the 
Librarian is a Presidential appointee.

  Currently, whenever the Copyright Office is tasked with an executive-
type function, the constitutional question arises. This concern 
discourages utilization of the Copyright Office from playing a more 
significant role in copyright matters. This issue has arisen, for 
example, in discussions about instituting virtual magistrates in the 
Copyright Office to render quick decisions on on-line service provider 
liability and on fair use.
  In sum, my bill vests primary responsibility for intellectual 
property policy in the head of the USIPO, the Commissioner of 
Intellectual Property and primary responsibility for administration of 
the patent, trademark, and copyright systems in the respective 
Commissioners of Patents, Trademarks,

[[Page S7899]]

and Copyrights. The corporate form of the USIPO inoculates the Patent, 
Trademark, and Copyright Offices as much as possible from the 
bureaucratic sclerosis that infects many Federal agencies.
  Although I considered making the USIPO an independent agency in the 
executive branch, this bill links the USIPO to the Secretary of 
Commerce by providing that the Commissioner of Intellectual Property, 
the head of the USIPO, will be the policy advisor of the Secretary 
regarding intellectual property matters.
  The parties interested in patents, copyrights, and trademarks support 
having close access to the President by having the chief intellectual 
policy advisor directly linked to a cabinet officer. The Secretary of 
Commerce is a logical choice. The PTO, which today has the major role 
in intellectual property policy as such is in the Department of 
Commerce. I do not believe, however, that the USIPO necessarily belongs 
there.
  Mr. President, although the creation of the USIPO may be the most 
dramatic part of this bill, it also contains several important changes 
to substantive patent law that will, taken as a whole, dramatically 
improve our patent system.
  With the adoption of the GATT provisions in 1994, the United States 
changed the manner in which it calculated the duration of patent terms. 
Under the old rule, utility patents lasted for 17 years after the grant 
of the patent. The new rule under the legislation implementing GATT is 
that these patents last for 20 years from the time the patent 
application is filed.
  In addition to harmonizing American patent terms with those of our 
major trading partners, this change solved the problem of submarine 
patents. A submarine patent is not a military secret. Rather, it is a 
colloquial way to describe a legal but unscrupulous strategy to game 
the system and unfairly extend a patent term.
  Submarine patenting is when an applicant purposefully delays the 
final granting of his permit by filing a series of amendments and 
delaying motions. Since, under the old system, the term did not start 
until the patent was granted, no time was lost. And since patent 
applications are secret in the United States until a patent is actually 
granted, no one knows that the patent application is pending. Thus, 
competitors continue to spend precious research and development dollars 
on technology that has already been developed.
  When a competitor finally does develop the same technology, the 
submarine applicant springs his trap. He stops delaying his application 
and it is finally approved. Then, he sues his competitor for infringing 
on his patent. Thus, he maximizes his own patent term while tricking 
his competitors into wasting their money.
  Mr. President, submarine patents are terribly inefficient. Because of 
them, the availability of new technology is delayed and instead of 
moving to new and better research, companies are fooled into throwing 
away time and money on technology that already exists.
  By changing the manner in which we calculate the patent term to 20 
years from filing, we eliminated the submarine problem. Under the 
current rule, if an applicant delays his own application, it simply 
shortens the time he will have after the actual granting of the patent. 
Thus, we have eliminated this unscrupulous, inefficient practice by 
removing its benefits.
  Unfortunately, the change in term calculation potentially creates a 
new problem. Under the new system, if the Patent Office takes a long 
time to approve a patent, the delay comes out of the patent term, thus 
punishing the patent holder for the PTO's delay. This is not right.
  The question we face now, Mr. President, is how to fix this new 
problem. Some have suggested combining the old 17 years from granting 
system with the new 20 years from filing and giving the patent holder 
whichever is longer. But that approach leads to uncertainty in the 
length of a patent term and even worse, resurrects the submarine patent 
problem by giving benefits to an applicant who purposefully delays his 
own application. I believe that titles II and III of the Omnibus Patent 
Act of 1996 solve the administrative delay dilemma without recreating 
old problems.


                           Early Publication

  Title II of the bill provides for the early publication of patent 
applications. It would require the Patent Office to publish pending 
applications 18 months after the application was filed. An exception to 
this rule is made for applications filed only in the United States. 
Those applications will be published 18 months after filing or 3 months 
after the office issues its first response on the application, 
whichever is later. By publishing early, competitors are put on notice 
that someone has already beaten them to the invention and thus allowing 
them to stop spending money researching that same invention.
  The claims that early publication will allow foreign competitors to 
steal American technology are simply not true. To start with, between 
75 and 80 percent of patent applications filed in the United States are 
also filed abroad where 18 month publication is the rule. Further, I 
have provided in my bill for delayed publication of applications only 
submitted in the United States to protect them from competitors. 
Additionally, once an application is published, title II grants the 
applicant provisional rights, that is, legal protection for his 
invention. Thus, while it is true that someone could break the law and 
steal the invention, that is true under current law and will always be 
true. And the early publication provision will result in publication 
only 2 or 3 months before the granting of most patents, so there is 
little additional time for would-be pirates to steal the invention.


                        Patent Term Restoration

  Title III deals directly with the administrative delay problem by 
restoring to the patent holder any part of the term that is lost due to 
undue administrative delay. This title is very similar to a bill I 
introduced earlier this Congress, S. 1540. Some concerns were raised 
about that bill because it left the decision of what was an undue delay 
to the Commissioner of the PTO. I took those concerns to heart and 
adopted the provision that appears in H.R. 3460, Congressman Moorhead's 
Omnibus Patent bill, giving clear deadlines for the Patent Office to 
act. Any delay beyond those deadlines is considered undue delay and 
will be restored to the Patent term. Thus, title III solves the 
administrative delay problem in a clear, predictable, and objective 
manner.


                     Prior Domestic Commercial Use

  Title IV deals with people who independently invent something and use 
it in commercial sale but who never patent their invention. 
Specifically, this title provides rights to a person who has 
commercially sold an invention more than 1 year before that invention 
was patented by another person. Anyone in this situation will be 
permitted to continue to sell his product without being forced to pay a 
royalty to the patent holder. This basic fairness measure is aimed at 
protecting the innocent inventor who chooses to use trade secret 
protection instead of pursuing a patent and who has expended enough 
time and money to begin commercial sale of the invention. It also 
serves as an incentive for those who wish to seek a patent to seek it 
quickly, thus reducing the time during which others may acquire prior 
user rights. The incentives of this title will improve the efficiency 
of our patent system by protecting ongoing business concerns and 
encouraging swift prosecution of patent applications.


                      Patent Reexamination Reform

  Title V provides for a greater role for third parties in patent re-
examination proceedings. It is taken almost verbatim from my free-
standing re-examination bill, S. 1070.
  Nothing is more basic to an effective system of patent protection 
than a reliable examination process. Without the high level of faith 
that the PTO has earned, respect for existing patents would fall away 
and innovation would be discouraged for fear of a lack of protection 
for new inventions.
  In the information age, however, it is increasingly difficult for the 
PTO to keep track of all the prior art that exists. It does the best 
job it can, but inevitably someone misses something and grants a patent 
that should not be granted. This is the problem that Title V addresses.
  Title V allows third-parties to raise a challenge to an existing 
patent and to

[[Page S7900]]

participate in the re-examination process in a meaningful way. Thus, 
the expertise of the patent examiner is supplemented by the knowledge 
and resources of third-parties who may have information not known to 
the patent examiner. Through this joint effort, we maximize the flow of 
information, increase the reliability of patents, and thereby increase 
the strength of the American patent system.


                  Provisional Applications for Patents

  Title VI is comprised of miscellaneous provisions. First, it fixes a 
matter of a rather technical nature. Some foreign courts have 
interpreted American provisional applications in a way that would not 
preserve their filing priority. This title amends section 115 of title 
35 of the United States Code to clarify that if a provisional 
application is converted into a nonprovisional application within 12 
months of filing, that it stands as a full patent application, with the 
date of filing of the provisional application as the date of priority. 
If no request is made within 12 months, the provisional application is 
considered abandoned. This clarification will make certain that 
American provisional applications are given the same weight as other 
countries' provisional applications in other countries' courts.


                             Plant Patents

  Title VI also makes two fairly technical corrections to the plant 
patent statute. First, the ban on tuber propagated plants is removed. 
This depression-era ban was included for fear of limiting the food 
supply. Obviously, this is no longer a concern. Second, the plant 
patent statute is amended to include parts of plants. This closes a 
loophole that foreign growers have used to import the fruit or flowers 
of patented plants without paying a royalty because the entire plant 
was not being sold.


                 Attorney's Fees for Takings of Patents

  Title VI has an additional provision that requires the Federal 
Government to pay a successful plaintiff's reasonable attorney's fees 
in a suit for the taking of a patent. This is only fair as the nature 
of both patent litigation and takings litigation is long and expensive. 
In many cases the award that is finally won is reduced dramatically 
when attorney's fees are factored in. This provision allows a 
successful plaintiff to truly be made whole.


                           Electronic Filing

  Last, this title also allows for the filing of patent and trademark 
documents by electronic medium.
  Mr. President, I have already mentioned H.R. 3460, Congressman 
Moorhead's omnibus patent bill. H.R. 3460 provides for restructuring of 
the Patent and Trademark Office and deals with virtually all of the 
substantive patent issues that are in my bill, and in a similar way. 
The most significant difference is that my bill restructures all of 
intellectual property policymaking and administration by the Federal 
Government. If we are going to restructure patents and trademarks, I 
believe that copyright policymaking and administration cannot be 
ignored.
  H.R. 3460 has been reported out of the House Committee on the 
Judiciary and is awaiting floor action. I hope for swift action by the 
Senate on the bill I am introducing today.
  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:

            Omnibus Patent Act of 1996 Summary   July 16, 1996


     Title I--The United States Intellectual Property Organization

       This title establishes the United States Intellectual 
     Property Organization (USIPO). The USIPO brings together in 
     one entity patent, trademark, and copyright policy 
     formulation and the administration of the patent, trademark, 
     and copyright systems. The USIPO is a government corporation 
     connected to the Department of Commerce.
       The USIPO is headed by a Commissioner of Intellectual 
     Property [CIP] who is the chief advisor to the President 
     through the Secretary of Commerce regarding intellectual 
     property policy. He or she is appointed by the President with 
     Senate confirmation, and he or she serves at the pleasure of 
     the President.
       The USIPO has three autonomous subdivisions: the Patent 
     Office, the Trademark Office, and the Copyright Office. Each 
     office is responsible for the administration of its own 
     system. Each office controls its own budget and its 
     management structure and procedures. Each office must 
     generate its own revenue in order to be self-sustaining and 
     to provide for the office of the CIP. The Patent, Trademark 
     and Copyright Offices are headed by the Commissioner of 
     Patents, the Commissioner of Trademarks, and the Commissioner 
     of Copyrights, respectively. The three Commissioners are 
     appointed by the CIP and serve at his or her pleasure.
       Title I also abolishes the Copyright Arbitration Royalty 
     Panels [CARPs] for rate-setting and distribution under some 
     of the compulsory licenses and replaces them with 
     administrative law judges.


                      Title II--Early Publication

       Title II of the bill provides for the early publication of 
     patent applications. It would require the Patent Office to 
     publish pending applications eighteen months after the 
     application was filed. An exception to this rule is made for 
     applications filed only in the United States. Those 
     applications will be published eighteen months after filing 
     or three months after the office issues its first response on 
     the application, whichever is later. Additionally, once an 
     application is published, Title II grants the applicant 
     ``provisional rights,'' that is, legal protection for his or 
     her invention.


                   Title III--Patent Term Restoration

       Title III deals with the problem of administrative delay in 
     the patent examination process by restoring to the patent 
     holder any part of the term that is lost due to undue 
     administrative delay. Title III gives clear deadlines in 
     which the Patent Office must act. Any delay beyond those 
     deadlines is considered undue delay and will be restored to 
     the patent term.


                Title IV--Prior Domestic Commercial Use

       This title provides rights to a person who has commercially 
     sold an invention more than one year before that invention 
     was patented by another person. Anyone in this situation will 
     be permitted to continue to sell his or her product without 
     being forced to pay a royalty to the patent holder.


                 Title V--Patent Re-examination Reform

       Title V provides for a greater role for third parties in 
     patent re-examination proceedings by allowing third-parties 
     to raise a challenge to an existing patent and to participate 
     in the re-examination process in a meaningful way.


                        Title VI--Miscellaneous

                  Provisional Applications for Patents

       This title amends section 115 of Title 35 of the U.S. Code 
     to clarify that if a provisional application is converted 
     into a non-provisional application within twelve months of 
     filing, that it stands as a full patent application, with the 
     date of filing of the provisional application as the date of 
     priority. If no request is made within twelve months, the 
     provisional application is considered abandoned. This 
     clarification will make certain that American provisional 
     applications are given the same weight as other countries' 
     provisional applications in other countries' courts.

                             Plant Patents

       Title VI also makes two fairly technical corrections to the 
     plant patent statute. First, the ban on tuber propagated 
     plants in removed. This depression-era ban was included for 
     fear of limiting the food supply. This is no longer a 
     concern. Second, the plant patent statute is amended to 
     include parts of plants. This closes a loophole that foreign 
     growers have used to import the fruit or flowers of patented 
     plants without paying a royalty because the entire plant was 
     not being sold.

                 Attorney's Fees for Takings of Patents

       Title VI has an additional provision that requires the 
     federal government to pay a successful plaintiff's reasonable 
     attorney's fees in a suit for the taking of a patent.

                           Electronic Filing

       Lastly, this title also allows for the filing of patent and 
     trademark documents by electronic medium.
                                 ______
                                 
      By Mr. McCAIN (for himself, Mr. Inouye, Mr. Glenn, Mr. Thomas, 
        Mr. Domenici, Mrs. Kassebaum, Mr. Cochran, Mr. Murkowski, Mr. 
        Campbell and Mr. Simon):

  S. 1962. A bill to amend the Indian Child Welfare Act of 1978, and 
for other purposes; to the Committee on Indian Affairs.


                  THE INDIAN CHILD WELFARE ACT OF 1978

  Mr. McCAIN. Mr. President, I rise today with great pleasure to 
introduce a measure which has been laboriously crafted to resolve many 
of the differences between Indian tribes and advocates of adoption. The 
voices of reason and good will have prevailed. The measure I am 
introducing today, along with Senators Inouye, Thomas, Domenici, 
Kassebaum, Cochran, Murkowski, Campbell, Glenn, and Simon, enjoys the 
support of both the Indian tribes and the adoption community.
  The bill reflects a very delicate compromise. But fragile it is not. 
Its strength lies in both the process by which it was developed and the 
substance it embodies.
  More than one year ago, several high-profile cases adoption cases 
captured national attention because they involved Indian children 
caught in protracted legal disputes under the Indian

[[Page S7901]]

Child Welfare Act of 1978 [ICWA]. Adoption advocates believed these 
cases would provide political support for amendments they had long 
sought to the act. Indian tribes felt like they were under siege, 
battling distorted news stories about what the ICWA does and does not 
do while simultaneously having to fend off overly broad amendments to 
ICWA. As more time passed, the rhetoric heightened, the stakes of the 
game rose, and positions hardened.
  It is remarkable that a few visionaries on both sides ventured away 
from these battle lines last year to begin to talk with each other 
about what common ground might exist. These talks began a long process 
of negotiation over possible compromise amendments to ICWA. Over time, 
the protagonists began to see ways in which some of each side's 
objectives could be accomplished through common agreement. Mr. 
President, I know it is perhaps an over-used phrase, but I can think of 
no more fitting example of a win-win resolution of an otherwise 
intractable problem.
  ICWA was enacted in 1978 in response to growing concern over the 
consequences to Indian children, families and tribes of the separation 
of large numbers of Indian children from their families and tribes 
through adoption or foster care placements by the State courts. Studies 
conducted by the Association of American Indian Affairs [AAIA] in the 
mid-1970s revealed that 25 to 35 percent of all Indian children had 
been separated from their families and placed into adoptive families, 
foster care, or other institutions. For example, in the State of 
Minnesota nearly one in every four Indian children under the age of 1 
year was placed for adoption between 1971 and 1972, and approximately 
90 percent of adoptive placements of Indian children at that time were 
with non-Indian families. In response, Congress protected both the best 
interest of Indian children and the interest of Indian tribes in the 
welfare of their children, by carefully crafting ICWA to make use of 
the roles traditionally played by Indian tribes and families in the 
welfare of their children through a unique jurisdictional framework, 
favorably described in the majority opinion of the United States 
Supreme Court in Mississippi Band of Choctaw Indians versus Holyfield 
as follows:

       At the heart of the ICWA are its provisions concerning 
     jurisdiction over Indian child custody proceedings. Section 
     1911 lays out a dual jurisdictional scheme. Section 1911(a) 
     establishes exclusive jurisdiction in the tribal courts for 
     proceedings concerning an Indian child 'who resides or is 
     domiciled within the reservation of such tribe,' as well as 
     for wards of tribal courts regardless of domicile. Section 
     1911(b), on the other hand, creates concurrent but 
     presumptively tribal jurisdiction in the case of children not 
     domiciled on the reservation: on petition of either parent or 
     the tribe, state-court proceedings for foster care placement 
     or termination of parental rights are to be transferred to 
     the tribal court, except in cases of 'good cause,' objection 
     by either parent, or declination of jurisdiction by the 
     tribal court. 490 U.S. 30, 36 (1989).

  The issue of Indian child welfare stirs the deepest emotions. Nothing 
is more sacred than children. And while developing common ground is 
always extremely difficult during a battle, it is especially difficult 
on such a deeply personal issue.
  As with all compromises, I am sure each side would prefer language 
that is better for them. I am told many Indian tribes would rather not 
have any amendments at all, and that many in the adoption community 
would rather have the House-passed amendments be the law of the land. 
But on behalf of the Indian children and their parents, both biological 
and adoptive, I want to extend my personal thanks to persons on both 
sides of this debate who have led the way to a compromise in which both 
sides, and most importantly, Indian children, are the winners.
  I am especially grateful for the position taken by the Indian tribes, 
and particularly, for the leadership of the National Congress of 
American Indians [NCAI], its President, the Honorable Ron Allen and his 
able NCAI staff, and that of Terry Cross, Jack Trope, Mike Walleri and 
other tribal leaders or representatives associated with the National 
Indian Child Welfare Association [NICWA], Tanana Chiefs Conference, and 
others. Their efforts to reach out to the adoption community, even as 
the debate was quickening, made all the difference.
  Likewise, I am indebted to the courage and foresight that led 
adoption advocates like Jane Gorman and Marc Gradstein to pursue a 
reasonable and fair-minded approach in dialogue with their tribal 
counterparts. These two practicing attorneys gave many hours to the 
task of fashioning a compromise that has now been endorsed by their 
colleagues in the American Academy of Adoption Attorneys and the 
Academy of California Adoption Attorneys.
  Finally, I want to commend the tribal delegates and representatives 
who labored for many long hours at the mid-year convention of the 
National Congress of American Indians in Tulsa, OK in early June in 
order to respond to the request I and Congressman Don Young, Chairman 
of the House Committee on Resources, made to them, asking that they 
work in good faith with adoption attorneys to finalize a minimum set of 
compromise amendment provisions that could be adopted as an alternative 
to the House-passed amendments. I am told that hundreds of delegates 
worked around the clock for several days to come up with the language 
that I am introducing today. The process makes for a remarkable story.
  And the product is even more remarkable. The bill I am introducing 
today will amend the Indian Child Welfare Act of 1978 to better serve 
the best interests of Indian children without trampling on tribal 
sovereignty and without eroding fundamental principles of Federal-
Indian law.
  The compromise bill would achieve greater certainty and speed in 
adoptions involving Indian children through new guarantees of early and 
effective notice in all cases combined with new, strict time 
restrictions placed on both the right of Indian tribes and families to 
intervene and the right of Indian birth parents to revoke their consent 
to an adoptive placement. The compromise bill would encourage early 
identification of the relatively few cases involving controversy, and 
promote settlement of cases by making visitation agreements 
enforceable.
  It would limit when and how an Indian family or tribe may intervene 
in an adoption case involving an Indian child; 25 U.S.C. 1911(c) and 
1913(e) would be substantially amended to curtail the present right of 
an Indian family or tribe to intervene at any point in the proceeding. 
Under the compromise, this right of intervention could be exercised 
only within the following periods of time: within 30 days of receipt of 
notice of a termination of parental rights proceeding, or within the 
later of 90 days of receipt of notice of an adoptive placement or 30 
days of receipt of notice of a voluntary adoption proceeding. With 
proper notice, an Indian tribe's failure to act within these timeframes 
early in the placement proceedings would be considered final. An Indian 
tribe's waiver of its right to intervene would be considered binding. 
If an Indian tribe seeks to intervene, it must accompany its motion 
with a certification that the child at issue is, or is eligible to be, 
a member of the tribe and it must provide documentation of this 
pursuant to tribal law.
  The compromise bill would limit when an Indian biological parent may 
withdraw his or her consent to adoption or termination of parental 
rights; 25 U.S.C. 1913(b) would be substantially amended to curtail the 
present right of an Indian parent to withdraw his or her consent to an 
adoption placement or termination of parental rights at any time prior 
to entry of a final decree. Under the bill, such consent could be 
withdrawn before a final decree of adoption has been entered only if 
less than 6 months has passed since the Indian child's tribe received 
the required notice, or if the adoptive placement specified by 
the parent ends, or if less than 30 days has passed since the adoption 
proceeding began. An Indian biological parent may otherwise revoke 
consent only under applicable State law. In the case of fraud or 
duress, an Indian biological parent may seek to invalidate an adoption 
up to 2 years after the adoption has been in effect, or within a longer 
period established by the applicable State law.

  This legislation would require those facilitating an adoption to 
provide early and effective notice and information to Indian tribes; 25 
U.S.C. 1913 would be substantially amended to add a requirement for 
notice to be sent to the Indian child's tribe by a party seeking to 
place or to effect a voluntary termination of parental rights

[[Page S7902]]

concerning a child known to be an Indian. Under the bill, this notice 
must be sent by registered mail within 100 days following a foster care 
placement, within 5 days following a pre-adoptive or adoptive 
placement, and within 10 days of the commencement of a termination of 
parental rights proceeding or adoption proceeding. The bill would 
specify the particular information that is to be provided. In addition, 
25 U.S.C 1913(a) would be amended to require a certification by the 
State court that the attorney or public or private agency facilitating 
the voluntary termination of parental rights or adoptive placement has 
informed the biological parents of their placement options and of other 
provisions of ICWA and has certified that the natural parents will be 
notified within 10 days of any change in the adoptive placement.
  The compromise bill would authorize and encourage open adoptions and 
enforceable visitation agreements between Indians and non-Indians; 25 
U.S.C. 1913 would be amended to encourage and facilitate voluntary 
agreements between Indian families or tribes and non-Indian adoptive 
families for enforceable rights of visitation or continued contact 
after entry of an adoption decree. This provision would have the effect 
of authorizing such agreements where independent authority does not 
exist in a particular State's law. This should help encourage early 
identification and settlement of controversial cases.
  Finally, this bill would apply penalties for fraud and 
misrepresentation as a sanction against efforts to evade 
responsibilities under the act. The bill would apply criminal penalties 
to any efforts to encourage or facilitate fraudulent representations or 
omissions regarding whether a child or biological parent is an Indian 
for purposes of the act. The exclusive jurisdiction of tribal courts 
under 25 U.S.C. 1911(a) would be clarified to continue once a child is 
properly made a ward of that tribal court, regardless of the location 
of the treatment ordered by the court. And the bill would make a few 
minor changes to existing law to clarify several issues which have 
caused delays in child custody and placement proceedings.
  I view this compromise bill as a wholly appropriate and fair-minded 
alternative to the title III provisions which the Committee on Indian 
Affairs voted on June 19 to strike from H.R. 3286, the Adoption 
Promotion and Stability Act of 1996. Title III, proposed by 
Congresswoman Deborah Pryce, would substantially amend ICWA in ways I 
and many others on the committee concluded would eviscerate the act. 
Title III was passed by the House in May by a narrow margin after 
extended debate. The Senate Committee on Indian Affairs deleted that 
controversial title because of our serious concern about the breadth of 
its language and the fundamental changes it would make to the 
government-to-government relations between the United States and Indian 
tribes. Title III was strenuously opposed by virtually every tribal 
government in the Nation and by the Justice and Interior Departments.

  At the same time, I told Congresswoman Pryce that I and many others 
believed that some of the problems identified by her and other 
proponents of title III were legitimate. It seemed to me that adoptive 
families seek certainty, speed, and stability throughout the adoption 
process. They do not want surprises that threaten to take away from 
them a child they have loved and cared for after they have followed the 
law. At the same time, Indian tribes have long sought early and 
substantive notice of proposed adoptions and the continued protections 
of tribal sovereignty. They do not want to learn that their young 
tribal members have been placed for adoption outside of the Indian 
community many months or years after the fact.
  I was pleased to see that the negotiators of the compromise bill 
responded to these concerns. And I am extremely pleased to say that 
Congresswoman Pryce has indicated to me she will now lend her support 
to prompt enactment of this landmark, compromise legislation. Because 
it is a delicately balanced package, I am strongly committed to moving 
this compromise language without substantial change as quickly as 
possible through the Senate and the House in the remaining weeks before 
the close of this Congress. Mr. President, I ask my colleagues to join 
me in this effort.
  There is no doubt in my mind that in the case of an Indian child 
there are special interests that must be taken into account during an 
adoption placement process. But these interests, as provided for in 
ICWA, must serve the best interests of the Indian child. And those best 
interests are best served by certainty, speed, and stability in making 
adoptive placements with the participation of Indian tribes. This is 
the key, these concerns can be addressed in ways that preserve 
fundamental principles of tribal sovereignty by recognizing and 
preserving the appropriate role of tribal governments in the lives of 
Indian children.
  Mr. President, I urge my colleagues to support the compromise bill so 
that the agreement reached by the parties can be realized.
  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. 1962

       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 
     Child Welfare Act Amendments 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 Child Welfare Act of 1978 (25 U.S.C. 1901 et seq.).

     SEC. 2. EXCLUSIVE JURISDICTION.

       Section 101(a) (25 U.S.C. 1911(a)) is amended--
       (1) by inserting ``(1)'' after ``(a)''; and
       (2) by striking the last sentence and inserting the 
     following:
       ``(2) An Indian tribe shall retain exclusive jurisdiction 
     over any child custody proceeding that involves an Indian 
     child, notwithstanding any subsequent change in the residence 
     or domicile of the Indian child, in any case in which the 
     Indian child--
       ``(A) resides or is domiciled within the reservation of the 
     Indian tribe and is made a ward of a tribal court of that 
     Indian tribe; or
       ``(B) after a transfer of jurisdiction is carried out under 
     subsection (b), becomes a ward of a tribal court of that 
     Indian tribe.''.

     SEC. 3. INTERVENTION IN STATE COURT PROCEEDINGS.

       Section 101(c) (25 U.S.C. 1911(c)) is amended by striking 
     ``In any State court proceeding'' and inserting ``Except as 
     provided in section 103(e), in any State court proceeding''.

     SEC. 4. VOLUNTARY TERMINATION OF PARENTAL RIGHTS.

       Section 103(a) (25 U.S.C. 1913(a)) is amended--
       (1) by inserting ``(1)'' before ``Where'';
       (2) by striking ``foster care placement'' and inserting 
     ``foster care or preadoptive or adoptive placement'';
       (3) by striking ``judge's certificate that the terms'' and 
     inserting the following: ``judge's certificate that--
       ``(A) the terms'';
       (4) by striking ``or Indian custodian.'' and inserting ``or 
     Indian custodian; and'' ;
       (5) by inserting after subparagraph (A), as designated by 
     paragraph (3) of this subsection, the following new 
     subparagraph:
       ``(B) any attorney or public or private agency that 
     facilitates the voluntary termination of parental rights or 
     preadoptive or adoptive placement has informed the natural 
     parents of the placement options with respect to the child 
     involved, has informed those parents of the applicable 
     provisions of this Act, and has certified that the natural 
     parents will be notified within 10 days of any change in the 
     adoptive placement.'';
       (6) by striking ``The court shall also certify'' and 
     inserting the following:
       ``(2) The court shall also certify'';
       (7) by striking ``Any consent given prior to,'' and 
     inserting the following:
       ``(3) Any consent given prior to,''; and
       (8) by adding at the end the following new paragraph:
       ``(4) An Indian custodian who has the legal authority to 
     consent to an adoptive placement shall be treated as a parent 
     for the purposes of the notice and consent to adoption 
     provisions of this Act.''.

     SEC. 5. WITHDRAWAL OF CONSENT.

       Section 103(b) (25 U.S.C. 1913(b)) is amended--
       (1) by inserting ``(1)'' before ``Any''; and
       (2) by adding at the end the following new paragraphs:
       ``(2) Except as provided in paragraph (4), a consent to 
     adoption of an Indian child or voluntary termination of 
     parental rights to an Indian child may be revoked, only if--
       ``(A) no final decree of adoption has been entered; and
       ``(B)(i) the adoptive placement specified by the parent 
     terminates; or
       ``(ii) the revocation occurs before the later of the end 
     of--

[[Page S7903]]

       ``(I) the 180-day period beginning on the date on which the 
     Indian child's tribe receives written notice of the adoptive 
     placement provided in accordance with the requirements of 
     subsections (c) and (d); or
       ``(II) the 30-day period beginning on the date on which the 
     parent who revokes consent receives notice of the 
     commencement of the adoption proceeding that includes an 
     explanation of the revocation period specified in this 
     subclause.
       ``(3) The Indian child with respect to whom a revocation 
     under paragraph (2) is made shall be returned to the parent 
     who revokes consent immediately upon an effective revocation 
     under that paragraph.
       ``(4) Subject to paragraph (6), if, by the end of the 
     applicable period determined under subclause (I) or (II) of 
     paragraph (2)(B)(ii), a consent to adoption or voluntary 
     termination of parental rights has not been revoked, 
     beginning after that date, a parent may revoke such a consent 
     only--
       ``(A) pursuant to applicable State law; or
       ``(B) if the parent of the Indian child involved petitions 
     a court of competent jurisdiction, and the court finds that 
     the consent to adoption or voluntary termination of parental 
     rights was obtained through fraud or duress.
       ``(5)(A) Subject to paragraph (6), if a consent to adoption 
     or voluntary termination of parental rights is revoked under 
     paragraph (4)(B), with respect to the Indian child involved--
       ``(i) in a manner consistent with paragraph (3), the child 
     shall be returned immediately to the parent who revokes 
     consent; and
       ``(ii) if a final decree of adoption has been entered, that 
     final decree shall be vacated.
       ``(6) Except as otherwise provided under applicable State 
     law, no adoption that has been in effect for a period longer 
     than or equal to 2 years may be invalidated under this 
     subsection.''.

     SEC. 6. NOTICE TO INDIAN TRIBES.

       Section 103(c) (25 U.S.C. 1913(c)) is amended to read as 
     follows:
       ``(c)(1) A party that seeks the voluntary placement of an 
     Indian child or the voluntary termination of the parental 
     rights of a parent of an Indian child shall provide written 
     notice of the placement or proceeding to the Indian child's 
     tribe. A notice under this subsection shall be sent by 
     registered mail (return receipt requested) to the Indian 
     child's tribe, not later than the applicable date specified 
     in paragraph (2) or (3).
       ``(2)(A) Except as provided in paragraph (3), notice shall 
     be provided under paragraph (1) in each of the following 
     cases:
       ``(i) Not later than 100 days after any foster care 
     placement of an Indian child occurs.
       ``(ii) Not later than 5 days after any preadoptive or 
     adoptive placement of an Indian child.
       ``(iii) Not later than 10 days after the commencement of 
     any proceeding for a termination of parental rights to an 
     Indian child.
       ``(iv) Not later than 10 days after the commencement of any 
     adoption proceeding concerning an Indian child.
       ``(B) A notice described in subparagraph (A)(ii) may be 
     provided before the birth of an Indian child if a party 
     referred to in paragraph (1) contemplates a specific adoptive 
     or preadoptive placement.
       ``(3) If, after the expiration of the applicable period 
     specified in paragraph (2), a party referred to in paragraph 
     (1) discovers that the child involved may be an Indian 
     child--
       ``(A) the party shall provide notice under paragraph (1) 
     not later than 10 days after the discovery; and
       ``(B) any applicable time limit specified in subsection (e) 
     shall apply to the notice provided under subparagraph (A) 
     only if the party referred to in paragraph (1) has, on or 
     before commencement of the placement made reasonable inquiry 
     concerning whether the child involved may be an Indian 
     child.''.

     SEC. 7. CONTENT OF NOTICE.

       Section 103(d) (25 U.S.C. 1913(d)) is amended to read as 
     follows:
       ``(d) Each written notice provided under subsection (c) 
     shall contain the following:
       ``(1) The name of the Indian child involved, and the actual 
     or anticipated date and place of birth of the Indian child.
       ``(2) A list containing the name, address, date of birth, 
     and (if applicable) the maiden name of each Indian parent and 
     grandparent of the Indian child, if--
       ``(A) known after inquiry of--
       ``(i) the birth parent placing the child or relinquishing 
     parental rights; and
       ``(ii) the other birth parent (if available); or
       ``(B) otherwise ascertainable through other reasonable 
     inquiry.
       ``(3) A list containing the name and address of each known 
     extended family member (if any), that has priority in 
     placement under section 105.
       ``(4) A statement of the reasons why the child involved may 
     be an Indian child.
       ``(5) The names and addresses of the parties involved in 
     any applicable proceeding in a State court.
       ``(6)(A) The name and address of the State court in which a 
     proceeding referred to in paragraph (5) is pending, or will 
     be filed; and
       ``(B) the date and time of any related court proceeding 
     that is scheduled as of the date on which the notice is 
     provided under this subsection.
       ``(7) If any, the tribal affiliation of the prospective 
     adoptive parents.
       ``(8) The name and address of any public or private social 
     service agency or adoption agency involved.
       ``(9) An identification of any Indian tribe with respect to 
     which the Indian child or parent may be a member.
       ``(10) A statement that each Indian tribe identified under 
     paragraph (9) may have the right to intervene in the 
     proceeding referred to in paragraph (5).
       ``(11) An inquiry concerning whether the Indian tribe that 
     receives notice under subsection (c) intends to intervene 
     under subsection (e) or waive any such right to intervention.
       ``(12) A statement that, if the Indian tribe that receives 
     notice under subsection (c) fails to respond in accordance 
     with subsection (e) by the applicable date specified in that 
     subsection, the right of that Indian tribe to intervene in 
     the proceeding involved shall be considered to have been 
     waived by that Indian tribe.''.

     SEC. 8. INTERVENTION BY INDIAN TRIBE.

       Section 103 (25 U.S.C. 1913) is amended by adding at the 
     end the following new subsections:
       ``(e)(1) The Indian child's tribe shall have the right to 
     intervene at any time in a voluntary child custody proceeding 
     in a State court only if--
       ``(A) in the case of a voluntary proceeding to terminate 
     parental rights, the Indian tribe filed a notice of intent to 
     intervene or a written objection to the termination, not 
     later than 30 days after receiving notice that was provided 
     in accordance with the requirements of subsections (c) and 
     (d); or
       ``(B) in the case of a voluntary adoption proceeding, the 
     Indian tribe filed a notice of intent to intervene or a 
     written objection to the adoptive placement, not later than 
     the later of--
       ``(i) 90 days after receiving notice of the adoptive 
     placement that was provided in accordance with the 
     requirements of subsections (c) and (d); or
       ``(ii) 30 days after receiving a notice of the voluntary 
     adoption proceeding that was provided in accordance with the 
     requirements of subsections (c) and (d).
       ``(2)(A) Except as provided in subparagraph (B), the Indian 
     child's tribe shall have the right to intervene at any time 
     in a voluntary child custody proceeding in a State court in 
     any case in which the Indian tribe did not receive written 
     notice provided in accordance with the requirements of 
     subsections (c) and (d).
       ``(B) An Indian tribe may not intervene in any voluntary 
     child custody proceeding in a State court if the Indian tribe 
     gives written notice to the State court or any party involved 
     of--
       ``(i) the intent of the Indian tribe not to intervene in 
     the proceeding; or
       ``(ii) the determination by the Indian tribe that--
       ``(I) the child involved is not a member of, or is not 
     eligible for membership in, the Indian tribe; or
       ``(II) neither parent of the child is a member of the 
     Indian tribe.
       ``(3) If an Indian tribe files a motion for intervention in 
     a State court under this subsection, the Indian tribe shall 
     submit to the court, at the same time as the Indian tribe 
     files that motion, a certification that includes a statement 
     that documents, with respect to the Indian child involved, 
     the membership or eligibility for membership of that Indian 
     child in the Indian tribe under applicable tribal law.
       ``(f) Any act or failure to act of an Indian tribe under 
     subsection (e) shall not--
       ``(1) affect any placement preference or other right of any 
     individual under this Act;
       ``(2) preclude the Indian tribe of the Indian child that is 
     the subject of an action taken by the Indian tribe under 
     subsection (e) from intervening in a proceeding concerning 
     that Indian child if a proposed adoptive placement of that 
     Indian child is changed after that action is taken; or
       ``(3) except as specifically provided in subsection (e), 
     affect the applicability of this Act.
       ``(g) Notwithstanding any other provision of law, no 
     proceeding for a voluntary termination of parental rights or 
     adoption of an Indian child may be conducted under applicable 
     State law before the date that is 30 days after the Indian 
     child's tribe receives notice of that proceeding that was 
     provided in accordance with the requirements of subsections 
     (c) and (d).
       ``(h) Notwithstanding any other provision of law (including 
     any State law)--
       ``(1) a court may approve, as part of an adoption decree of 
     an Indian child, an agreement that states that a birth 
     parent, an extended family member, or the Indian child's 
     tribe shall have an enforceable right of visitation or 
     continued contact with the Indian child after the entry of a 
     final decree of adoption; and
       ``(2) the failure to comply with any provision of a court 
     order concerning the continued visitation or contact referred 
     to in paragraph (1) shall not be considered to be grounds for 
     setting aside a final decree of adoption.''.

     SEC. 9. FRAUDULENT REPRESENTATION.

       Title I of the Indian Child Welfare Act of 1978 is amended 
     by adding at the end the following new section:

     ``SEC. 114. FRAUDULENT REPRESENTATION.

       ``(a) In General.--With respect to any proceeding subject 
     to this Act involving an Indian child or a child who may be 
     considered to be an Indian child for purposes of this Act, a 
     person, other than a birth parent of the child, shall, upon 
     conviction, be subject to a criminal sanction under 
     subsection (b) if that person--

[[Page S7904]]

       ``(1) knowingly and willfully falsifies, conceals, or 
     covers up by any trick, scheme, or device, a material fact 
     concerning whether, for purposes of this Act--
       ``(A) a child is an Indian child; or
       ``(B) a parent is an Indian; or
       ``(2)(A) makes any false, fictitious, or fraudulent 
     statement, omission, or representation; or
       ``(B) falsifies a written document knowing that the 
     document contains a false, fictitious, or fraudulent 
     statement or entry relating to a material fact described in 
     paragraph (1).
       ``(b) Criminal Sanctions.--The criminal sanctions for a 
     violation referred to in subsection (a) are as follows:
       ``(1) For an initial violation, a person shall be fined in 
     accordance with section 3571 of title 18, United States Code, 
     or imprisoned not more than 1 year, or both.
       ``(2) For any subsequent violation, a person shall be fined 
     in accordance with section 3571 of title 18, United States 
     Code, or imprisoned not more than 5 years, or both.''.
                                                                    ____


  Section-by-Section Analysis--Indian Child Welfare Act Amendments of 
                                  1996


                   section 1. short title; references

       Section 1 cites the short title of the bill as the ``Indian 
     Child Welfare Act Amendments of 1996'' and clarifies that 
     references in the bill to amendment or repeal relate to the 
     Indian Child Welfare Act of 1978 (25 U.S.C. 1901 et seq.).


                   section 2. exclusive jurisdiction

       Section 2 adds a provision to 25 U.S.C. 1911(a) to clarify 
     that an Indian tribe retains exclusive jurisdiction over any 
     child otherwise made a ward of the tribal court when the 
     child subsequently changes residence or domicile for 
     treatment or other purposes.


           section 3. intervention in state court proceedings

       Section 3 makes a conforming technical amendment 
     conditioning an Indian tribe's existing right of intervention 
     under 25 U.S.C. 1911(c) to the time limitations added by 
     Section 8 of the bill.


          section 4. voluntary termination of parental rights

       Section 4 amends 25 U.S.C. 1913(a) to clarify that the Act 
     applies to voluntary consents in adoptive, preadoptive and 
     foster care placements. In addition, Section 4 adds a 
     requirement that the presiding judge certify that any 
     attorney or public or private agency facilitating the 
     voluntary termination of parental rights or adoptive 
     placement has informed the birth parents of the placement 
     options available and of the applicable provisions of the 
     Indian Child Welfare Act, and has certified that the birth 
     parents will be notified within 10 days of any change in the 
     adoptive placement. An Indian custodian vested with legal 
     authority to consent to an adoptive placement is to be 
     treated as a parent for purposes of these amendments, 
     including the requirements governing notice provided or 
     received and consent given or revoked.


                    section 5. withdrawal of consent

       Section 5 amends the Act by adding several new paragraphs 
     to 25 U.S.C. 1913(b). The additional paragraphs would set 
     limits on when an Indian birth parent may withdraw his or her 
     consent to an adoption. Paragraph (2) would permit revocation 
     of parental consent in only two instances before a final 
     decree of adoption is entered except as provided in paragraph 
     (4). First, a birth parent could revoke his or her consent if 
     the original placement specified by the birth parent 
     terminates before a final decree of adoption has been 
     entered. Second, a birth parent could revoke his or her 
     consent if the revocation is made before the end of a 30 day 
     period that begins on the day that parent received notice of 
     the commencement of the adoption proceeding or before the end 
     of a 180 day period that begins on the day the Indian tribe 
     has received notice of the adoptive placement, whichever 
     period ends first. Paragraph (3) provides that upon the 
     effective revocation of consent by a birth parent under the 
     terms of paragraph (2), the child shall be returned to that 
     birth parent. Paragraph (4) requires that if a birth parent 
     has not revoked his or her consent within the time frames set 
     forth in paragraph (2), thereafter he or she may revoke 
     consent only pursuant to applicable State law or upon a 
     finding by a court of competent jurisdiction that the consent 
     was obtained through fraud or duress. Paragraph (5) provides 
     that upon the effective revocation of consent by a birth 
     parent under the terms of paragraph (4)(B), the child shall 
     be returned to that birth parent and the decree vacated. 
     Paragraph (6) provides that no adoption that has been in 
     effect for a period of longer than or equal to two years can 
     be invalidated under any of the conditions set forth in this 
     section, including those related to a finding of duress or 
     fraud.


                   section 6. notice to indian tribes

       Section 6 requires notice to be provided to the Indian 
     tribe by any person seeking to secure the voluntary placement 
     of an Indian child or the voluntary termination of the 
     parental rights of a parent of an Indian child. The notice 
     must be provided no later than 100 days after a foster care 
     placement occurs, no later than five days after a preadoptive 
     or adoptive placement occurs, no later than ten days after 
     the commencement of a proceeding for the termination of 
     parental rights, and no later than ten days after the 
     commencement of an adoption proceeding. Notice may be given 
     prior to the birth of an Indian child if a particular 
     placement is contemplated. If an Indian birth parent is 
     discovered after the applicable notice periods have otherwise 
     expired, despite a reasonable inquiry having been made on or 
     before the commencement of the placement about whether the 
     child may be an Indian child, the time limitations placed by 
     Section 8 upon the rights of an Indian tribe to intervene 
     apply only if the party discovering the Indian birth parent 
     provides notice to the Indian tribe under this section not 
     later than ten days after making the discovery.


                      section 7. content of notice

       Section 7 requires that the notice provided under Section 6 
     include the name of the Indian child involved and the actual 
     or anticipated date and place of birth of the child, along 
     with an identification, if known after reasonable inquiry, of 
     the Indian parent, grandparent, and extended family members 
     of the Indian child. The notice must also provide 
     information on the parties and court proceedings pending 
     in State court. The notice must inform the Indian tribe 
     that it may have the right to intervene in the court 
     proceeding, and must inquire whether the Indian tribe 
     intends to intervene or waive its right to intervene. 
     Finally, the notice must state that if the Indian tribe 
     fails to respond by the statutory deadline, the right of 
     that Indian tribe to intervene will be considered to have 
     been waived.


                section 8. intervention by indian tribe

       Section 8 adds four new subsections to 25 U.S.C. 1913, 
     which would limit the right of an Indian tribe to intervene 
     in a court proceeding involving foster care placement or 
     termination of parental rights and which would authorize 
     voluntary agreements for enforceable rights of visitation.
       Under subsection (e), an Indian tribe could intervene in a 
     voluntary proceeding to terminate parental rights only if it 
     has filed a notice of intent to intervene or a written 
     objection not later than 30 days after receiving the notice 
     required by Sections 6 and 7. An Indian tribe could intervene 
     in a voluntary adoption proceeding only if it has filed a 
     notice of intent to intervene or a written objection not 
     later than the later of 90 days after receiving notice of the 
     adoptive placement or 30 days after receiving notice of the 
     adoption proceeding pursuant to sections 6 and 7. If these 
     notice requirements are not complied with, the Indian tribe 
     could intervene at any time. However, an Indian tribe may no 
     longer intervene in a proceeding after it has provided 
     written notice to a State court of its intention not to 
     intervene or of its determination that neither the child nor 
     any birth parent is a member of that Indian tribe. Finally, 
     subsection (e) would require that an Indian tribe accompany a 
     motion for intervention with a certification that documents 
     the tribal membership or eligibility for membership of the 
     Indian child under applicable tribal law.
       Subsection (f) would clarify that the act or failure to act 
     of an Indian tribe to intervene or not intervene under 
     subsection (e) shall not affect any placement preferences or 
     other rights accorded to individuals under the Act, nor may 
     this preclude an Indian tribe from intervening in a case in 
     which a proposed adoptive placement is changed.
       Subsection (g) would prohibit any court proceeding 
     involving the voluntary termination of parental rights or 
     adoption of an Indian child from being conducted before the 
     date that is 30 days after the Indian tribe has received 
     notice under sections 6 and 7.
       Subsection (h) would authorize courts to approve, as part 
     of the adoption decree of an Indian child, a voluntary 
     agreement made by an adoptive family that a birth parent, a 
     member of the extended family, or the Indian tribe will have 
     an enforceable right of visitation or continued contact after 
     entry of the adoption decree. However, failure to comply with 
     the terms of such agreement may not be considered grounds for 
     setting aside the adoption decree.


                  section 9. fraudulent representation

       Section 9 would add a new section 114 to the Indian Child 
     Welfare Act that would apply criminal sanctions to any person 
     other than a birth parent who--(1) knowingly and willfully 
     falsifies, conceals, or covers up a material fact concerning 
     whether, for purposes of the Act, a child is an Indian child 
     or a parent is an Indian; or (2) makes any false or 
     fraudulent statement, omission, or representation, or 
     falsifies a written document knowing that the document 
     contains a false or fraudulent statement or entry relating to 
     a material fact described in (1). Upon conviction of an 
     initial violation, a person shall be subjected to the fine 
     prescribed in 18 U.S.C. 3571 for a Class A misdemeanor (not 
     more than $100,000), imprisonment for not more than 1 year, 
     or both. Upon conviction of any subsequent violation, a 
     person shall be subjected to the fine prescribed in 18 U.S.C. 
     3751 for a felony (not more than $250,000), imprisonment for 
     not more than 5 years, or both.
                                                                    ____

                                                    July 16, 1996.
     Hon. John McCain,
     Chairman, Senate Indian Affairs Committee, Washington, DC
       Dear Chairman McCain: Thank you for your swift attention 
     and hard work on the issue of the Indian Child Welfare Act 
     (ICWA) as it relates to adoption.
       I have reviewed a draft of the legislation you plan to 
     introduce to amend the ICWA and, after careful consideration, 
     have decided that I can lend the bill my qualified support. 
     As you know, your legislation offers

[[Page S7905]]

     a much different approach to reform of the ICWA than what I 
     prefer and what was passed by the House, your changes being 
     procedural and mine substantive. I believe, however, the 
     procedural reforms will help to facilitate compliance with 
     the ICWA and prevent some of the adoption tragedies that have 
     occurred under the current Act.
       Further, I appreciate your willingness to address some of 
     my concerns by incorporating protections for adoptive parents 
     in cases where there is no disclosure or knowledge of a 
     child's Native American heritage. These provisions are 
     necessary in situations like that of the Rost family of 
     Columbus, Ohio. The Rosts were unaware of the Native American 
     ancestry of their twin adoptive daughters because that 
     information was withheld by the birth parents.
       While I believe the reforms in your bill are useful, I 
     still feel that additional reforms are necessary to address 
     the underlying and fundamental problems with the ICWA as it 
     relates to adoption. The definition and jurisdiction problems 
     involved in the application of the ICWA remain unsolved, as 
     it is still unclear to whom this Act should apply. More and 
     more frequently, the courts are deciding that application of 
     the ICWA based on race alone is unconstitutional. I believe 
     it would be desirable for your committee to address this 
     issue at some point, or the legitimate purpose of the ICWA--
     to preserve the Indian family and culture--may be lost with 
     the Act's eventual demise.
       However, at this point, I support your legislation, 
     recognizing that it has the support of Native Americans, 
     adoption attorneys, and the Rost family. In my view, this 
     legislation represents a step toward ICWA reform that will 
     provide stability and security to the adoption process and 
     more importantly decrease the likelihood of adoption 
     tragedies.
       Thank you for your consideration of my views and for your 
     hard work to develop a solution to some of the problems that 
     the ICWA poses as currently applied. I look forward to 
     continuing to work with you on this issue as we monitor the 
     implementation of the changes purposed by your legislation.
           Very truly yours,
                                                    Deborah Pryce,
                                               Member of Congress.

  Mr. INOUYE. Mr. President, the Indian Child Welfare Act was enacted 
by the Congress in 1978 to secure long overdue protection for Indian 
children. In enacting the Indian Child Welfare Act, the Congress was 
concerned not only with the removal of Indian children from their 
families, but also their removal from their Indian heritage, culture, 
and identity.
  For the past 18 years, the Indian Child Welfare Act has served as a 
ray of hope and promise to Indian people striving to protect their 
children and the security and integrity of their families and tribal 
communities.
  While there is much debate about whether or not amendments are needed 
to the Indian Child Welfare Act, I have great respect for the leaders 
of the tribal governments who have come together to address the 
concerns of others notwithstanding the fact that these amendments will 
affect their most precious resource--the children of the native people 
of America.
  I wish to take this opportunity to make it clear to my colleagues 
that the amendments contained in this bill are intended to and will 
apply to all child custody proceedings affecting Indian children and 
their families.
  Mr. GLENN. Mr. President, I am pleased to join Senator McCain as an 
original cosponsor of this legislation to amend the Indian Child 
Welfare Act [ICWA]. By clarifying and improving a number of provisions 
of ICWA, this legislation brings more stability and certainty to Indian 
child adoptions while preserving the underlying policies and objectives 
of ICWA. This bill embodies the consensus agreement reached when Indian 
tribes from around the Nation met in Tulsa, OK, to address questions 
regarding ICWA's application. Mr. President, I believe that the 
overriding goal of this agreement, which I support, is to serve the 
best interests of children.
  The bill being introduced today deals with several issues critical to 
the application of ICWA to child custody proceedings including notice 
to Indian tribes for voluntary adoptions, time lines for tribal 
intervention in voluntary cases, criminal sanctions to discourage 
fraudulent practices in Indian adoptions and a mandate that attorneys 
and adoption agencies must inform Indian parents under ICWA. I believe 
that the formal notice requirements to the potentially affected tribe 
as well as the time limits for tribal intervention after the tribe has 
been notified are significant improvements in providing needed 
certainty in placement proceedings.
  Mr. President, I am also pleased that this legislation contains 
provisions addressing my specific concern: the retroactive application 
of ICWA in child custody proceedings. ICWA currently allows biological 
parents to withdraw their consent to an adoption for up to 2 years 
until the adoption is finalized. With the proposed changes, the time 
that the biological parents may withdraw their consent under ICWA is 
substantially reduced. I believe that a shorter deadline provides 
greater certainty for the potential adoptive family, the Indian family, 
the tribe, and the extended family. This certainty is vital for the 
preservation of the interest of the child.
  Mr. President, my concern with this issue and my insistence on the 
need to address the problem of retroactive application of ICWA was a 
direct response to a situation with a family in Columbus, OH. The Rost 
family of Columbus received custody of twin baby girls in the State of 
California in November 1993, following the relinquishment of parental 
rights by both birth parents. The biological father did not disclose 
his native American heritage in response to a specific question on the 
relinquishment document. In February 1994, the birth father informed 
his mother of the pending adoption of the twins. Two months later, in 
April 1994, the birth father's mother enrolled herself, the birth 
father, and the twins with the Pomo Indian tribe in California. The 
adoption agency was then notified that the adoption could not be 
finalized without a determination of the applicability of ICWA.
  The Rost situation made me aware of the harmful impact that 
retroactive application of ICWA could have on children. While I would 
have preferred tighter restrictions to preclude other families enduring 
the hardships the Rosts have experienced, I appreciated the efforts of 
Senator McCain, other members of the Committee and the Indian tribes to 
address these concerns. I believe that the combination of measures 
contained in this bill will significantly lessen the possibility of 
future Rost cases. Taken together the imposition of criminal sanctions 
for attorneys and adoption agencies that knowingly violate ICWA, the 
imposition of formal notice requirements and the imposition of 
deadlines for tribal intervention, provide new protections in law for 
children and families involved in child custody proceedings.
  Mr. President, I have reviewed the Rost case to reiterate that my 
interest in reforming ICWA has been limited to the issue of retroactive 
application. I have no intention to weaken ICWA protection, to narrow 
the designation of individuals as members of an Indian tribe, or to 
change any tribes' ability to determine its membership or what 
constitutes that membership. Once a voluntary legal agreement has been 
entered into, I do not believe that it is in the best interest of the 
child for this proceeding to be disrupted because of the retroactive 
application of ICWA. To allow this to happen could have a harmful 
impact on the child. I know that my colleagues share my overriding 
concern in assuring the best interest of children.
  Mr. President, I look forward to continued efforts to reform ICWA in 
ways that protect the best interest of children. I appreciate the work 
of Senator McCain and others to accommodate my concerns in this 
legislation and am pleased to cosponsor the bill.

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